TENNANT CO
For the period ended Dec 31, 2023. Filed Feb 22, 2024.
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FY2023 · Filed Feb 22, 2024
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Goodwill and Intangible Assets
- Goodwill and Intangible Assets
For purposes of performing our goodwill impairment analysis, we have identified our reporting units as North America, Latin America, EMEA and APAC. In 2021, the Coatings reporting unit was sold and is no longer considered a reporting unit.
We have the option of first analyzing qualitative factors to determine whether it is more likely than not that the fair value of any reporting unit is less than its carrying amount. We may elect to perform a quantitative goodwill impairment test in lieu of the qualitative test, and in 2023 we performed the qualitative goodwill test on all reporting units. In 2022, we elected to perform the quantitative goodwill test on all reporting units. Based on our analysis, we determined that there wasno impairment of goodwill as of December 31, 2023 and 2022.
The changes in the carrying amount of goodwill are as follows:
| Goodwill | AccumulatedImpairmentLosses | Total | |
|---|---|---|---|
| Balance as of December 31, 2023 | $220.7 | $(33.3) | $187.4 |
| Foreign currency fluctuations | 1.9 | 3.5 | 5.4 |
| Balance as of December 31, 2022 | $218.8 | $(36.8) | $182.0 |
| Foreign currency fluctuations | (15.1) | 4.0 | (11.1) |
| Balance as of December 31, 2021 | $233.9 | $(40.8) | $193.1 |
The balances of acquired intangible assets, excluding goodwill, are as follows:
| CustomerLists · TradeNames · Technology · Total | ||||||
|---|---|---|---|---|---|---|
| Original cost | $150.6 | $29.3 | $16.3 | $196.2 | ||
| Accumulated amortization | (100.8) | (19.2) | (13.1) | (133.1) | ||
| Carrying amount | $49.8 | $10.1 | $3.2 | $63.1 | ||
| Weighted-average original life (in years) | 15 | 11 | 11 | |||
| Original cost | $146.6 | $28.6 | $15.9 | $191.1 | ||
| Accumulated amortization | (87.5) | (15.9) | (11.3) | (114.7) | ||
| Carrying amount | $59.1 | $12.7 | $4.6 | $76.4 | ||
| Weighted-average original life (in years) | 15 | 11 | 11 | |||
In 2021, we divested identified intangible assets, excluding goodwill, with a carrying value of $0.9 million and $1.4 million in the categories of customer lists and trade names, respectively, as a result of the sale of the Coatings business discussed in Note 5.
Amortization expense of intangible assets was $14.7 million, $15.9 million and $20.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Estimated aggregate amortization expense based on the current carrying amount of amortizable intangible assets for each of the five succeeding years is as follows:
| 2024 | $13.4 |
| 2025 | 12.0 |
| 2026 | 10.7 |
| 2027 | 7.3 |
| 2028 | 5.6 |
| Thereafter | 14.1 |
| Total | $63.1 |
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