XML 28 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Goodwill and Other Intangible Assets
 12 Months Ended
Jan. 02, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets [Text Block]
GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and Intangible Assets
Changes in the carrying amount of goodwill, intangible assets subject to amortization, consisting primarily of customer relationships, and indefinite-lived intangible assets, consisting of brands and distribution agreements, are presented in the following tables:

Carrying amount of goodwill
(millions)North
America		EuropeLatin
America		AMEAConsoli-
dated
December 29, 2018$4,611 $346 $218 $875 $6,050 
Divestiture(191)— — — (191)
Currency translation adjustment2 1 (5)4 2 
December 28, 2019$4,422 $347 $213 $879 $5,861 
Currency translation adjustment1 20 (33)(50)(62)
January 2, 2021$4,423 $367 $180 $829 $5,799 
Intangible assets subject to amortization
Gross carrying amount          
(millions)North AmericaEuropeLatin
America		AMEAConsoli-
dated
December 29, 2018$74 $43 $63 $428 $608 
Additions2 — — — 2 
Divestiture(12)— — — (12)
Currency translation adjustment— (2)(3)1 (4)
December 28, 2019$64 $41 $60 $429 $594 
Additions1 — — — 1 
Currency translation adjustment— 1 (13)(39)(51)
January 2, 2021$65 $42 $47 $390 $544 
Accumulated Amortization          
December 29, 2018$39 $20 $12 $16 $87 
Amortization4 2 3 18 27 
Divestiture(12)— — — (12)
Currency translation adjustment— (1)— — (1)
December 28, 2019$31 $21 $15 $34 $101 
Amortization (a)4 3 3 17 27 
Currency translation adjustment— — (3)(4)(7)
January 2, 2021$35 $24 $15 $47 $121 
Intangible assets subject to amortization, net
December 29, 2018$35 $23 $51 $412 $521 
Additions2 — — — 2 
Amortization(4)(2)(3)(18)(27)
Currency translation adjustment— (1)(3)1 (3)
December 28, 2019$33 $20 $45 $395 $493 
Additions1 — — — 1 
Amortization(4)(3)(3)(17)(27)
Currency translation adjustment— 1 (10)(35)(44)
January 2, 2021$30 $18 $32 $343 $423 
(a) The currently estimated aggregate amortization expense for each of the next five succeeding fiscal periods is approximately $28 million per year through 2025.
Intangible assets not subject to amortization
(millions)North AmericaEuropeLatin
America		AMEAConsoli-
dated
December 29, 2018
$1,985 $401 $73 $381 $2,840 
Additions18 — — — 18 
Divestiture(765)— — — (765)
Currency translation adjustment— (9)(3)2 (10)
December 28, 2019
$1,238 $392 $70 $383 $2,083 
Divestiture— (3)— — (3)
Currency translation adjustment— 37 (15)(34)(12)
January 2, 2021$1,238 $426 $55 $349 $2,068 
    
Annual Impairment Testing
At January 2, 2021, goodwill and other intangible assets amounted to $8.3 billion, consisting primarily of goodwill and brands. Within this total, approximately $2.1 billion of non-goodwill intangible assets were classified as indefinite-lived, including $1.7 billion related to trademarks, comprised principally of Pringles and cracker-related trademarks. The majority of all goodwill and other intangible assets are recorded in our North America reporting unit. The Company currently believes the fair value of goodwill and other intangible assets exceeds their carrying value and that those intangibles so classified will contribute indefinitely to cash flows. Through impairment testing performed during the fourth quarter of 2020, no heightened risk of impairment of individual intangible assets or reporting units was identified.

Additionally, the Company has goodwill of $373 million at January 2, 2021 related to the RX reporting unit. In performing the quantitative test of goodwill for RX, fair value was determined based on a calculation which gave consideration to an income approach utilizing the discounted cash flow method and the market approach using the guideline public company and guideline transaction methods. The significant assumptions utilized within the RX discounted cash flow method are forecasted net sales and profitability growth and the discount rate. The Company determined the fair value of RX exceeds the carrying value and no heightened risk of impairment exists for the reporting unit.
In the fourth quarter of 2020 management finalized a decision to reorganize part of its North America operating segment, including the RX reporting unit, effective at the beginning of fiscal 2021. The reorganization further integrates the RX business with the rest of the North American business and changes internal reporting provided to the segment manager. As a result of these changes, the Company has re-evaluated its North American reporting units and determined that effective at the beginning of fiscal 2021, the RX reporting unit will be combined with the North America reporting unit. The Company evaluated the related impacted reporting units for impairment on a before and after basis and concluded that the fair values of each reporting unit exceeded their carrying values.