Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the changes in the carrying amount of goodwill by segment as of September 30, 2019 (in thousands):



	Strayer University		Capella University			Non-Degree Programs		Total
Balance as of December 31, 2018	$	337,381	$	395,159		$	—	$	732,540
Additions	—		—			—		—
Impairments	—		—			—		—
Adjustments	—		(465		)	—		(465		)
Balance as of September 30, 2019	$	337,381	$	394,694		$	—	$	732,075

During the nine months ended September 30, 2019, the Company recorded $0.5 million net measurement period adjustments, as discussed in Note 3.

The Company assesses goodwill at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount. No events or circumstances occurred in the three and nine months ended September 30, 2019 to indicate an impairment to goodwill. Accordingly, there were no impairment charges related to goodwill recorded during the three and nine months ended September 30, 2019. During the three and nine months ended September 30, 2018, the Company recorded goodwill impairment charges of $11.1 million and $13.9 million, respectively, related to its New York Code and Design Academy ("NYCDA") reporting unit (which, following the merger, is included in the Non-Degree Programs segment) based on a quantitative impairment analysis performed. The goodwill impairment charge represented the excess of the carrying value of the net assets of the NYCDA reporting unit over its estimated fair value and is reflected within the Impairment of intangible assets line in the unaudited condensed consolidated statements of income.

Intangible Assets

The following table represents the balance of the Company’s intangible assets as of December 31, 2018 and September 30, 2019 (in thousands):



	December 31, 2018							September 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Subject to amortization
Student relationships	$	166,000	$	(23,056	)	$	142,944	$	166,000	$	(64,556	)	$	101,444
Not subject to amortization
Trade names	185,400		—			185,400		185,400		—			185,400
Total	$	351,400	$	(23,056	)	$	328,344	$	351,400	$	(64,556	)	$	286,844

The Company’s finite-lived intangible assets are comprised of student relationships, which are being amortized on a straight-line basis over a three-year useful life. Straight-line amortization expense for finite-lived intangible assets reflects the pattern in which the assets' economic benefits are consumed over their estimated useful lives. Amortization expense related to finite-lived intangible assets was $13.8 million and $41.5 million for the three and nine months ended September 30, 2019, respectively.

Indefinite-lived intangible assets not subject to amortization consist of trade names. The Company assigned an indefinite useful life to its trade name intangible assets, as it is believed these assets have the ability to generate cash flows indefinitely. In addition, there are no legal, regulatory, contractual, economic or other factors to limit the useful life of the trade name intangibles.

The Company assesses indefinite-lived intangible assets at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective asset below its carrying amount. No events or circumstances occurred in the three and nine months ended September 30, 2019 to indicate an impairment to indefinite-lived intangible assets. Accordingly, there were no impairment charges related to indefinite-lived intangible assets recorded during the three and nine months ended September 30, 2019. During the three and nine months ended September 30, 2018, the Company recorded impairment charges of $2.0 million and $5.4 million, respectively, related to the NYCDA trade name based on a quantitative impairment analysis performed. The indefinite-lived intangible asset impairment charge represented the excess of the carrying value of the NYCDA trade name over its estimated fair value and is reflected within the Impairment of intangible assets line in the unaudited condensed consolidated statements of income.