Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets, Net

Goodwill and Intangible Assets, Net

11.  Goodwill and Intangible Assets, Net

Goodwill consists of the following:

	December 31, 2023
	Automotive		Food Packaging		Home Fashion		Pharma		Consolidated
	(in millions)
Gross carrying amount, Jan 1	$	337	$	6	$	22	$	13	$	378
Foreign Exchange		—		—		—		—		—
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, 2022
	Automotive		Food Packaging		Home Fashion		Pharma		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

Intangible assets, net consists of the following:

	December 31, 2023						December 31, 2022
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Value		Amount		Amortization		Value
	(in millions)
Definite-lived intangible assets:
Customer relationships	$	392	$	(229)	$	163	$	393	$	(212)	$	181
Developed technology		254		(90)		164		254		(62)		192
Other		164		(101)		63		167		(90)		77
	$	810	$	(420)	$	390	$	814	$	(364)	$	450
Indefinite-lived intangible assets					$	76					$	83
Intangible assets, net					$	466					$	533

Amortization expense associated with definite-lived intangible assets for the years ended December 31, 2023, 2022 and 2021 was $58 million, $61 million and $62 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)
2024	$	57
2025		56
2026		36
2027		35
2028		31
Thereafter		175
	$	390

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 2023, our Automotive segment performed a quantitative impairment analysis at its reporting unit and determined that the fair value was higher than the carrying value and therefore, no impairment was required.

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

Impairment of Intangible Assets

In conjunction with our goodwill impairment test, we also performed a trademarks and brand names impairment analysis in accordance with FASB ASC 350, Intangibles-Goodwill and other, as of December 31, 2023. Our impairment analyses compare the fair values of these assets to the related carrying values, and impairment charges are recorded for any excess of carrying values over fair values. The fair values of these assets are based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets. The inputs used to determine the fair values of tradenames and trademarks are (i) the projected revenue growth, (ii) the royalty rate, (iii) the discount rate, and (iv) the tax rate. Following this analysis, our Automotive segment recognized a $7 million impairment charge in the fourth quarter of 2023, resulting from a decrease in projected revenue growth.