Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

6.	Intangible Assets and Goodwill

We amortize intangible assets subject to amortization on a straight-line or accelerated basis based on the period for which the economic benefits of the asset are expected to be realized. In connection with our acquisition of Nutrisystem on March 8, 2019, we recorded the following amounts of intangible assets and goodwill. All of the goodwill was recorded to the Nutrition segment, and none of the goodwill is deductible for tax purposes.

(In thousands)	Fair Value		Estimated Useful Life (in years)

Intangible assets subject to amortization:
Tradename - South Beach Diet		9,000		15
Customer list		110,000		7
Retail customer relationship		8,000		10
Noncompetition agreements		6,000		5
Subtotal	$	133,000

Intangible assets not subject to amortization:
Tradename - Nutrisystem		800,000	n/a
Total intangible assets	$	933,000

Goodwill		457,056	n/a

In the fourth quarter of 2019, we recorded impairment losses of $240.0 million and $137.1 million related to the Nutrisystem tradename and goodwill, respectively (see Note 13).

A reconciliation of our goodwill balance is as follows:

(In thousands)	Healthcare December 31,						Nutrition December 31,			Consolidated December 31,
	2019			2018			2019			2019			2018
Beginning balance, gross	$	517,040		$	517,040		$	—		$	517,040		$	517,040
Accumulated impairment		(182,360	)		(182,360	)		—			(182,360	)		(182,360	)
Beginning balance, net	$	334,680		$	334,680		$	—		$	334,680		$	334,680
Acquisition of Nutrisystem		—			—			445,671			445,671			—
Measurement period adjustment ⁽¹⁾		—			—			11,384			11,384			—
Goodwill impairment ⁽²⁾		—			—			(137,100	)		(137,100	)		—
Ending balance, gross	$	517,040		$	517,040		$	457,055		$	974,095		$	517,040
Accumulated impairment		(182,360	)		(182,360	)		(137,100	)		(319,460	)		(182,360	)
Ending balance, net	$	334,680		$	334,680		$	319,955		$	654,635		$	334,680

(1)

See Note 2 for explanation.

(2)

See Note 13 for explanation.

Intangible assets subject to amortization at December 31, 2019 consisted of the following:

(In thousands)	Gross Carrying Amount		Accumulated Amortization			Net
Acquired technology	$	1,483	$	(1,483	)		—
Distributor and provider networks		8,709		(8,709	)		—
Tradename		9,000		(489	)		8,511
Customer list		110,000		(30,245	)		79,755
Retail customer relationship		8,000		(652	)		7,348
Noncompetition agreements		6,000		(977	)		5,023
Total	$	143,192	$	(42,555	)	$	100,637

Intangible assets subject to amortization at December 31, 2018 consisted of the following:

(In thousands)	Gross Carrying Amount		Accumulated Amortization			Net
Acquired technology	$	1,483	$	(1,483	)		—
Distributor and provider networks		8,709		(8,709	)		—
Total	$	10,192	$	(10,192	)	$	—

Total amortization expense for the years ended December 31, 2019, 2018, and 2017 was $32.4 million, $0, and $0, respectively. Expected future amortization expense of intangible assets for each of the next five years and thereafter is as follows:

(In thousands)
Year ending December 31,
2020	$	30,351
2021		22,864
2022		16,924
2023		11,559
2024		6,969
Thereafter		11,970
Total	$	100,637

At December 31, 2019 and 2018, intangible assets not subject to amortization consist of tradenames of $589.0 million and $29.0 million, respectively.