Goodwill and Intangible Assets

9 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The following table summarizes the changes in the carrying value of goodwill by reportable segment (in thousands):


	GSG		CIG		Total

Balance at October 2, 2022	$	519,102	$	591,310	$	1,110,412
Acquisition activity	104,100		619,832		723,932

Translation adjustments	5,459		47,051		52,510
Balance at July 2, 2023	$	628,661	$	1,258,193	$	1,886,854

The foreign currency translation adjustments resulted from our foreign subsidiaries with functional currencies that are different than our reporting currency. These goodwill amounts are presented net of reductions from historical impairment adjustments. The gross amounts for GSG were $646.4 million and $536.8 million at July 2, 2023 and October 2, 2022, respectively, excluding accumulated impairment of $17.7 million at each date. The gross amounts of goodwill for CIG were $1,379.7 million and $712.8 million at July 2, 2023 and October 2, 2022, respectively, excluding accumulated impairment of $121.5 million at each date.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our most recent annual review at July 4, 2022 (i.e. the first day of our fourth quarter in fiscal 2022) indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. At July 4, 2022, and after the reallocation of goodwill on the first day of fiscal 2022, we had no reporting units that had estimated fair values that exceeded their carrying values by less than 165%.

We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired.

The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets ($ in thousands):


	Period Ended
	July 2, 2023							October 2, 2022
	Weighted- Average Remaining Life (in Years)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount

Client relations	7.2	$	226,024	$	(36,952)	$	189,072	$	41,676	$	(21,092)	$	20,584
Backlog	0.9	57,342		(41,616)		15,726		33,286		(29,990)		3,296
Trade names	2.7	29,262		(9,028)		20,234		12,711		(7,428)		5,283
Total		$	312,628	$	(87,596)	$	225,032	$	87,673	$	(58,510)	$	29,163

Amortization expense for the three and nine months ended July 2, 2023 was $14.1 million and $29.6 million, compared to $3.7 million and $9.6 million for the prior-year periods. Estimated amortization expense for the remainder of fiscal 2023 and succeeding years is as follows (in thousands):


	Amount

2023 (remaining)	$	13,541
2024	46,669
2025	34,702
2026	29,585
2027	24,577
Beyond	75,958
Total	$	225,032