Intangible Assets

6 Months Ended

Jun. 17, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

During the 12 weeks ended June 11, 2022, macroeconomic factors, sanctions and other regulations as a result of the Russia-Ukraine conflict indicated a material deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in Russia, primarily assumptions underlying the weighted-average cost of capital. These factors required us to perform a quantitative assessment, despite the absence of a material adverse impact on these assets’ financial performance (e.g., sales, operating profit, cash flows).

The fair value of our indefinite-lived intangible assets in Russia was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 measurement. We determined that the carrying value exceeded the fair value, with the decrease in the fair value primarily attributable to a significant increase in the weighted-average cost of capital, which reflects the macroeconomic uncertainty in Russia. As a result of the quantitative assessment, in the 12 and 24 weeks ended June 11, 2022, we recorded pre-tax impairment charges of $1.2 billion ($958 million after-tax or $0.69 per share) in impairment of intangible assets, related to our juice and dairy brands in Russia in our Europe division. See Note 1 for further information.

During the 24 weeks ended June 11, 2022, we repositioned or discontinued certain juice and dairy brands in Russia in our Europe division. As a result, we recognized pre-tax impairment charges (included in brand portfolio impairment charges) of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets, primarily related to indefinite-lived intangible assets. See Note 1 for further information.

For further information on indefinite-lived intangible assets, see Notes 2 and 4 to our consolidated financial statements in our 2022 Form 10-K.

A summary of our amortizable intangible assets is as follows:


	6/17/2023						12/31/2022
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights	$	840	$	(206)	$	634	$	837	$	(200)	$	637
Customer relationships	555		(245)		310		571		(237)		334
Brands	1,085		(974)		111		1,097		(973)		124
Other identifiable intangibles	443		(266)		177		447		(265)		182
Total	$	2,923	$	(1,691)	$	1,232	$	2,952	$	(1,675)	$	1,277

The change in the book value of indefinite-lived intangible assets is as follows:


	Balance 12/31/2022		Acquisitions		Translation and Other		Balance 6/17/2023

FLNA
Goodwill	$	451	$	—	$	3	$	454
Brands	251		—		—		251
Total	702		—		3		705
QFNA
Goodwill	189		—		—		189
Total	189		—		—		189
PBNA
Goodwill	11,947		3		10		11,960
Reacquired franchise rights	7,061		62		20		7,143
Acquired franchise rights (a)	1,758		—		(34)		1,724
Brands	2,508		—		—		2,508
Total	23,274		65		(4)		23,335
LatAm
Goodwill	436		—		17		453
Brands	75		—		4		79
Total	511		—		21		532
Europe
Goodwill	3,646		—		(132)		3,514
Reacquired franchise rights	421		—		(10)		411
Acquired franchise rights	148		—		—		148
Brands	1,664		—		10		1,674
Total	5,879		—		(132)		5,747
AMESA
Goodwill	1,015		—		(91)		924
Brands	156		—		(23)		133
Total	1,171		—		(114)		1,057
APAC
Goodwill	518		—		(15)		503
Brands	267		—		(8)		259
Total	785		—		(23)		762

Total goodwill	18,202		3		(208)		17,997
Total reacquired franchise rights	7,482		62		10		7,554
Total acquired franchise rights	1,906		—		(34)		1,872
Total brands	4,921		—		(17)		4,904
Total	$	32,511	$	65	$	(249)	$	32,327

(a)Translation and other primarily reflects adjustments to previously recorded amounts related to our agreement with Celsius Holdings, Inc. to distribute Celsius energy drinks in the United States.