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Goodwill And Intangible Assets, Net
3 Months Ended
Mar. 31, 2019
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net

6.

GOODWILL AND INTANGIBLE ASSETS, NET

The changes made to the goodwill balances of our reporting units for the three months ended March 31, 2019 and the year ended December 31, 2018, were as follows (shown in thousands):

 

 

 

Healthcare

 

 

Energy

 

 

Financial Services Advisory and Compliance

 

 

Total Company

 

Goodwill at December 31, 2018

 

$

294,283

 

 

$

80,034

 

 

$

48,040

 

 

$

422,357

 

Acquisitions

 

 

3,237

 

 

 

-

 

 

 

-

 

 

 

3,237

 

Adjustments

 

 

(2

)

 

 

-

 

 

 

(6

)

 

 

(8

)

Foreign currency translation

 

 

-

 

 

 

(58

)

 

 

(459

)

 

 

(517

)

Goodwill at March 31, 2019

 

$

297,518

 

 

$

79,976

 

 

$

47,575

 

 

$

425,069

 

 

 

 

Healthcare

 

 

Energy

 

 

Financial Services Advisory and Compliance

 

 

Total Company

 

Goodwill at December 31, 2017

 

$

294,064

 

 

$

80,109

 

 

$

48,786

 

 

$

422,959

 

Adjustments

 

 

365

 

 

 

200

 

 

 

(24

)

 

 

541

 

Foreign currency translation

 

 

(146

)

 

 

(275

)

 

 

(722

)

 

 

(1,143

)

Goodwill at December 31, 2018

 

$

294,283

 

 

$

80,034

 

 

$

48,040

 

 

$

422,357

 

 

We performed our annual goodwill impairment test as of May 31, 2018 on our three continuing reporting units and our former Disputes, Forensics and Legal Technology reporting unit using certain key assumptions. The key assumptions included: internal projections completed during our first quarter 2018 forecasting process; profit margin improvement generally consistent with our longer-term historical performance; assumptions regarding contingent revenue; revenue growth consistent with our longer-term historical performance, also considering our near-term investment plans and growth objectives; discount rates based on comparable discount rates for our peer group; revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples comparable to multiples for our peer group; Navigant-specific risk considerations; control premium; and cost of capital based on our historical experience.  

As of May 31, 2018, the estimated fair value of our Healthcare, Energy and Financial Services Advisory and Compliance reporting units exceeded the fair value of invested capital by 23%, 32%, and 72%, respectively.

We have reviewed our most recent financial projections and considered the impact of changes to our business and market conditions on our goodwill valuation and determined that no events or conditions have occurred or are expected to occur that would trigger a need to perform an interim goodwill impairment test on our remaining three reporting units. We will continue to monitor the factors and key assumptions used in determining the fair value of each of our continuing three reporting units. There can be no assurance that goodwill or intangible assets will not be impaired in the future. We will perform our next annual goodwill impairment test as of May 31, 2019.

  Intangible assets consisted of (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Intangible assets:

 

 

 

 

 

 

 

 

Customer lists and relationships

 

$

108,555

 

 

$

105,368

 

Non-compete agreements

 

 

23,066

 

 

 

22,923

 

Other

 

 

28,450

 

 

 

28,304

 

Intangible assets, at cost

 

 

160,071

 

 

 

156,595

 

Less: accumulated amortization

 

 

(144,601

)

 

 

(142,429

)

Intangible assets, net

 

$

15,470

 

 

$

14,166

 

 

Our intangible assets have estimated remaining useful lives ranging up to six years which approximate the estimated periods of consumption. We will amortize the remaining net book values of intangible assets over their remaining useful lives. At March 31, 2019, our intangible assets categories were as follows (in thousands, except year data):

 

Category

 

Weighted

Average

Remaining

Years

 

 

Amount

 

Customer lists and relationships, net

 

 

4.1

 

 

$

14,014

 

Non-compete agreements, net

 

 

2.2

 

 

 

1,018

 

Other intangible assets, net

 

 

3.3

 

 

 

438

 

Total intangible assets, net

 

 

3.9

 

 

$

15,470

 

 

Total amortization expense was $1.4 million and $1.8 million for the three months ended March 31, 2019 and 2018, respectively. The estimated annual aggregate amortization expense to be recorded related to intangible assets at March 31, 2019 is as follows (in thousands):

 

Year Ending December 31,

 

Amount

 

2019 (includes January - March)

 

$

5,393

 

2020

 

 

4,196

 

2021

 

 

4,085

 

2022

 

 

936

 

2023

 

 

1,243

 

2024 and thereafter

 

 

989