Goodwill and Other Intangible Assets

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill by segment for the six months ended July 2, 2022, are as follows:


(Amounts in millions)	Commercial & Industrial Group		Snap-on Tools Group		Repair Systems & Information Group		Total
Balance as of January 1, 2022	$	325.8	$	12.4	$	778.3	$	1,116.5
Currency translation	(22.7)		—		(14.7)		(37.4)
Acquisition-related adjustments	(0.5)		—		(32.6)		(33.1)

Balance as of July 2, 2022	$	302.6	$	12.4	$	731.0	$	1,046.0

Goodwill of $1,046.0 million as of July 2, 2022, included $118.2 million from the acquisition of Dealer-FX, $10.2 million from the acquisition of Pradines and $3.3 million from the acquisition of AutoCrib Germany. In the first quarter of 2022, the purchase accounting valuations for the acquired net assets, including deferred tax assets, of Dealer-FX were completed, resulting in a reduction of goodwill of $32.6 million from 2021 year end. In the second quarter of 2022, the purchase accounting valuations for the acquired net assets of Pradines were completed, resulting in a reduction of goodwill of $0.5 million from 2021 year end. 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:


	July 2, 2022				January 1, 2022
(Amounts in millions)	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Amortized other intangible assets:
Customer relationships	$	212.6	$	(145.1)	$	217.8	$	(142.1)
Developed technology	35.9		(24.3)		36.6		(23.2)
Internally developed software	180.6		(138.0)		182.7		(139.1)
Patents	46.4		(25.0)		45.7		(25.1)
Trademarks	3.8		(2.3)		3.9		(2.3)
Other	7.9		(4.0)		8.3		(4.1)
Total	487.2		(338.7)		495.0		(335.9)
Non-amortized trademarks	135.0		—		142.6		—
Total other intangible assets	$	622.2	$	(338.7)	$	637.6	$	(335.9)

As of July 2, 2022, the gross carrying value of intangible assets includes $28.4 million of customer relationships, $14.8 million of developed technology and a $17.7 million non-amortized trademark related to the Dealer-FX acquisition.

Snap-on completed its annual impairment testing of goodwill and other indefinite-lived intangible assets in the second quarter of 2022, and the testing did not result in any impairment. Provision for impairment of goodwill and/or other intangible assets could arise in a future period 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 July 2, 2022, the company had no accumulated impairment losses.

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


			In Years
Customer relationships			14
Developed technology			5
Internally developed software			6
Patents			14
Trademarks			9
Other			39

Snap-on is amortizing its customer relationships on both an accelerated and straight-line basis over a 14 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 12 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 14 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 $7.2 million and $14.4 million for the respective three and six month periods ended July 2, 2022, and $6.3 million and $12.3 million for the respective three and six month periods ended July 3, 2021. Based on current levels of amortizable intangible assets and estimated weighted-average useful lives, estimated annual amortization expense is expected to be $28.4 million in 2022, $25.8 million in 2023, $19.6 million in 2024, $14.1 million in 2025, $10.9 million in 2026, and $9.7 million in 2027.