Goodwill and Intangible Assets and Liabilities

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets and Liabilities

Changes in the carrying amount of goodwill occurring during the nine months ended September 30, 2024 are as follows:


(Thousands)	Uniti Fiber		Total
Goodwill at December 31, 2023	$	672,878	$	672,878
Accumulated impairment charges as of December 31, 2023	(515,498)		(515,498)
Balance at December 31, 2023	$	157,380	$	157,380

Goodwill at September 30, 2024	$	672,878	$	672,878
Accumulated impairment charges as of September 30, 2024	(515,498)		(515,498)
Balance at September 30, 2024	$	157,380	$	157,380

In accordance with ASC 350-20, Intangibles-Goodwill and Other ("ASC 350-20"), we evaluate goodwill for impairment

between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount (a “Triggering Event”). During the three months ended September 30, 2023, the Company identified a Triggering Event and, therefore, performed a qualitative and quantitative goodwill impairment test. The Triggering Event was a result of macroeconomic and financial market factors, specifically increased interest rates, impacting our discount rate. As a result of this interim assessment of goodwill, we concluded that the fair value of the Uniti Fiber segment, estimated using a combination of the income approach and market approach, was less than its carrying amount. Accordingly, we recorded a $204.0 million ($151.9 million net of tax) goodwill impairment charge in the Uniti Fiber segment during the three months ended September 30, 2023 (as restated).

Carrying value of intangible assets and liabilities at September 30, 2024 and December 31, 2023 are as follows:


(Thousands)	September 30, 2024				December 31, 2023
	Original Cost		Accumulated Amortization		Original Cost		Accumulated Amortization
Finite life intangible assets:
Customer lists	$	416,104	$	(168,630)	$	416,104	$	(151,542)
Contracts	52,536		(26,268)		52,536		(21,343)
Underlying Rights	10,497		(1,400)		10,497		(1,137)

Total intangible assets	$	479,137			$	479,137
Less: accumulated amortization	(196,298)				(174,022)
Total intangible assets, net	$	282,839			$	305,115

Finite life intangible liabilities:
Below-market leases	$	191,154	$	(42,777)	$	191,154	$	(34,757)

Finite life intangible liabilities:
Below-market leases	$	191,154			$	191,154
Less: accumulated amortization	(42,777)				(34,757)
Total intangible liabilities, net	$	148,377			$	156,397

As of September 30, 2024, the remaining weighted average amortization period of the Company’s intangible assets was 13.4 years, 4 years, and 26 years for customer lists, contracts, and underlying rights, respectively. As of September 30, 2024, the total remaining weighted average amortization period for total intangible assets was 13 years.

Amortization expense for the three and nine months ended September 30, 2024 was $7.4 million and $22.3 million, respectively. Amortization expense for the three and nine months ended September 30, 2023 was $7.4 million and $22.3 million, respectively. Amortization expense is estimated to be $29.7 million for the full year of 2024, $29.7 million in 2025, $29.7 million in 2026, $29.7 million in 2027, and $28.1 million for 2028.

We recognize the amortization of below-market leases in revenue. Revenue related to the amortization of the below-market leases for the three and nine months ended September 30, 2024 was $2.7 million and $8.0 million, respectively. Revenue related to the amortization of the below-market leases for the three and nine months ended September 30, 2023 was $2.7 million and $8.0 million, respectively. As of September 30, 2024, the remaining weighted average amortization period of the Company’s intangible liabilities was 15.4 years. Revenue due to the amortization of the below-market leases is estimated to be $10.7 million for the full year of 2024, $10.7 million in 2025, $10.7 million in 2026, $10.7 million in 2027, and $10.2 million in 2028.