Goodwill and Other Intangible Assets

9 Months Ended

Jan. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

A summary of changes in goodwill is as follows:


	U.S. Retail Pet Foods		U.S. Retail Coffee		U.S. Retail Consumer Foods		International and Away From Home		Total
Balance at May 1, 2020	$	2,442.3	$	2,090.9	$	1,358.2	$	413.1	$	6,304.5
Divestitures	(74.1)		—		(210.7)		(16.9)		(301.7)
Other (A)	—		—		—		14.1		14.1
Balance at January 31, 2021 (B)	$	2,368.2	$	2,090.9	$	1,147.5	$	410.3	$	6,016.9

(A)The amounts classified as other represent foreign currency exchange adjustments.

(B)Included in goodwill as of May 1, 2020, are accumulated goodwill impairment charges of $242.9. No impairment charges have been recognized in 2021.

The following table summarizes our other intangible assets and related accumulated amortization and impairment charges including foreign currency exchange adjustments.


	January 31, 2021						April 30, 2020
	Acquisition Cost		Accumulated Amortization/Impairment Charges/Foreign Currency Exchange		Net		Acquisition Cost		Accumulated Amortization/Impairment Charges/Foreign Currency Exchange		Net
Finite-lived intangible assets subject to amortization:
Customer and contractual relationships	$	4,471.1	$	1,497.2	$	2,973.9	$	4,471.1	$	1,353.0	$	3,118.1
Patents and technology	168.5		145.1		23.4		168.5		138.4		30.1
Trademarks	348.0		177.9		170.1		662.0		311.0		351.0
Total intangible assets subject to amortization	$	4,987.6	$	1,820.2	$	3,167.4	$	5,301.6	$	1,802.4	$	3,499.2
Indefinite-lived intangible assets not subject to amortization:
Trademarks	$	3,158.1	$	226.1	$	2,932.0	$	3,158.1	$	228.3	$	2,929.8
Total other intangible assets	$	8,145.7	$	2,046.3	$	6,099.4	$	8,459.7	$	2,030.7	$	6,429.0

The decrease in finite-lived intangible assets from April 30, 2020, is primarily due to the divestitures of the Crisco and Natural Balance trademarks during the third quarter of 2021. For additional information, see Note 4: Divestitures.

We review goodwill and other indefinite-lived intangible assets for impairment at least annually on February 1, and more often if indicators of impairment exist. As a result of the divestitures during the third quarter of 2021, we reviewed all impacted reporting units and concluded that the estimated fair values were in excess of the carrying values as of the date of the divestitures. Furthermore, there were no other indicators of impairment, and as a result, we do not believe that our reporting units or any of our material indefinite-lived intangible assets are more likely than not impaired as of January 31, 2021. However, the goodwill and indefinite-lived trademarks within the U.S. Retail Pet Foods segment remain susceptible to future impairment charges due to the narrow differences between fair value and carrying value. Any significant adverse change in our near or long-term projections or macroeconomic conditions could result in future impairment charges. The carrying values of the goodwill and indefinite-lived intangible assets within the U.S. Retail Pet Foods segment were $2.4 billion and $1.4 billion, respectively, as of January 31, 2021.

In addition, we continue to evaluate the nature and extent to which the novel coronavirus (“COVID-19”) could impact our business, specifically as it relates to the fair value of our goodwill and indefinite-lived intangible assets. While we have concluded there were no indicators of impairment as of January 31, 2021, any significant sustained adverse change in consumer purchasing behaviors, government restrictions, financial results, or macroeconomic conditions could result in future impairment, specifically as it relates to the Away From Home reporting unit, which has experienced a decline in demand as a result of COVID-19. As of January 31, 2021, the goodwill related to the Away From Home reporting unit represented approximately 65 percent of the goodwill within the combined International and Away From Home operating segments.

During the third quarter of 2020, we recognized an impairment charge of $52.4 related to the recently divested Natural Balance brand within the U.S. Retail Pet Foods segment due to a decline in the 2020 and long-term net sales expectations and the royalty rate used in the interim analysis, primarily driven by the market environment and re-positioning of this brand within the Pet Foods brand portfolio. This charge was included as a noncash charge in our Condensed Statement of Consolidated Income. Additionally, we reclassified the Natural Balance brand as a finite-lived intangible asset as of February 1, 2020, as a result of a change in our long-term strategic expectations for the brand.