XML 32 R15.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Goodwill and Other Intangible Assets, Net | 12 Months Ended
--- | ---
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net A summary of changes in the Company’s goodwill by reportable business segment is as follows for 2023 and 2022 (in millions):
|  |  |  |  |  |  |  | December 31, 2023
Segments: |  | Net Book Value at December 31, 2022 |  | Impairment Charges |  | Foreign Exchange |  | Gross Carrying Amount |  | Accumulated Impairment Charges |  | Net Book Value
Home and Commercial Solutions |  | $ | 747 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,052 |  |  | $ | (3,305) |  |  | $ | 747 |
Learning and Development |  | 2,551 |  |  | (241) |  |  | 14 |  |  | 3,411 |  |  | (1,087) |  |  | 2,324 |
Outdoor and Recreation |  | — |  |  | — |  |  | — |  |  | 788 |  |  | (788) |  |  | — |
|  | $ | 3,298 |  |  | $ | (241) |  |  | $ | 14 |  |  | $ | 8,251 |  |  | $ | (5,180) |  |  | $ | 3,071 |
During the third quarter of 2023, the Company concluded that a triggering event had occurred 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 lower volume and profitability expectations, as well as rising interest rates. The Company performed a quantitative impairment test and determined that the Baby reporting unit goodwill was impaired. During the third quarter of 2023, the Company recorded a non-cash impairment charge of $241 million as the carrying value of the reporting unit exceeded its fair value.
|  |  |  |  |  |  |  | December 31, 2022
Segments: |  | Net Book Value at December 31, 2021 |  | Impairment Charges |  | Foreign Exchange |  | Gross Carrying Amount |  | Accumulated Impairment Charges |  | Net Book Value
Home and Commercial Solutions |  | $ | 911 |  |  | $ | (164) |  |  | $ | — |  |  | $ | 4,052 |  |  | $ | (3,305) |  |  | $ | 747 |
Learning and Development |  | 2,593 |  |  | — |  |  | (42) |  |  | 3,397 |  |  | (846) |  |  | 2,551 |
Outdoor and Recreation |  | — |  |  | — |  |  | — |  |  | 788 |  |  | (788) |  |  | — |
|  | $ | 3,504 |  |  | $ | (164) |  |  | $ | (42) |  |  | $ | 8,237 |  |  | $ | (4,939) |  |  | $ | 3,298 |
During the fourth quarter of 2022, in conjunction with its annual impairment testing, the Company recorded a non-cash impairment charge to write-off the remaining $56 million of goodwill for its Home Fragrance reporting unit, in the Home and Commercial Solutions segment as the carrying value exceeded its fair value. This impairment reflected a further downward revision to the forecasted cash flows used in connection with the third quarter triggering event assessment, driven by inflationary pressures which continue to impact discretionary spending behavior of consumers at higher rates than previously expected. During the third quarter of 2022, the Company concluded that a triggering event had occurred for its Home Fragrance reporting unit, in the Home and Commercial Solutions segment, as a result of a downward revision of forecasted cash flows due to softening global demand, as retailers significantly pulled back on orders in an effort to rebalance inventory, and rising interest rates. The decline in global demand is driven primarily by inflationary pressures which are impacting the discretionary spending behavior of consumers. The Company performed a quantitative impairment test and determined that the Home Fragrance reporting unit goodwill was impaired and recorded a non-cash impairment charge of $108 million, as the carrying value of the reporting unit exceeded its fair value. The impairment charges for indefinite-lived tradenames were recorded in the Company’s reporting segments as follows for the years ended December 31, (in millions):
| 2023 (1) |  | 2022 (2) |  | 2021 (3)
Impairment of indefinite-lived tradenames |  |  |  |  |
Home and Commercial Solutions | $ | 76 |  |  | $ | 280 |  |  | $ | 29 |
Learning and Development | — |  |  | 30 |  |  | 31 |
Outdoor and Recreation | 22 |  |  | — |  |  | — |
| $ | 98 |  |  | $ | 310 |  |  | $ | 60 |
(1)During the fourth quarter of 2023, in conjunction with its annual impairment testing, the Company recorded a non-cash impairment charge of $68 million associated with two tradenames in the Home and Commercial Solutions segment, as the carrying values exceeded the fair values. The decline in the fair values of the tradenames in the Home and Commercial Solutions segment were due to current market contraction, reflecting a reset of demand levels. During the third quarter of 2023, the Company concluded that a triggering event had occurred for an indefinite-lived tradename in the Outdoor and Recreation segment, as a result of a downward revision of forecasted cash flows due to market conditions, as well as rising interest rates. The Company performed a quantitative impairment test and determined that the indefinite-lived tradename in the Outdoor and Recreation segment was impaired. During the third quarter of 2023, the Company recorded a non-cash impairment charge of $22 million for the indefinite-lived tradename in the Outdoor and Recreation segment, as the carrying value of the tradename exceeded its fair value. During the second quarter of 2023, the Company concluded that a triggering event had occurred for indefinite-lived tradename in the Home Fragrance reporting unit in the Home and Commercial Solutions 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 second quarter of 2023, the Company recorded a non-cash impairment charge of $8 million, as the carrying value of the tradename exceeded its fair value. (2)During the fourth quarter of 2022, in conjunction with its annual impairment testing, the Company recorded aggregate non-cash impairment charges of $270 million associated with two tradenames in the Home and Commercial Solutions segment and one tradename in the Learning and Development segment, as the carrying values exceeded their fair values. The decline in fair values for one tradename in the Home and Commercial Solutions segment and the tradename in the Learning and Development segment reflected a further downward revision to the forecasted cash flows used in connection with the third quarter triggering event assessment, driven by inflationary pressures which are impacting discretionary spending behavior of consumers at higher rates than previously expected, including higher than expected overhead costs. The decline in fair value for the remaining tradename in the Home and Commercial Solutions segment reflected a change in management's assumptions, including the timing of a labor shortage recovery in a certain international market, which negatively impacted the long-term profitability estimates used to develop the forecasted cash flow projections for the annual impairment test. During the third quarter of 2022, the Company concluded that a triggering event had occurred for two indefinite-lived tradenames in the Home and Commercial Solutions segment, as a result of a downward revision of forecasted cash flows due to softening global demand, as retailers significantly pulled back on orders in an effort to rebalance inventory and rising interest rates. The decline in global demand is driven primarily by inflationary pressures which are impacting the discretionary spending behavior of consumers. The Company also concluded that a triggering event had occurred for two indefinite-lived tradenames in the Learning and Development segment, as a result of rising interest rates and inflationary pressures. The Company performed a quantitative impairment test and determined that the indefinite-lived tradenames in the Home and Commercial Solutions segment and two indefinite-lived tradenames in the Learning and Development segment were impaired. During the third quarter of 2022, the Company recorded an aggregate non-cash impairment charge of $40 million, as the carrying values of these tradenames exceeded their fair values. (3)During the fourth quarter of 2021, in conjunction with its annual impairment testing, the Company recorded non-cash impairment charges of $60 million associated with two tradenames in the Home and Commercial Solutions and Learning and Development segments, as the carrying values exceeded their fair values, reflecting a downward revision of future expected cash flows, which include the impact of the COVID-19 global pandemic. The table below summarizes the balance of other intangible assets, net and the related amortization periods using the straight-line method and attribution method at December 31, 2023 and 2022 (in millions):
| December 31, 2023 |  | December 31, 2022 |  |
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Book Value |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Book Value |  | Amortization Periods (In years)
Tradenames - indefinite life (1) | $ | 1,535 |  |  | $ | — |  |  | $ | 1,535 |  |  | $ | 1,689 |  |  | $ | — |  |  | $ | 1,689 |  |  | N/A
Tradenames - other (1) | 232 |  |  | (105) |  |  | 127 |  |  | 160 |  |  | (79) |  |  | 81 |  |  | 2-15
Capitalized software | 628 |  |  | (512) |  |  | 116 |  |  | 602 |  |  | (481) |  |  | 121 |  |  | 3-12
Patents and intellectual property | 22 |  |  | (20) |  |  | 2 |  |  | 22 |  |  | (17) |  |  | 5 |  |  | 3-14
Customer relationships and distributor channels | 1,078 |  |  | (370) |  |  | 708 |  |  | 1,072 |  |  | (319) |  |  | 753 |  |  | 3-30
| $ | 3,495 |  |  | $ | (1,007) |  |  | $ | 2,488 |  |  | $ | 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 of 2023 as finite-lived tradenames with useful lives ranging from five to ten years. Amortization expense for intangible assets was $109 million, $100 million and $120 million in 2023, 2022 and 2021, respectively. At December 31, 2023, the aggregate estimated intangible amortization amounts for the succeeding five years are as follows (in millions):
Years ending December 31, |  | Amount
2024 |  | $ | 107 |
2025 |  | 95 |
2026 |  | 80 |
2027 |  | 72 |
2028 |  | 61 |
Thereafter |  | 538 |
The Company continues to evaluate its brand strategy including the assessment of indefinite-lived criteria which may impact the future estimated intangible amortization.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration