XML 28 R15.htm IDEA: XBRL DOCUMENT v3.22.1
Goodwill and Other Intangible Assets
 12 Months Ended
Apr. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
Note 6: Goodwill and Other Intangible Assets
The following table summarizes the changes in our goodwill.
U.S. Retail
Pet Foods		U.S. Retail
Coffee		U.S. Retail
Consumer Foods		International
and Away
From Home		Total
Balance at May 1, 2020$2,442.3 $2,090.9 $1,358.2 $413.1 $6,304.5 
Divestitures(74.1)— (210.7)(16.9)(301.7)
Other (A)
— — — 20.8 20.8 
Balance at April 30, 2021$2,368.2 $2,090.9 $1,147.5 $417.0 $6,023.6 
Other (A)
— — — (7.8)(7.8)
Balance at April 30, 2022 (B)
$2,368.2 $2,090.9 $1,147.5 $409.2 $6,015.8 
(A)The amounts classified as other represent foreign currency exchange adjustments.
(B)Included in goodwill as of April 30, 2022, are accumulated goodwill impairment charges of $242.9.
The following table summarizes our other intangible assets and related accumulated amortization and impairment charges, including foreign currency exchange adjustments.
  April 30, 2022April 30, 2021
  Acquisition
Cost		Accumulated
Amortization/
Impairment
Charges/
Foreign
Currency
Exchange		NetAcquisition
Cost		Accumulated
Amortization/
Impairment
Charges/
Foreign
Currency
Exchange		Net 
Finite-lived intangible assets subject to
  amortization:
Customer and contractual relationships$4,450.0 $1,724.8 $2,725.2 $4,471.1 $1,545.0 $2,926.1 
Patents and technology167.6 155.0 12.6 168.5 147.3 21.2 
Trademarks661.7 354.1 307.6 364.5 186.7 177.8 
Total intangible assets subject to amortization$5,279.3 $2,233.9 $3,045.4 $5,004.1 $1,879.0 $3,125.1 
Indefinite-lived intangible assets not subject to amortization:
Trademarks$2,833.1 $226.3 $2,606.8 $3,141.1 $225.0 $2,916.1 
Total other intangible assets$8,112.4 $2,460.2 $5,652.2 $8,145.2 $2,104.0 $6,041.2 
Amortization expense for finite-lived intangible assets was $222.5, $232.0, and $235.3 in 2022, 2021, and 2020, respectively. The weighted-average useful lives of the customer and contractual relationships, patents and technology, and trademarks are 24 years, 16 years, and 15 years, respectively. The weighted-average useful life of total finite-lived intangible assets is
23 years. Based on the carrying value of intangible assets subject to amortization at April 30, 2022, the estimated amortization expense is $222.5 for 2023, $218.4 for 2024, $215.3 for 2025, $213.6 for 2026, and $213.0 for 2027.

We review goodwill and other indefinite-lived intangible assets for impairment at least annually on February 1 and more often if indicators of impairment exist.

During the third quarter of 2022, we made certain strategic decisions related to our U.S. Retail Pet Foods segment in support of our continued focus on prioritizing and accelerating growth in dog snacks, driving momentum in cat food, and improving dog food performance, which will require further allocation of resources to support more strategic, faster growth opportunities. As a result, we completed an interim review to determine the impact these strategic decisions had on the fair value of the goodwill and certain indefinite-lived intangible assets within the U.S. Retail Pet Foods segment. We recognized an impairment charge of $150.4 related to the Rachael Ray Nutrish brand within the U.S. Retail Pet Foods segment, primarily driven by the re-positioning of this brand within the Pet Foods brand portfolio, which led to a decline in the current and long-term net sales expectations and the royalty rate used in the valuation analysis. This charge was included as a noncash charge in our Statement of Consolidated Income. Additionally, we reassessed the long-term strategic expectations for the Rachael Ray Nutrish brand and reclassified this brand as a finite-lived intangible asset as of January 31, 2022.
As of February 1, 2022, we completed the annual impairment review, in which goodwill impairment was tested at the reporting unit level for our six reporting units with goodwill. As part of our annual evaluation, we did not recognize any additional impairment charges related to our goodwill and indefinite-lived intangible assets. The estimated fair value exceeded the carrying value by greater than 10 percent for all our goodwill and indefinite-lived intangible assets, with the exception of the Pet Foods reporting unit, for which its fair value exceeded its carrying value by approximately 6 percent. The carrying value of the goodwill within the U.S. Retail Pet Foods segment was $2.4 billion as of April 30, 2022, and remains susceptible to future impairment charges due to the narrow difference between fair value and carrying value. Additional sensitivity analyses were performed for the Pet Foods reporting unit, assuming a hypothetical 50-basis-point decrease in the expected long-term growth rate or a hypothetical 50-basis-point increase in the weighted-average cost of capital. Both scenarios independently yielded an estimated fair value for the Pet Foods reporting unit below carrying value. Therefore, any significant adverse change in our near or long-term projections or macroeconomic conditions could result in future impairment charges, which could be material.

In addition, we continue to evaluate the nature and extent to which COVID-19 could impact our business, specifically as it relates to the fair value of our goodwill and indefinite-lived intangible assets. While we have concluded there were no
indicators of impairment as of April 30, 2022, any significant sustained adverse change in our consumer purchasing behaviors, government restrictions, financial results, or macroeconomic conditions could result in future impairment.

During 2021, we recognized an impairment charge of $3.8 related to an immaterial trademark within the U.S. Retail Consumer Foods segment. During 2020, we recognized an impairment charge of $52.4 related to the divested Natural Balance brand within the U.S. Retail Pet Foods segment due to a decline in the 2020 and long-term net sales expectations and the royalty rate used in the interim analysis, primarily driven by the market environment and re-positioning of this brand within the Pet Foods brand portfolio. These charges were included as noncash charges in our Statements of Consolidated Income.