Mirion Technologies, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill is calculated as the excess of consideration transferred over the net assets recognized for acquired businesses and represents future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The Company assesses goodwill for impairment at the reporting unit level annually on the first day of the fourth quarter and upon the occurrence of a triggering event or change in circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Goodwill is assigned to reporting units at the date the goodwill is initially recorded and is reallocated as necessary based on the composition of reporting units over time. No goodwill impairment was recognized for the three months ended March 31, 2022 and 2021, respectively.

The following table shows changes in the carrying amount of goodwill by reportable segment as of March 31, 2022 and December 31, 2021 (in millions):


Successor
	Medical		Industrial		Consolidated
Balance—December 31, 2021	$	712.5	$	950.1	$	1,662.6
Translation adjustment	—		(10.1)		(10.1)
Balance—March 31, 2022	$	712.5	$	940.0	$	1,652.5

A portion of the goodwill is deductible for income tax purposes.

Intangible Assets

Intangible assets consist of our developed technology, customer relationships, backlog, trade names, and non-compete agreements at the time of acquisition through business combinations. The customer relationships definite lived intangible assets are amortized using the double declining balance method while all other definite lived intangible assets are amortized on a straight-line basis over their estimated useful lives.

Many of our intangible assets are not deductible for income tax purposes. A summary of intangible assets useful lives, gross carrying value and related accumulated amortization is below (in millions):


Successor
		March 31, 2022
	Original Average Life in Years	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	6 - 13	$	339.5	$	(33.2)	$	306.3
Distributor relationships	7 - 13	61.0		(3.4)		57.6
Developed technology	5 - 16	249.2		(13.5)		235.7
Trade names	3 - 10	99.4		(4.6)		94.8
Backlog and other	1 - 4	84.9		(15.8)		69.1
Total		$	834.0	$	(70.5)	$	763.5

		December 31, 2021
	Original Average Life in Years	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Customer relationships	6 - 13	$	341.0	$	(15.3)	$	325.8
Distributor relationships	7 - 13	61.0		(1.5)		59.5
Developed technology	5 - 16	251.2		(5.9)		245.3
Trade names	3 - 10	100.0		(2.1)		97.9
Backlog and other	1 - 4	85.7		(7.2)		78.4
Total		$	838.9	$	(32.0)	$	806.9

Aggregate amortization expense for intangible assets included in cost of revenues and operating expenses was as follows (in millions):


	Successor		Predecessor
	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Amortization expense for intangible assets in:
Cost of revenues	$	6.7	$	6.9
Operating expenses	$	32.1	$	11.7