Note 7 - Goodwill and Other Acquired Intangible Assets, Net

9 Months Ended

Sep. 30, 2020

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 Real Estate segment. The following table shows the changes in the carrying amount of goodwill for the year-to-date periods ended December 31, 2019 and September 30, 2020:

(In thousands)	Goodwill		Accumulated Impairment Losses		Net
Balance at December 31, 2018	$	200,561	$	(186,469)	$	14,092
Goodwill acquired	538		—		538
Impairment losses	—		(4,828)		(4,828)
Balance at December 31, 2019	201,099		(191,297)		9,802
Goodwill disposed (1)	(191,297)		191,297		—
Balance at September 30, 2020	$	9,802	$	—	$	9,802

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(1)Related to the sale of Clayton in January 2020. See Note 7 of Notes to Consolidated Financial Statements in our 2019 Form 10-K for additional information on the sale of Clayton.

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

	September 30, 2020
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Client relationships	$	43,550	$	(29,748)	$	13,802
Technology	8,285		(6,988)		1,297
Trade name and trademarks	480		(461)		19
Licenses	463		(115)		348
Total	$	52,778	$	(37,312)	$	15,466

	December 31, 2019
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Client relationships	$	43,550	$	(27,269)	$	16,281
Technology	8,435		(6,789)		1,646
Trade name and trademarks	480		(404)		76
Licenses	463		(81)		382
Total	$	52,928	$	(34,543)	$	18,385

Interim Impairment Analysis

Goodwill is deemed to have an indefinite useful life and is subject to review for impairment annually, or more frequently, if certain events and circumstances indicate potential impairment. We generally perform our annual goodwill impairment test during the fourth quarter of each year, using balances as of the prior quarter. Events and circumstances that could result in an interim assessment of goodwill and other acquired intangible assets and/or a potential impairment loss include, but are not limited to: (i) significant under-performance of the Real Estate segment relative to historical or projected future operating results; (ii) significant changes in the strategy for the Real Estate segment; (iii) significant negative industry or economic trends; and (iv) a decline in market capitalization below the book value attributable to the Real Estate segment.

Due to the rapidly changing social and economic impacts associated with the COVID-19 pandemic on the U.S. and global economies generally, and in particular on the U.S. housing, real estate and housing finance markets during the first quarter of 2020, we opted to perform an interim quantitative impairment assessment of our goodwill and other acquired intangible assets for the first quarter of 2020. In connection with that assessment, we first evaluated the recoverability of our other acquired intangible assets, as factors affecting the estimated fair value of our goodwill also affect the estimated recoverability of our other acquired intangible assets. Based on our quantitative goodwill impairment assessment as of March 31, 2020, no impairment was indicated for other acquired intangible assets, as the remaining carrying amounts were estimated to be recoverable despite the recent market disruptions associated with the COVID-19 pandemic. Based on our analysis in the first quarter of 2020, and the evaluation of factors that affect our estimated fair value as of September 30, 2020, we concluded that there were no events or circumstances that would more likely than not reduce the fair value of our reporting unit, including acquired intangible assets. Our assumptions related to projected cash flows did not significantly change as a result of the observed market conditions during the first three quarters of 2020.

The value of our goodwill and other acquired intangible assets is supported by cash flow projections, which are primarily driven by projected transaction volume and margins. Given that the value of our goodwill and other acquired intangible assets continues to rely on achieving our projected future cash flows, failure to meet those projections and lower earnings over sustained periods may result in impairment in a future period, which could result in a charge to earnings.

For additional information on our accounting policies for goodwill and other acquired intangible assets, see Notes 2 and 7 of Notes to Consolidated Financial Statements in our 2019 Form 10-K.