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Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2022

9. Goodwill and Intangible Assets, Net

Goodwill consists of the following:


	December 31, 2022
	Automotive		Food Packaging		Home Fashion		Pharma		Metals		Consolidated

	(in millions)
Gross carrying amount, Jan 1	$	337	$	6	$	24	$	13	$	—	$	380
Foreign Exchange		—		—		(2)		—		—		(2)
Gross carrying amount, Dec 31		337		6		22		13		—		378

Accumulated impairment, Jan 1		(87)		—		(3)		—		—		(90)
Impairment		—		—		—		—		—		—
Accumulated impairment, Dec 31		(87)		—		(3)		—		—		(90)

Net carrying value, Dec 31	$	250	$	6	$	19	$	13	$	—	$	288


	December 31, 2021
	Automotive		Food Packaging		Home Fashion		Pharma		Metals		Consolidated

	(in millions)
Gross carrying amount, Jan 1	$	337	$	6	$	24	$	13	$	4	$	384
Dispositions		—		—		—		—		(4)		(4)
Foreign exchange		—		—		—		—		—		—
Gross carrying amount, Dec 31		337		6		24		13		—		380

Accumulated impairment, Jan 1		(87)		—		(3)		—		—		(90)
Impairment		—		—		—		—		—		—
Accumulated impairment, Dec 31		(87)		—		(3)		—		—		(90)

Net carrying value, Dec 31	$	250	$	6	$	21	$	13	$	—	$	290

Intangible assets, net consists of the following:


	December 31, 2022						December 31, 2021
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Value		Amount		Amortization		Value

	(in millions)
Definite-lived intangible assets:
Customer relationships	$	393	$	(212)	$	181	$	394	$	(192)	$	202
Developed technology		254		(62)		192		254		(34)		220
Other		167		(90)		77		167		(77)		90
	$	814	$	(364)	$	450	$	815	$	(303)	$	512

Indefinite-lived intangible assets					$	83					$	83
Intangible assets, net					$	533					$	595

Amortization expense associated with definite-lived intangible assets for the years ended December 31, 2022, 2021 and 2020 was $61 million, $62 million and $44 million, respectively. We utilize the straight-line method of amortization, recognized over the estimated useful lives of the assets.

The estimated future amortization expense for our definite-lived intangible assets is as follows:


Year	Amount
	(in millions)
2023	$	59
2024		57
2025		56
2026		36
2027		36
Thereafter		206
	$	450

Impairment of Goodwill

When performing the quantitative analysis for goodwill impairment testing, we base the fair value of our reporting units on consideration of various valuation methodologies, including projecting future cash flows discounted at rates commensurate with the risks involved (“DCF”). Assumptions used in a DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows. The forecasted cash flows are based on current plans and for years beyond that plan, the estimates are based on assumed growth rates. We believe that our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in a DCF are based on estimates of the weighted-average cost of capital of a market participant. Such estimates are derived from our analysis of peer companies and consider the industry weighted average return on debt and equity from a market participant perspective.

Automotive

We perform the annual goodwill impairment test for our Automotive segment as of October 1 of each year, or more frequently if impairment indicators exist.

During 2022 and 2021, our Automotive segment considered qualitative factors to determine that goodwill at its Service reporting unit did not require further testing for impairment.

During the first quarter of 2020, due to the COVID-19 pandemic and its impact on our Automotive segment’s operations, we performed an interim goodwill impairment analysis. At such time, our Automotive segment had $250 million of goodwill, all of which was allocated to its Service reporting unit. Based on the interim impairment analysis, we determined that the fair value of our Automotive segment’s Service reporting unit was significantly in excess of its carrying value and therefore, no impairment is required. For our Automotive segment’s annual impairment test for 2020, our Automotive segment considered qualitative factors to determine that goodwill at its Service reporting unit did not require further testing for impairment.

Home Fashion

We perform the annual goodwill impairment test for our Home Fashion segment as of October 1 of each year, or more frequently if impairment indicators exist. During the second quarter of 2020, our Home Fashion segment impaired a portion of its goodwill in the amount of $3 million.