| Goodwill and Other Intangibles |
5. GOODWILL AND OTHER INTANGIBLES
We have two reporting units which are also our operating and reporting segments: Installation and Specialty Distribution. Both reporting units contain goodwill. Assets acquired and liabilities assumed are assigned to the applicable reporting unit based on whether the acquired assets and liabilities relate to the operations of such unit and determination of its fair value. Goodwill assigned to the reporting unit is the excess of the fair value of the acquired business over the fair value of the individual assets acquired and liabilities assumed for the reporting unit.
In the fourth quarters of 2021 and 2020, we performed annual qualitative assessments of our goodwill resulting in no indicators of impairment.
Changes in the carrying amount of goodwill for the years ended December 31, 2021 and 2020, by segment, were as follows, in thousands:
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Fx |
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Accumulated |
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Gross Goodwill |
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Translation |
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Gross Goodwill |
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Impairment |
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Net Goodwill |
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December 31, 2020 |
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Additions |
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Adjustment |
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December 31, 2021 |
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Losses |
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December 31, 2021 |
Goodwill, by segment: |
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Installation |
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$ |
1,726,356 |
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$ |
92,516 |
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— |
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$ |
1,818,872 |
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$ |
(762,021) |
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$ |
1,056,851 |
Specialty Distribution |
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446,350 |
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451,331 |
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(4,769) |
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892,912 |
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— |
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892,912 |
Total goodwill |
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$ |
2,172,706 |
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$ |
543,847 |
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$ |
(4,769) |
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$ |
2,711,784 |
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$ |
(762,021) |
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$ |
1,949,763 |
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Accumulated |
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Gross Goodwill |
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Gross Goodwill |
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Impairment |
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Net Goodwill |
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December 31, 2019 |
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Additions |
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December 31, 2020 |
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Losses |
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December 31, 2020 |
Goodwill, by segment: |
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Installation |
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$ |
1,683,589 |
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$ |
42,767 |
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$ |
1,726,356 |
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$ |
(762,021) |
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$ |
964,335 |
Specialty Distribution |
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446,350 |
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— |
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446,350 |
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— |
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446,350 |
Total goodwill |
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$ |
2,129,939 |
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$ |
42,767 |
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$ |
2,172,706 |
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$ |
(762,021) |
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$ |
1,410,685 |
The following table sets forth our other intangible assets, in thousands:
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As of December 31, |
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2021 |
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2020 |
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2019 |
Gross definite-lived intangible assets |
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$ |
783,843 |
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$ |
252,751 |
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$ |
221,382 |
Accumulated amortization |
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(99,634) |
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(62,146) |
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(40,260) |
Net definite-lived intangible assets |
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684,209 |
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190,605 |
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181,122 |
Indefinite-lived intangible assets not subject to amortization |
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— |
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— |
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— |
Other intangible asset, net |
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$ |
684,209 |
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$ |
190,605 |
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$ |
181,122 |
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Amortization expense |
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$ |
36,501 |
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$ |
21,886 |
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$ |
20,765 |
The following table sets forth a breakout of our intangible assets as of December 31, 2021, in thousands:
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Gross Definite-lived Intangible Assets |
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Accumulated Amortization |
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Net Definite-lived Intangible Assets |
Trademarks |
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$ |
44,365 |
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$ |
(8,161) |
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$ |
36,204 |
Customer relationships |
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731,759 |
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(84,499) |
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647,260 |
Non-compete |
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7,719 |
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(6,974) |
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745 |
Total |
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$ |
783,843 |
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$ |
(99,634) |
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$ |
684,209 |
The following table sets forth the amortization expense related to the definite-lived intangible assets during each of the next five years, in thousands:
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Amortization
Expense |
2022 |
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$ |
67,216 |
2023 |
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66,532 |
2024 |
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66,443 |
2025 |
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66,443 |
2026 |
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66,443 |
See Note 15 – Business Combinations for breakout by major intangible asset class and their weighted average estimated useful lives.
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