| 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 2023 and 2022, we performed annual assessments of our goodwill resulting in no indicators of impairment.
Changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022, by segment, were as follows, in thousands:
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Accumulated |
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Gross Goodwill |
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FX Translation |
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Gross Goodwill |
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Impairment |
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Net Goodwill |
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December 31, 2022 |
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Additions/Disposals |
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Adjustment |
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December 31, 2023 |
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Losses |
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December 31, 2023 |
Goodwill, by segment: |
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Installation |
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$ |
1,826,979 |
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$ |
74,181 |
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$ |
- |
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$ |
1,901,160 |
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$ |
(762,021) |
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$ |
1,139,139 |
Specialty Distribution |
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902,036 |
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- |
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1,393 |
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903,429 |
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- |
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903,429 |
Total goodwill |
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$ |
2,729,015 |
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$ |
74,181 |
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$ |
1,393 |
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$ |
2,804,589 |
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$ |
(762,021) |
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$ |
2,042,568 |
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Accumulated |
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Gross Goodwill |
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FX Translation |
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Gross Goodwill |
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Impairment |
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Net Goodwill |
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December 31, 2021 |
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Additions |
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Adjustment |
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December 31, 2022 |
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Losses |
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December 31, 2022 |
Goodwill, by segment: |
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Installation |
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$ |
1,818,872 |
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$ |
8,107 |
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$ |
- |
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$ |
1,826,979 |
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$ |
(762,021) |
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$ |
1,064,958 |
Specialty Distribution |
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892,912 |
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10,585 |
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(1,461) |
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902,036 |
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- |
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902,036 |
Total goodwill |
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$ |
2,711,784 |
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$ |
18,692 |
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$ |
(1,461) |
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$ |
2,729,015 |
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$ |
(762,021) |
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$ |
1,966,994 |
The following table sets forth our other intangible assets, in thousands:
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As of December 31, |
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2023 |
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2022 |
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2021 |
Gross definite-lived intangible assets |
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$ |
827,793 |
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$ |
782,316 |
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$ |
783,843 |
Accumulated amortization |
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(236,735) |
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(167,349) |
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(99,634) |
Other intangible assets, net |
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$ |
591,058 |
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$ |
614,967 |
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$ |
684,209 |
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Amortization expense |
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$ |
69,139 |
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$ |
67,620 |
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$ |
36,501 |
The following table sets forth a detail of our intangible assets as of December 31, 2023, 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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$ |
46,775 |
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$ |
(18,951) |
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$ |
27,824 |
Customer relationships |
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773,099 |
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(210,029) |
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563,070 |
Non-compete |
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7,919 |
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(7,755) |
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164 |
Total |
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$ |
827,793 |
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$ |
(236,735) |
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$ |
591,058 |
The following table sets forth a detail of our intangible assets as of December 31, 2022, 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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$ |
44,047 |
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$ |
(13,513) |
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$ |
30,534 |
Customer relationships |
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730,550 |
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(146,192) |
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584,358 |
Non-compete |
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7,719 |
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(7,644) |
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75 |
Total |
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$ |
782,316 |
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$ |
(167,349) |
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$ |
614,967 |
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 |
2024 |
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$ |
70,636 |
2025 |
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70,636 |
2026 |
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70,636 |
2027 |
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69,417 |
2028 |
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68,921 |
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