Goodwill and Intangible Assets

9 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

The following table summarizes the changes in the carrying value of goodwill:



	GSG			CIG			Total
	(in thousands)
Balance at September 30, 2018	$	389,741		$	409,079		$	798,820
Acquisition activity	38,680			20,078			58,758
Translation and other	(581		)	(5,376		)	(5,957		)
Balance at June 30, 2019	$	427,840		$	423,781		$	851,621

During the first nine months of fiscal 2019, we recorded goodwill additions as a result of our recent acquisitions. The purchase price allocation for these acquisitions are preliminary and subject to adjustment based upon the final determination of the net assets acquired and information to perform the final valuation. Our goodwill was impacted by foreign currency translation related to our foreign subsidiaries with functional currencies that are different than our reporting currency. The goodwill amounts above are presented net of any reductions from historical impairment adjustments. The gross amounts of goodwill for GSG were $445.5 million and $407.4 million at June 30, 2019 and September 30, 2018, respectively, excluding $17.7 million of accumulated impairment. The gross amounts of goodwill for CIG were $521.7 million and $507.0 million at June 30, 2019 and September 30, 2018, respectively, excluding $97.9 million of accumulated impairment.

We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our most recent annual review at July 2, 2018 (i.e. the first day of our fourth quarter in fiscal 2018) indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that exceeded their carrying values, including goodwill, by more than 30%.

We regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy, or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods.

We estimate the fair value of all reporting units with a goodwill balance based on a comparison and weighting of the income approach (weighted 70%), specifically the discounted cash flow method, and the market approach (weighted 30%), which estimates the fair value of our reporting units based upon comparable market prices and recent transactions, and also validates the reasonableness of the multiples from the income approach. The resulting fair value is most sensitive to the assumptions we use in our discounted cash flow analysis. The assumptions that have the most significant impact on the fair value calculation are the reporting unit’s revenue growth rate and operating profit margin, and the discount rate used to convert future estimated cash flows to a single present value amount.

The gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets - net” on our consolidated balance sheets, were as follows:



	June 30, 2019						September 30, 2018
	Weighted- Average Remaining Life (in Years)	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
	($ in thousands)
Non-compete agreements	—	$	—	$	—		$	83	$	(83	)
Client relations	2.5	54,483		(49,791		)	54,639		(46,449		)
Backlog	0.7	26,075		(23,623		)	23,371		(20,007		)
Trade names	2.6	7,956		(4,662		)	8,144		(3,575		)
Total		$	88,514	$	(78,076	)	$	86,237	$	(70,114	)

Amortization expense for the three and nine months ended June 30, 2019 was $2.4 million and $8.6 million, respectively, compared to $5.2 million and $14.9 million for the prior-year periods. Estimated amortization expense for the remainder of fiscal 2019 and succeeding years is as follows:



	Amount
	(in thousands)
2019	$	1,873
2020	4,871
2021	2,246
2022	1,020
2023	428
Total	$	10,438