XML 30 R16.htm IDEA: XBRL DOCUMENT
v3.22.4

Goodwill and Identifiable Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Identifiable Intangible Assets | 6. Goodwill and Identifiable Intangible Assets We had goodwill of $1,640.7 million and $1,538.9 million as of December 31, 2022 and 2021, respectively. The change in the net carrying amount of goodwill by segment was as follows:
(In millions) |  | Water Innovations |  |  |  | Outdoors & Security |  |  | Total Goodwill |
Balance at December 31, 2020(a) |  | $ | 750.1 |  |  |  | $ | 718.6 |  |  | $ | 1,468.7 |
2021 translation adjustments |  |  | (1.3 | ) |  |  |  | 0.1 |  |  |  | (1.2 | )
Acquisition-related adjustments |  |  | 65.3 |  |  |  |  | 6.1 |  |  |  | 71.4 |
Balance at December 31, 2021(a) |  | $ | 814.1 |  |  |  | $ | 724.8 |  |  | $ | 1,538.9 |
2022 translation adjustments |  |  | (9.4 | ) |  |  |  | (0.8 | ) |  |  | (10.2 | )
Acquisition-related adjustments |  |  | 88.7 |  |  |  |  | 23.3 |  |  |  | 112.0 |
Balance at December 31, 2022(a) |  | $ | 893.4 |  |  |  | $ | 747.3 |  |  | $ | 1,640.7 |
(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 intangible assets as of December 31, 2022 and 2021 were as follows:
| As of December 31, 2022 |  | As of December 31, 2021 |
(In millions) | Gross Carrying Amounts |  | Accumulated Amortization |  | Net Book Value |  | Gross Carrying Amounts |  | Accumulated Amortization |  | Net Book Value |
Indefinite-lived tradenames | $ | 478.1 |  | $ | — |  | $ | 478.1 |  | $ | 479.2 |  | $ | — |  | $ | 479.2 |
Amortizable intangible assets |  |  |  |  |  |  |  |  |  |  |  |
Tradenames |  | 47.5 |  |  | (6.8 | ) |  | 40.7 |  |  | 25.8 |  |  | (5.2 | ) |  | 20.6 |
Customer and contractual relationships |  | 662.6 |  |  | (239.6 | ) |  | 423.0 |  |  | 611.2 |  |  | (205.7 | ) |  | 405.5 |
Patents/proprietary technology |  | 128.5 |  |  | (69.5 | ) |  | 59.0 |  |  | 122.1 |  |  | (59.3 | ) |  | 62.8 |
Total |  | 838.6 |  |  | (315.9 | ) |  | 522.7 |  |  | 759.1 |  |  | (270.2 | ) |  | 488.9 |
Total identifiable intangibles | $ | 1,316.7 |  | $ | (315.9 | ) | $ | 1,000.8 |  | $ | 1,238.3 |  | $ | (270.2 | ) | $ | 968.1 |
We had identifiable intangible assets, principally tradenames and customer relationships, of $1,000.8 million and $968.1 million as of December 31, 2022 and 2021, respectively. The $78.4 million increase in gross identifiable intangible assets was primarily due to the acquisitions of Aqualisa and Solar. Amortizable intangible assets, principally customer relationships, are subject to amortization on a straight-line basis 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 include customer attrition rates and other relevant factors. We expect to record intangible amortization of approximately $50 million in 2023, $50 million in 2024, $50 million in 2025, $49 million in 2026 and $47 million in 2027. During the second quarter of 2020, extended closures of luxury plumbing showrooms associated with COVID-19 led to lower than expected sales related to an indefinite-lived tradename within the Water Innovations segment, which combined with the updated financial outlook compared to previous forecasts and the continued uncertainty of the pandemic on the sales and profitability related to the tradename, led us to conclude that it was more likely than not that the indefinite-lived tradename was impaired. Therefore, we performed an interim impairment test as of June 30, 2020, and as a result we recognized a pre-tax impairment charge of $13.0 million related to this tradename. We also performed an evaluation of the useful life of this tradename and determined it was no longer indefinite-lived due to changes in long-term management expectations and future operating plans. As a result, the remaining carrying value of this tradename is being amortized over its estimated useful life of 30 years. The fair value of the impaired 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 value include forecasted revenue growth rates, assumed royalty rates, and market-participant discount rates that reflect 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 10, Fair Value Measurements). As of December 31, 2022, the fair value of one of our Outdoors & Security tradenames exceeded its carrying value of $111.0 million by less than 10%. A reduction in the estimated fair value of any of our tradenames could trigger 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, 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. The significant assumptions used to estimate the fair value of the tradename impaired during the year ended December 31, 2020 were as follows:
Unobservable Input |  | 2020 |
Discount rate |  |  | 15.8 | %
Royalty rate (a) |  |  | 5.0 | %
Long-term revenue growth rate (b) |  |  | 3.0 | %
(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.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration