Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

The Company performs its annual testing of goodwill and indefinite-lived intangibles on the first day of the fourth quarter of each year. Between annual testing dates, the Company monitors factors such as its market capitalization, comparable company market multiples and macroeconomic conditions to identify conditions that could impact the Company’s assumptions utilized in the determination of the estimated fair values of the Company’s reporting units and indefinite-lived intangible assets significantly enough to trigger an impairment.

The goodwill impairment tests are based on determining the fair value of the specified reporting units based on management judgments and assumptions using the discounted cash flows under the income approach classified in Level 3 of the fair value hierarchy and comparable company market valuation classified in Level 2 of the fair value hierarchy approaches. The Company has identified Global Ceramic, Flooring NA and Flooring ROW as its reporting units for the purposes of allocating goodwill and intangibles at the asset level, as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as judgments and assumptions about appropriate sales growth rates, operating margins, weighted average cost of capital (“WACC”) and comparable company market multiples.

As a result of a decrease in the Company’s market capitalization, macroeconomic conditions and an increase in the WACC, the Company determined that a triggering event occurred requiring goodwill impairment testing for each of its reporting units as of September 30, 2023. The impairment tests indicated pre-tax, non-cash goodwill impairment charges related to all 3 reporting units of $870.8 million ($859.7 million net of tax) which the Company recorded during 2023.

The Company compared the estimated fair values of its indefinite-lived intangibles to their carrying values and determined that there were impairment charges of $8.2 million ($6.3 million net of tax) in Global Ceramic Segment during the fourth quarter of 2024 and $7.0 million ($5.2 million net of tax) in all 3 reporting units during the third quarter of 2023.

A significant or prolonged deterioration in economic conditions, continued increases in the costs of raw materials and energy combined with an inability to pass these costs on to customers, a further decline in the Company’s market capitalization or comparable company market multiples, projected future cash flows, or increases in the WACC, could impact the Company’s assumptions and require a reassessment of goodwill or indefinite-lived intangible assets for impairment in future periods. Future declines in estimated after tax cash flows, increases in the WACC or a decline in market capitalization could result in an additional indication of impairment in one or more of the Company’s reporting units.

The following tables summarize the components of goodwill and intangible assets:

Goodwill:


(In millions)	Global Ceramic		Flooring NA	Flooring ROW	Total
Balances as of December 31, 2022 (1)	$	339.8	592.0	996.0	1,927.8
Goodwill adjustments related to acquisitions	—		(4.9)	3.2	(1.7)
Goodwill recognized	87.5		—	—	87.5
Impairment charges	(424.3)		(214.8)	(231.7)	(870.8)
Currency translation	(3.0)		—	19.9	16.9
Balances as of December 31, 2023	—		372.3	787.4	1,159.7
Goodwill adjustments related to acquisitions	—		—	—	—
Goodwill recognized	—		—	—	—
Impairment charges	—		—	—	—
Currency translation	—		—	(47.6)	(47.6)
Balances as of December 31, 2024	$	—	372.3	739.8	1,112.1

(1) Net of accumulated impairment losses of $2,015.9 ($1,220.4 in Global Ceramic, $343.1 in Flooring NA and $452.4 in Flooring ROW).

Intangible assets:


(In millions)	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2022	$	668.3
Intangible assets acquired	38.5
Intangible assets impaired	(7.0)
Currency translation	5.9
Balance as of December 31, 2023	705.7
Intangible assets acquired	—
Intangible assets impaired	(8.2)
Currency translation	(39.7)
Balance as of December 31, 2024	$	657.8


(In millions)	Customer Relationships		Patents	Other	Total
Intangible assets subject to amortization:
Balances as of December 31, 2022
Gross carrying amount	$	673.6	242.1	8.5	924.2
Accumulated amortization	(493.4)		(239.0)	(2.2)	(734.6)
Net intangible assets subject to amortization	180.2		3.1	6.3	189.6
Balances as of December 31, 2023
Gross carrying amount	691.5		249.7	8.7	949.9
Accumulated amortization	(531.0)		(247.2)	(2.1)	(780.3)
Net intangible assets subject to amortization	160.5		2.5	6.6	169.6
Balances as of December 31, 2024
Gross carrying amount	662.4		235.4	8.5	906.3
Accumulated amortization	(536.3)		(233.6)	(2.3)	(772.2)
Net intangible assets subject to amortization	$	126.1	1.8	6.2	134.1


	Years Ended December 31,
(In millions)	2024		2023	2022
Amortization expense	$	27.6	28.3	28.1

Estimated amortization expense for the years ending December 31 are as follows:


(In millions)	Amount
2025	$	26.9
2026	26.7
2027	19.9
2028	12.5
2029	10.5