Goodwill and Intangible Assets

3 Months Ended

Dec. 29, 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 29, 2019	$	441,802	$	483,018	$	924,820
Translation	2,502		9,746		12,248
Balance at December 29, 2019	$	444,304	$	492,764	$	937,068

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 $462.0 million and $459.5 million at December 29, 2019 and September 29, 2019, respectively, excluding $17.7 million of accumulated impairment. The gross amounts of goodwill for CIG were $598.5 million and $588.7 million at December 29, 2019 and September 29, 2019, respectively, excluding $105.7 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 1, 2019 (i.e. the first day of our fourth quarter in fiscal 2019) indicated that we had no impairment of goodwill, and

all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. All of our reporting units had estimated fair values that exceeded their carrying values by more than 25%.

We also 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. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired.

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.

During the fourth quarter of fiscal 2019, we performed an interim goodwill impairment review of our Remediation and Field Services ("RFS") reporting unit and recorded a $7.8 million goodwill impairment charge. As a result of the impairment charge, the estimated fair value of the RFS reporting unit equaled its carrying value of $61 million at September 29, 2019, including the remaining $48.8 million of goodwill. If the financial performance of the operations in the RFS reporting unit were to fall below our revenue growth or operating profit margin forecasts, or we are required to increase the discount rate used in our cash flow analysis, the related goodwill may become further impaired.

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:



	December 29, 2019						September 29, 2019
	Weighted- Average Remaining Life (in Years)	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
	($ in thousands)
Client relations	2.8	$	57,065	$	(51,401	)	$	56,779	$	(50,455	)
Backlog	1.2	33,112		(27,312		)	32,229		(24,968		)
Trade names	2.2	7,919		(5,302		)	7,714		(4,859		)
Total		$	98,096	$	(84,015	)	$	96,722	$	(80,282	)

Amortization expense for the three months ended December 29, 2019 was $2.9 million, compared to $4.0 million for the prior-year period. Estimated amortization expense for the remainder of fiscal 2020 and succeeding years is as follows:



	Amount
	(in thousands)
2020	$	6,770
2021	4,729
2022	1,660
2023	922
Total	$	14,081