GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

GOODWILL AND OTHER INTANGIBLES [Abstract]

Grainger completed its annual impairment testing of goodwill and intangible assets during the fourth quarter of 2022 and 2021. Based on the results of that testing, the Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators and concluded that it was more likely than not that the fair value of the reporting units exceeded their carrying amounts at each respective period.

High-Touch Solutions N.A. – Canada Business

As of December 31, 2022 and 2021, the Canada business reporting unit had goodwill of $121 million and $129 million, respectively. As part of our annual impairment testing, the Company performed evaluations of changes in key assumptions, notably projections of revenue growth, operating expenditures, changes in working capital, and factors that could impact the discount rate used in the analysis. In doing so, we compared the current results to forecasted expectations of the most recent quantitative analysis, along with analyzing macroeconomic conditions, current industry trends and transactions, and other market data of industry peers. The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators for its Canada business and concluded that it was more likely than not that the fair value of the Canada business reporting unit exceeded its carrying amount.

The Company's balances and changes in the carrying amount of Goodwill by segment are as follows (in millions of dollars):


	High-Touch Solutions N.A.		Endless Assortment		Other		Total
Balance at January 1, 2021	$	321	$	70	$	—	$	391


Translation	—		(7)		—		(7)
Balance at December 31, 2021	321		63		—		384


Translation	(8)		(5)		—		(13)
Balance at December 31, 2022	$	313	$	58	$	—	$	371

The aggregate cumulative goodwill impairments as of December 31, 2022, was $137 million and consisted of $32 million in High-Touch Solutions N.A. and $105 million in Other.

The balances and changes in intangible assets – net are as follows (in millions of dollars):


		As of December 31,
		2022						2021
	Weighted average life	Gross carrying amount		Accumulated amortization/ impairment		Net carrying amount		Gross carrying amount		Accumulated amortization/impairment		Net carrying amount
Customer lists and relationships	11.7 years	$	217	$	181	$	36	$	221	$	176	$	45
Trademarks, trade names and other	14.4 years	32		22		10		36		24		12
Non-amortized trade names and other	Indefinite	22		—		22		25		—		25
Capitalized software	4.2 years	580		416		164		525		369		156
Total intangible assets	6.9 years	$	851	$	619	$	232	$	807	$	569	$	238

Amortization expense of intangible assets recorded in SG&A was $61 million, $63 million, and $60 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Estimated amortization expense for future periods is as follows (in millions of dollars):


Year	Expense
2023	$	61
2024	53
2025	44
2026	31
2027	16
Thereafter	5
Total	$	210