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Goodwill and Other Intangible Assets (Notes) | 12 Months Ended
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Dec. 31, 2024
Goodwill and intangible assets [Abstract] |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Other Intangible Assets Goodwill Goodwill is the excess purchase price remaining from an acquisition after an allocation of purchase price has been made to identifiable assets acquired and liabilities assumed based on estimated fair values. The Company transferred certain agencies between operating segments as of January 1, 2023 and January 1, 2024, respectively, which resulted in certain changes to our reporting units and reportable segments. We have allocated goodwill to our reporting units using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior and subsequent to the reallocations and determined that no impairment existed. The changes in the carrying value of goodwill for our reportable segments, MD&E, IA&C and SC&E, for the years ended December 31, 2024 and 2023 are listed below.
|  | MD&E |  | IA&C |  | SC&E |  | Total 1
Balance as of December 31, 2022 |  | $ | 2,487.6 |  |  | $ | 1,878.6 |  |  | $ | 684.4 |  |  | $ | 5,050.6 |
Goodwill Reallocation |  | 180.6 |  |  | (180.6) |  |  | — |  |  | — |
Balance as of January 1, 2023 |  | $ | 2,668.2 |  |  | $ | 1,698.0 |  |  | $ | 684.4 |  |  | $ | 5,050.6 |
Acquisitions/(Dispositions) |  | 2.2 |  |  | 10.7 |  |  | (9.8) |  |  | 3.1 |
Foreign currency and other |  | 7.1 |  |  | 14.5 |  |  | 5.6 |  |  | 27.2 |
Balance as of December 31, 2023 |  | $ | 2,677.5 |  |  | $ | 1,723.2 |  |  | $ | 680.2 |  |  | $ | 5,080.9 |
Goodwill Reallocation |  | 13.3 |  |  | (13.3) |  |  | — |  |  | — |
Balance as of January 1, 2024 |  | $ | 2,690.8 |  |  | $ | 1,709.9 |  |  | $ | 680.2 |  |  | $ | 5,080.9 |
Impairment of goodwill 1 |  | (232.1) |  |  | — |  |  | — |  |  | (232.1) |
(Dispositions)/Acquisitions 2 |  | (116.5) |  |  | (1.2) |  |  | 0.1 |  |  | (117.6) |
Foreign currency and other |  | (9.4) |  |  | (26.9) |  |  | (5.5) |  |  | (41.8) |
Balance as of December 31, 2024 3 |  | $ | 2,332.8 |  |  | $ | 1,681.8 |  |  | $ | 674.8 |  |  | $ | 4,689.4 |
1 The amounts for our MD&E segment includes impairment of $24.9 related to a disposal group. 2 The amounts for the year ended December 31, 2024 within our MD&E segment represents goodwill allocated to businesses which were held for sale as of the third quarter of 2024. The sale of one of these businesses closed in the fourth quarter of 2024. 3 The goodwill balances at December 31, 2024 includes $207.2 of accumulated impairment related to the MD&E reportable segment. The accumulated impairment relates to impairment charges recorded during the third quarter of 2024. Q3 2024 Interim Goodwill Test During the third quarter of 2024, we concluded that declines in the forecasted performance of one of our reporting units included within our MD&E segment, combined with the classification of R/GA and Huge, which comprised a significant portion of the reporting unit, as held for sale was a triggering event which required a goodwill impairment assessment. As of August 31, 2024, we performed a pre-classification goodwill impairment test and determined that the carrying value of the reporting unit exceeded its fair value, and therefore, goodwill of the reporting unit was impaired. The Company completed an analysis to allocate goodwill to the remaining reporting unit, R/GA and Huge using a relative fair value approach. Additionally, we performed a post-classification goodwill impairment test on R/GA and Huge, as well as an impairment test of the businesses remaining within the reporting unit. We determined that the carrying value of one disposal group exceeded its fair value and goodwill was impaired. As a result of both the pre-classification and post-classification impairment tests, the Company recorded non-cash goodwill impairment charges of $232.1. We concluded that the fair value of the remaining reporting unit exceeded its carrying value and the remaining reporting unit was not impaired. The fair value of both the reporting unit pre-classification and the fair values of the disposal groups and the remaining reporting unit that is in our ongoing operations for which we performed the quantitative interim impairment tests were estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. We generally apply an equal weighting to the income and market approaches for our quantitative impairment test analysis, although higher weighting was given to the market approach for determining the fair value of disposal groups. For the income approach, we used projections, which require the use of significant estimates and assumptions specific to the reporting unit as well as those based on general economic conditions. Factors specific to the reporting unit and disposal groups include revenue growth, profit margins, terminal value growth rates, capital expenditures projections, assumed tax rates, discount rates and other assumptions deemed reasonable by management. For the market approach, we used judgment in identifying the relevant comparable-company market multiples. Additionally, our determination of the market approach for the disposal groups also considered ranges of initial offers received as part of the sale process. The discount rate used for the reporting unit and disposal groups is influenced by general market conditions as well as factors specific to the reporting unit. For the interim impairment tests of goodwill, the discount rates used ranged from 14.5% to 22.0%, and the terminal value growth rates were 2.5% and 3.0%. The terminal value growth rates represent the expected long-term growth rates. The revenue growth rates utilized in the interim impairment tests were between (2.0%) and 6.0%. Factors influencing the revenue growth rates include the nature of the services the reporting unit and disposal groups provide for its clients, the geographic locations in which the reporting unit and disposal groups conduct business and the maturity of the reporting units and disposal groups. We believe that the estimates and assumptions we made are reasonable, but they are susceptible to change from period to period. Actual results of operations, cash flows and other factors will likely differ from the estimates used in our valuation, and it is possible that differences and changes could be material. A deterioration in profitability, adverse market conditions, significant client losses, changes in spending levels of our existing clients or a different economic outlook than currently estimated by management could have a significant impact on the estimated fair value of our reporting unit and could result in an impairment charge in the future. See Note 1 for information regarding our annual impairment testing methodology. Other Intangible Assets Other intangible assets primarily consist of customer lists and know-how and technology, which have definite lives and are subject to amortization on a straight-line basis with estimated useful lives generally between 10 and 15 years, as well as trade names which have both indefinite and definite lives which are subject to amortization on a straight-line basis with estimated useful lives of 15 years. Amortization expense for other intangible assets for the years ended December 31, 2024, 2023 and 2022 was $81.8, $84.0 and $84.7, respectively. There were no material impairment charges on other intangibles for the years ended December 31, 2024, 2023 and 2022. During 2024 there were no other intangible assets related to our acquisitions, and during 2023 we recorded approximately $8.5 of other intangible assets related to our acquisitions. The following table provides a summary of other intangible assets, which are included in our Consolidated Balance Sheets.
|  | December 31,
|  | 2024 |  | 2023
|  | Gross Amount |  | Accumulated Amortization |  | Net Amount |  | Gross Amount |  | Accumulated Amortization |  | Net Amount
Customer lists |  | $ | 872.9 |  |  | $ | (474.0) |  |  | $ | 398.9 |  |  | $ | 882.1 |  |  | $ | (431.6) |  |  | $ | 450.5 |
Know-how and technology |  | 239.2 |  |  | (166.4) |  |  | 72.8 |  |  | 239.5 |  |  | (138.9) |  |  | 100.6 |
Trade names |  | 225.5 |  |  | (48.1) |  |  | 177.4 |  |  | 227.3 |  |  | (45.7) |  |  | 181.6 |
Other |  | 16.1 |  |  | (5.3) |  |  | 10.8 |  |  | 16.2 |  |  | (5.3) |  |  | 10.9 |
Total 1 |  | $ | 1,353.7 |  |  | $ | (693.8) |  |  | $ | 659.9 |  |  | $ | 1,365.1 |  |  | $ | (621.5) |  |  | $ | 743.6 |
1 Total gross amount includes indefinite-lived intangible assets not subject to amortization of $165.3 and $165.7 in the years ended December 31, 2024 and 2023, respectively, which primarily consist of trade names. The estimated annual amortization expense for other intangible assets for the next five years as of December 31, 2024 is listed below.
|  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029
Estimated amortization expense |  | $ | 80.9 |  |  | $ | 78.0 |  |  | $ | 68.6 |  |  | $ | 51.3 |  |  | $ | 50.8 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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