Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Note 6. Goodwill and Intangible Assets

Goodwill by operating segment was:


	As of December 31,
	2022		2021
	(in millions)
Latin America	$	1,421	$	674
AMEA	3,132		3,365
Europe	8,009		7,830
North America	10,888		10,109
Goodwill	$	23,450	$	21,978

Intangible assets consisted of the following:


	As of December 31,
	2022		2021
	(in millions)
Indefinite-life intangible assets	$	18,413	$	17,299
Definite-life intangible assets	3,354		2,991
	21,767		20,290
Accumulated amortization	(2,057)		(1,999)
Intangible assets, net	$	19,710	$	18,291

Indefinite-life intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., the global LU biscuit business of Groupe Danone S.A., Cadbury Limited and Clif Bar. Definite-life intangible assets consist primarily of trademarks, customer-related intangibles, process technology, licenses and non-compete agreements.

Amortization expense for intangible assets was $132 million in 2022, $134 million in 2021 and $194 million in 2020. For the next five years, we estimate annual amortization expense of approximately $150 million in 2023-2025, approximately $95 million in 2026 and approximately $90 million in 2027 (reflecting December 31, 2022 exchange rates).

Changes in goodwill and intangible assets consisted of:


	2022				2021
	Goodwill		Intangible Assets, at cost		Goodwill		Intangible Assets, at cost
	(in millions)
Balance at January 1	$	21,978	$	20,290	$	21,895	$	20,399
Changes due to:
Currency	(757)		(692)		(464)		(465)
Acquisitions	2,529		2,941		547		405
Held for Sale	(292)		(671)		—		—
Divestitures	(8)		—		—		(17)
Asset impairments	—		(101)		—		(32)
Balance at December 31	$	23,450	$	21,767	$	21,978	$	20,290

Changes to goodwill and intangibles were:

•Acquisitions – In connection with our 2022 acquisitions, we recorded $1.0 billion to goodwill and $1.7 billion to intangible assets for Clif Bar, $795 million to goodwill and $734 million to intangible assets for Chipita, and $714 million to goodwill and $557 million to intangible assets for Ricolino as part of purchase accounting. In connection with our 2021 acquisitions of Gourmet Food, Grenade and the remaining interest

in Hu, we recorded $547 million of goodwill and $405 million of intangible assets as part of purchase accounting. See Note 2, Acquisitions and Divestitures, for additional information.

•Held for Sale - During the fourth quarter of 2022, we agreed to sell our gum business in North America and Europe. As a result, we reclassified $292 million of goodwill and $671 million of intangible assets to held for sale. See Note 2, Acquisitions and Divestitures, for additional information.

•Divestitures – During 2022 and 2021, we made divestitures in Latin America and AMEA which were not material.

•Asset impairments – As further discussed below, we recorded $101 million of intangible asset impairments in 2022 and $32 million in 2021.

In 2022, 2021 and 2020, there were no goodwill impairments and each of our reporting units had sufficient fair value in excess of its carrying value. While all reporting units passed our annual impairment testing, if planned business performance expectations are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then the estimated fair values of a reporting unit or reporting units might decline and lead to a goodwill impairment in the future.

In 2022, we recorded $101 million of intangible asset impairment charges related to two biscuit brands in AMEA. We also identified eight brands with $1.5 billion of aggregate book value as of December 31, 2022 that each had a fair value in excess of book value of 10% or less. We believe our current plans for each of these brands will allow them to not be impaired, but if the brand earnings expectations are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then a brand or brands could become impaired in the future. In 2021, we recorded a $32 million of intangible asset impairment charge related to one biscuit brand in North America.