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Goodwill and Acquired Intangible Assets | 3 Months Ended
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Mar. 30, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill The carrying value of goodwill by segment was as follows (in millions):
| Digital Imaging |  | Instrumentation |  | Aerospace and Defense Electronics |  | Engineered Systems |  | Total
Balance at December 29, 2024 | $ | 6,854.6 |  |  | $ | 955.3 |  |  | $ | 163.0 |  |  | $ | 17.6 |  |  | $ | 7,990.5 |
Current year acquisitions | — |  |  | — |  |  | 456.6 |  |  | — |  |  | 456.6 |
Foreign currency changes and other | 63.6 |  |  | 10.6 |  |  | 12.7 |  |  | — |  |  | 86.9 |
Balance at March 30, 2025 | $ | 6,918.2 |  |  | $ | 965.9 |  |  | $ | 632.3 |  |  | $ | 17.6 |  |  | $ | 8,534.0 |
Acquired intangible assets Acquired intangible assets consisted of the following (in millions):
|  | March 30, 2025 |  | December 29, 2024
|  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Proprietary technology |  | $ | 1,830.5 |  |  | $ | 859.1 |  |  | $ | 971.4 |  |  | $ | 1,665.5 |  |  | $ | 796.6 |  |  | $ | 868.9 |
Customer list/relationships |  | 655.6 |  |  | 266.3 |  |  | 389.3 |  |  | 599.3 |  |  | 252.9 |  |  | 346.4 |
Patents |  | 0.6 |  |  | 0.6 |  |  | — |  |  | 0.6 |  |  | 0.6 |  |  | — |
Non-compete agreements |  | 0.9 |  |  | 0.9 |  |  | — |  |  | 0.9 |  |  | 0.9 |  |  | — |
Trademarks |  | 48.4 |  |  | 9.4 |  |  | 39.0 |  |  | 12.2 |  |  | 7.7 |  |  | 4.5 |
Backlog |  | 16.2 |  |  | 16.2 |  |  | — |  |  | 16.0 |  |  | 16.0 |  |  | — |
Total intangibles subject to amortization |  | 2,552.2 |  |  | 1,152.5 |  |  | 1,399.7 |  |  | 2,294.5 |  |  | 1,074.7 |  |  | 1,219.8 |
Intangibles not subject to amortization: |  |  |  |  |  |  |  |  |  |  |  |
Trademarks |  | 788.1 |  |  | — |  |  | 788.1 |  |  | 793.1 |  |  | — |  |  | 793.1 |
Total acquired intangible assets |  | $ | 3,340.3 |  |  | $ | 1,152.5 |  |  | $ | 2,187.8 |  |  | $ | 3,087.6 |  |  | $ | 1,074.7 |  |  | $ | 2,012.9 |
An evaluation of the carrying value of goodwill and indefinite-lived intangibles is required to be performed on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Based on the results of the Company’s annual assessment in the fourth quarter of 2024, all reporting units with the exception of the FLIR reporting unit in the Digital Imaging segment had estimated fair values that significantly exceeded their respective carrying value. At the assessment date in the fourth quarter of 2024, the estimated fair value of the FLIR reporting unit exceeded its carrying value by approximately $420 million, or 5%, and the FLIR reporting unit had $5,856.5 million of goodwill at the prior year assessment date. As of March 30, 2025, the FLIR reporting unit had $5,873.4 million of goodwill, with the change in value from the prior year assessment date related to the impact of foreign currency translation. Although the assumptions used in the Company’s prior year discounted cash flow model and market approach are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in determining the expected results of the FLIR reporting unit. Changes in forecast estimates or the application of alternative assumptions could produce significantly different results. The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. Although no impairment existed for the FLIR reporting unit as of the prior year assessment date, a non-cash impairment of goodwill could result from a number of circumstances, including different assumptions used in determining the fair value of the reporting unit, changes to customer spending priorities, or a sharp increase in interest rates without a corresponding increase in future net sales. For all reporting units, including the FLIR reporting unit, there have been no events or changes in circumstances which indicate that it is more likely than not that the fair value of the reporting unit is below its carrying value. As such, no interim impairment review was required. The Company will perform its annual analysis during the fourth quarter of 2025. Based on the results of the Company’s annual assessment in the fourth quarter of 2024, the estimated fair value of all material indefinite-lived trademarks, with the exception of the FLIR indefinite-lived trademark, significantly exceeded their respective carrying value. At the prior year annual assessment date, the FLIR indefinite-lived trademark value was reduced to $635.8 million, which represented the estimated fair value of the asset as of the prior year assessment date. The most significant assumptions utilized in the determination of the fair value of the FLIR trademark were the net sales growth rates (including residual growth rates), discount rate, and royalty rate. Although the FLIR sales forecasts were based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in determining the expected results of the FLIR business. Changes in sales forecast estimates or the application of alternative assumptions could produce significantly different results. The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. The royalty rate was driven by historical and estimated future profitability of the underlying FLIR business. The royalty rate may be impacted by significant adverse changes in long-term operating margins. Subsequent to the assessment made in the prior year, additional non-cash impairment of the trademark could result from a number of circumstances, including different assumptions used in determining the fair value of the trademark, changes to customer spending priorities, or a sharp increase in interest rates without a corresponding increase in future net sales. For all indefinite-lived trademarks, including the FLIR trademark, there have been no events or changes in circumstances which indicate that it is more likely than not that the fair value of the trademark is below its carrying value. As such, no interim impairment review was required. The Company will perform its annual analysis during the fourth quarter of 2025.

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