9. Intangible Assets and Goodwill

Intangibles

Intangible assets are stated at cost or acquisition-date fair value less amortization and impairment and consist of the following:


	December 31, 2019
	Gross Carrying				Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	508,074	$	(237,313)	$	270,761
Developed technology		89,053		(87,109)		1,944
Trade names (b)		8,400		(3,100)		5,300
Outsource contract costs		16,726		(11,749)		4,977
Internally developed software		43,261		(12,129)		31,132
Trademarks		23,378		(23,370)		8
Non-compete agreements		1,350		(1,350)		—
Assembled workforce		4,473		(1,118)		3,355
Purchased software		26,749		(1,783)		24,966
Intangibles, net	$	721,464	$	(379,021)	$	342,443


	December 31, 2018 (As Restated)
	Gross Carrying				Intangible
	Amount (a)		Amortization		Asset, net
Customer relationships	$	507,905	$	(190,666)	$	317,239
Developed technology		89,053		(85,967)		3,086
Trade names (c)		9,400		(3,100)		6,300
Outsource contract costs		15,439		(8,817)		6,622
Internally developed software		36,820		(6,278)		30,542
Trademarks		23,379		(23,370)		9
Non-compete agreements		1,350		(1,350)		—
Assembled workforce		4,473		—		4,473
Purchased software		26,749		—		26,749
Intangibles, net	$	714,568	$	(319,548)	$	395,020

(a)

Amounts include intangibles acquired in business combinations and asset acquisitions.

(b)

The carrying amount of trade names for 2019 is net of accumulated impairment losses of $44.1 million, of which $1.0 million was recognized in 2019.

(c)

The carrying amount of trade names for 2018 is net of accumulated impairment losses of $43.1 million, of which $3.7 million was recognized in 2018.

During the third quarter of 2019, the Company made an evaluation based on factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, and concluded that a triggering event for an interim impairment analysis had occurred. As part of the assessment, it was determined that the increase in the discount rate applied in the valuation was required to reflect current market dynamics and company-specific risk. This higher discount rate, in conjunction with revised long-term projections, resulted in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. As a result of the interim impairment assessment in the third quarter, the Company recorded an impairment charge to goodwill and trade names of $96.2 million (as restated) and $1.0 million, respectively. The Company did not update its analysis for purposes of the annual impairment test as of October 1, 2019 as the measurement date of the impairment test performed during the quarter-ended September 30, 2019 was one day from the annual impairment test date.

Additionally, later during the fourth quarter of 2019, the Company conducted its annual budgeting process along with an update to its long-range plan. Following the completion of that process, the Company made an evaluation based on factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, concluding that a second triggering event for an impairment analysis had occurred. Revised long-term projections coupled with a decline in the market capitalization, resulted in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. Accordingly, we performed another quantitative impairment test as of December 31, 2019, resulting in an additional impairment charge of $252.4 million to goodwill. Therefore, as a result of these two interim impairment assessments in the third and fourth quarters of 2019, impairment charges totaling $348.6 million and $1.0 million were recorded to goodwill and trade names, respectively, for the year ended December 31, 2019. Accumulated impairment losses on goodwill were $560.9 million and $212.3 million as at December 31, 2019 and 2018, respectively.

In connection with the completion of the annual impairment test as of October 1, 2018, the Company recorded impairment charges of $44.4 million and $3.7 million to goodwill and trade names, respectively.

The impairment charges are included within Impairment of goodwill and other intangible assets in the consolidated statements of operations for both 2018 and 2019.

Aggregate amortization expense related to intangibles was $59.3 million, $94.9 million (as restated), and $67.1 million (as restated) for the years ended December 31, 2019, 2018, and 2017, respectively.

Estimated intangibles amortization expense for the next five years and thereafter consists of the following:


	Estimated
	Amortization
	Expense (As Restated)
2020	$	55,323
2021		50,015
2022		45,535
2023		37,168
2024		29,704
Thereafter		120,163
	$	337,908

Goodwill

Goodwill by reporting segment consists of the following:




	Beginning of Year Balance (a)			Additions			Reductions			Currency Translation Adjustments		End of Year Balance (a)
ITPS	$	566,215	$	5,580	(c)	$	—		$	(220)	$	571,575
HS		86,786		—			—			—		86,786
LLPS		94,324		—			(44,427)	(b)		—		49,897
Total - Year 2018	$	747,325	$	5,580		$	(44,427)		$	(220)	$	708,258
ITPS		571,575		—			(317,525)	(d)		70		254,120
HS		86,786		—			—			—		86,786
LLPS		49,897		—			(31,032)	(e)		—		18,865
Total - Year 2019	$	708,258	$	—		$	(348,557)		$	70	$	359,771

(a)

The carrying amount of goodwill for all periods presented is net of accumulated impairment losses of $167.9 million.

(b)

The reduction in goodwill is due to $44.4 million for impairment recorded in the fourth quarter of 2018.

(c)

Addition to goodwill due to the Asterion Business Combination (Refer to note 4) and other immaterial acquisitions in the third and fourth quarter of 2018.

(d)

The reduction in goodwill for the ITPS segment is due to $317.5 million for impairment recorded for the year ended December 31, 2019.

(e)

The reduction in goodwill for the LLPS segment is due to $31.0 million for impairment recorded for the year ended December 31, 2019.