6. Goodwill and Intangible Assets

Goodwill

The following is a summary of changes in the Company’s goodwill by business line for the years ended December 31, 2018 and 2017 (in thousands):


	Consumer
	Services and
	Plans		Dealership		Retail		Consolidated
Balance as of January 1, 2017 (excluding impairment charges)	$	96,828	$	246,929	$	11,109	$	354,866
Accumulated impairment charges		(46,884)		(143,798)		(11,109)		(201,791)
Balance as of January 1, 2017		49,944		103,131		—		153,075
Acquisitions		—		158,845		36,467		195,312
Balance as of December 31, 2017		49,944		261,976		36,467		348,387
Acquisitions		376		46,821		3,579		50,776
Impairment charge		—		—		(40,046)		(40,046)
Balance as of December 31, 2018	$	50,320	$	308,797	$	—	$	359,117

The Company evaluates goodwill for impairment on an annual basis as of the beginning of the fourth quarter, or more frequently if events or changes in circumstances indicate that the Company’s goodwill or indefinite‑lived intangible assets might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is required to perform the first step of a two‑step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the Company records an impairment of goodwill equal to the amount that the carrying amount of a reporting unit exceeds its fair value.

In the fourth quarter of 2018, the Company performed its annual goodwill impairment test, which resulted in the determination that the carrying value of the Retail reporting unit, which is comprised of the entire Retail segment, exceeded its estimated fair value by an amount that exceeded the reporting unit’s goodwill balance. The Company estimated the fair value of the Retail reporting unit using a combination of the guideline public company method under the market approach and the discounted cash flow analysis method under the income approach. The Company weighted the income approach at 70% and the market approach at 30% since the income approach was deemed to better reflect the discrete earnings potential of the reporting unit and the observed guideline companies operate in the same industry, but do not specifically offer the same products and services as the reporting unit. The assumptions in the income approach included the Company’s internal projections for the reporting unit, a 2.5% growth rate to calculate the terminal value and a discount rate of 10.5%. The excess of the carrying value over the estimated fair value of this reporting unit was primarily due to a decline in segment income leading to lower expected future cash flows for this reporting unit. The Company recorded an impairment charge of $40.0 million in the fourth quarter of 2018 related to this reporting unit. The Retail reporting unit goodwill was reduced to zero.

Additionally in the fourth quarter of 2018, the Company performed its annual goodwill impairment test of the Dealership reporting unit, which resulted in the determination that the estimated fair value of the Dealership reporting unit, which is comprised of the entire Dealership segment, exceeded its carrying value. Therefore, no impairment charge was recorded for the Dealership reporting unit during the year ended December 31, 2018. The Company estimated the fair value of the Dealership reporting unit using a combination of the guideline public company method under the market approach and the discounted cash flow analysis method under the income approach. The Company weighted the income approach at 70% and the market approach at 30% since the income approach was deemed to better reflect the discrete earnings potential of the reporting unit and the observed guideline companies operate in the same industry, but do not specifically offer the same products and services as the reporting unit. The assumptions in the income approach included the Company’s internal projections for the reporting unit, a 2.3% growth rate to calculate the terminal value and a discount rate of 8.7%.

The Company’s GSS Enterprises, LLC (“GSS”) reporting unit, which is comprised of a portion of the Consumer Services and Plans segment and holds all of that segment’s goodwill, had negative carrying value, including goodwill of $50.3 million, at the annual goodwill impairment testing date and at December 31, 2018. Therefore, a goodwill impairment test was not necessary for the GSS reporting unit during the fourth quarter of 2018.

The Company did not record any impairments of goodwill during the years ended December 31, 2017 and 2016.

Intangible Assets

Finite‑lived intangible assets and related accumulated amortization consisted of the following at December 31, (in thousands):


	December 31, 2018
	Cost or		Accumulated
	Fair Value		Amortization		Net
Consumer Services and Plans:
Membership and customer lists	$	9,140	$	(7,174)	$	1,966
Retail:
Customer lists and domain names		3,415		(1,559)		1,856
Trademarks and trade names		29,304		(2,853)		26,451
Websites		6,074		(1,063)		5,011
	$	47,933	$	(12,649)	$	35,284

	December 31, 2017
	Cost or		Accumulated
	Fair Value		Amortization		Net
Consumer Services and Plans:
Membership and customer lists	$	8,375	$	(6,431)	$	1,944
Retail:
Customer lists and domain names		3,914		(1,048)		2,866
Trademarks and trade names		28,987		(901)		28,086
Websites		6,073		(262)		5,811
	$	47,349	$	(8,642)	$	38,707

Amortization expense of finite-lived intangibles for the years ended December 31, 2018, 2017, and 2016 was $4.5 million, $2.6 million and $1.0 million, respectively. The Company reclassified the amounts by operating segment and made immaterial correcting adjustments to the previously recorded balances for the categories of intangible assets as of December 31, 2017 by approximately $15 million. These changes had no impact on total intangible assets. The aggregate future five‑year amortization of finite‑lived intangibles at December 31, 2018, was as follows (in thousands):


2019	$	4,509
2020		3,640
2021		3,218
2022		3,023
2023		2,489
Thereafter		18,405
	$	35,284