Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The carrying values of intangible assets were as follows:


	December 31, 2023						December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)						(In thousands)
Goodwill	$	907,331	$	—	$	907,331	$	862,253	$	—	$	862,253
Definite-lived intangible assets subject to amortization:
Developed technology	$	300,240	$	(219,210)	$	81,030	$	273,524	$	(190,808)	$	82,716
Customer relationships	296,616		(145,739)		150,877		253,275		(129,730)		123,545
Trademarks	43,862		(35,089)		8,773		40,951		(30,077)		10,874
Backlog	14,847		(13,483)		1,364		13,554		(11,192)		2,362
In-service research and development	5,000		(5,000)		—		5,507		(5,342)		165
Non-compete agreements	810		(710)		100		780		(612)		168
Total intangible assets subject to amortization	$	661,375	$	(419,231)	$	242,144	$	587,591	$	(367,761)	$	219,830
Indefinite-lived intangible assets not subject to amortization:
Trademarks	$	27,000	$	—	$	27,000	$	27,000	$	—	$	27,000

Total intangible assets not subject to amortization	$	27,000	$	—	$	27,000	$	27,000	$	—	$	27,000
Intangible assets	$	688,375	$	(419,231)	$	269,144	$	614,591	$	(367,761)	$	246,830

Segment Allocation of Goodwill and Trademarks

The changes in the carrying amount of goodwill assigned to reporting units in our reportable segments are as follows:


	Enterprise Solutions		Industrial Automation Solutions		Consolidated
	(In thousands)
Balance at December 31, 2021	$	473,241	$	348,207	$	821,448
Acquisitions	6,528		44,068		50,596

Translation impact	(1,935)		(7,856)		(9,791)
Balance at December 31, 2022	$	477,834	$	384,419	$	862,253
Acquisitions	32,243		5,816		38,059

Translation impact	1,447		5,572		7,019
Balance at December 31, 2023	$	511,524	$	395,807	$	907,331

The carrying amount of a certain indefinite-lived trademark in our Enterprise Solutions segment was $27.0 million as of December 31, 2023 and 2022.

Annual Impairment Test

The annual measurement date for our goodwill and indefinite-lived intangible assets impairment test is our fiscal November month-end. For our 2023 goodwill impairment test, we performed a quantitative assessment for three of our reporting units and determined the estimated fair values by calculating the present value of estimated future cash flows using Level 3 inputs. We determined that the fair values for the reporting units were in excess of their respective carrying values. We performed a qualitative assessment for the remaining three reporting units, and determined that it was more likely than not that the fair value of each reporting unit was greater than its respective carrying value. Therefore, we did not record any goodwill impairment in 2023. We did not recognize any goodwill impairment from continuing operations in 2022 or 2021 other than a $1.7 million impairment in 2021 in connection with the sale of an oil and gas business in Brazil. See Note 5.

For our quantitative impairment test in 2023, the excess of the fair value over the carrying value for the reporting units ranged from 30% to 106%. The assumptions used to estimate fair value were based on the past performance of the reporting unit as well as the projections incorporated in our strategic plan. Significant assumptions included sales growth, profitability, and related cash flows, along with cash flows associated with taxes and capital spending. The discount rate used to estimate fair value was risk adjusted in consideration of the economic conditions in effect at the time of the impairment test. We also considered assumptions that market participants may use. In our assessment, the discount rate ranged from 11.9% to 13.8%, the 2024 to 2033 compounded annual revenue growth rate ranged from 4.2% to 6.3%, and the revenue growth rate beyond 2033 ranged from 2.0% to 3.0%. By their nature, these assumptions involve risks and uncertainties. There is inherent risk associated with using an income approach to estimate fair values. If actual results are significantly different from our estimates or assumptions, we may have to recognize impairment charges that could be material.

We tested our indefinite-lived intangible asset, a trademark, for impairment during the fourth quarter using a quantitative assessment. We determined the fair value of the trademark using a relief from royalty methodology and compared the fair value to the carrying value. Significant assumptions to determine fair value included sales growth, royalty rates, and discount rates. We did not recognize any indefinite-lived intangible asset impairment charges in 2023, 2022, or 2021.

Impairment of Discontinued Operations

Prior to the Tripwire divestiture in 2022, we recognized a goodwill impairment charge of $131.2 million during 2021. See Note 5.

Amortization Expense

We recognized amortization expense in income from continuing operations of $48.1 million, $41.7 million, and $32.2 million in 2023, 2022, and 2021, respectively. We expect to recognize annual amortization expense of $44.7 million in 2024, $39.5 million in 2025, $27.6 million in 2026, $26.4 million in 2027, and $21.5 million in 2028 related to our intangible assets balance as of December 31, 2023.