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Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets  
Goodwill and Intangible Assets

Note 7—Goodwill and Intangible Assets

 

The change in goodwill by segment for 2018 and 2017 was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power

 

Pipeline

 

Utilities

 

Transmission

 

Civil

 

Total

 

Balance at January 1, 2017

 

$

24,512

 

$

42,252

 

$

20,312

 

$

 —

 

$

40,150

 

$

127,226

 

Goodwill acquired during the year

 

 

 —

 

 

9,269

 

 

17,000

 

 

 —

 

 

 —

 

 

26,269

 

Purchase price allocation adjustments

 

 

(121)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(121)

 

Balance at January 1, 2018

 

$

24,391

 

$

51,521

 

$

37,312

 

$

 —

 

$

40,150

 

$

153,374

 

Goodwill acquired during the year

 

 

1,542

 

 

764

 

 

 —

 

 

50,479

 

 

 —

 

 

52,785

 

Balance at December 31, 2018

 

$

25,933

 

$

52,285

 

$

37,312

 

$

50,479

 

$

40,150

 

$

206,159

 

 

During the third quarter of 2016, we made a decision to divest our Texas heavy civil business unit, a division of Primoris Heavy Civil within the Civil segment.  We engaged a financial advisor to assist in the marketing and sale of the business unit, and planned to continue operating the business unit until completion of a sale.  In April 2017, the Board of Directors determined that based on the information available, we would attain the best long-term value by withdrawing from the sales process and continuing to operate the business unit.  We will aggressively pursue claims for five Texas Department of Transportation projects that resulted in significant losses recorded in 2016.  However, there can be no assurance as to the final amounts collected.  In accordance with ASC 350, "Intangibles—Goodwill and Other”,  the planned divestiture triggered an analysis of the goodwill at Primoris Heavy Civil, resulting in a pre-tax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter of 2016.  

 

There were no impairments of goodwill for the years ended December 31, 2018 and 2017.

 

The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

December 31, 2017

 

 

    

Weighted
Average Life

    

Gross Carrying
Amount

    

Accumulated
Amortization

    

Intangible assets, net

    

Gross Carrying
Amount

    

Accumulated
Amortization

    

Intangible assets, net

 

Tradename

 

9 years

 

$

31,390

 

$

(25,156)

 

$

6,234

 

$

32,175

 

$

(22,238)

 

$

9,937

 

Customer relationships

 

16 years

 

 

97,400

 

 

(23,079)

 

 

74,321

 

 

49,900

 

 

(16,338)

 

 

33,562

 

Non-compete agreements

 

5 years

 

 

1,900

 

 

(1,387)

 

 

513

 

 

1,900

 

 

(820)

 

 

1,080

 

Other

 

3 years

 

 

275

 

 

(145)

 

 

130

 

 

275

 

 

(54)

 

 

221

 

Total

 

15 years

 

$

130,965

 

$

(49,767)

 

$

81,198

 

$

84,250

 

$

(39,450)

 

$

44,800

 

 

Amortization expense of intangible assets was $11.3 million, $8.7 million and $6.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. In the second quarter of 2017, we recorded a $0.5 million impairment charge related to a tradename intangible asset in our Pipeline segment.  The impairment charge is included in “Selling, general and administrative expenses” in the Consolidated Statements of Income. Estimated future amortization expense for intangible assets as of December 31, 2018 is as follows (in thousands):

 

 

 

 

 

 

 

 

Estimated

 

 

 

Intangible

 

 

 

Amortization

 

For the Years Ending December 31, 

    

Expense

 

2019

 

$

11,559

 

2020

 

 

8,814

 

2021

 

 

7,577

 

2022

 

 

6,416

 

2023

 

 

5,394

 

Thereafter

 

 

41,438

 

 

 

$

81,198