Note 6 - Goodwill and Other Acquired Intangible Assets, Net

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

Goodwill and Other Acquired Intangible Assets, Net

All of our goodwill and other acquired 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 September 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 September 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 third quarter of 2018, we performed a qualitative assessment of goodwill and other acquired intangible assets and considered factors such as: (i) the decline in and timing of revenues during 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 third 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 September 30, 2018. In addition, we concluded that the carrying amounts of other acquired 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 acquired intangible assets, see Note 2 of Notes to Consolidated Financial Statements in our 2017 Form 10-K.

Other Acquired Intangible Assets

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

	September 30, 2018
(In thousands)	Original Amount Acquired		Accumulated Amortization and Impairment			Net Carrying Amount
Client relationships (1)	$	82,530	$	(46,569	)	$	35,961
Technology (2)	15,250		(11,567		)	3,683
Trade name and trademarks	8,340		(3,649		)	4,691
Client backlog	6,680		(6,680		)	—
Non-competition agreements	185		(175		)	10
Licenses	463		(23		)	440
Total	$	113,448	$	(68,663	)	$	44,785

	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

______________________

(1) Includes a cumulative impairment charge of $14.9 million.

(2) Includes a cumulative impairment charge of $0.9 million.

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

2018	$	3,461
2019	8,146
2020	6,827
2021	5,413
2022	4,881
2023	4,430
Thereafter	11,627
Total	$	44,785

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