GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

GOODWILL AND OTHER INTANGIBLES [Abstract]

Grainger completed its annual impairment testing of goodwill and intangible assets during the fourth quarter of 2023 and 2022. Based on the results of that testing, the Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators and concluded that it was more likely than not that the fair value of the reporting units exceeded their carrying amounts at each respective period.

High-Touch Solutions N.A. – Canada Business

As of December 31, 2023 and 2022, the Canada business reporting unit had goodwill of $124 million and $121 million, respectively. As part of our annual impairment testing, the Company compared the current results to forecasted expectations of the most recent quantitative analysis, along with analyzing macroeconomic conditions, current industry trends and transactions, and other market data of industry peers. The Company also performed various sensitivities over key assumptions, including projections of future operating expenditures used in the analysis. The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators for its Canada business, and concluded it was more likely than not its fair value exceeded its carrying value.

The Company's balances and changes in the carrying amount of Goodwill by segment are as follows (in millions of dollars):


	High-Touch Solutions N.A.		Endless Assortment		Total
Balance at January 1, 2022	$	321	$	63	$	384


Translation	(8)		(5)		(13)
Balance at December 31, 2022	313		58		371


Translation	2		(3)		(1)
Balance at December 31, 2023	$	315	$	55	$	370

Grainger's cumulative goodwill impairment as of December 31, 2023, was $137 million. No goodwill impairment was recorded for the twelve months ended December 31, 2023, 2022 and 2021.

The balances and changes in intangible assets – net are as follows (in millions of dollars):


		As of December 31,
		2023						2022
	Weighted average life	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Customer lists and relationships	10.7 years	$	166	$	153	$	13	$	217	$	181	$	36
Trademarks, trade names and other	14.9 years	31		23		8		32		22		10
Non-amortized trade names and other	Indefinite	20		—		20		22		—		22
Capitalized software	4.2 years	659		466		193		580		416		164
Total intangible assets	6.1 years	$	876	$	642	$	234	$	851	$	619	$	232

Amortization expense of intangible assets recorded in SG&A was $64 million, $61 million and $63 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Estimated amortization expense for future periods is as follows (in millions of dollars):


Year	Expense
2024	$	66
2025	58
2026	46
2027	28
2028	13
Thereafter	3
Total	$	214