Goodwill and Intangibles

9 Months Ended

Sep. 30, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Note 4. Goodwill and Intangibles

The Company assesses goodwill and other intangible assets with indefinite lives for impairment annually in October and when an event occurs or circumstances change that would suggest a triggering event. If a triggering event is identified, a step one assessment is performed to identify any possible goodwill impairment in the period in which the event is identified. In connection with our annual assessment of goodwill during the fourth quarter of calendar year 2015, we will update our key assumptions, including our forecasts of revenue and income for each reporting unit. There can be no assurance that the revenue estimates and assumptions regarding forecasted cash flows, the impact of further declines with AT&T spending, or other inputs used in forecasting the present value of forecasted cash flows will prove to be accurate projections of future performance.

Determining the fair value of a reporting unit or an indefinite-lived intangible asset involves judgment and the use of significant estimates and assumptions, particularly related to future operating results and cash flows. These estimates and assumptions include, but are not limited to, revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and identification of appropriate market comparable data. Preparation of forecasts and the selection of the discount rate involve significant judgments that we base primarily on existing firm orders, expected future orders, and general market conditions. Significant changes in these forecasts, the discount rate selected, or the weighting of the income and market approach could affect the estimated fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. In addition, the identification of reporting units and the allocation of assets and liabilities to the reporting units when determining the carrying value of each reporting unit also requires judgment. All of these factors are subject to change with a change in the telecommunication services industry or larger macroeconomic environment.

The estimated fair values of each of our Infrastructure Segment (“IS”) and Field Service (“FS”) reporting units have historically substantially exceeded their respective carrying values and further passed the qualitative analysis performed on October 1, 2015. However, our CND reporting unit which is part of our Professional Services (“PS”) segment, and represents a carrying value of $8.6 million in goodwill as of September 30, 2015, did not pass the qualitative analysis due to substantial declines in its forecasted revenue and margins and market performance of comparable public companies at October 1, 2015. The Company is in the process of completing a quantitative analysis of the fair value of the CND reporting unit. Depending on the results of this analysis, an impairment charge could be necessary.

The changes in goodwill, by business segment for the nine months ended September 30, 2015 are as follows (in thousands):

	Professional Services		Infrastructure Services		Field Services		Other Services		Total
Goodwill at December 31, 2014	$	8,648	$	1,882	$	58,648	$	—	$	69,178
Impairment adjustments		—		—		—		—		—
Goodwill at September 30, 2015	$	8,648	$	1,882	$	58,648	$	—	$	69,178

Intangible assets were as follows (in thousands):

	September 30, 2015
	Gross Carrying Amount		Accumulated Amortization		Impairment Charges		Intangible Assets, net
Customer contracts	$	13,900	$	3,087		—	$	10,813
Customer relationships		6,610		3,743		—		2,867
Tradename		3,860		3,860		—		—
Noncompete agreements		3,150		1,629		—		1,521
Customer backlog		1,400		1,400		—		—
Total	$	28,920	$	13,719	$	-	$	15,201

Amortization of intangible assets was $1.3 million and $1.5 million for the three months ended September 30, 2014 and 2015, respectively, and $4.1 million and $4.4 million for the nine months ended September 30, 2014 and 2015, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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