Note 6 - Goodwill and Other Intangible Assets, Net

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

All of our goodwill and other intangible assets relate to our Services segment. The following table shows the changes in the carrying amount of goodwill for the year-to-date periods ended June 30, 2018 and December 31, 2017:



(In thousands)	Goodwill		Accumulated Impairment Losses			Net
Balance at December 31, 2016	$	197,265	$	(2,095	)	$	195,170
Goodwill acquired	126		—			126
Impairment losses	—		(184,374		)	(184,374		)
Balance at December 31, 2017	197,391		(186,469		)	10,922
Goodwill acquired	—		—			—
Impairment losses	—		—			—
Balance at June 30, 2018	$	197,391	$	(186,469	)	$	10,922

Accounting Policy Considerations

Goodwill is an asset representing the estimated future economic benefits arising from the assets we have acquired that are not individually identified and separately recognized, and includes the value of the discounted expected future cash flows from these businesses, the workforce, expected synergies with our other affiliates and other unidentifiable intangible assets. Goodwill is deemed to have an indefinite useful life and is subject to review for impairment annually, or more frequently, whenever events and circumstances indicate potential impairment. For purposes of performing our goodwill impairment test, we have concluded that the Services segment constitutes one reporting unit to which all of our recorded goodwill is related.

In the second quarter of 2018, we performed a qualitative assessment of goodwill and other intangible assets and considered factors such as: (i) the decline in and timing of revenues during the second quarter of 2018 for the Services segment (as compared to the forecasted amounts for the same period); (ii) the current carrying amount of reporting unit and asset groupings; and (iii) our recent goodwill impairment test and recognition of impairment charges. Based on our qualitative assessment in the second quarter of 2018, we concluded that it is not “more likely than not” that the fair value of the Services reporting unit is less than its carrying amount as of June 30, 2018. In addition, we concluded that the carrying amounts of other intangible assets are supported by projected earnings. We monitor the performance of the Services segment each quarter, including through our annual impairment assessment planned for the fourth quarter of 2018.

For additional information on our accounting policies for goodwill and other intangible assets, see Note 2 of Notes to Consolidated Financial Statements in our 2017 Form 10-K.

Other Intangible Assets

The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated:



	June 30, 2018
(In thousands)	Original Amount Acquired		Accumulated Amortization and Impairment			Net Carrying Amount
Client relationships (1)	$	82,530	$	(44,912	)	$	37,618
Technology (2)	15,250		(9,992		)	5,258
Trade name and trademarks	8,340		(3,434		)	4,906
Client backlog	6,680		(6,680		)	—
Non-competition agreements	185		(173		)	12
Licenses	463		—			463
Total	$	113,448	$	(65,191	)	$	48,257



	December 31, 2017
(In thousands)	Original Amount Acquired		Accumulated Amortization			Net Carrying Amount
Client relationships (1)	$	82,530	$	(41,596	)	$	40,934
Technology (2)	15,250		(8,922		)	6,328
Trade name and trademarks	8,340		(3,003		)	5,337
Client backlog	6,680		(6,006		)	674
Non-competition agreements	185		(168		)	17
Total	$	112,985	$	(59,695	)	$	53,290

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(1)	Includes an impairment charge of $14.9 million in the quarter ended June 30, 2017.


(2)	Includes an impairment charge of $0.9 million in the quarter ended June 30, 2017.

The estimated aggregate amortization expense for the remainder of 2018 and thereafter is as follows (in thousands):



2018	$	6,934
2019	8,146
2020	6,827
2021	5,413
2022	4,881
2023	4,430
Thereafter	11,626
Total	$	48,257

Generally, for tax purposes, substantially all of our goodwill and other intangible assets are deductible and will be amortized over a period of 15 years from acquisition.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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