Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from 1 year to 20 years.

The changes in carrying amounts of goodwill attributable to continuing operations for the years ended December 31, 2021 and 2020 are as follows (in thousands):


	Amount
Balance as of January 1, 2020	$	320,095
Goodwill acquired (Note 4)	15,844


Foreign exchange translation	6,491

Balance as of December 31, 2020	$	342,430



Foreign exchange translation	(3,221)

Balance as of December 31, 2021	$	339,209

There has not previously been an impairment charge of goodwill related to continuing operations.

Intangible Assets with Indefinite Lives:

Intangible assets are summarized as of December 31, 2021 and 2020 as follows (in thousands):


	2021		2020
Trade names	$	27,388	$	27,463
Other	3,683		3,691
Total	$	31,071	$	31,154

Intangible Assets Subject to Amortization:

As of December 31, 2021, intangible assets subject to amortization relate primarily to the following (in thousands):


	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	1.6 years	$	12,219	$	10,633	$	1,586
Patent and patent licenses	0.0 years	10,162		9,751		411
Customer relationships (1)	4.3 years	99,571		90,050		9,521
Other purchased intangibles	3.8 years	13,160		12,200		960
Total		$	135,112	$	122,634	$	12,478

(1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four to five years, despite the overall life of the asset.

As of December 31, 2020, intangible assets subject to amortization relate primarily to the following (in thousands):


	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	2.6 years	$	13,435	$	11,548	$	1,887
Patent and patent licenses	1.0 year	1,686		1,568		118
Customer relationships (1)	5.3 years	101,780		88,102		13,678
Other purchased intangibles	4.8 years	10,948		9,019		1,929
Total		$	127,849	$	110,237	$	17,612

Expected amortization expenses for intangible assets subject to amortization at December 31, 2021 are as follows (in thousands):


Fiscal Year:	Amount
2022	$	4,052
2023	2,832
2024	2,041
2025	1,300
2026	828
Thereafter	1,425
Total expected amortization expense	$	12,478

As part of the Separation, Ziff Davis transferred $8.5 million in patent and patent licenses to Consensus in a non-cash transaction. These patent and patent licenses were not historically Cloud Fax assets, thereby increasing the historical cost of patent and patent licenses from $1.7 million in 2020 to $10.2 million in 2021.

Amortization expense was $4.8 million, $4.7 million and $7.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.