XML 23 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
GOODWILL AND OTHER INTANGIBLE ASSETS
 6 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill, by reportable segment, for the six months ended June 30, 2018, were as follows:
 
December 31,
2017
 
Goodwill
Resulting from
Business
Combinations (1)
 
Impairments
 
Foreign
Currency
Translation
 
June 30,
2018
HVAC segment
 

 
 
 
 

 
 

 
 

Gross goodwill
$
263.7

 
$
—

 
$
—

 
$
(1.1
)
 
$
262.6

Accumulated impairments
(144.7
)
 
—

 
—

 
0.1

 
(144.6
)
Goodwill
119.0

 
—

 
—

 
(1.0
)
 
118.0

 
 
 
 
 
 
 
 
 
 
Detection and Measurement segment
 

 
 

 
 

 
 

 
 

Gross goodwill
216.6

 
48.4

 
—

 
(0.6
)
 
264.4

Accumulated impairments
(136.0
)
 
—

 
—

 
0.6

 
(135.4
)
Goodwill
80.6

 
48.4

 
—

 
—

 
129.0

 
 
 
 
 
 
 
 
 
 
Engineered Solutions segment
 

 
 

 
 

 
 

 
 

Gross goodwill
358.3

 
—

 
—

 
(1.3
)
 
357.0

Accumulated impairments
(212.0
)
 
—

 
—

 
1.3

 
(210.7
)
Goodwill
146.3

 
—

 
—

 
—

 
146.3

 
 
 
 
 
 
 
 
 
 
Total
 

 
 

 
 

 
 

 
 

Gross goodwill
838.6

 
48.4

 
—

 
(3.0
)
 
884.0

Accumulated impairments
(492.7
)
 
—

 
—

 
2.0

 
(490.7
)
Goodwill
$
345.9

 
$
48.4

 
$
—

 
$
(1.0
)
 
$
393.3

___________________________
(1) 
Reflects amounts acquired in connection with the Schonstedt and Cues acquisitions of $1.8 and $46.6, respectively.
Other Intangibles, Net
Identifiable intangible assets at June 30, 2018 and December 31, 2017 comprised the following:
 
June 30, 2018
 
December 31, 2017
 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Net
Carrying
Value
 
Gross
Carrying
Value
 
Accumulated
Amortization
 
Net
Carrying
Value
Intangible assets with determinable lives:(1)
 

 
 

 
 

 
 

 
 

 
 

Customer relationships
$
44.8

 
$
(1.7
)
 
$
43.1

 
$
1.4

 
$
(1.4
)
 
$
—

Technology
17.1

 
(0.5
)
 
16.6

 
2.1

 
(0.5
)
 
1.6

Patents
4.5

 
(4.5
)
 
—

 
4.5

 
(4.5
)
 
—

Other
11.3

 
(7.1
)
 
4.2

 
11.7

 
(7.9
)
 
3.8

 
77.7

 
(13.8
)
 
63.9

 
19.7

 
(14.3
)
 
5.4

Trademarks with indefinite lives(2)
138.0

 
—

 
138.0

 
112.2

 
—

 
112.2

Total
$
215.7

 
$
(13.8
)
 
$
201.9

 
$
131.9

 
$
(14.3
)
 
$
117.6

___________________________
(1) 
The identifiable intangible assets associated with the Schonstedt acquisition consist of customer relationships and technology of $0.8 and $8.3, respectively. The identifiable intangible assets associated with the Cues acquisition consist of customer backlog, customer relationships, and technology of $0.8, $42.6, and $8.5, respectively. Additionally, the technology associated with Heat Transfer of $1.5 was sold during the second quarter of 2018 in connection with the planned wind-down of the business.
(2) 
Changes during the six months ended June 30, 2018 related primarily to the acquisition of the Schonstedt and Cues trademarks of $1.8 and $27.6, respectively, and the sale of the trademarks associated with Heat Transfer of $3.3 in connection with the planned wind-down of the business.
In connection with the acquisition of Schonstedt and Cues, which has determinable lived intangibles as noted above, we updated our estimated annual amortization expense related to intangible assets to $4.2 for full year 2018, and $5.3 for each of the five years thereafter.
At June 30, 2018, the net carrying value of intangible assets with determinable lives consisted of $3.6 in the HVAC reportable segment and $60.3 in the Detection and Measurement reportable segment. At June 30, 2018, trademarks with indefinite lives consisted of $89.4 in the HVAC reportable segment, $39.5 in the Detection and Measurement reportable segment, and $9.1 in the Engineered Solutions reportable segment.
We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with such testing based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a more frequent basis if there are indications of potential impairment. A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates. Such indication may include: a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit.
We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis, if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions (fair value based on unobservable inputs - Level 3, as defined in Note 16). The primary basis for these projected revenues is the annual operating plan for each of the related businesses, which is prepared in the fourth quarter of each year.