Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

During 2022, the Company acquired five companies which resulted in the recognition of goodwill of $565.8 million and finite-lived intangibles of $282.8 million. The acquired intangibles are being amortized over a weighted-average useful life of approximately 14 years. During 2021, the Company acquired two companies which resulted in the recognition of goodwill of $155.6 million and finite-lived intangibles of $11.3 million. As a result of certain adjustments to the preliminary purchase accounting for the 2021 acquisitions during 2022, goodwill decreased by $72.3 million and the fair value of finite-lived intangibles assets increased by $61.3 million. In addition, during 2021, the Company divested its Wattyl business in Australia and New Zealand. See Note 3 for additional information related to the acquisitions and divestiture.

In accordance with the Goodwill and Other Intangibles Topic of the ASC, goodwill at the reporting unit level and indefinite-lived intangible assets are tested for impairment annually, and interim impairment tests are performed whenever an event occurs or circumstances change that indicate an impairment has more likely than not occurred. October 1 has been established for the annual impairment review. An optional qualitative assessment may alleviate the need to perform quantitative goodwill and indefinite-lived intangible asset impairment tests when impairment is unlikely. Should a quantitative impairment test be performed, values are estimated separately for goodwill and indefinite-lived intangible assets using a valuation model, incorporating discount rates commensurate with the risks involved for each group of assets.

The annual impairment review performed as of October 1, 2022, which incorporated the impact of the Restructuring Plan, resulted in trademark impairments totaling $15.5 million in the Consumer Brands Group related to the discontinuation of an architectural paint brand and lower than anticipated sales of an acquired brand and no goodwill impairment.

The annual impairment review performed as of October 1, 2021 did not result in any trademark or goodwill impairment. The annual impairment review performed as of October 1, 2020 resulted in trademark impairment of $2.3 million in the Performance Coatings Group related to lower than anticipated sales of an acquired brand and no goodwill impairment.

A summary of changes in the Company’s carrying value of goodwill by Reportable Segment is as follows:


Goodwill	The Americas Group		Consumer Brands Group		Performance Coatings Group		Consolidated Totals
Balance at January 1, 2020 (1)	$	2,256.6	$	1,753.9	$	2,994.3	$	7,004.8

Currency and other adjustments			0.7		43.6		44.3
Balance at December 31, 2020 (1)	2,256.6		1,754.6		3,037.9		7,049.1
Acquisitions					155.6		155.6
Currency and other adjustments			(45.7)		(24.4)		(70.1)
Balance at December 31, 2021 (1)	2,256.6		1,708.9		3,169.1		7,134.6
Acquisitions and acquisition adjustments	49.7		21.3		422.5		493.5
Currency and other adjustments			(2.8)		(42.1)		(44.9)
Balance at December 31, 2022 (1)	$	2,306.3	$	1,727.4	$	3,549.5	$	7,583.2

(1) Net of accumulated impairment losses of $19.4 million ($10.5 million in The Americas Group, $8.1 million in the Consumer Brands Group and $0.8 million in the Performance Coatings Group).

A summary of the Company’s carrying value of intangible assets is as follows:


	Finite-Lived Intangible Assets										Trademarks With Indefinite Lives (1)		Total Intangible Assets
	Software		Customer Relationships		Intellectual Property		All Other		Subtotal
December 31, 2022
Gross	$	180.2	$	3,121.2	$	1,732.5	$	427.5	$	5,461.4
Accumulated amortization	(148.1)		(1,132.1)		(477.4)		(258.0)		(2,015.6)
Net value	$	32.1	$	1,989.1	$	1,255.1	$	169.5	$	3,445.8	$	556.2	$	4,002.0

December 31, 2021
Gross	$	166.0	$	3,005.7	$	1,730.3	$	303.5	$	5,205.5
Accumulated amortization	(149.3)		(961.6)		(396.5)		(279.7)		(1,787.1)
Net value	$	16.7	$	2,044.1	$	1,333.8	$	23.8	$	3,418.4	$	583.1	$	4,001.5

December 31, 2020
Gross	$	166.8	$	3,181.6	$	1,730.3	$	306.8	$	5,385.5
Accumulated amortization	(142.8)		(804.7)		(310.0)		(273.4)		(1,530.9)
Net value	$	24.0	$	2,376.9	$	1,420.3	$	33.4	$	3,854.6	$	616.6	$	4,471.2

(1) Trademarks are net of accumulated impairment losses of $139.9 million as of December 31, 2022 and $124.4 million as of December 31, 2021 and 2020.

Amortization of finite-lived intangible assets is estimated as follows for the next five years: $323.1 million in 2023, $320.0 million in 2024, $311.1 million in 2025, $302.9 million in 2026 and $298.9 million in 2027.

Although the Company believes its estimates of fair value related to reporting units and indefinite-lived intangible assets are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact and future impairment charges may be required.