Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. At December 31, 2022 and 2021, we had $922.4 million and $923.5 million of goodwill recorded in our Packaging segment, which represents the entire goodwill balance reported on our Consolidated Balance Sheets.

Changes in the carrying amount of our goodwill were as follows (dollars in millions):


	Goodwill
Balance at January 1, 2021	$	863.5
Acquisition (a)		60.0
Balance at December 31, 2021		923.5
Acquisition adjustment (b)		(1.0	)
Adjustment related to sale of corrugated assets (c)		(0.1	)
Balance at December 31, 2022	$	922.4

(a)

In connection with the December 2021 acquisition of Advance Packaging, the Company recorded $60.0 million of goodwill in the Packaging segment.

(b)

During 2022, the Company recorded a $1.0 million adjustment to decrease the goodwill balance for the Company's December 2021 acquisition of Advance Packaging.

(c)

During 2022, a corrugated products facility sold part of its operations, which primarily included existing inventory. As a result, the Company recorded a $0.1 million adjustment to decrease the goodwill balance.

See Note 5, Acquisitions, for more information on the December 2021 acquisition of Advance Packaging.

Intangible Assets

Intangible assets are comprised of customer relationships and trademarks and trade names. The weighted average useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in millions):


	As of December 31, 2022						As of December 31, 2021
	Weighted Average Remaining Useful Life (in Years)		Gross Carrying Amount		Accumulated Amortization		Weighted Average Remaining Useful Life (in Years)		Gross Carrying Amount		Accumulated Amortization
Customer relationships (d)		8.2	$	546.0	$	290.9		8.5	$	551.1	$	254.9
Trademarks and trade names (d)		7.2		41.3		28.6		8.4		37.6		25.5
Other (d)		3.4		4.4		4.3		2.2		4.4		4.3
Total intangible assets (excluding goodwill)		8.1	$	591.7	$	323.8		8.5	$	593.1	$	284.7

(d)

In connection with the December 2021 acquisition of Advance Packaging, the Company recorded intangible assets of $47.3 million for customer relationships, $2.8 million for trade names, and $0.1 million for other intangibles. During 2022, the Company made a $1.4 million net adjustment based on the final valuation received for the intangible assets. This adjustment resulted in a revision to the original allocations for customer relationships and trade names. As of December 31, 2022, the revised allocations for customer relationships and trade names were $42.2 million and $6.5 million, respectively.

Amortization expense was $39.1 million, $37.7 million, and $42.9 million (including the $4.5 million adjustment to the customer relationships intangible asset related to the San Lorenzo, California facility closure, which was written off to amortization expense) for the years ended December 31, 2022, 2021, and 2020, respectively. Estimated amortization expense of intangible assets over the next five years is expected to approximate $38.2 million (2023), $37.7 million (2024), $37.6 million (2025), $37.5 million (2026) and $34.7 million (2027).

Impairment Testing

We test goodwill for impairment annually in the fourth quarter or sooner if events or changes in circumstances indicate that the carrying value of the asset may exceed fair value. Additionally, when we experience changes to our business or operating environment, we evaluate the remaining useful lives and recoverability of our finite-lived purchased intangible assets to determine whether any adjustments to the useful lives or impairment are necessary. We completed our annual qualitative assessment in the fourth quarter, and there was no indication of goodwill or intangible asset impairment.