Note 9 - Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE

9

— INTANGIBLE ASSETS AND GOODWILL

Intangible assets amounting to

$199.9

million and

$85.4

million consist mainly of the Company’s PPAs acquired in business combinations and Viridity’s storage activities, net of accumulated amortization of

$61.5

million and

$50.0

million as of

December 31, 2018

and

2017,

respectively. Intangible assets relating to our storage activities, as of

December 31, 2018

and

2017,

amounted to

$32.2

million and

$33.8

million, net of accumulated amortization of

$3.4

million and

$1.7

million, respectively. Amortization expense for the years ended

December 31, 2018,

2017,

and

2016

amounted to

$11.2

million,

$6.9

million, and

$4.4

million, respectively. Additions to intangible assets for the years ended

December 31, 2018,

2017

and

2016,

amounted to

$127.0

million,

$35.6

million and

$33.0

million, respectively. The additions to intangible assets in

2018,

2017

and

2016

primarily relate to the USG acquisition, Viridity acquisition and the purchase of the Guadeloupe plant, respectively. The Company tested the intangible assets for recoverability in

December 2018

and

2017

and assessed whether there are events or change in circumstances which

may

indicate that the intangible assets are

not

recoverable. Our assessment resulted in that there were

no

write-offs of intangible assets in

2018,

2017

and

2016.

Estimated future amortization expense for the intangible assets as of

December 31, 2018

is as follows:

	(Dollars in thousands)
Year ending December 31:
2019	$	13,422
2020		13,105
2021		13,105
2022		12,850
2023		12,734
Thereafter		134,658
Total	$	199,874

Goodwill

Goodwill amounting to

$20.0

million and

$21.0

million as of

December 31, 2018

and

2017,

respectively, represents the excess of the fair value of considerations transferred in business combination transactions over the fair value of tangible and intangible assets acquired, net of the fair value of liabilities assumed and non-controlling interest (as applicable) in the acquisitions.

During the

fourth

quarter of

2018,

the Company determined that certain qualitative indicators of a potential impairment existed in relation to its storage and energy management services reporting unit which required further quantitative assessment of goodwill impairment (step

one

as described in Note

1

to the consolidated financial statements under the caption “Goodwill”). The qualitative indicators included a significant update to the reporting unit’s business forecasts combined with a large-scale restructuring of the way the Company runs this reporting unit which were both executed during the

fourth

quarter of

2018.

As a result of the quantitative assessment, the Company recorded a goodwill impairment charge of

$13.5

million in the consolidated statements of operations and comprehensive income (loss) for the year ended

December 31, 2018.

Following this impairment charge, the goodwill allocated to the storage and energy management services reporting unit is

zero

. The Company estimated the fair value of the storage and energy management services reporting unit by using the income approach based on discounted cash flows, which utilized Level

3

measurement that represent unobservable inputs into the Company’s valuation method.

Except as noted above, for the years

2018

and

2017,

our impairment assessment related to the Company’s other reporting units for which goodwill is allocated to resulted in

no

impairment to goodwill.

Changes in the carrying amount of the Company’s goodwill for the years ended

December 31, 2018

and

2017

were as follows:

	2018			2017
	(Dollars in thousands)
Goodwill as of January 1,	$	21,037		$	6,650
Goodwill acquired		12,710			13,464
Goodwill impairment charge		(13,464	)		-
Translation differences		(333	)		923
Goodwill as of December 31,	$	19,950		$	21,037