Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets Disclosure [Text Block]

Note 14 – Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the three months ended March 31, 2020 were as follows:

								Global
								Specialty
		Americas		EMEA		Asia/Pacific		Businesses		Total
Balance as of December 31, 2019		$	216,385	$	133,018	$	141,727	$	116,075	$	607,205
	Currency translation and other adjustments		(11,212)		(5,557)		5,113		(3,164)		(14,820)
Balance as of March 31, 2020		$	205,173	$	127,461	$	146,840	$	112,911	$	592,385

Other adjustments in the table above include updates to the Company’s allocation of the Houghton purchase price and associated goodwill to each of the Company’s reportable segments during the first quarter of 2020.

Gross carrying amounts and accumulated amortization for definite-lived intangible assets as of March 31, 2020 and December 31, 2019 were as follows:

	Gross Carrying				Accumulated
	Amount				Amortization
	2020		2019		2020		2019
Customer lists and rights to sell	$	772,747	$	792,362	$	60,610	$	49,932
Trademarks, formulations and product technology		155,416		157,049		23,075		21,299
Other		6,274		6,261		5,649		5,776
Total definite-lived intangible assets	$	934,437	$	955,672	$	89,334	$	77,007

The Company amortizes definite-lived intangible assets on a straight-line basis over their useful lives. The Company recorded $14.0 million and $1.8 million of amortization expense for the three months ended March 31, 2020 and 2019, respectively. Estimated annual aggregate amortization expense for the current year and subsequent five years is as follows:

For the year ended December 31, 2020	$	54,690
For the year ended December 31, 2021		54,301
For the year ended December 31, 2022		54,154
For the year ended December 31, 2023		53,940
For the year ended December 31, 2024		53,526
For the year ended December 31, 2025		52,766

Goodwill and intangible assets that have indefinite lives are not amortized and are required to be assessed at least annually for impairment. The Company completes its annual goodwill and indefinite-lived intangible asset impairment test during the fourth quarter of each year. The Company continuously evaluates if triggering events indicate a possible impairment in one or more of its reporting units or indefinite-lived or long-lived assets.

As of March 31, 2020, the Company evaluated the current impact of COVID-19 on the Company’s operations, as well as the volatility and uncertainty in the economic outlook as a result of COVID-19, to determine if this indicated it was more likely than not that the carrying value of any of the Company’s reporting units or other indefinite-lived or long-lived intangible assets were not recoverable. The Company concluded that the impact of COVID-19 did not represent a triggering event as of March 31, 2020 with regards to any of the Company’s reporting units or other indefinite-lived and long-lived intangible assets, except for the Company’s Houghton and Fluidcare trademark and tradename indefinite-lived intangible assets.

The Company determined that the expected impact from COVID-19 on current and future year projected net sales attributable to legacy Houghton represented a triggering event, and as a result of this conclusion, the Company completed an interim quantitative indefinite-lived intangible asset impairment assessment as of March 31, 2020. Driven by a decrease in projected legacy Houghton net sales in the current year and the impact of the current year decline on projected future legacy Houghton net sales as well as an increase in the weighted average cost of capital assumption utilized in the quantitative impairment assessment, the Company concluded that the estimated fair values of the Houghton and Fluidcare trademark and tradename intangible assets were less than their carrying values. As a result, an impairment charge of $38.0 million to write down the carrying values of these intangible assets to their estimated fair values was recorded in the first quarter of 2020. The Company’s estimate of fair value and the carrying value of these Houghton and Fluidcare trademark and tradename indefinite-lived intangible assets as of March 31, 2020 was $204.0 million. Comparatively, these indefinite-lived intangible assets totaled $242.0 million as of December 31, 2019. In addition, the Company has other indefinite-lived intangible assets totaling $1.1 million as of both March 31, 2020 and December 31, 2019.

While the Company concluded that the impact of COVID-19 did not represent a triggering event as of March 31, 2020 for any of its other long-lived or indefinite-lived assets or reporting units, the Company will continue to evaluate the impact of COVID-19 on the Company’s current and projected results. If current economic conditions worsen or projections of the timeline for recovery are significantly extended, then the Company may conclude in the future that the impact from COVID-19 requires the need to perform further interim quantitative impairment tests, which could result in additional impairment charges in the future.