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Goodwill and Intangible Assets
9 Months Ended
Sep. 30, 2021
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 nine months ended
 
September 30, 2021 were as follows:
Global
Specialty
Americas
EMEA
Asia/Pacific
Businesses
Total
Balance as of December 31, 2020
$
213,242
$
140,162
$
158,090
$
119,718
 
$
631,212
Goodwill additions
1,208
2,626
1,308
1,951
7,093
Currency translation and other adjustments
 
(621)
(5,530)
1,109
(2,594)
(7,636)
Balance as of September 30, 2021
$
213,829
$
137,258
$
160,507
$
119,075
 
$
630,669
Gross carrying amounts and accumulated amortization for definite-lived
 
intangible assets as of September 30, 2021 and
December 31, 2020 were as follows:
Gross Carrying
Accumulated
Amount
Amortization
2021
2020
2021
2020
Customer lists and rights to sell
$
847,909
 
$
839,551
 
$
135,571
 
$
99,806
Trademarks, formulations and product
 
technology
 
167,682
 
 
166,448
 
 
36,871
 
 
30,483
Other
 
6,325
 
 
6,372
 
 
5,886
 
 
5,824
Total definite-lived
 
intangible assets
$
1,021,916
 
$
1,012,371
 
$
178,328
 
$
136,113
The Company amortizes definite-lived intangible assets on a straight-line basis over
 
their useful lives.
 
The Company recorded
$
14.9
 
million and $
44.7
 
million of amortization expense for the three and nine months ended September
 
30, 2021, respectively.
 
Comparatively,
 
the Company recorded $
14.0
 
million and $
41.7
 
million of amortization expense for the three and nine months ended
September 30, 2020, respectively.
Estimated annual aggregate amortization expense for the current year
 
and subsequent five years is as follows:
For the year ended December 31, 2021
$
58,852
For the year ended December 31, 2022
59,173
For the year ended December 31, 2023
59,005
For the year ended December 31, 2024
58,338
For the year ended December 31, 2025
57,653
For the year ended December 31, 2026
57,346
The Company has four indefinite-lived intangible assets totaling $
205.1
 
million as of both September 30, 2021 and December 31,
2020, including $
204.0
 
million of indefinite-lived intangible assets for trademarks and tradename associated
 
with the Combination.
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.
The Company previously disclosed in its 2020 Form 10-K that as of March 31, 2020,
 
the Company concluded that the impact of
COVID-19 did not represent a triggering event 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 during that year and the impact of the sales 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 was recorded in the first quarter of 2020 to write down the carrying values of
 
these
intangible assets to their estimated fair values.
As of September 30, 2021, the Company continued to evaluate all potential triggering
 
events, including 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 September 30, 2021.
 
While the Company concluded that the impact of COVID-19 did not represent a
 
triggering
event as of September 30, 2021, 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.