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Goodwill and Other Intangibles, Net | 9 Months Ended
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Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangibles, Net | 11. Goodwill and Other Intangibles, Net The following table provides information related to the carrying value of all intangible assets, other than goodwill:
| September 30, 2022 |  |  | December 31, 2021 |
| Gross |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |
| Carrying |  |  | Accumulated |  |  |  |  |  | Carrying |  |  | Accumulated |  |  |  |
| Amount |  |  | Amortization |  |  | Net |  |  | Amount |  |  | Amortization |  |  | Net |
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade Names | $ | 1,384.7 |  |  | $ | (384.5 | ) |  | $ | 1,000.2 |  |  | $ | 1,386.7 |  |  | $ | (336.2 | ) |  | $ | 1,050.5 |
Customer Relationships |  | 664.0 |  |  |  | (349.3 | ) |  |  | 314.7 |  |  |  | 664.0 |  |  |  | (322.4 | ) |  |  | 341.6 |
Patents/Formulas |  | 239.1 |  |  |  | (110.6 | ) |  |  | 128.5 |  |  |  | 239.1 |  |  |  | (99.4 | ) |  |  | 139.7 |
Total | $ | 2,287.8 |  |  | $ | (844.4 | ) |  | $ | 1,443.4 |  |  | $ | 2,289.8 |  |  | $ | (758.0 | ) |  | $ | 1,531.8 |
Indefinite Lived Intangible Assets - Gross Carrying Amount
| September 30, |  |  | December 31, |  |  |  |  |  |  |  |  |
| 2022 |  |  | 2021 |  |  |  |  |  |  |  |  |
Trade Names | $ | 1,960.7 |  |  | $ | 1,962.5 |  |  |  |  |  |  |  |  |
Intangible amortization expense was $29.3 and $29.9 for the third quarter of 2022 and 2021, respectively. Intangible amortization expense amounted to $88.1 and $90.9 for the first nine months of 2022 and 2021, respectively. The Company estimates that intangible amortization expense will be approximately $117.0 in 2022 and approximately $115.0 to $107.0 annually over the next five years. The Company’s indefinite lived intangible impairment review is completed in the fourth quarter of each year. Fair value for indefinite lived intangible assets was estimated based on a “relief from royalty” or “excess earnings” discounted cash flow method, which contains numerous variables that are subject to change as business conditions change, and therefore could impact fair values in the future. The key assumptions used in determining fair value are sales growth, profitability margins, tax rates, discount rates and royalty rates. The Company determined that the fair value of all indefinite lived intangible assets for each of the years in the three-year period ended December 31, 2021 exceeded their respective carrying values based upon the forecasted cash flows and profitability. Recently, the Company’s global FLAWLESS business has experienced declining customer demand for many of its products, primarily due to lower consumer spending for discretionary products from inflation. In addition, the FLAWLESS business has also started to experience margin contraction as the Company has been unable to implement price increases in a highly competitive category to offset higher labor, material and transportation costs. These factors have resulted in a reduction in expected future cash flows that, if these factors persist or continue to worsen, may result in cash flows that are not sufficient to recover the carrying value of the long-lived assets of the business. The projected cash flows exceed the carrying value of the long lived assets by slightly more than 10%. The key assumptions used to determine the projected cash flows include revenue, gross margin and marketing expense assumptions based on recent trends, including the reduction in customer demand for discretionary products and declining gross margins that FLAWLESS has been experiencing. The carrying value of the long-lived assets for the FLAWLESS business is approximately $465.0 at September 30, 2022. These assets are being amortized over their remaining weighted average life of 16 years. The long-lived assets of the FLAWLESS business are susceptible to impairment risk based on the factors described above. While management can and has implemented strategies to address the risk, including lowerin g the Company’s production costs, investing in new product ideas, and developing new creative advertising, significant adverse changes in demand, operating plans or economic factors in the future could reduce the underlying cash flows that could trigger a future impairment charge. In recent years the Company’s TROJAN® business, specifically the condom category, has not grown and competition has increased. Social distancing requirements due to the COVID-19 pandemic had further negatively impacted the business. As a result, the TROJAN business had experienced stagnant sales and profits resulting in a reduction in expected future cash flows which eroded a portion of the excess between the fair and carrying value of the tradename. This indefinite-lived intangible asset may be susceptible to impairment risk and a continued decline in fair value could trigger a future impairment charge of the TROJAN tradename. The carrying value of the TROJAN tradename is $176.4 and fair value exceeded carrying value by 70% as of October 1, 2021. The key assumptions used in the projections from the Company’s October 1, 2021 impairment analysis include discount rates of 7.0% in the U.S. and 8.5% internationally, revenue assumptions based on recent trends, and an average royalty rate of approximately 10%. While management has implemented strategies to address the risk, including lowering production costs, investing in new product ideas, and developing new creative advertising, significant changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair value. More recently, TROJAN has experienced a recovery in sales and profits as it has benefited from an easing of COVID-19 social restrictions which led to an increase in sexual activity. The Company expects this trend will continue with the adoption of vaccines, the reduction of social distancing restrictions and the benefit of management strategies to improve sales and profitability. The Company’s Passport Food Safety business has experienced sales and profit declines due to decreased demand driven by the COVID-19 pandemic and pressures from new competitive activities resulting from the loss of exclusivity on a key product line. In the fourth quarter of 2021, management’s review of the outlook for the Passport business indicated an assessment of the recoverability of the long-lived assets associated with the business was necessary. That review determined that the estimated future cash flows would not be sufficient to recover the carrying value of the assets resulting in an impairment of the associated tradename and other intangible assets of $11.3 in the fourth quarter of 2021. The charge was recorded in selling, general and administrative expenses. The assets have a current net book value of approximately $8.5 and are being amortized over their remaining weighted average life of 6 years. The Company is implementing strategies to address the decline in profitability. However, if unsuccessful, this decline could trigger an additional future impairment char ge. The carrying amount of goodwill is as follows:
| Consumer |  |  | Consumer |  |  | Specialty |  |  |  |
| Domestic |  |  | International |  |  | Products |  |  | Total |
Balance at December 31, 2021 | $ | 1,899.8 |  |  | $ | 238.7 |  |  | $ | 136.0 |  |  | $ | 2,274.5 |
TheraBreath adjustment |  | 0.5 |  |  |  | (4.3 | ) |  |  | 0.0 |  |  |  | (3.8 | )
Balance at September 30, 2022 | $ | 1,900.3 |  |  | $ | 234.4 |  |  | $ | 136.0 |  |  | $ | 2,270.7 |
The result of the Company’s annual goodwill impairment test, performed in the beginning of the second quarter of 2022, determined that the estimated fair value substantially exceeded the carrying values of all reporting units. The determination of fair value contains numerous variables that are subject to change as business conditions change and therefore could impact fair value in the future. The Company has never incurred a goodwill impairment charge.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
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