Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Our business acquisitions have typically resulted in the recognition of goodwill and other intangible assets. We follow the provisions under ASC Topic 350, “Intangibles – Goodwill and Other” as it relates to the accounting for goodwill in our condensed consolidated financial statements. These provisions require that we, on at least an annual basis, evaluate the fair value of the reporting units to which goodwill is assigned and attributed and compare that fair value to the carrying value of the reporting unit to determine if an impairment has occurred. We perform our annual impairment testing during the fourth quarter. Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a potential impairment. We believe that there have been no events or circumstances which would more likely than not reduce the fair value for our reporting units below its carrying value. A reporting unit is an operating segment unless discrete financial information is prepared and reviewed by segment management for businesses one level below that operating segment (a “component”), in which case the component would be the reporting unit. As of June 30, 2022, we had seven reporting units.

Intangibles with indefinite useful lives, consisting of trade names, are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment. If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value. Fair value is calculated using relief from royalty method. We amortize the cost of definite-lived intangibles over their estimated useful lives. We also review all of our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Changes to goodwill are as follows:


(in millions)	Aerospace & Electronics		Process Flow Technologies		Payment & Merchandising Technologies		Engineered Materials		Total
Balance as of December 31, 2021	$	202.5	$	349.4	$	860.6	$	171.3	$	1,583.8


Currency translation	(0.2)		(12.0)		(25.6)		—		(37.8)
Disposal on sale of business	—		(22.3)		—		—		(22.3)
Balance at June 30, 2022	$	202.3	$	315.1	$	835.0	$	171.3	$	1,523.7

As of June 30, 2022, we had $435.8 million of net intangible assets, of which $69.5 million were intangibles with indefinite useful lives. As of December 31, 2021, we had $467.1 million of net intangible assets, of which $70.6 million were intangibles with indefinite useful lives.

Changes to intangible assets are as follows:


(in millions)	Six Months Ended June 30, 2022		Year Ended December 31, 2021
Balance at beginning of period, net of accumulated amortization	$	467.1	$	520.3


Amortization expense	(20.9)		(44.5)
Currency translation and other	(10.4)		(8.7)
Balance at end of period, net of accumulated amortization	$	435.8	$	467.1

A summary of intangible assets follows:


		June 30, 2022						December 31, 2021
(in millions)	Weighted Average Amortization Period of Finite Lived Assets (in years)	Gross Asset		Accumulated Amortization		Net		Gross Asset		Accumulated Amortization		Net
Intellectual property rights	15.1	$	134.4	$	58.6	$	75.8	$	136.8	$	59.2	$	77.6
Customer relationships and backlog	18.1	633.1		313.6		319.5		651.7		308.8		342.9
Drawings	40	11.1		10.7		0.4		11.1		10.6		0.5
Other	11.8	138.7		98.6		40.1		142.1		96.0		46.1
Total	18.6	$	917.3	$	481.5	$	435.8	$	941.7	$	474.6	$	467.1

Future amortization expense associated with intangible assets is expected to be:


(in millions)
Remainder of 2022	$	20.9
2023	41.4
2024	40.6
2025	35.3
2026 and after	228.1