Goodwill and Other Intangible Assets

6 Months Ended

Jul. 02, 2016

Acquisitions, Goodwill and Other Intangible Assets [Abstract]

Goodwill and other intangible assets

Acquisition

In March 2016, the Company completed the acquisition of an organic and natural snack company for $18 million, which was accounted for under the purchase method and financed with cash on hand. The assets, which primarily consist of indefinite lived brands, and liabilities are included in the Consolidated Balance Sheet as of July 2, 2016 within the North America Other segment.

Joint Venture

In January 2016, the Company formed a Joint Venture with Tolaram Africa to develop snacks and breakfast foods for the West Africa market. In connection with the formation, the Company contributed the rights to indefinitely use the Company’s brands in these categories, including the Pringles brand. Accordingly, the Company recorded a contribution of $5 million of intangible assets not subject to amortization with a corresponding increase in Investments in unconsolidated entities during the year-to-date period ended July 2, 2016, which represents the value attributed to the Pringles brand for this market.

Carrying amount of goodwill



(millions)	U.S. Morning Foods		U.S. Snacks		U.S. Specialty		North America Other		Europe			Latin America			Asia Pacific		Consoli- dated
January 2, 2016	$	131	$	3,568	$	82	$	456	$	431		$	76		$	224	$	4,968
Currency translation adjustment	—		—		—		3		(8		)	(1		)	1		(5		)
July 2, 2016	$	131	$	3,568	$	82	$	459	$	423		$	75		$	225	$	4,963

Intangible assets subject to amortization

(millions)



Gross carrying amount	U.S. Morning Foods		U.S. Snacks			U.S. Specialty		North America Other		Europe			Latin America		Asia Pacific		Consoli- dated
January 2, 2016	$	8	$	42		$	—	$	5	$	45		$	6	$	10	$	116
Currency translation adjustment	—		—			—		—		—			—		—		—
July 2, 2016	$	8	$	42		$	—	$	5	$	45		$	6	$	10	$	116

Accumulated Amortization
January 2, 2016	$	8	$	16		$	—	$	4	$	11		$	6	$	2	$	47
Amortization	—		2			—		—		2			—		—		4
July 2, 2016	$	8	$	18		$	—	$	4	$	13		$	6	$	2	$	51

Intangible assets subject to amortization, net
January 2, 2016	$	—	$	26		$	—	$	1	$	34		$	—	$	8	$	69
Currency translation adjustment	—		—			—		—		—			—		—		—
Amortization	—		(2		)	—		—		(2		)	—		—		(4		)
July 2, 2016	$	—	$	24		$	—	$	1	$	32		$	—	$	8	$	65

For intangible assets in the preceding table, amortization was $4 million for the year-to-date periods ended July 2, 2016 and July 4, 2015. The currently estimated aggregate annual amortization expense for full-year 2016 is approximately $7 million.

Intangible assets not subject to amortization



(millions)	U.S. Morning Foods		U.S. Snacks		U.S. Specialty		North America Other		Europe			Latin America		Asia Pacific		Consoli- dated
January 2, 2016	$	—	$	1,625	$	—	$	158	$	416		$	—	$	—	$	2,199
Additions	—		—		—		18		—			—		—		18
Contribution to joint venture	—		—		—		—		(5		)	—		—		(5		)
Currency translation adjustment	—		—		—		1		4			—		—		5
July 2, 2016	$	—	$	1,625	$	—	$	177	$	415		$	—	$	—	$	2,217

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities.The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details