Goodwill and Other Intangible Assets, Net

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

Goodwill activity for the six months ended June 30, 2023 is as follows (in millions):


Segments	Net Book Value at December 31, 2022		Foreign Exchange		Gross Carrying Amount		Accumulated Impairment Charges		Net Book Value at June 30, 2023
Home and Commercial Solutions	$	747	$	—	$	4,052	$	(3,305)	$	747
Learning and Development	2,551		12		3,409		(846)		2,563
Outdoor and Recreation	—		—		788		(788)		—
	$	3,298	$	12	$	8,249	$	(4,939)	$	3,310

Other intangible assets, net, are comprised of the following (in millions):


	June 30, 2023						December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Tradenames — indefinite life (1)	$	1,620	$	—	$	1,620	$	1,689	$	—	$	1,689
Tradenames — other (1)	232		(93)		139		160		(79)		81
Capitalized software	614		(497)		117		602		(481)		121
Patents and intellectual property	22		(18)		4		22		(17)		5
Customer relationships and distributor channels	1,077		(345)		732		1,072		(319)		753

	$	3,565	$	(953)	$	2,612	$	3,545	$	(896)	$	2,649

(1)In connection with the operating model changes associated with Project Phoenix, the Company determined that six tradenames with aggregate carrying values of $70 million no longer met indefinite-lived criteria and were reclassified during the first quarter as finite-lived tradenames, with useful lives ranging from five to ten years.

Amortization expense for intangible assets was $27 million and $24 million for the three months ended June 30, 2023 and 2022, respectively and $54 million and $51 million for the six months ended June 30, 2023 and 2022, respectively.

During the second quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the Home Fragrance reporting unit in the Home and Commercial Solutions segment and for the goodwill associated with the Baby reporting unit in the Learning and Development segment, as a result of a downward revision of forecasted cash flows due to softening global demand, primarily caused by continued inflationary pressure that is impacting discretionary spending behavior of consumers, as well as rising interest rates. The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Home and Commercial Solutions segment was impaired. During the three and six months ended June 30, 2023, the Company recorded an aggregate non-cash impairment charge of $8 million, as the carrying value of the tradename exceeded its fair value. The Company concluded that the Baby reporting unit goodwill was not impaired during the second quarter of 2023.