DuPont de Nemours Inc

NOTE 14 -GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023:

1. On August 1, 2023, DuPont completed the acquisition of Spectrum, which is included in the Electronics & Industrial segment. See Note 3 for additional information.

2. On July 28, 2024, DuPont completed the acquisition of Donatelle Plastics, which is included in the Electronics & Industrial segment. See Note 3 for additional information.

3. In the third quarter 2024, the Company finalized the working capital settlements which impacted the residual goodwill recorded. See Note 3 for additional information.

The Company tests goodwill for impairment annually during the fourth quarter, or more frequently when events or changes in circumstances indicate that the fair value is below carrying value. As a result of the related acquisition method of accounting in connection with the DWDP Merger, EIDP’s assets and liabilities were measured at fair value resulting in increases to the Company’s goodwill and other intangible assets. The fair value valuation increased the risk that any declines in financial projections, including changes to key assumptions, could have a material, negative impact on the fair value of the Company’s reporting units and assets, and therefore could result in an impairment. The Company’s significant assumptions in these analyses include projected revenue growth, EBITDA margin, weighted average cost of capital and terminal growth rates and the tax rate for the income approach and projected EBITDA and derived multiples from comparable market transactions for the market approach.

The Company's estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and planned business strategies. Should future cash flows differ materially from the Company's estimate, or should there be a future market downturn, the Company may be required to perform additional impairment analyses that could result in a non-cash goodwill impairment charge.

As part of its annual impairment test at October 1, 2024, the Company performed qualitative testing onseven of its reporting units and performed quantitative testing onone of its reporting units. The qualitative evaluation is an assessment of factors, including reporting unit or asset specific operating results and cost factors, as well as industry, market and macroeconomic conditions, to determine whether it is more likely than not (more than 50 percent) that the fair value of a reporting unit or asset is less than the respective carrying amount, including goodwill. The results of the qualitative assessments indicated that it is not more likely than not that the fair values of theseven reporting units were less than their carrying values. The Protection reporting unit (aggregation of the Safety and Shelter businesses), within the Water & Protection segment, was tested by applying the quantitative assessment. The Company used a combination of discounted cash flow models (a form of the income approach) and the Guideline Public Company Method (a form of the market approach). No impairments were identified. The estimated fair value of the Protection reporting unit, exceeded its carrying value by approximately five percent. Given this level of fair value, the reporting unit remains at risk for future impairment. Should adverse impacts from macroeconomic conditions, or other events occur indicating that the estimated future cash flows of the reporting unit have declined and the reporting unit is unable to meet or exceed its projections, the Company may be required to record future non-cash impairment charges related to goodwill. As of the date of the quantitative assessment, the carrying amount of goodwill within this reporting unit was $4.8 billion.

Effective as of January 1, 2024, Electronics & Industrial realigned certain of its product lines making up its lines of business (Industrial Solutions, Interconnect Solutions and Semiconductor Technologies). During the first quarter of 2024, the realignment of the businesses within Electronics & Industrial served as a triggering event requiring the Company to perform an impairment analysis related to goodwill carried by certain reporting units as of January 1, 2024, prior to the realignment. As part of the realignment, the Company assessed and re-defined certain reporting units effective January 1, 2024, including reallocation of goodwill on a relative fair value basis, as applicable, to reporting units impacted. Goodwill impairment analyses were then performed for reporting units impacted in the Electronics and Industrial segment and no impairments were identified. The fair value of each reporting unit tested was estimated using a combination of a discounted cash flow model and market approach. The Company’s assumptions in estimating fair value include projected revenue growth, gross margins, selling, administrative, research and development expenses (SARD), capital expenditures, weighted average cost of capital, terminal growth rates, and the tax rate for the income approach and projected EBITDA and derived multiples from comparable market transactions for the market approach.

In connection with the preparation of the full year 2023 financial statements, the continuation of previously disclosed challenging macroeconomic environment in the residential, non-residential, and the repair and remodel construction markets, as well as incremental channel inventory destocking in healthcare and industrial end-markets served as a triggering event requiring the Company to perform an impairment analysis of the goodwill associated with its Protection reporting unit as of December 31, 2023 As a result of the analysis performed, the Company concluded that the carrying amount of the Protection reporting unit exceeded its fair value resulting in a non-cash goodwill impairment charge of $804 million, which is recorded within “Goodwill impairment charge” on the Consolidated Statements of Operations for the year ended December 31, 2023.

The gross carrying amounts and accumulated amortization of other intangible assets by major class are as follows:

During the fiscal year 2024, the Company retired fully amortized assets of $145 million of developed technology intangible assets and $27 million of trademarks/tradename intangible assets.

During the fiscal year 2023, the Company retired fully amortized assets of $399 million of customer-related intangible assets and $25 million of other intangible assets.

The following table provides the net carrying value of other intangible assets:

1.Includes intangible assets acquired as part of the Donatelle and Spectrum Acquisitions. See Note 3 for additional information.

Total estimated amortization expense for the next five fiscal years is as follows: