XML 31 R15.htm IDEA: XBRL DOCUMENT v3.22.0.1
GOODWILL AND INTANGIBLE ASSETS
 12 Months Ended
Jan. 01, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETSGOODWILL — The changes in the carrying amount of goodwill by segment are as follows:
 
(Millions of Dollars)Tools & StorageIndustrialOtherTotal
Balance December 28, 2019$5,161.8 $1,995.5 $223.3 $7,380.6 
Acquisitions0.1 635.7 — 635.8 
Foreign currency translation and other85.8 15.3 (31.0)70.1 
Balance January 2, 2021$5,247.7 $2,646.5 $192.3 $8,086.5 
Acquisitions777.3 (0.5)— 776.8 
Foreign currency translation and other(50.2)(29.0)0.1 (79.1)
Balance January 1, 2022$5,974.8 $2,617.0 $192.4 $8,784.2 

Goodwill totaling $1,894.5 million and $1,951.6 million was reclassed to assets held for sale as of January 1, 2022 and January 2, 2021, respectively.
The goodwill amount for the 2021 acquisitions is subject to change based upon the finalization of the acquisition accounting during the measurement period. Refer to Note E, Acquisitions and Investments, for further discussion.
In accordance with ASC 350, Intangibles - Goodwill and Other, a portion of the goodwill within Other was allocated to the aforementioned sale of the commercial electronic security business in five countries in Europe and emerging markets based on the relative fair value of the business disposed of and the portion of the reporting unit that was retained. Accordingly, goodwill for the Security segment was reduced by $31.3 million and included in the gain on sale of this divestiture in 2020. Refer to Note T, Divestitures, 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 2021. 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 six 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 2021 performance compared to prior year and their respective industries, analyst multiples and other positive qualitative information. Based on the results of the annual impairment testing performed in the third quarter of 2021, the Company determined that the fair values of each of its reporting units exceeded their respective carrying amounts.

INTANGIBLE ASSETS — Intangible assets at January 1, 2022 and January 2, 2021 were as follows:
 
 20212020
(Millions of Dollars)Gross
Carrying
Amount		Accumulated
Amortization		Gross
Carrying
Amount		Accumulated
Amortization
Amortized Intangible Assets — Definite lived
Patents and copyrights$27.0 $(26.6)$28.1 $(27.6)
Trade names276.3 (119.2)180.8 (105.6)
Customer relationships3,042.8 (1,038.4)2,452.3 (904.1)
Other intangible assets150.1 (137.2)150.5 (132.0)
Total$3,496.2 $(1,321.4)$2,811.7 $(1,169.3)

Net intangibles totaling $177.8 millionand $217.7 million were reclassed to assets held for sale as of January 1, 2022 and January 2, 2021, respectively.
Indefinite-lived trade names totaled $2.525 billion at January 1, 2022 and $2.195 billion at January 2, 2021. The year-over-year change is primarily due to the indefinite-lived trade names acquired in the MTD acquisition.
The fair values of the Company's indefinite-lived trade names were assessed using 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. The Company determined that the fair values of its indefinite-lived trade names exceeded their respective carrying amounts.
Intangible assets amortization expense by segment was as follows:
(Millions of Dollars)202120202019
Tools & Storage$64.1 $61.5 $73.1 
Industrial99.9 96.6 69.6 
Other39.1 43.5 44.7 
Consolidated$203.1 $201.6 $187.4 
The amounts above are inclusive of amortization expense for discontinued operations amounting to $38.4 million in 2021,
$42.8 million in 2020, and $44.4 million in 2019.
Future amortization expense in each of the next five years amounts to $206.3 million for 2022, $199.0 million for 2023, $192.8 million for 2024, $176.7 million for 2025, $163.2 million for 2026 and $1,236.8 million thereafter.