Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 12—Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment were as follows:

	Interconnect		Cable
	Products and		Products and
	Assemblies		Solutions		Total
Goodwill at December 31, 2019	$	4,710.0	$	157.1	$	4,867.1
Acquisition-related		49.2		0.5		49.7
Foreign currency translation		38.7		—		38.7
Goodwill at September 30, 2020	$	4,797.9	$	157.6	$	4,955.5

The Company performs its annual evaluation for the impairment of goodwill for the Company’s reporting units as of each July 1 or more frequently if an event occurs or circumstances change that would indicate that a reporting unit’s carrying amount may be impaired. The Company reviews its reporting unit structure each year as part of the annual goodwill impairment assessment and continues to define its reporting units as the two reportable business segments “Interconnect Products and Assemblies” and “Cable Products and Solutions”, as the components of these reportable business segments have similar economic characteristics. In the third quarter of 2020 when testing for goodwill impairment, the Company performed a quantitative goodwill impairment assessment for each reporting unit.  As part of the quantitative assessment, the Company estimated the fair value of each of its reporting units using a market approach.  The Company believes the market-based guideline public company method provides the best indicator of fair value, by utilizing market prices and other relevant metrics for comparable publicly-traded companies with similar operating and investment characteristics, as well as recent transactions of similar businesses within the industry.  Significant estimates and assumptions were used in the Company’s goodwill impairment assessment,

including both historical and projected revenue and profitability data, the determination and selection of appropriate publicly-traded market comparison companies, and the calculation of comparable earnings-based and other multiples derived from comparable publicly traded companies and from recent transactions within the industry.  As part of our quantitative approach, the Company evaluated whether there were reasonably likely changes to management’s estimates and assumptions that would have a material impact on the results of the goodwill impairment assessment.  As of July 1, 2020, the Company determined that the fair value of each of the Company’s reporting units was substantially in excess of their respective carrying amounts, and therefore, no goodwill impairment resulted from the assessment. The Company has not recognized any goodwill impairment in 2020, 2019 or 2018 in connection with our annual impairment assessments.

Other than goodwill noted above, the Company’s intangible assets as of September 30, 2020 and December 31, 2019 were as follows:

		September 30, 2020						December 31, 2019
	Weighted	Gross				Net		Gross				Net
	Average	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Life (years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Customer relationships	9	$	452.0	$	301.5	$	150.5	$	446.2	$	272.2	$	174.0
Proprietary technology	11		156.1		84.8		71.3		156.0		74.4		81.6
Backlog and other	2		49.7		49.4		0.3		49.7		49.4		0.3
Total intangible assets (definite-lived)	9		657.8		435.7		222.1		651.9		396.0		255.9
Trade names (indefinite-lived)			186.1				186.1		186.1				186.1
		$	843.9	$	435.7	$	408.2	$	838.0	$	396.0	$	442.0

Amortization expense for the three months ended September 30, 2020 and 2019 was approximately $12.3 and $13.6, respectively. Amortization expense for the nine months ended September 30, 2020 and 2019 was approximately $37.6 and $54.0, respectively. Amortization expense during the nine months ended September 30, 2019 included $15.7 related to the amortization of acquired backlog, primarily related to the SSI acquisition. As of September 30, 2020, amortization expense relating to the Company’s current intangible assets estimated for the remainder of 2020 is approximately $12.0 and for each of the next five fiscal years is approximately $45.7 in 2021, $38.2 in 2022, $35.4 in 2023, $29.8 in 2024 and $20.5 in 2025.

The Company reviews its identifiable intangible assets subject to amortization whenever events or changes in circumstances indicate the intangible assets’ carrying amount may not be recoverable, while any indefinite-lived intangible assets that are not subject to amortization, which are comprised of certain trade names, are reviewed at least annually for impairment. In the third quarter of 2020, the Company performed its annual assessment of these identifiable indefinite-lived intangible assets. Based on our assessment, the Company determined that it was more likely than not that the fair value of the indefinite-lived intangible assets exceeded their respective carrying amounts. There has been no intangible asset impairment in 2020, 2019 or 2018 as a result of such reviews.