Balance Sheet Information and Other Supplemental Disclosures

9 Months Ended

Sep. 27, 2024

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Information and Other Supplemental Disclosures

Note 5: Balance Sheet Information and Other Supplemental Disclosures

Goodwill

Goodwill is tested for impairment annually on the first day of the fourth quarter, or more frequently, if events or changes in circumstances (each, a "triggering event") would more likely-than-not reduce the fair value of a reporting unit below its carrying value.

As a result of the segment reorganization during the first quarter of 2024 discussed in Note 2: ''Segments and Revenue,'' management performed a goodwill impairment analysis on the divisions (which were the reporting units) prior to and after the reorganization and did not identify an impairment. In connection with the reorganization, the Company changed its reporting units structure, which resulted in the reallocation of $25.9 million of goodwill, presented on a prospective basis, from PSG to AMG based on the relative fair values of the businesses transferred.

The following table summarizes goodwill by operating and reportable segments (in millions): 

	As of
	September 27, 2024								December 31, 2023
	Goodwill		Accumulated Impairment Losses		Reallocation		Carrying Value		Goodwill		Accumulated Impairment Losses		Carrying Value
Operating and Reportable Segments:
PSG	$	708.0	$	(31.9)	$	(25.9)	$	650.2	$	708.0	$	(31.9)	$	676.1
AMG	1,536.4		(748.9)		25.9		813.4		1,536.4		(748.9)		787.5
ISG	124.3		—		—		124.3		114.0		—		114.0
Total	$	2,368.7	$	(780.8)	$	—	$	1,587.9	$	2,358.4	$	(780.8)	$	1,577.6

The change in the goodwill balance from December 31, 2023 to September 27, 2024 is as follows (in millions):

Net balance as of December 31, 2023	$	1,577.6
Addition due to business acquisition	10.3
Net balance as of September 27, 2024	$	1,587.9

There was an immaterial business acquisition within the ISG segment during the quarter ended September 27, 2024.

Inventories

Details of inventories included in the Consolidated Balance Sheets were as follows (in millions):

	As of
	September 27, 2024		December 31, 2023
Inventories:
Raw materials	$	400.8	$	469.3
Work in process	1,383.6		1,221.1
Finished goods	458.4		421.4
Total	$	2,242.8	$	2,111.8

Defined Benefit Plans

The Company recognizes the aggregate amount of all over-funded plans as assets and the aggregate amount of all underfunded plans as liabilities in its financial statements. As of September 27, 2024, the net assets for the over-funded plans totaled $17.1 million. The total accrued pension liability for underfunded plans was $69.0 million, of which the current portion of $1.4 million was classified as accrued expenses and other current liabilities. As of December 31, 2023, the net funded status for all the plans was a liability of $50.8 million, of which the current portion of $1.4 million was classified as accrued expenses and other current liabilities.

The components of the net periodic pension expense were as follows (in millions):

	Quarters Ended				Nine Months Ended
	September 27, 2024		September 29, 2023		September 27, 2024		September 29, 2023
Service cost	$	1.2	$	1.2	$	3.7	$	3.6
Interest cost	1.4		1.6		4.2		4.8
Expected return on plan assets	(1.2)		(1.2)		(3.6)		(3.6)
Total	$	1.4	$	1.6	$	4.3	$	4.8

Leases

Operating lease arrangements are comprised primarily of real estate and equipment agreements. The components of lease expense were as follows (in millions):

	Quarters Ended				Nine Months Ended
	September 27, 2024		September 29, 2023		September 27, 2024		September 29, 2023
Operating lease	$	13.5	$	11.9	$	41.1	$	36.2
Variable lease	1.3		1.2		4.0		4.0
Short-term lease	2.4		0.3		3.2		1.5
Total	$	17.2	$	13.4	$	48.3	$	41.7

The operating lease liabilities and operating ROU assets recognized in the Consolidated Balance Sheets were as follows (in millions):

	As of
	September 27, 2024		December 31, 2023
Operating lease liabilities included in:
Accrued expenses and other current liabilities	$	28.9	$	33.0
Other long-term liabilities	250.7		231.0
Total	$	279.6	$	264.0
Operating ROU assets included in:
Other assets	$	257.6	$	247.3

As of September 27, 2024, the weighted-average remaining lease-terms were 10.4 years and 17.3 years, and the weighted-average discount rates were 5.2% and 5.7%, for operating leases and financing leases, respectively.

Supplemental Disclosure of Cash Flow Information

Certain of the cash and non-cash activities were as follows (in millions):

	Nine Months Ended
	September 27, 2024		September 29, 2023
Non-cash investing activities:
Capital expenditures in accounts payable and other long-term liabilities	$	200.7	$	426.3
Operating ROU assets obtained in exchange for lease liabilities	46.8		15.8
Cash paid for:
Interest expense	$	53.5	$	65.2
Income taxes	294.1		327.4
Operating lease payments in operating cash flows	39.5		34.1

The following table shows a reconciliation of the captions in the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows (in millions):

	As of
	September 27, 2024		December 31, 2023		September 29, 2023		December 31, 2022
Consolidated Balance Sheets:
Cash and cash equivalents	$	2,470.2	$	2,483.0	$	2,679.2	$	2,919.0
Restricted cash (included in other current assets)	2.2		2.0		11.6		14.0
Cash, cash equivalents and restricted cash in Consolidated Statements of Cash Flows	$	2,472.4	$	2,485.0	$	2,690.8	$	2,933.0