Goodwill and Other Intangible Assets

6 Months Ended

Jul. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets included in the Condensed Consolidated Balance Sheets consisted of the following:


	July 1, 2023		December 31, 2022
Goodwill, net	$	493.2	$	305.9
Definite-lived intangible assets, net	193.0		118.4
Indefinite-lived intangible assets	15.5		15.5
Total goodwill and other intangible assets, net	$	701.8	$	439.8

Goodwill

The changes in the carrying amount of goodwill, by reporting segment, are as follows:


	Workplace Furnishings		Residential Building Products		Total
Balance as of December 31, 2022
Goodwill	$	148.7	$	222.4	$	371.1
Accumulated impairment losses	(65.0)		(0.1)		(65.2)
Net goodwill balance as of December 31, 2022	83.6		222.3		305.9

Goodwill acquired	187.3		—		187.3



Balance as of July 1, 2023
Goodwill	336.0		222.4		558.4
Accumulated impairment losses	(65.0)		(0.1)		(65.2)
Net goodwill balance as of July 1, 2023	$	270.9	$	222.3	$	493.2

Goodwill acquired in the second quarter of 2023 relates to the acquisition of Kimball International. See "Note 3. Acquisitions and Divestitures" in the Notes to Condensed Consolidated Financial Statements for further information.

Definite-lived intangible assets

The table below summarizes amortizable definite-lived intangible assets, which are reflected in "Goodwill and Other Intangible Assets, net" in the Condensed Consolidated Balance Sheets:


	July 1, 2023						December 31, 2022
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net

Software	$	223.6	$	134.1	$	89.5	$	194.4	$	122.5	$	71.9
Trademarks and trade names	34.3		6.7		27.6		14.3		5.9		8.4
Customer lists and other	120.6		44.7		75.9		80.2		42.1		38.1
Net definite-lived intangible assets	$	378.5	$	185.5	$	193.0	$	288.8	$	170.4	$	118.4

The increase in gross definite-lived intangible assets is due to the acquisition of Kimball International.

Amortization expense is reflected in "Selling and administrative expenses" in the Condensed Consolidated Statements of Comprehensive Income and was as follows:


	Three Months Ended				Six Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022
Capitalized software	$	5.5	$	6.1	$	10.9	$	12.3
Other definite-lived intangibles	$	1.9	$	1.6	$	3.4	$	3.2

The occurrence of events such as acquisitions, dispositions, or impairments may impact future amortization expense. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five years is as follows:


	2023		2024		2025		2026		2027
Amortization expense	$	32.3	$	33.7	$	31.3	$	25.0	$	17.8

Indefinite-lived intangible assets

The Corporation also owns certain intangible assets, which are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely. These indefinite-lived intangible assets are reflected in "Goodwill and Other Intangible Assets, net" in the Condensed Consolidated Balance Sheets:


	July 1, 2023		December 31, 2022
Trademarks and trade names	$	15.5	$	15.5

Impairment Analysis

The Corporation evaluates its goodwill and indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter, or whenever indicators of impairment exist. The Corporation also evaluates long-lived assets (which include definite-lived intangible assets) for impairment if indicators exist.