Goodwill and Other Intangibles (Notes)

12 Months Ended

Jan. 02, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill are as follows:


	Fiscal Year
(In millions)	2020		2019
Goodwill balance at beginning of the year	$	438.9	$	424.4
Acquisition of a business (see Note 19)	—		12.0


Foreign currency translation effects	3.5		2.5
Goodwill balance at end of the year	$	442.4	$	438.9

The Company did not recognize any goodwill impairment charges during fiscal years 2020, 2019 and 2018. The annual impairment testing indicated, for all reporting units tested quantitatively, that the fair values exceeded the respective carrying values. For the reporting units that the Company elected to test qualitatively, the Company concluded it to be more likely than not that their estimated fair values are greater than their respective carrying values.

The Company’s indefinite-lived intangible assets, which comprise trade names and trademarks, totaled $382.3 million and $604.5 million as of January 2, 2021 and December 28, 2019, respectively. In the fourth quarter of fiscal 2020, after the completion of the annual impairment testing, the Company recognized a $222.2 million impairment charge for the Sperry®

trade name resulting from reductions in the future cash flow assumptions mainly due to the impact of the COVID-19 pandemic to the Sperry® brand and an increase in the discount rate. The Sperry® trade name was valued using the income approach, specifically the multi-period excess earnings method with the key assumptions used in the valuation being revenue growth, operating profit, and the discount rate. If the operating results for Sperry® decline in future periods compared to current projections, the discount rate increases, increases in the assumed tax rate, or macroeconomic conditions deteriorate further due to the COVID-19 pandemic and adversely affect the value of the Company’s Sperry® trade name balance, the Company may need to record additional non-cash impairment charges. The Company continues to monitor the effects of the COVID-19 pandemic, and actions taken by governments, businesses and individuals in response to the pandemic, on the global economy to assess the outlook for demand for the Company's products and the impact on the Company's business and financial performance. The carrying value of the Company’s Sperry® trade name indefinite-lived intangible asset was $296.0 million as of January 2, 2021.

Amortizable intangible assets are amortized using the straight-line method over their estimated useful lives. The combined gross carrying values and accumulated amortization for these amortizable intangibles are as follows:


	January 2, 2021
(In millions)	Gross carrying value		Accumulated amortization		Net		Average remaining life (years)
Customer relationships	$	114.5	$	44.9	$	69.6	12
Other	18.7		15.3		3.4		3
Total	$	133.2	$	60.2	$	73.0


	December 28, 2019
(In millions)	Gross carrying value		Accumulated amortization		Net		Average remaining life (years)
Customer relationships	$	113.3	$	38.8	$	74.5	13
Other	17.3		14.0		3.3		3
Total	$	130.6	$	52.8	$	77.8

Amortization expense for these amortizable intangible assets was $7.1 million, $8.6 million and $6.2 million for fiscal years 2020, 2019 and 2018, respectively. Estimated aggregate amortization expense for such intangibles for the fiscal years subsequent to January 2, 2021 is as follows:


(In millions)	2021		2022		2023		2024		2025
Amortization expense	$	7.1	$	6.8	$	6.6	$	6.3	$	6.0