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Goodwill and Intangible Assets
6 Months Ended
Jun. 30, 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
 
six months ended June 30, 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
Goodwill acquired
531
531
Currency translation and other adjustments
 
(4,569)
(3,256)
5,940
(1,202)
(3,087)
Balance as of June 30, 2020
$
211,816
$
130,293
$
147,667
$
114,873
 
$
604,649
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 six months of 2020.
Gross carrying amounts and accumulated amortization
 
for definite-lived intangible assets as of June 30, 2020 and December
 
31,
2019 were as follows:
Gross Carrying
Accumulated
Amount
Amortization
2020
2019
2020
2019
Customer lists and rights to sell
$
781,188
 
$
792,362
 
$
72,803
 
$
49,932
Trademarks, formulations and product
 
technology
 
155,924
 
 
157,049
 
 
25,475
 
 
21,299
Other
 
6,266
 
 
6,261
 
 
5,684
 
 
5,776
Total definite
 
-lived intangible assets
$
943,378
 
$
955,672
 
$
103,962
 
$
77,007
The Company amortizes definite-lived intangible assets on
 
a straight-line basis over their useful lives.
 
The Company recorded
$
13.7
 
million and $
27.7
 
million of amortization expense for the three and six months
 
ended June 30, 2020, respectively.
 
Comparatively,
 
the Company recorded $
1.8
 
million and $
3.6
 
million of amortization expense for the three and six months
 
ended June
30, 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
$
55,145
For the year ended December 31, 2021
54,885
For the year ended December 31, 2022
54,732
For the year ended December 31, 2023
54,515
For the year ended December 31, 2024
54,089
For the year ended December 31, 2025
53,418
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 initial imp
 
act of COVID-19 on the Company’s
 
operations, and the volatility
and uncertainty in the economic outlook as a result of
 
COVID-19 to determine if they indicated it was more likely
 
than not that the
carrying value of any of the Company’s
 
reporting units or indefinite-lived or long-lived assets was 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 the Company’s
reporting units or indefinite-lived and long-lived assets, except
 
for the Company’s Houghton
 
and Fluidcare trademark and tradename
indefinite-lived intangible assets.
 
The determination of estimated fair value of the Houghton
 
and Fluidcare trademark and tradename indefinite-lived assets was
based on a relief from royalty valuation method which
 
requires management’s
 
judgment and often involves the use of significant
estimates and assumptions, including assumptions with respect
 
to the weighted average cost of capital (“WACC”)
 
as well as projected
net sales.
 
In the first quarter of 2020, as a result of the impact of
 
COVID-19 driving 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 WACC
 
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
 
June 30, 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 June 30, 2020 and December 31, 2019.
 
As of June 30, 2020, the Company continued to evaluate the on
 
-going impact of COVID-19 on the Company’s
 
operations, and
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 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 June 30, 2020 with
regards to any of the Company’s
 
reporting units or indefinite-lived and long-lived intangible
 
assets.
While the Company concluded that the impact of COVID-19
 
did not represent a triggering event as of June 30, 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 the 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.