Goodwill and Identifiable Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identifiable Intangible Assets

We had goodwill of $925.1 million and $924.2 million as of December 31, 2023 and December 25, 2022, respectively. The change in the net carrying amount of goodwill was as follows:


(U.S. Dollars presented in millions)	Total Goodwill
Balance at December 26, 2021	$	926.2
2022 translation adjustments	(2.0)
Balance at December 25, 2022	$	924.2
2023 translation adjustments	0.9
Balance at December 31, 2023	$	925.1

The gross carrying value and accumulated amortization by class of intangible assets as of December 31, 2023 and December 25, 2022 were as follows:


	As of December 31, 2023						As of December 25, 2022
(U.S. Dollars presented in millions)	Gross Carrying Amounts		Accumulated Amortization		Net Book Value		Gross Carrying Amounts		Accumulated Amortization		Net Book Value
Indefinite-lived tradenames	$	184.2	$	—	$	184.2	$	183.1	$	—	$	183.1
Amortizable intangible assets
Tradenames	10.4		(10.4)		—		10.3		(10.2)		0.1
Customer and contractual relationships	363.6		(212.3)		151.3		362.9		(196.8)		166.1
Patents/proprietary technology	11.0		(11.0)		—		11.0		(10.5)		0.5
Total	385.0		(233.7)		151.3		384.2		(217.5)		166.7
Total identifiable intangibles	$	569.2	$	(233.7)	$	335.5	$	567.3	$	(217.5)	$	349.8

Amortizable intangible assets, principally customer relationships, are subject to amortization on a straight-line basis over their estimated useful life, ranging from 18 to 20 years, based on the assessment of a number of factors that may impact useful life, including customer attrition rates and other relevant factors. We expect to record intangible amortization of $14.7 million annually from 2024 through 2028.

In the second quarter of 2022, subsequent to the balance sheet date, we recognized an impairment charge of $26.0 million related to an indefinite-lived tradename. During the second quarter of 2022, production was shifted within our manufacturing footprint to enable what we expect to be a higher value purpose and growth opportunity, which led to downward revisions to forecasted revenue growth rates associated with the tradename. In the fourth quarter of 2022, we recognized an impairment charge of $12.8 million related to the same indefinite-lived tradename as a result of further shifts within our product portfolio to better align with forecasted future customer demand as a result of a significant decrease in sales during the fourth quarter of 2022, driven by continued and persistent inflation, as well as elevated interest rates and economic uncertainty. These downward revisions to forecasted revenue growth were not known when recording the impairment charge during the second quarter of 2022. As of both December 31, 2023 and December 25, 2022, the carrying value of this tradename was $46.2 million.

In the fourth quarter of 2022, we recognized an impairment charge of $7.6 million to a second indefinite-lived tradename. This was primarily due to a shift in customer demand from this tradename to a lower price point product, as a result of continued and persistent inflation, as well as elevated interest rates and economic uncertainty. As of both December 31, 2023 and December 25, 2022, the carrying value of this tradename was $19.1 million.

The fair values of the impaired tradenames were measured using the relief-from-royalty approach, which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over its remaining useful life. Some of the more significant assumptions inherent in estimating the fair values include market-participant discount rates based on the weighted-average cost of capital, which is dependent on comparable company prices and other relevant information generated by market transactions, as well as broader market assumptions, such as U.S. treasury rates, forecasted revenue growth rates and assumed royalty rates. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated growth rates, and management plans. These assumptions represent Level 3 inputs of the fair value hierarchy (refer to Note 10, “Fair Value Measurements” ).

A reduction in the estimated fair value of any of our tradenames could trigger impairment charges in future periods. Events or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: increases in discount rates, lower than forecasted revenues, actual new construction and repair and remodel growth rates that fall below our assumptions, actions of key customers,continued economic uncertainty, higher levels of unemployment, weak consumer confidence, higher interest rates, lower levels of discretionary consumer spending, a decrease in royalty rates and a decline in the trading price of our common stock. We cannot predict with certainty the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived assets.

There were no impairments of goodwill for any periods presented. There were no impairments of indefinite-lived assets for the years ended December 31, 2023 or December 26, 2021. The significant assumptions used to estimate the fair values of the tradenames impaired during the year ended December 25, 2022 were as follows:


	2022
Unobservable Input	Min		Max		Wtd Avg(a)
Discount rate	11.6	%	12.6	%	12.1	%
Royalty rate(b)	2.5	%	3.0	%	2.8	%
Long-term revenue growth rate(c)	1.0	%	1.0	%	1.0	%

a)Weighted by relative fair value of the impaired tradenames.

b)Represents estimated percentage of sales a market-participant would pay to license the impaired tradenames.

c)Selected long-term revenue growth rate within 10-year projection period of the impaired tradenames.