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Goodwill and Identifiable Intangible Assets | 9 Months Ended
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Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Identifiable Intangible Assets | 5. Goodwill and Identifiable Intangible Assets We had goodwill of $2,546.2 million and $2,465.1 million as of September 30, 2022 and December 31, 2021, respectively. The change in the net carrying amount of goodwill by segment was as follows:
(In millions) |  | Water Innovations |  |  | Outdoors & Security |  |  | Cabinets |  |  | Total Goodwill |
Goodwill at December 31, 2021(a) |  | $ | 814.1 |  |  | $ | 724.8 |  |  | $ | 926.2 |  |  | $ | 2,465.1 |
Year-to-date translation adjustments |  |  | (24.5 | ) |  |  | (0.8 | ) |  |  | (1.9 | ) |  |  | (27.2 | )
Acquisition-related adjustments |  |  | 87.3 |  |  |  | 21.0 |  |  |  | - |  |  |  | 108.3 |
Goodwill at September 30, 2022(a) |  | $ | 876.9 |  |  | $ | 745.0 |  |  | $ | 924.3 |  |  | $ | 2,546.2 |
(a) Net of accumulated impairment losses of $399.5 million in the Outdoors & Security segment. The gross carrying value and accumulated amortization by class of identifiable intangible assets as of September 30, 2022 and December 31, 2021 were as follows:
(In millions) |  | As of September 30, 2022 |  |  | As of December 31, 2021 |
|  | Gross Carrying Amounts |  |  | Accumulated Amortization |  |  | Net Book Value |  |  | Gross Carrying Amounts |  |  | Accumulated Amortization |  |  | Net Book Value |
Indefinite-lived tradenames |  | $ | 681.5 |  |  | $ | - |  |  | $ | 681.5 |  |  | $ | 711.1 |  |  | $ | - |  |  | $ | 711.1 |
Amortizable intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tradenames |  |  | 54.3 |  |  |  | (16.4 | ) |  |  | 37.9 |  |  |  | 36.4 |  |  |  | (15.5 | ) |  |  | 20.9 |
Customer and contractual relationships |  |  | 1,016.5 |  |  |  | (422.0 | ) |  |  | 594.5 |  |  |  | 975.7 |  |  |  | (388.2 | ) |  |  | 587.5 |
Patents/proprietary technology |  |  | 139.0 |  |  |  | (77.0 | ) |  |  | 62.0 |  |  |  | 133.1 |  |  |  | (68.8 | ) |  |  | 64.3 |
Total |  |  | 1,209.8 |  |  |  | (515.4 | ) |  |  | 694.4 |  |  |  | 1,145.2 |  |  |  | (472.5 | ) |  |  | 672.7 |
Total identifiable intangibles |  | $ | 1,891.3 |  |  | $ | (515.4 | ) |  | $ | 1,375.9 |  |  | $ | 1,856.3 |  |  | $ | (472.5 | ) |  | $ | 1,383.8 |
We had net identifiable intangible assets of $1,375.9 million and $1,383.8 million as of September 30, 2022 and December 31, 2021, respectively. The $35.0 million increase in gross identifiable intangible assets was primarily due to the acquisition of Aqualisa and Solar partially offset b y the tradename impairment charges of $26.0 million in our Cabinets segment (as discussed below) and translation adjustments. Amortizable identifiable intangible assets, principally customer relationships, are subject to amortization over their estimated useful life, ranging from 5 to 30 years, based on the assessment of a number of factors that may impact useful life, which includes customer attrition rates and other relevant factors. The asset impairment charge of $26.0 million in 2022 relates to an indefinite-lived tradename within our Cabinets segment. During the second quarter of 2022, production was shifted at a historical make-to-order plant to a stock product line, to enable what we expect to be a higher value purpose and growth opportunity. This production shift led to downward revisions to forecasted revenue growth rates associated with the tradename. The fair value of this tradename was measured using the relief-from-royalty approach, which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over its remaining useful life. Some of the more significant assumptions inherent in estimating the fair values include forecasted revenue growth rates for the tradename, assumed royalty rate, and a market-participant discount rate that reflects the level of risk associated with the tradenames’ future revenues and profitability. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated growth rates, and management plans. These assumptions represent Level 3 inputs of the fair value hierarchy (refer to Note 8). The significant assumptions used to estimate the fair value of the tradename impaired in the second quarter of 2022 were as follows:
Unobservable Input |  | 2022 |
Discount rate |  |  | 11.6 | %
Royalty rate(a) |  |  | 3 | %
Long-term revenue growth rate(b) |  |  | 1 | %
(a) Represents estimated percentage of sales a market-participant would pay to license the impaired tradename. (b) Selected long-term revenue growth rate within 10-year projection period of the impaired tradename. As of September 30, 2022, the estimated fair value of this tradename equaled its carrying value of $59.0 million. A reduction in the estimated fair value of this tradename could trigger additional impairment charges in future periods. Events or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include: lower than forecasted revenues, more severe impacts of the COVID-19 pandemic than currently expected, including due to resurgences of the virus, actual new construction and repair and remodel growth rates that fall below our assumptions, actions of key customers, increases in discount rates, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, lower levels of discretionary consumer spending, a decrease in royalty rates and a decline in the trading price of our common stock. We cannot predict the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived assets.

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