Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2016

Acquisitions, Goodwill and Other Intangibles [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

cquisition

In December 2016, the Company acquired Ritmo Investimentos, controlling shareholder of Parati S/A, Afical Ltda and Padua Ltda ("Parati Group"), a leading Brazilian food group for approximately BRL1.38 billion ($381 million) or $379 million, net of cash and cash equivalents. The purchase price is subject to certain working capital and net debt adjustments based on the actual working capital and net debt existing on the acquisition date compared to targeted amounts. The acquisition was accounted for under the purchase price method and was financed with cash on hand and short-term borrowings. The assets and liabilities of the Parati Group are included in the Consolidated Balance Sheet as of December 31, 2016 within the Latin America segment. The acquired assets and assumed liabilities include the following:

(millions)	December 1, 2016
Current assets	$	44
Property	76
Goodwill	241
Intangible assets	121
Current liabilities	(48		)
Non-current deferred tax liability and other	(55		)
	$	379

The above amounts represent the preliminary allocation of purchase price and are subject to revision when the working capital and net debt adjustments to the purchase price are agreed between the parties and appraisals are finalized for property and intangible assets. These items will be finalized during 2017.

As of December 31, 2016, no tax basis on intangibles has been recorded as a result of the acquisition. The Company is evaluating the ability to legally merge its Brazilian current and acquired legal entities, which could result in tax basis on some intangible assets which modify the purchase price allocation adjustments between goodwill and deferred tax assets and liabilities.

A portion of the acquisition price aggregating $67 million was placed in escrow in favor of the seller for general representations and warranties, as well as pending resolution of certain contingencies arising from the business prior to the acquisition. The Company is still evaluating these amounts, which could result in the recognition of certain contingent liabilities along with corresponding receivables from the escrow account.

In September 2016, the Company acquired a majority ownership interest in a natural, bio-organic certified breakfast company for €3 million, which was accounted for under the purchase method and financed with cash on hand. The assets, which primarily consist of indefinite lived intangible assets and goodwill, and liabilities, including non-controlling interests, are included in the Consolidated Balance Sheet as of December 31, 2016, within the Europe segment.

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 December 31, 2016 within the North America Other segment.

Bisco Misr acquisition

In January 2015, the Company completed its acquisition of a majority interest in Bisco Misr, the number one packaged biscuits company in Egypt, for $125 million, or $117 million net of cash and cash equivalents acquired. The acquisition was accounted for under the purchase method and was financed through cash on hand. The assets and liabilities of Bisco Misr are included in the Consolidated Balance Sheet as of December 31, 2016 and January 2, 2016 and the results of its operations subsequent to the acquisition date, which are immaterial, are included in the Consolidated Statement of Income within the Europe operating segment. In addition, the pro-forma effect of this acquisition, if the acquisition had been completed at the beginning of 2014, would have been immaterial.

The acquired assets and assumed liabilities include the following:

(millions)	January 18, 2015
Current assets	$	11
Property	79
Goodwill	59
Intangible assets and other	30
Current liabilities	(15		)
Other non current liabilities, primarily deferred taxes	(27		)
Non-controlling interests	(20		)
	$	117

Schedule of Goodwill [Table Text Block]

Changes in the carrying amount of goodwill, intangible assets subject to amortization, consisting primarily of customer lists, and indefinite-lived intangible assets, consisting of brands, are presented in the following tables:

Changes in the 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 3, 2015	$	131	$	3,589		$	82	$	465		$	389		$	83		$	232		$	4,971
Additions	—		—			—		—			81			—			—			81
VIE deconsolidation	—		(21		)	—		—			—			—			—			(21		)
Currency translation adjustment	—		—			—		(9		)	(39		)	(7		)	(8		)	(63		)
January 2, 2016	$	131	$	3,568		$	82	$	456		$	431		$	76		$	224		$	4,968
Additions	—		—			—		—			4			241			—			245
Currency translation adjustment	—		—			—		1			(59		)	11			—			(47		)
December 31, 2016	$	131	$	3,568		$	82	$	457		$	376		$	328		$	224		$	5,166

Schedule of Finite-Lived Intangible Assets [Table Text Block]

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 3, 2015	$	8	$	65		$	—	$	5	$	38		$	6	$	10		$	132
Additions	—		—			—		—		9			—		—			9
VIE Deconsolidation	—		(23		)	—		—		—			—		—			(23		)
Currency translation adjustment	—		—			—		—		(2		)	—		—			(2		)
January 2, 2016	$	8	$	42		$	—	$	5	$	45		$	6	$	10		$	116
Additions	—		—			—		—		—			29		—			29
Currency translation adjustment	—		—			—		—		(5		)	1		—			(4		)
December 31, 2016	$	8	$	42		$	—	$	5	$	40		$	36	$	10		$	141
Accumulated Amortization
January 3, 2015	$	8	$	16		$	—	$	4	$	7		$	6	$	2		$	43
VIE deconsolidation	—		(4		)	—		—		—			—		—			(4		)
Amortization	—		4			—		—		4			—		—			8
January 2, 2016	$	8	$	16		$	—	$	4	$	11		$	6	$	2		$	47
Amortization (a)	—		3			—		—		3			—		1			7
December 31, 2016	$	8	$	19		$	—	$	4	$	14		$	6	$	3		$	54
Intangible assets subject to amortization, net
January 3, 2015	$	—	$	49		$	—	$	1	$	31		$	—	$	8		$	89
Additions	—		—			—		—		9			—		—			9
Amortization	—		(4		)	—		—		(4		)	—		—			(8		)
VIE Deconsolidation	—		(19		)	—		—		—			—		—			(19		)
Currency translation adjustment	—		—			—		—		(2		)	—		—			(2		)
January 2, 2016	$	—	$	26		$	—	$	1	$	34		$	—	$	8		$	69
Additions	—		—			—		—		—			29		—			29
Amortization (a)	—		(3		)	—		—		(3		)	—		(1		)	(7		)
Currency translation adjustment	—		—			—		—		(5		)	1		—			(4		)
December 31, 2016	$	—	$	23		$	—	$	1	$	26		$	30	$	7		$	87

(a) The currently estimated aggregate amortization expense for each of the next five succeeding fiscal periods is approximately $8 million for 2017 and 2018 and $7 million per year thereafter through 2021.

Schedule of Indefinite-Lived Intangible Assets [Table Text Block]

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 3, 2015	$	—	$	1,625	$	—	$	158	$	423		$	—	$	—	$	2,206
Additions	—		—		—		—		36			—		—		36
Currency translation adjustment	—		—		—		—		(43		)	—		—		(43		)
January 2, 2016	$	—	$	1,625	$	—	$	158	$	416		$	—	$	—	$	2,199
Additions	—		—		—		18		3			92		—		113
Contribution to joint venture	—		—		—		—		(5		)	—		—		(5		)
Currency translation adjustment	—		—		—		—		(31		)	6		—		(25		)
December 31, 2016	$	—	$	1,625	$	—	$	176	$	383		$	98	$	—	$	2,282