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Goodwill and Purchased Intangible Assets | 9 Months Ended
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Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Purchased Intangible Assets | 12. Goodwill and Purchased Intangible Assets Goodwill and other indefinite-lived intangible assets are not amortized but are assessed for impairment annually or more frequently if potential interim indicators exist that could result in impairment. The Company performs its annual impairment test in the fourth quarter. During the 2023 annual impairment review, the estimated fair value of the Pratt Miller reporting unit exceeded its carrying value by approximately 10%. During the second quarter of 2024, the Company assessed Pratt Miller for impairment as a result of unfavorable performance compared to forecast and adverse market conditions related to mobility and motorsports leading to a decline in the Company's expectations for future performance. The Company used a combination of the income and market approaches. A weighted-average cost of capital of 13.0% (14.0% at October 1, 2023) and a terminal growth rate of 3.0% (3.0% at October 1, 2023) were used by the Company to estimate the fair value of the reporting unit. Under the market approach, the Company derived the fair value of the reporting unit based on an earnings multiple of comparable publicly traded companies. Changes in estimates or the application of alternative assumptions could have produced significantly different results, or could result in additional impairments in the future. As a result of the assessment, the Company recorded an impairment charge of $38.7 million within "Intangible asset impairments" in the Condensed Consolidated Statement of Income during the second quarter of 2024. The Company acquired AUSA on September 3, 2024. See Note 2 of the Condensed Consolidated Financial Statements for additional information. The following table presents changes in goodwill during the nine months ended September 30, 2024 (in millions):
|  | Access |  |  | Vocational |  |  | Corporate and Other |  |  | Total |
Net goodwill at December 31, 2023 |  | $ | 979.9 |  |  | $ | 392.1 |  |  | $ | 44.4 |  |  | $ | 1,416.4 |
Impairment |  |  | — |  |  |  | — |  |  |  | (38.7 | ) |  |  | (38.7 | )
Foreign currency translation |  |  | 3.2 |  |  |  | — |  |  |  | — |  |  |  | 3.2 |
Acquisitions |  |  | 55.3 |  |  |  | 1.7 |  |  |  | — |  |  |  | 57.0 |
Net goodwill at September 30, 2024 |  | $ | 1,038.4 |  |  | $ | 393.8 |  |  | $ | 5.7 |  |  | $ | 1,437.9 |
The following table presents details of the Company’s goodwill allocated to the reportable segments (in millions):
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | Gross |  |  | Accumulated Impairment |  |  | Net |  |  | Gross |  |  | Accumulated Impairment |  |  | Net |
Access |  | $ | 1,970.5 |  |  | $ | (932.1 | ) |  | $ | 1,038.4 |  |  | $ | 1,912.0 |  |  | $ | (932.1 | ) |  | $ | 979.9 |
Vocational |  |  | 563.2 |  |  |  | (169.4 | ) |  |  | 393.8 |  |  |  | 561.5 |  |  |  | (169.4 | ) |  |  | 392.1 |
Corporate and other |  |  | 44.4 |  |  |  | (38.7 | ) |  |  | 5.7 |  |  |  | 44.4 |  |  |  | — |  |  |  | 44.4 |
|  | $ | 2,578.1 |  |  | $ | (1,140.2 | ) |  | $ | 1,437.9 |  |  | $ | 2,517.9 |  |  | $ | (1,101.5 | ) |  | $ | 1,416.4 |
Pratt Miller's purchased intangibles were also assessed for impairment during the second quarter of 2024. The Company used the relief-from-royalty and multiple-period excess earnings approaches to estimate the fair value of a trade name and customer relationship asset, respectively. As a result of the assessments, the Company recorded impairment charges of $8.8 million related to the trade name and $4.1 million related to the customer relationship within "Intangible asset impairments" in the Condensed Consolidated Statement of Income during the second quarter of 2024. Details of the Company’s total purchased intangible assets are as follows (in millions):
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | Gross |  |  | Accumulated Amortization |  |  | Net |  |  | Gross |  |  | Accumulated Amortization |  |  | Net |
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 826.4 |  |  | $ | (596.9 | ) |  | $ | 229.5 |  |  | $ | 819.5 |  |  | $ | (574.6 | ) |  | $ | 244.9 |
Trade names |  |  | 121.9 |  |  |  | (16.7 | ) |  |  | 105.2 |  |  |  | 118.6 |  |  |  | (7.5 | ) |  |  | 111.1 |
Technology-related |  |  | 170.4 |  |  |  | (105.2 | ) |  |  | 65.2 |  |  |  | 166.5 |  |  |  | (108.2 | ) |  |  | 58.3 |
Distribution network |  |  | 55.3 |  |  |  | (39.4 | ) |  |  | 15.9 |  |  |  | 55.3 |  |  |  | (38.4 | ) |  |  | 16.9 |
Other |  |  | 29.6 |  |  |  | (23.5 | ) |  |  | 6.1 |  |  |  | 37.5 |  |  |  | (25.2 | ) |  |  | 12.3 |
|  |  | 1,203.6 |  |  |  | (781.7 | ) |  |  | 421.9 |  |  |  | 1,197.4 |  |  |  | (753.9 | ) |  |  | 443.5 |
Non-amortizable trade names |  |  | 386.6 |  |  |  | — |  |  |  | 386.6 |  |  |  | 386.7 |  |  |  | — |  |  |  | 386.7 |
|  | $ | 1,590.2 |  |  | $ | (781.7 | ) |  | $ | 808.5 |  |  | $ | 1,584.1 |  |  | $ | (753.9 | ) |  | $ | 830.2 |
Amortization of purchased intangible assets was $15.4 million and $46.7 million (including $2.0 million and $6.2 million recognized in "Cost of sales" in the Condensed Consolidated Statements of Income) for the three and nine months ended September 30, 2024, respectively. Estimated future amortization expense for purchased intangible assets is as follows (in millions):
Years: |  |  |
2024 (remaining three months) |  | $ | 16.1 |
2025 |  |  | 55.8 |
2026 |  |  | 53.0 |
2027 |  |  | 53.0 |
2028 |  |  | 49.3 |
2029 |  |  | 45.9 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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