XML 25 R12.htm IDEA: XBRL DOCUMENT
v3.22.4

GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | 12 Months Ended
--- | ---
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS | GOODWILL AND OTHER INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS Goodwill Results from our annual goodwill impairment test in the fourth quarter of 2022 indicated that no impairment occurred during 2022. The assumptions used in our assessment of these assets were primarily based on Level 3 inputs. During the fourth quarter of 2022, we changed our operating structure to align with our overall business strategy. As a result, our fiscal year 2022 results are reported based on our new reportable segments described in Note 15, "Segment Information. We have recast prior periods to reflect our new operating structure. There was no goodwill impairment recognized as a result of the change in reportable segments. Changes in the net carrying amount of goodwill for 2022 and 2021 by reportable segment are shown below:
(In millions) |  | Materials Group |  | Solutions Group |  |  |  |  |  | Total
Goodwill as of January 2, 2021 |  | $ | 664.6 |  |  | $ | 471.8 |  |  |  |  |  |  | $ | 1,136.4 |
Acquisitions(1) |  | 6.9 |  |  | 774.5 |  |  |  |  |  |  | 781.4 |
Acquisition adjustment(2) |  | 1.2 |  |  | — |  |  |  |  |  |  | 1.2 |
Translation adjustments |  | (27.2) |  |  | (10.3) |  |  |  |  |  |  | (37.5) |
Goodwill as of January 1, 2022 |  | 645.5 |  |  | 1,236.0 |  |  |  |  |  |  | 1,881.5 |
Acquisitions(3) |  | — |  |  | 16.3 |  |  |  |  |  |  | 16.3 |
Acquisition adjustment(4) |  | — |  |  | (.5) |  |  |  |  |  |  | (.5) |
Translation adjustments |  | (26.8) |  |  | (8.1) |  |  |  |  |  |  | (34.9) |
Goodwill as of December 31, 2022 |  | $ | 618.7 |  |  | $ | 1,243.7 |  |  |  |  |  |  | $ | 1,862.4 |
(1)Goodwill acquired related to the acquisitions of Vestcom, JDC and ZippyYum. We expect nearly all of the recognized goodwill related to the Vestcom and JDC acquisitions not to be deductible for income tax purposes and the recognized goodwill related to the ZippyYum acquisition to be deductible for income tax purposes. (2)Measurement period adjustment related to the finalization of the purchase price allocation for the December 2020 acquisition of ACPO, Ltd. (3)Goodwill acquired related to the 2022 Acquisitions. We expect the recognized goodwill related to the 2022 Acquisitions to be non-deductible for income tax purposes. (4)Measurement period adjustment related to the finalization of the purchase price allocation for the August 2021 acquisition of Vestcom. The carrying amounts of goodwill at December 31, 2022 and January 1, 2022 were net of accumulated impairment losses of $820 million recognized in fiscal year 2009 by our Solutions Group reportable segment. Indefinite-Lived Intangible Assets In connection with our acquisition of Vestcom, we acquired approximately $135 million of identifiable indefinite lived intangible assets consisting of trade names and trademarks. We utilized the income approach to estimate the fair values of acquired identifiable intangibles, primarily using Level 3 inputs. We applied significant judgment in determining the fair value of intangible assets, which included our estimates and assumptions with respect to estimated future revenue and related profit margins, royalty rates, discount rates and economic lives assigned to the acquired intangible assets. Results from our annual indefinite-lived intangible assets impairment test in the fourth quarter indicated that no impairment occurred in 2022. The carrying value of indefinite-lived intangible assets resulting from business acquisitions, consisting of trade names and trademarks, was $154.7 million and $155.6 million at December 31, 2022 and January 1, 2022, respectively. Finite-Lived Intangible Assets In connection with the 2022 Acquisitions, we acquired approximately $21 million of identifiable finite-lived intangible assets, which consisted of patented and other developed technology as well as customer relationships. In connection with our acquisition of Vestcom, we acquired approximately $592 million of identifiable finite-lived intangible assets, which consisted of customer relationships and patented and other developed technology. We utilized the income approach to estimate the fair values of acquired identifiable intangibles, primarily using Level 3 inputs. We applied significant judgment in determining the fair value of intangible assets, which included our estimates and assumptions with respect to estimated future revenue and related profit margins, customer retention rates, technology migration curves, royalty rates, discount rates and economic lives assigned to the acquired intangible assets. The table below summarizes the amounts and weighted average useful lives of these intangible assets as of the acquisition date.
|  | Amount (in millions) |  | Weighted average amortization period (in years)
Customer relationships |  | $ | 492.0 |  |  | 12
Patented and other developed technology |  | 100.4 |  |  | 7
The intangible assets from the Other 2021 Acquisitions were not material to the Consolidated Financial Statements. Refer to Note 2, “Acquisitions,” for more information. The table below sets forth our finite-lived intangible assets resulting from business acquisitions at December 31, 2022 and January 1, 2022, which continue to be amortized.
|  | 2022 |  | 2021
(In millions) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer relationships |  | $ | 852.2 |  |  | $ | 330.1 |  |  | $ | 522.1 |  |  | $ | 862.5 |  |  | $ | 277.2 |  |  | $ | 585.3 |
Patented and other developed technology |  | 261.9 |  |  | 104.3 |  |  | 157.6 |  |  | 247.7 |  |  | 84.7 |  |  | 163.0 |
Trade names and trademarks |  | 14.4 |  |  | 10.3 |  |  | 4.1 |  |  | 14.8 |  |  | 9.7 |  |  | 5.1 |
Other intangibles |  | 3.2 |  |  | 1.4 |  |  | 1.8 |  |  | 3.2 |  |  | .8 |  |  | 2.4 |
Total |  | $ | 1,131.7 |  |  | $ | 446.1 |  |  | $ | 685.6 |  |  | $ | 1,128.2 |  |  | $ | 372.4 |  |  | $ | 755.8 |
Amortization expense for finite-lived intangible assets resulting from business acquisitions was $81.8 million for 2022, $44.6 million for 2021 and $19.9 million for 2020. We expect estimated amortization expense for finite-lived intangible assets resulting from business acquisitions for each of the next five fiscal years and thereafter to be as follows:
(In millions) |  | Estimated Amortization Expense
2023 |  | $ | 80.9 |
2024 |  | 79.2 |
2025 |  | 78.4 |
2026 |  | 75.5 |
2027 |  | 75.2 |
2028 and thereafter |  | 296.4 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration