Goodwill and Other Intangible Assets

9 Months Ended

Oct. 02, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill by segment for the nine months ended October 2, 2021, are as follows:


(Amounts in millions)	Commercial & Industrial Group		Snap-on Tools Group		Repair Systems & Information Group		Total
Balance as of January 2, 2021	$	331.2	$	12.4	$	638.8	$	982.4
Currency translation	(12.6)		—		(8.0)		(20.6)
Acquisitions and related adjustments	14.0		—		195.2		209.2

Balance as of October 2, 2021	$	332.6	$	12.4	$	826.0	$	1,171.0

Goodwill of $1,171.0 million as of October 2, 2021, included $195.2 million, on a preliminary basis, from the acquisition of Dealer-FX, $10.7 million, on a preliminary basis, from the acquisition of Pradines and $3.3 million, on a preliminary basis, from the acquisition of AutoCrib Germany. The goodwill from Dealer-FX is included in the Repair Systems & Information Group and the goodwill from Pradines and AutoCrib Germany is included in the Commercial & Industrial Group. See Note 3 for additional information on acquisitions.

Additional disclosures related to other intangible assets are as follows:


	October 2, 2021				January 2, 2021
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Amortized other intangible assets:
Customer relationships	$	190.0	$	(137.8)	$	191.5	$	(130.1)
Developed technology	21.8		(20.6)		21.8		(19.9)
Internally developed software	180.7		(136.2)		172.2		(128.0)
Patents	44.4		(25.0)		43.2		(25.3)
Trademarks	4.0		(2.4)		3.9		(2.4)
Other	8.2		(4.0)		8.2		(3.9)
Total	449.1		(326.0)		440.8		(309.6)
Non-amortized trademarks	126.5		—		129.6		—
Total other intangible assets	$	575.6	$	(326.0)	$	570.4	$	(309.6)

Snap-on completed its annual impairment testing of goodwill and other indefinite-lived intangible assets in the second quarter of 2021, and the testing did not result in any impairment. Provision for impairment of goodwill and/or other intangible assets in a future period could arise due to significant and unanticipated changes in circumstances, such as declines in profitability and cash flow due to significant and long-term deterioration in macroeconomic, industry and market conditions, the loss of key customers, changes in technology or markets, significant changes in key personnel or litigation, a significant and sustained decrease in share price and/or other events, including effects from the sale or disposal of a reporting unit. As of October 2, 2021, the company had no accumulated impairment losses.

The weighted-average amortization periods related to other intangible assets are as follows:


			In Years
Customer relationships			15
Developed technology			3
Internally developed software			6
Patents			7
Trademarks			5
Other			39

Snap-on is amortizing its customer relationships on both an accelerated and straight-line basis over a 15-year weighted-average life; the remaining intangibles are amortized on a straight-line basis. The weighted-average amortization period for all amortizable intangibles on a combined basis is 11 years.

The company’s customer relationships generally have contractual terms of three to five years and are typically renewed without significant cost to the company. The weighted-average 15-year life for customer relationships is based on the company’s historical renewal experience. Intangible asset renewal costs are expensed as incurred.

The aggregate amortization expense was $6.4 million and $18.7 million for the respective three and nine month periods ended October 2, 2021, and $5.8 million and $17.2 million for the respective three and nine month periods ended September 26, 2020. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $24.8 million in 2021, $22.7 million in 2022, $19.1 million in 2023, $13.5 million in 2024, $8.8 million in 2025, and $8.1 million in 2026.