LITTELFUSE INC DE

5. Goodwill and Other Intangible Assets

The amounts for goodwill and changes in the carrying value by segment are as follows:

(a) The additions resulted from the acquisitions of Western Automation and C&K Switches.

The Company tests its goodwill annually for impairment on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The results of the goodwill impairment test as of September 29, 2024 indicated that the estimated fair values for the Industrial controls and sensors and Automotive sensors reporting units were below their respective carrying values. Accordingly, the Company recorded non-cash charges of $36.1 million and $8.6 million, respectively, to reflect the impairment of goodwill for the Industrial controls and sensors reporting unit within the Industrial segment and the Automotive sensors reporting unit within the Transportation segment. There wereno impairment charges recorded during the fiscal years of 2023 and 2022.

The goodwill impairment charge for the Industrial controls and sensors reporting unit was due to reduction in the estimated fair value of the reporting unit based on lower expectations for future revenue, profitability and cash flows as compared to the expectations of the 2023 annual goodwill impairment test driven by lower-than-expected demand in the electric vehicle end market as well as reduced government funding to support charging infrastructures for electric vehicles, primarily in Europe.

The goodwill impairment charge for the Automotive sensors reporting unit was due to reductions in the estimated fair value for the automotive sensors reporting unit based on lower expectations for future revenue, profitability and cash flows as compared to the expectations of the 2023 annual goodwill impairment test. These lower future expectations were driven by projected declines in end market demand and reduced revenue and profitability with existing customers.

The goodwill impairment charge was determined using Level 3 inputs, including discounted cash flow analysis and comparable marketplace fair value data. As of December 28, 2024, the Industrial controls and sensors reporting unit had $115.2 million of remaining goodwill, and the Automotive sensors reporting unit hadno remaining goodwill.

The components of intangible assets at December 28, 2024 and December 30, 2023 are as follows:

For intangible assets with definite lives, the Company recorded amortization expense of $62.1 million, $65.8 million, and $55.7 million in 2024, 2023, and 2022, respectively.

During the fourth quarter of 2024, the Company recorded non-cash impairment charges of $47.8 million for the impairment of intangible assets, including $47.6 million related to the impairment of certain acquired customer relationships, developed technology, and tradename intangible assets in the Industrial controls and sensors reporting unit within the Industrial segment. This impairment resulted from lower expectations of future revenue and cash flows and was determined using Level 3 inputs and estimated based on cash flow analyses, which included management’s assumptions related to future revenues and profitability. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within Industrial segment. During the first quarter of 2024, the Company recognized a $0.9 million impairment related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

Estimated annual amortization expense related to intangible assets with definite lives at December 28, 2024 is as follows: