GOODWILL AND OTHER INTANGIBLE ASSETS
Grainger completed its annual impairment testing of goodwill and intangible assets during the fourth quarter of 2025 and 2024. Based on the results of that testing, the Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators and concluded that it was more likely than not that the fair value of the reporting units exceeded their carrying amounts at each respective period.
High-Touch Solutions N.A. – Canada Business
As of December 31, 2025 and 2024, the Canada business reporting unit had goodwill of $119 million and $114 million, respectively. As part of our annual impairment testing, the Company compared the current results to forecasted expectations of the most recent quantitative analysis, along with analyzing macroeconomic conditions, current industry trends and transactions, and other market data of industry peers. The Company also performed various sensitivities over key assumptions, including projections of future revenue growth and operating expenditures used in the analysis. The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators for its Canada business, and concluded it was more likely than not its fair value exceeded its carrying value.
The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars):
| | | | | | | | | | | | | | | | | | | |
| High-Touch Solutions N.A. | | Endless Assortment | | | | Total |
Balance at January 1, 2024 | $ | 315 | | | $ | 55 | | | | | $ | 370 | |
| | | | | | | |
| | | | | | | |
| Translation | (9) | | | (6) | | | | | (15) | |
| Balance at December 31, 2024 | 306 | | | 49 | | | | | 355 | |
| | | | | | | |
| | | | | | | |
| Translation | 5 | | | — | | | | | 5 | |
| Balance at December 31, 2025 | $ | 311 | | | $ | 49 | | | | | $ | 360 | |
The Company's cumulative goodwill impairment as of December 31, 2025, was $32 million. No goodwill impairment was recorded for the twelve months ended December 31, 2025, 2024 and 2023.
The balances and changes in intangible assets – net are as follows (in millions of dollars):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | As of December 31, |
| | | 2025 | | 2024 |
| Weighted average life | | Gross carrying amount | | Accumulated amortization | | Net carrying amount | | Gross carrying amount | | Accumulated amortization | | Net carrying amount |
| Customer lists and relationships | 10.7 years | | $ | 163 | | | $ | 157 | | | $ | 6 | | | $ | 164 | | | $ | 155 | | | $ | 9 | |
| Trademarks, trade names and other | 16.5 years | | 20 | | | 17 | | | 3 | | | 31 | | | 24 | | | 7 | |
| Non-amortized trade names and other | Indefinite | | 19 | | | — | | | 19 | | | 18 | | | — | | | 18 | |
| Capitalized software | 4.5 years | | 821 | | | 584 | | | 237 | | | 714 | | | 505 | | | 209 | |
| Total intangible assets | 5.8 years | | $ | 1,023 | | | $ | 758 | | | $ | 265 | | | $ | 927 | | | $ | 684 | | | $ | 243 | |
Amortization expense of intangible assets recorded in SG&A was $81 million, $70 million and $64 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Estimated amortization expense for future periods is as follows (in millions of dollars):
| | | | | | | | |
| Year | | Expense |
| 2026 | | $ | 76 | |
| 2027 | | 68 | |
| 2028 | | 53 | |
| 2029 | | 32 | |
| 2030 | | 12 | |
| Thereafter | | 5 | |
| Total | | $ | 246 | |