GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

5. GOODWILL AND INTANGIBLE ASSETS

The following table sets forth the changes in the carrying value of goodwill by reportable segment for the periods presented:


	EES		CSS		UBS		Total
(In thousands)
Balance as of January 1, 2021	$	853,456	$	1,115,500	$	1,218,213	$	3,187,169
Adjustments to goodwill for acquisitions(1)	1,124		8,603		4,215		13,942
Foreign currency exchange rate changes and other	6,378		(2,391)		3,235		7,222
Balance as of December 31, 2021	$	860,958	$	1,121,712	$	1,225,663	$	3,208,333
Adjustments to goodwill for acquisitions(2)	—		97,426		—		97,426
Foreign currency exchange rate changes	(35,459)		(10,241)		(19,128)		(64,828)
Balance as of December 31, 2022	$	825,499	$	1,208,897	$	1,206,535	$	3,240,931

(1) Reflects the effect on goodwill of the adjustments to the assets acquired and liabilities assumed in the merger with Anixter since their initial measurement, as described in Note 6, “Acquisitions and Disposals”.

(2) Adjustments to goodwill reflect the preliminary allocation of the purchase price paid to acquire Rahi Systems, as disclosed in Note 6, “Acquisitions and Disposals”, which is part of the CSS segment.

The components of intangible assets are as follows:


		December 31, 2022						December 31, 2021
	Life (in years)	Gross Carrying Amount (1)		Accumulated Amortization (1)		Net Carrying Amount		Gross Carrying Amount (1)		Accumulated Amortization (1)		Net Carrying Amount
		(In thousands)
Intangible assets:
Trademarks	Indefinite	$	792,080	$	—	$	792,080	$	795,065	$	—	$	795,065
Customer relationships	10 - 20	1,515,994		(377,645)		1,138,349		1,431,251		(308,180)		1,123,071
Distribution agreements	15 - 19	29,212		(24,388)		4,824		29,212		(22,714)		6,498
Trademarks	5 - 12	15,543		(7,396)		8,147		38,758		(20,058)		18,700
Non-compete agreements	2	—		—		—		4,300		(3,493)		807
		$	2,352,829	$	(409,429)	$	1,943,400	$	2,298,586	$	(354,445)	$	1,944,141

(1)Excludes the original cost and related accumulated amortization of fully-amortized intangible assets.

Amortization expense related to intangible assets totaled $92.9 million, $119.6 million and $66.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The following table sets forth the remaining estimated amortization expense for intangible assets for the next five years and thereafter:


For the year ending December 31,	(In thousands)
2023	$	88,498
2024	86,088
2025	83,015
2026	77,663
2027	74,769
Thereafter	741,287

The Company performed its annual impairment tests of goodwill and indefinite-lived intangible assets during the fourth quarter of 2022 by assessing qualitative factors to determine whether it was more likely than not that the fair values of its reporting units and indefinite-lived intangible assets were less than their respective carrying amounts. In performing this qualitative assessment, the Company assessed relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant events such as changes in key personnel, changes in the composition or carrying amount of the net assets of a reporting unit, and changes in share price. As a result of this assessment, the Company determined that it was more likely than not that the fair values of its reporting units and indefinite-lived intangible assets continued to exceed their respective carrying amounts and, therefore, a quantitative impairment test was not necessary.

The annual impairment tests of goodwill and indefinite-lived intangible assets involve the assessment of factors, events and circumstances at a point in time that are subject to change. As a result, there can be no assurance that the fair values of the Company's reporting units and indefinite-lived intangible assets will exceed their carrying values in the future, and that goodwill and indefinite-lived intangible assets will be fully recoverable.