Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Note 8—Goodwill and Intangible Assets

The change in goodwill by segment for 2017 and 2016 was as follows (in thousands):


	Power		Pipeline		Utilities		Civil		Total
Balance at January 1, 2016	$	20,731	$	42,252	$	18,312	$	42,866	$	124,161
Goodwill acquired during the year		3,781		—		2,000		—		5,781
Goodwill impairment		—		—		—		(2,716)		(2,716)
Balance at December 31, 2016	$	24,512	$	42,252	$	20,312	$	40,150	$	127,226
Goodwill acquired during the year		—		9,269		17,000		—		26,269
Purchase price allocation adjustments		(121)		—		—		—		(121)
Balance at December 31, 2017	$	24,391	$	51,521	$	37,312	$	40,150	$	153,374

During the third quarter of 2016, we made a decision to divest our Texas heavy civil business unit, a division of Primoris Heavy Civil within the Civil segment. We engaged a financial advisor to assist in the marketing and sale of the business unit, and planned to continue operating the business unit until completion of a sale. In April 2017, the Board of Directors determined that based on the information available, we would attain the best long-term value by withdrawing from the sales process and continuing to operate the business unit. We will aggressively pursue claims for five Texas Department of Transportation projects that resulted in significant losses recorded in 2016. However, there can be no assurance as to the final amounts collected. In accordance with ASC 350, the planned divestiture triggered an analysis of the goodwill at Primoris Heavy Civil, resulting in a pretax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter of 2016.

In the fourth quarter of 2015, an impairment expense of $0.4 million was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is part of the Power Segment.

There was no impairment of goodwill for the year ended December 31, 2017.

The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis, at December 31 (in thousands):


		December 31, 2017				December 31, 2016
	Weighted Average Life	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Tradename	9 years	$	32,175	$	(22,238)	$	30,485	$	(18,733)
Customer relationships	10 years		49,900		(16,338)		33,579		(13,439)
Non-compete agreements	5 years		1,900		(820)		2,250		(1,301)
Other	3 years		275		(54)		—		—
		$	84,250	$	(39,450)	$	66,314	$	(33,473)

Amortization expense of intangible assets was $8.7 million, $6.6 million and $6.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. In the second quarter of 2017, we recorded a $0.5 million impairment charge related to our tradename intangible assets. Estimated future amortization expense for intangible assets as of December 31, 2017 is as follows (in thousands):


	Estimated
	Intangible
For the Years Ending	Amortization
December 31,	Expense
2018	$	9,541
2019		9,193
2020		6,442
2021		5,203
2022		4,048
Thereafter		10,373
	$	44,800

- 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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