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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and other intangible assets included in the Consolidated Balance Sheets consisted of the following:
| December 30, 2023 |  | December 31, 2022
Goodwill, net | $ | 441.0 |  |  | $ | 305.9 |
Definite-lived intangible assets, net | 161.7 |  |  | 118.4 |
Indefinite-lived intangible assets | 49.1 |  |  | 15.5 |
Total goodwill and other intangible assets, net | $ | 651.9 |  |  | $ | 439.8 |
Goodwill The changes in the carrying amount of goodwill, by reportable segment, are as follows:
| Workplace Furnishings |  | Residential Building Products |  | Total
Balance as of January 1, 2022 |  |  |  |  |
Goodwill | $ | 162.3 |  |  | $ | 213.8 |  |  | $ | 376.1 |
Accumulated impairment losses | (78.6) |  |  | (0.1) |  |  | (78.8) |
Net goodwill balance as of January 1, 2022 | $ | 83.6 |  |  | $ | 213.7 |  |  | $ | 297.3 |
Goodwill acquired (disposed) / measurement period adjustments | (13.6) |  |  | 8.6 |  |  | (5.0) |
Accumulated impairment losses disposed | 13.6 |  |  | — |  |  | 13.6 |
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 / measurement period adjustments | 162.7 |  |  | — |  |  | 162.7 |
Impairment losses | (27.6) |  |  | — |  |  | (27.6) |
Goodwill disposed | (14.1) |  |  | — |  |  | (14.1) |
Accumulated impairment losses disposed | 14.1 |  |  | — |  |  | 14.1 |
Balance as of December 30, 2023 |  |  |  |  |
Goodwill | 297.2 |  |  | 222.4 |  |  | 519.6 |
Accumulated impairment losses | (78.5) |  |  | (0.1) |  |  | (78.6) |
Net goodwill balance as of December 30, 2023 | $ | 218.7 |  |  | $ | 222.3 |  |  | $ | 441.0 |
Current year goodwill acquired and measurement period adjustments relate to the acquisition of Kimball International, see "Note 4. Acquisitions and Divestitures" for additional information. Current year goodwill and accumulated impairment disposed relates to the closure of the OFM business. Prior year goodwill and accumulated impairment disposed relates to the retirement of the Maxon brand and the sale of Lamex. See Impairment Analysis section below for additional information regarding the goodwill impairment recorded in 2023. Definite-lived intangible assets The table below summarizes amortizable definite-lived intangible assets, which are reflected in "Goodwill and Other Intangible Assets" in the Consolidated Balance Sheets:
|  | December 30, 2023 |  | December 31, 2022
|  | Gross |  | Accumulated Amortization |  | Net |  | Gross |  | Accumulated Amortization |  | Net
Software |  | $ | 199.6 |  |  | $ | 143.4 |  |  | $ | 56.2 |  |  | $ | 194.4 |  |  | $ | 122.5 |  |  | $ | 71.9 |
Trademarks and trade names |  | 18.1 |  |  | 7.3 |  |  | 10.8 |  |  | 14.3 |  |  | 5.9 |  |  | 8.4 |
Customer lists and other |  | 143.9 |  |  | 49.2 |  |  | 94.7 |  |  | 80.2 |  |  | 42.1 |  |  | 38.1 |
Net definite-lived intangible assets |  | $ | 361.6 |  |  | $ | 199.8 |  |  | $ | 161.7 |  |  | $ | 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 Consolidated Statements of Comprehensive Income and was as follows:
| 2023 |  | 2022 |  | 2021
Capitalized software | $ | 21.6 |  |  | $ | 24.4 |  |  | $ | 23.6 |
Other definite-lived intangibles | $ | 8.5 |  |  | $ | 6.5 |  |  | $ | 6.5 |
The occurrence of events such as acquisitions, dispositions, or impairments may impact future amortization expense. Over the next several years amortization expense is expected to decline due primarily to the completion of the amortization of the Corporation’s Business Systems Transformation investment. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows:
| 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028
Amortization expense | $ | 29.8 |  |  | $ | 27.0 |  |  | $ | 22.3 |  |  | $ | 16.8 |  |  | $ | 9.0 |
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" in the Consolidated Balance Sheets:
| December 30, 2023 |  | December 31, 2022
Trademarks and trade names | $ | 49.1 |  |  | $ | 15.5 |
The increase in indefinite-lived intangible assets in the current year was driven by the acquisition of Kimball International. In the fourth quarter of 2023, the Corporation recorded an impairment charge of $3.4 million, related to an indefinite-lived trade name in the workplace furnishings segment. See the Impairment Analysis below for additional information. Impairment Analysis The Corporation evaluates its goodwill and indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter (using a valuation date as of the start of the Corporation's 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. The Corporation elected to perform a qualitative assessment for purposes of its annual goodwill impairment testing in each of the last three years. Based on these assessments, management concluded that for the majority of reporting units it was more likely than not that the fair value of each reporting unit was greater than its carrying value. For a small workplace furnishings reporting unit, management concluded in 2023 and 2022 that a quantitative assessment was required. For the quantitative goodwill impairment testing, management utilized a combination of both a discounted cash flows approach and market approaches. As a result of the impairment testing in 2023, this reporting unit was determined to have a carrying value in excess of its fair value, resulting in a pretax goodwill impairment charge of $27.6 million. This reporting unit has remaining goodwill of $6.0 million. The driver of the impairment is a reduction in the short-to mid-term financial forecast for this business as a result of softening market demand tied to macroeconomic conditions. Projections used in the impairment model reflected management’s assumptions, which are those of a market participant, regarding revenue growth rates, economic and market trends, cost structure, investments required in support of strategic initiatives, and other expectations about the anticipated short-term and long-term operating results of the reporting unit (Level 3 measurements). For this reporting unit, the Corporation assumed a discount rate of approximately 14 percent, near-term growth rates ranging from -13 percent to +10 percent, and a terminal growth rate of 3 percent. As a result of the quantitative goodwill impairment testing in 2022, this reporting unit was determined to have a fair value that exceeded carrying value by a reasonable margin. For this testing, the corporation assumed a discount rate of 14 percent, near-term growth rates ranging from 4 percent to 12 percent, and a terminal growth rate of 3 percent. Holding other assumptions constant, a 100-basis point increase in the discount rate would have resulted in a $5 million decrease in the estimated fair value of the reporting unit. Holding other assumptions constant, a 100 basis point decrease in the terminal growth rate would have resulted in a $3 million decrease in the estimated fair value of the reporting unit. If there was both a 100-basis point decrease in the terminal growth rate and a 100-basis point increase to the discount rate, the estimated fair value of the reporting unit would still have exceeded the carrying value at that time. Near the end of the fourth quarter of 2021, subsequent to the 2021 annual impairment testing, a triggering event occurred that resulted in a goodwill impairment charge of $5.8 million in connection with the decision to exit the Maxon office furniture brand. The Corporation also elected to perform a qualitative assessment for purposes of its annual impairment testing for indefinite-lived intangible assets in each of the last three years. Based on these assessments, management concluded that it was more likely than not that the fair values of most of the Corporation’s indefinite-lived intangible assets were greater than their carrying values. For a small workplace furnishings brand, management concluded in each of the last three years that a quantitative assessment was required. As a result of the quantitative impairment testing in 2023, management concluded that a pretax impairment charge of $3.4 million was required related to this indefinite-lived intangible asset. The drivers of the impairment include a reduced sales outlook for this business and a decline in the estimated royalty rate. The valuation assessment of this trade name is considered a Level 3 measurement that utilized a relief-from-royalty discounted cash flows approach. Key inputs and assumptions involved in the quantitative testing included estimated near-term growth rates ranging from -2 percent to +5 percent, a long-term growth rate of 3 percent, a royalty rate of 1 percent, and a discount rate of 16 percent. See "Note 17. Restructuring and Impairment" for more information regarding goodwill, intangible asset, and long-lived asset impairments in the current and prior years.

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