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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure Goodwill and Intangible Assets
As of December 31, goodwill was as follows:
Integrated Agencies NetworkBrand Performance NetworkCommunications NetworkAll OtherTotal
Balance at December 31, 2019$88,094 $177,073 $33,258 $26,760 $325,185 
Acquired goodwill7,070 235 16,275 195 23,775 
Foreign currency translation— 3,331 — (566)2,765 
Balance at December 31, 2020$95,164 $180,639 $49,533 $26,389 $351,725 
Acquired goodwill1,058,411 178,994 66,244 — 1,303,649 
Disposition— — — (935)(935)
Foreign currency translation(502)(1,020)— (194)(1,716)
Balance at December 31, 2021$1,153,073 $358,613 $115,777 $25,260 $1,652,723 
Acquired goodwill (1)
3,330 26,176 6,569 29,387 65,462 
Impairment (49,840)(49,314)— (17,560)(116,714)
Transfer of goodwill between segments (2)
(111,065)111,065 — — — 
Foreign currency translation(11,422)(13,467)(753)— (25,642)
Other (3)
(15,682)685 6,124 — (8,873)
Balance at December 31, 2022$968,394 $433,758 $127,717 $37,087 $1,566,956 
(1) For the year ended December 31, 2022, the Company’s acquisitions resulted in goodwill of $65,462. See Note 4 of the Notes included herein for information related to the acquisitions.
(2) Due to changes in the Company’s internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments. Specifically, Forsman & Bodenfors, Observatory, Crispin Porter Bogusky, Bruce Mau and Vitro Brands, previously within the Integrated Agencies Network, are now within the Brand Performance Network. See Note 20 of the Notes included herein for additional information related to these changes.
(3) Other represents adjustments associated with the finalization of purchase price accounting for acquisitions occurring in 2021.
The Company recognized an impairment and other losses charge of $122,179 for the year ended December 31, 2022, primarily related to the impairment of goodwill totaling $116,714. The goodwill impairment was to write-down the carrying value in excess of the fair value at eight reporting units, two in the Integrated Agencies Network, five in the Brand Performance Network and one within the All Other category. The charge was recorded within Impairment and other losses on the Consolidated Statements of Operations.
At each reporting period, the Company assesses whether it is more likely than not that the carrying amount of its reporting units exceed their fair value. As of October 1, 2022 (the annual impairment test date) and December 31, 2022, the Company performed this assessment and determined that certain reporting units’ carrying values exceeded their fair value. As of October 1, 2022, the Company performed a quantitative impairment test for all reporting units and as of December 31, 2022, the Company performed a quantitative impairment test for certain reporting units that were determined to be more likely than not impaired. As a result of these tests, management concluded there to be certain reporting units with a carrying value in excess of their fair value resulting in an impairment of $116,714 in 2022. The difference in carrying value and fair value was primarily due to a combination of changes in fair value measures such as an increase in interest rates and decrease in market multiples of comparable public companies, as well as current financial forecasts below the previous forecast.
In its assessment, the Company uses a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. The Company generally applies an equal weighting to the income and market approaches for the impairment test. The income approach and the market approach both require the exercise of significant judgment, including judgment about the amount and timing of expected future cash flows, assumed terminal value and appropriate discount rates.
There was $116,714 of accumulated goodwill impairment charges as of December 31, 2022.
The gross and net amounts of intangible assets other than goodwill as of December 31, are as follows:
Intangible Assets20222021
Customer relationships – gross$875,160 $875,541 
Accumulated amortization(150,655)(92,746)
Customer relationships – net$724,505 $782,795 
Trade names – gross$197,037 $190,162 
Accumulated amortization(53,150)(36,775)
Trade names – net$143,887 $153,387 
Developed technology and other intangible assets – gross$63,565 $37,550 
Accumulated amortization(24,428)(14,950)
Developed technology and other intangible assets – net$39,137 $22,600 
Total intangible assets$1,135,762 $1,103,253 
Accumulated amortization(228,233)(144,471)
Total intangible assets – net$907,529 $958,782 
The table above has been revised to reclassify previously reported gross capitalized software and accumulated amortization of $29,844 and $8,757, respectively, as of December 31, 2021 that should have been classified within intangible assets rather than fixed assets to more closely align these net assets with the category of assets they represent.
For the year ended December 31, 2022, the Company recognized an impairment charge of $1,400 to reduce the carrying values of intangible assets within the Integrated Agencies Network and Brand Performance Network reportable segments primarily in connection with the abandonment of certain trade names as part of the integration of certain entities. For the year ended December 31, 2021, the Company recognized an impairment charge of $16,187 to reduce the carrying values of intangible assets within the Integrated Agencies Network and Brand Performance Network reportable segments in connection with the abandonment of certain trade names as part of the rebranding of certain Brands. These charges were recorded as Impairment and other losses on the Consolidated Statements of Operations.
The weighted average amortization period for customer relationships is fourteen years, trade names is twelve years, and developed technology and other intangible assets is three years. In total, the weighted average amortization period is thirteen years. Amortization expense related to amortizable intangible assets for the years ended December 31, 2022, 2021, and 2020 was $103,060, $61,054, and $33,999, respectively.
The estimated amortization expense for the five succeeding years is as follows:
YearAmortization
2023$101,734 
202496,245 
202595,380 
202684,089 
202782,007 
Thereafter448,074