GOODWILL AND OTHER INTANGIBLE ASSETS
The carrying amounts of the Company’s intangible assets, excluding goodwill, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | 2025 | | 2024 |
| | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization |
| Amortizing intangibles: | | | | | | | | |
| Customer relationships | | $ | 309.5 | | | $ | (149.7) | | | $ | 263.4 | | | $ | (128.8) | |
| Patents | | 7.4 | | | (7.4) | | | 7.2 | | | (7.2) | |
| | | | | | | | |
| Technology | | 10.5 | | | (7.8) | | | 7.5 | | | (7.5) | |
| Trade names | | 58.6 | | | (11.6) | | | 44.5 | | | (8.1) | |
| Other | | 3.1 | | | (2.5) | | | 2.8 | | | (2.4) | |
| Total | | $ | 389.1 | | | $ | (179.0) | | | $ | 325.4 | | | $ | (154.0) | |
| Non-amortizing intangibles: | | | | | | | | |
| Trade names | | 41.6 | | | — | | | 41.6 | | | — | |
| Total intangibles | | $ | 430.7 | | | $ | (179.0) | | | $ | 367.0 | | | $ | (154.0) | |
Amortization expense related to intangible assets for the years ended December 31, 2025, 2024, and 2023, was $23.6 million, $18.8 million, and $17.1 million, respectively.
Amortization expense for each of the five succeeding years is projected as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | 2026 | | 2027 | | 2028 | | 2029 | | 2030 |
| | $ | 24.0 | | | $ | 22.5 | | | $ | 21.9 | | | $ | 20.9 | | | $ | 20.3 | |
The change in the carrying amount of goodwill by reportable segment for 2025 and 2024, is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | Water Systems | | Energy Systems | | Distribution | | Consolidated |
| Balance as of December 31, 2023 | | $ | 221.4 | | | $ | 70.4 | | | $ | 50.6 | | | $ | 342.4 | |
| Acquisitions | | 0.8 | | | — | | | — | | | 0.8 | |
| Adjustments to prior year acquisitions | | (1.0) | | | — | | | — | | | (1.0) | |
| Foreign currency translation | | (3.6) | | | (0.1) | | | — | | | (3.7) | |
| Balance as of December 31, 2024 | | $ | 217.6 | | | $ | 70.3 | | | $ | 50.6 | | | $ | 338.5 | |
| | | | | | | | |
| Acquisitions | | 55.2 | | | — | | | — | | | 55.2 | |
| Adjustments to prior year acquisitions | | 0.1 | | | — | | | — | | | 0.1 | |
| Foreign currency translation | | 4.1 | | | 0.2 | | | — | | | 4.3 | |
| Balance as of December 31, 2025 | | $ | 277.0 | | | $ | 70.5 | | | 50.6 | | | $ | 398.1 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.