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Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill And Intangible Assets Disclosure [Text Block]
Note 16 – Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the
 
years ended December 31, 2020 and 2019 were as follows:
Global
Specialty
Americas
EMEA
Asia/Pacific
Businesses
Total
Balance as of December 31, 2018
$
28,464
$
17,423
$
13,149
$
24,297
 
$
83,333
Goodwill additions
188,494
114,167
130,091
91,545
524,297
Currency translation adjustments
 
(573)
1,428
(1,513)
233
(425)
Balance as of December 31, 2019
216,385
133,018
141,727
116,075
 
607,205
Goodwill additions
1,485
531
1,329
3,345
Currency translation and other
 
adjustments
(4,628)
6,613
16,363
2,314
20,662
Balance as of December 31, 2020
$
213,242
$
140,162
$
158,090
$
119,718
$
631,212
Other adjustments in the table above includes updates to
 
the Company’s allocation
 
of the Houghton purchase price and associated
goodwill to each of the Company’s
 
reportable segments during the year ended December 31, 2020,
 
including a $
2.6
 
million decrease
in the Americas, a $
1.4
 
million decrease in EMEA, a $
8.0
 
million increase in Asia/Pacific and a $
0.5
 
million increase in Global
Specialty Businesses.
 
Gross carrying amounts and accumulated amortization
 
for definite-lived intangible assets as of December 31, 2020 and
 
2019 were
as follows:
Gross Carrying
Accumulated
Amount
Amortization
2020
2019
2020
2019
Customer lists and rights to sell
$
839,551
$
792,362
 
$
99,806
 
$
49,932
Trademarks, formulations and product
 
technology
 
166,448
 
157,049
 
 
30,483
 
 
21,299
Other
 
6,372
 
 
6,261
 
 
5,824
 
 
5,776
Total definite
 
-lived intangible assets
$
1,012,371
 
$
955,672
 
$
136,113
 
$
77,007
The Company recorded $
55.9
 
million, $
26.7
 
million and $
7.3
 
million of amortization expense during the years ended December
31, 2020, 2019 and 2018, respectively.
 
Amortization is recorded within SG&A in the Company’s
 
Consolidated Statements of Income.
 
Estimated annual aggregate amortization expense for
 
the subsequent five years is as follows:
For the year ended December 31, 2021
$
58,752
For the year ended December 31, 2022
58,590
For the year ended December 31, 2023
58,361
For the year ended December 31, 2024
57,935
For the year ended December 31, 2025
57,263
The Company has four indefinite-lived intangible
 
assets totaling $
205.1
 
million as of December 31, 2020, including $
204.0
million of indefinite-lived intangible assets for trademarks and
 
tradename associated with the Combination.
 
Comparatively, the
Company had four indefinite-lived intangible assets for trademarks
 
and tradename totaling $
243.1
 
million as of December 31, 2019.
The Company completes its annual goodwill and indefinite
 
-lived intangible asset impairment test during the fourth
 
quarter of
each year, or more frequently if triggering
 
events indicate a possible impairment in one or more of its reporting
 
units.
 
The Company
completed its annual impairment assessment during the
 
fourth quarter of 2020 and concluded no impairment charge
 
was warranted.
 
The Company continually evaluates financial performance,
 
economic conditions and other relevant developments
 
in assessing if an
interim period impairment test for one or more of
 
its reporting units is necessary.
 
As of March 31, 2020, the Company evaluated the initial 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 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 trademarks
 
and tradename
indefinite-lived intangible assets.
 
The determination of estimated fair value of the Houghton
 
and Fluidcare trademarks 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”)
 
and royalty rates, as
well as revenue growth rates and terminal growth rates.
 
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 trademarks and tradename intangible
 
assets were
less than their carrying values.
 
As a result, an impairment charge of $
38.0
 
million, primarily related to the Houghton trademarks and
tradename, to write down the carrying values of these intangible
 
assets to their estimated fair values was recorded in the
 
first quarter
of 2020.
As of December 31, 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 December 31, 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 December 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 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.