Company: CHD
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000950170-25-019801
Chunk: 81

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1B
Chunk 81
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-lived trade names are reviewed at least annually for possible impairment.

Our impairment analysis is based on a discounted cash flow approach that requires significant judgment with respect to unit volume, revenue and expense growth rates, and the selection of an appropriate discount rate and royalty rate.  Management uses estimates based on expected trends in making these assumptions.  With respect to goodwill, impairment occurs when the carrying value of the reporting unit exceeds the discounted present value of cash flows for that reporting unit.  For trade names and other intangible assets, an impairment charge is recorded for the difference between the carrying value and the net present value of estimated future cash flows, which represents the estimated fair value of the asset. Fair value for indefinite-lived intangible assets is estimated based on a "relief from royalty" or "excess earnings" discounted cash flow method, which contains numerous variables that are subject to change as business conditions change, and therefore could impact fair values in the future.  Judgment is required in assessing whether assets may have become impaired between annual valuations.  Indicators such as unexpected adverse economic factors, unanticipated technological change, distribution losses, or competitive activities and acts by governments and courts may indicate that an asset has become impaired.  

The result of our annual goodwill impairment test determined that the estimated fair value substantially exceeded the carrying values of all reporting units.  We determined that the fair value of all indefinite-lived intangible assets for each of the years in the three-year period ended December 31, 2024, exceeded their respective carrying values based upon the forecasted cash flows and profitability, with the exception of our VMS business described below. 

During the third quarter of 2024, we continued to experience a decline in market share and a deterioration in the financial performance of our VMS business, which includes the VITAFUSION and L'IL CRITTERS trade name, primarily due to significant product competition coming from new category entrants, including private label.  The continued decline in profitability caused management to reassess its 

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CHURCH & DWIGHT CO., INC AND SUBSIDIARIES(Dollars in millions, except share and per share data) 

long-term strategy and financial outlook of the business.  The revised financial outlook reflects lower estimates of future sales growth and cash flows which resulted in a triggering event in the third quarter.  The triggering event required the Company to review the carrying value of assets supporting the business.  The assets supporting the VMS business include the VITAFUSION and L'IL