Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

The following table shows the carrying amount of goodwill by reportable segment as of September 30, 2022 and December 31, 2021:


	Ammonia(1)		Granular Urea		UAN		AN(1)		Other(1)		Total
	(in millions)
Balance as of December 31, 2021	$	579	$	828	$	576	$	69	$	39	$	2,091

Effect of exchange rate changes	(3)		—		—		—		—		(3)
Balance as of September 30, 2022	$	576	$	828	$	576	$	69	$	39	$	2,088

_______________________________________________________________________________

(1)At both September 30, 2022 and December 31, 2021, the carrying amount of goodwill includes accumulated impairment losses in our Ammonia, AN and Other segments of $9 million, $241 million and $35 million, respectively, which consist of impairment charges related to our U.K. operations.

All of our identifiable intangible assets have definite lives and are presented in other assets on our consolidated balance sheets at gross carrying amount, net of accumulated amortization, as follows:


	September 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(in millions)

Customer relationships(1)	$	50	$	(35)	$	15	$	84	$	(60)	$	24
Trade names(2)	—		—		—		31		(10)		21

Total intangible assets	$	50	$	(35)	$	15	$	115	$	(70)	$	45

_______________________________________________________________________________

(1)As of September 30, 2022, the gross carrying amount for customer relationships includes cumulative impairment charges related to our U.K. operations of $55 million, of which $6 million was recorded in the third quarter of 2022 and $49 million was recorded in 2021. As of December 31, 2021, the gross carrying amount for customer relationships includes cumulative impairment charges of $49 million, which were recorded in 2021.

(2)As of September 30, 2022, trade names, which are related to our U.K. operations, had been written down to zero as a result of cumulative impairment charges of $18 million, including $9 million recorded in the third quarter of 2022, $8 million recorded in the second quarter of 2022, and $1 million recorded in 2021. At December 31, 2021, the gross carrying amount for trade names includes cumulative impairment charges of $1 million, which were recorded in 2021.

Our customer relationships are being amortized over a weighted-average life of approximately 18 years. Amortization expense of our identifiable intangible assets was $1 million and $3 million for the three and nine months ended September 30, 2022, respectively, and $2 million and $6 million for the three and nine months ended September 30, 2021, respectively. Total estimated amortization expense for the remainder of 2022 is less than $1 million and for each of the fiscal years 2023-2027 is approximately $3 million.

In June 2022, we approved and announced our proposed plan to restructure our U.K. operations, including the permanent closure of our Ince facility and optimization of the remaining manufacturing operations at the Billingham facility. As a result, in the second quarter of 2022, we recorded an intangible asset impairment charge of $8 million related to trade names. In the third quarter of 2022, the United Kingdom continued to experience extremely high and volatile natural gas prices. Given the increase in the price of natural gas in the United Kingdom and the lack of a corresponding increase in global nitrogen product market prices, in September 2022, we temporarily idled ammonia production at our Billingham complex. As a result, we concluded that an additional impairment test was triggered for the asset groups that comprise the continuing U.K. operations, which resulted in asset impairment charges of $87 million in our U.K. Ammonia and U.K. AN asset groups, of which $15 million related to intangible assets, consisting of $6 million related to customer relationships and $9 million related to trade names. After the impairment charge, intangible assets related to our U.K. operations were fully written off. See Note 5—United Kingdom Operations Restructuring and Impairment Charges for additional information.