Goodwill and other intangible assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Changes in the carrying amount of goodwill by segment for the year ended December 31, 2023, are as follows:


	Consumer Packaging		Industrial Paper Packaging		All Other		Total
Balance as of January 1, 2023	$	898,625	$	394,826	$	381,860	$	1,675,311
Acquisitions	15,704		92,657		—		108,361
Divestitures	—		(6,375)		—		(6,375)

Measurement period adjustments	439		14,644		—		15,083
Foreign currency translation	5,669		10,654		1,951		18,274
Balance as of December 31, 2023	$	920,437	$	506,406	$	383,811	$	1,810,654

Goodwill activity reflected under the caption “Acquisitions” relates to the September 8, 2023 acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill and the December 1, 2023 acquisition of Inapel. Goodwill activity reflected under the caption “Divestitures” relates to the sales of the Company’s S3 business on January 26, 2023 and the U.S. BulkSak business on July 1, 2023. Goodwill activity reflected under the caption “Measurement period adjustments” relates to the current year acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill, as well as the prior year acquisitions of Metal Packaging, Skjern and Nordeste. See Note 3 for additional information.

The Company assesses goodwill for impairment annually during the third quarter, or from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. The Company completed its most recent annual goodwill impairment testing during the third quarter of 2023 and analyzed certain qualitative and quantitative factors in determining whether a goodwill impairment existed. The Company’s assessments reflected a number of significant management assumptions and estimates including the Company’s forecast of sales growth, gross profit margins, and discount rates. Changes in these assumptions could materially impact the Company’s conclusions. Based on its assessments, the Company concluded that there was no impairment of goodwill for any of its reporting units.

Although no reporting units failed the annual impairment test, in management’s opinion the goodwill balance of the Plastics-Medical reporting unit, previously known as Plastics-Healthcare, is at risk of impairment in the near term if the reporting unit’s operations do not perform in line with management’s expectations, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate.

In the annual goodwill impairment analysis completed during the third quarter of 2023, projected future cash flows for the Plastics-Medical reporting unit were discounted at 12.0% and its estimated fair value was determined to exceed its carrying values by approximately 29.9%. Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rate for this reporting unit would have to be increased to 14.5% in order for the estimated fair value of the reporting unit to fall below its carrying value. Total goodwill associated with the Plastics-Medical reporting unit was $64,212 at December 31, 2023.

During the time subsequent to the annual evaluation, and at December 31, 2023, the Company considered whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its reporting units may have been impaired. It is management’s opinion that no such events have occurred.

Other intangible assets

Details at December 31 are as follows:


	2023		2022
Other Intangible Assets, Gross:
Patents	$	29,304	$	29,303
Customer lists	1,282,689		1,092,232
Trade names	41,836		34,220
Proprietary technology	56,857		57,720
Other	6,916		6,721
Other Intangible Assets, Gross	$	1,417,602	$	1,220,196
Accumulated Amortization:
Patents	$	(19,549)	$	(17,889)
Customer lists	(493,778)		(417,034)
Trade names	(18,845)		(15,892)
Proprietary technology	(29,013)		(25,113)
Other	(2,747)		(2,670)
Accumulated Amortization	$	(563,932)	$	(478,598)
Other Intangible Assets, Net	$	853,670	$	741,598

The acquisition of the remaining interest in RTS Packaging and the acquisition of the Chattanooga Mill on September 8, 2023, and the December 1, 2023 acquisition of Inapel, resulted in the addition of $199,217 of intangible assets, primarily related to customer lists. These intangibles will be amortized over an average useful life of 14.8 years. The fair values of intangible assets associated with these acquisitions were determined using an income valuation approach.

Aggregate amortization expense on intangible assets was $87,264, $80,445 and $49,419 for the years ended December 31, 2023, 2022 and 2021, respectively. Amortization expense on intangible assets is expected to approximate $88,200 in 2024, $79,200 in 2025, $75,300 in 2026, $73,900 in 2027 and $73,100 in 2028 based on intangible assets as of December 31, 2023.