REGAL REXNORD CORP
For the period ended Dec 31, 2023. Filed Feb 26, 2024.
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FY2023 · Filed Feb 26, 2024
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(5) Goodwill and Intangible Assets
The following information presents changes to goodwill during the periods indicated, including the $57.3 million impairment recorded during the year ended December 31, 2023 (see Note 3 - Accounting Policies for additional information):
| Total | Industrial Powertrain Solutions | Power Efficiency Solutions | Automation & Motion Control | Industrial Systems | |
|---|---|---|---|---|---|
| Balance as of January 1, 2022 | $4,039.2 | $2,316.8 | $759.4 | $850.0 | $113.0 |
| Acquisitions | 27.2 | 9.5 | — | 17.7 | — |
| Translation and Other | (47.6) | (36.3) | (7.1) | (2.7) | (1.5) |
| Balance as of December 31, 2022 | $4,018.8 | $2,290.0 | $752.3 | $865.0 | $111.5 |
| Acquisitions | 2,614.6 | 1,438.3 | — | 1,176.3 | — |
| Reclassification to Noncurrent Assets Held for Sale | (53.9) | — | — | — | (53.9) |
| Impairment Charges | (57.3) | — | — | — | (57.3) |
| Translation and Other | 30.9 | 18.7 | 1.6 | 10.9 | (0.3) |
| Balance as of December 31, 2023 | $6,553.1 | $3,747.0 | $753.9 | $2,052.2 | $— |
| Cumulative Goodwill Impairment Charges | $386.0 | $18.1 | $200.4 | $5.1 | $162.4 |
Intangible Assets
Intangible assets consist of the following:
| December 31, 2023 · December 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|
| Weighted Average Amortization Period (Years) | Gross Amount | Accumulated Amortization | Net Carrying Amount | Gross Amount | Accumulated Amortization | Net Carrying Amount | |
| Customer Relationships | 15 | $4,028.5 | $746.2 | $3,282.3 | $2,321.4 | $532.0 | $1,789.4 |
| Technology | 13 | 302.6 | 92.9 | 209.7 | 246.2 | 125.0 | 121.2 |
| Trademarks | 10 | 712.1 | 120.7 | 591.4 | 392.7 | 73.4 | 319.3 |
| Total Intangibles | $5,043.2 | $959.8 | $4,083.4 | $2,960.3 | $730.4 | $2,229.9 | |
For the fiscal year ended December 31, 2023, the Company reclassified $59.2 million of gross intangible assets and $57.0 million of intangible assets accumulated amortization to Noncurrent Assets Held for Sale. See Note 4 - Held for Sale, Acquisitions and Divestitures for additional information.
While the Company believes its customer relationships are long-term in nature, the Company's contractual customer relationships are generally short-term. Useful lives are established at acquisition based on historical attrition rates.
Amortization expense was $307.8 million in fiscal 2023, $185.5 million in fiscal 2022 and $77.4 million in fiscal 2021.
The following table presents estimated future amortization expense:
| Year | Estimated Amortization |
|---|---|
| 2024 | $350.1 |
| 2025 | 348.1 |
| 2026 | 344.8 |
| 2027 | 344.7 |
| 2028 | 344.7 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.