GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL — The changes in the carrying amount of goodwill by segment are as follows:



(Millions of Dollars)	Tools & Storage		Industrial		Security		Total
Balance December 31, 2016	$	3,247.8	$	1,439.2	$	2,007.0	$	6,694.0
Acquisitions	1,762.7		—		60.5		1,823.2
Foreign currency translation and other	179.2		15.2		64.5		258.9
Balance December 30, 2017	$	5,189.7	$	1,454.4	$	2,132.0	$	8,776.1

In 2017, goodwill increased by approximately $2.1 billion, which primarily related to the Newell Tools and Craftsman brand acquisitions. The goodwill amounts for these and other 2017 acquisitions are subject to change based upon the allocation of the consideration transferred to the assets acquired and liabilities assumed. Refer to Note E, Acquisitions, for further discussion.

As required by the Company's policy, goodwill and indefinite-lived trade names were tested for impairment in the third quarter of 2017. The Company assessed the fair values of three of its reporting units utilizing a discounted cash flow valuation model and determined that the fair values exceeded the respective carrying amounts. The key assumptions used were discount rates and perpetual growth rates applied to cash flow projections. Also inherent in the discounted cash flow valuations were near-term revenue growth rates over the next five years. These assumptions contemplated business, market and overall economic conditions.

For the remaining two reporting units, the Company determined qualitatively that it was not more likely than not that goodwill was impaired, and thus, the quantitative goodwill impairment test was not required. In making this determination, the Company considered the significant excess of fair value over carrying amount as calculated in the most recent quantitative analysis, each reporting unit's 2017 performance compared to prior year and their respective industries, analyst multiples and other positive qualitative information, all of which indicated that it was more likely than not that the fair values of the two reporting units were greater than their respective carrying amounts.

As previously disclosed in the Company's Form 10-Q for the third quarter of 2017, the fair value of the Infrastructure reporting unit exceeded its carrying amount by 18%. In connection with the preparation of the Consolidated Financial Statements for the year ended December 30, 2017, the Company performed an updated impairment analysis with respect to the Infrastructure reporting unit, which included approximately $271 million of goodwill at year-end. Based on this analysis, which included updated assumptions of near-term revenue and profitability levels, it was determined that the fair value of the Infrastructure reporting unit exceeded its carrying value by 37%. The increase in excess fair value is reflective of an improved near-term outlook due to solid results in 2017, including robust organic growth of 12%. Management remains confident in the long-term viability and success of the Infrastructure reporting unit based on its leading market position in its respective industries and the Company's continued commitment to, and investments in, organic growth initiatives (including solid progress being made with respect to Breakthrough Innovation projects under SFS 2.0).

The fair values of the Company's indefinite-lived trade names were assessed using both qualitative assessments, which considered relevant key external and internal factors, and quantitative analyses, which utilized discounted cash flow valuation models taking into consideration appropriate discount rates, royalty rates and perpetual growth rates applied to projected sales. Based on the results of this testing, the Company determined that the fair values of each of its indefinite-lived trade names exceeded their respective carrying amounts.

In the event that future operating results of any of the Company's reporting units or indefinite-lived trade names do not meet current expectations, management, based upon conditions at the time, would consider taking restructuring or other strategic actions, as necessary, to maximize revenue growth and profitability. A thorough analysis of all the facts and circumstances existing at that time would need to be performed to determine if recording an impairment loss would be appropriate.

INTANGIBLE ASSETS — Intangible assets at December 30, 2017 and December 31, 2016 were as follows:



	2017					2016
(Millions of Dollars)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized Intangible Assets — Definite lives
Patents and copyrights	$	44.1	$	(41.0	)	$	40.7	$	(36.5	)
Trade names	154.0		(111.0		)	152.0		(100.4		)
Customer relationships	2,326.1		(1,155.4		)	1,614.6		(978.9		)
Other intangible assets	260.3		(175.6		)	258.2		(158.7		)
Total	$	2,784.5	$	(1,483.0	)	$	2,065.5	$	(1,274.5	)

Indefinite-lived trade names totaled $2.206 billion at December 30, 2017 and $1.509 billion at December 31, 2016. The year-over-year increase relates to the indefinite-lived trade names acquired in the Newell Tools and Craftsman acquisitions.

Aggregate intangible assets amortization expense by segment was as follows:



(Millions of Dollars)	2017		2016		2015
Tools & Storage	$	68.0	$	36.8	$	39.0
Industrial	45.4		49.8		56.8
Security	50.4		57.8		61.3
Consolidated	$	163.8	$	144.4	$	157.1

Future amortization expense in each of the next five years amounts to $167.1 million for 2018, $158.2 million for 2019, $139.7 million for 2020, $131.0 million for 2021, $122.0 million for 2022 and $583.5 million thereafter.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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