GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 29, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 29, 2024 were as follows:


	December 31, 2023		Goodwill Resulting from Business Combinations (1)		Foreign Currency Translation		June 29, 2024
HVAC reportable segment
Gross goodwill	$	777.8	$	147.2	$	(7.6)	$	917.4
Accumulated impairments	(331.9)		—		3.2		(328.7)
Goodwill	445.9		147.2		(4.4)		588.7

Detection and Measurement reportable segment
Gross goodwill	432.6		—		(3.2)		429.4
Accumulated impairments	(173.7)		—		0.6		(173.1)
Goodwill	258.9		—		(2.6)		256.3

Total
Gross goodwill	1,210.4		147.2		(10.8)		1,346.8
Accumulated impairments	(505.6)		—		3.8		(501.8)
Goodwill	$	704.8	$	147.2	$	(7.0)	$	845.0

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(1)Reflects (i) goodwill acquired with the Ingénia acquisition of $141.6 and (ii) an increase in ASPEQ and TAMCO goodwill of $3.9 and $1.7, respectively, resulting from revisions to the valuation of certain assets and liabilities. As indicated in Notes 1 and 3, the acquired assets, including goodwill, and liabilities assumed in the Ingénia acquisition have been recorded at estimates of fair value and are subject to change upon completion of acquisition accounting.

Other Intangibles, Net

Identifiable intangible assets at June 29, 2024 and December 31, 2023 comprised the following:


	June 29, 2024						December 31, 2023
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Intangible assets with determinable lives: (1)
Customer relationships	$	424.4	$	(86.1)	$	338.3	$	403.2	$	(68.8)	$	334.4
Technology	184.7		(34.6)		150.1		139.5		(27.8)		111.7
Patents	4.5		(4.5)		—		4.5		(4.5)		—
Other	72.6		(38.7)		33.9		45.4		(32.0)		13.4
	686.2		(163.9)		522.3		592.6		(133.1)		459.5
Trademarks with indefinite lives	220.4		—		220.4		221.3		—		221.3
Total	$	906.6	$	(163.9)	$	742.7	$	813.9	$	(133.1)	$	680.8

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(1)The gross carrying value of identifiable intangible assets acquired with the Ingénia acquisition consist of technology of $46.7, customer relationships of $23.5, definite-lived trademarks of $13.9, and backlog of $13.8.

In connection with the acquisition of Ingénia, which has definite-lived intangible assets as noted above, we updated our estimated annual amortization expense related to intangible assets to approximately $66.0 for the full year 2024, $54.0 for 2025, and $53.0 for each of the three years thereafter.

At June 29, 2024, the net carrying value of intangible assets with determinable lives consisted of $408.8 in the HVAC reportable segment and $113.5 in the Detection and Measurement reportable segment. At June 29, 2024, trademarks with indefinite lives consisted of $156.6 in the HVAC reportable segment and $63.8 in the Detection and Measurement reportable segment.

We review goodwill and indefinite-lived intangible assets for impairment annually 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. In reviewing goodwill and indefinite-lived intangible assets for impairment, we initially perform a qualitative analysis. If there is an indication of impairment, we then perform a quantitative analysis. 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.

The fair value of the assets related to the ASPEQ and Ingénia acquisitions approximate their respective carrying values. If ASPEQ and Ingénia are unable to achieve their current financial forecast, we may be required to record an impairment charge in a future period related to their goodwill or indefinite-lived intangible assets. As of June 29, 2024, ASPEQ and Ingénia's goodwill totaled $195.0 and $139.4, respectively, and indefinite-lived intangible assets totaled $51.5 for ASPEQ.

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 value of our trademarks is based on applying estimated royalty rates to projected revenues, with 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 17). 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.