Goodwill and Intangibles

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLES

We anticipate that the COVID-19 pandemic could continue to have an impact on the homebuilding industry in general, as it could result in further business interruptions (government-mandated or otherwise) and could affect, among other factors, employment levels, consumer spending and consumer confidence, which could decrease demand for homes, adversely affecting our business. As such, we considered whether impairment indicators arose through the date of filing of this Form 10-K for our goodwill, long-lived assets and other intangible assets and concluded that no factors caused us to impair any asset group during the year ended December 31, 2020. While we ultimately concluded that our goodwill, long-lived assets and other intangibles assets were not impaired as of December 31, 2020, we will continue to assess impairment indicators related to the impact of the COVID-19 pandemic on our business.

Goodwill

The change in carrying amount of goodwill was as follows (in thousands):


	Goodwill (Gross)		Accumulated Impairment Losses		Goodwill (Net)
January 1, 2019	$	243,053	$	(70,004)	$	173,049
Business combinations	22,405		—		22,405
Other	198		—		198
December 31, 2019	265,656		(70,004)		195,652
Business combinations	21,305		—		21,305
Other	(87)		—		(87)
December 31, 2020	$	286,874	$	(70,004)	$	216,870

Other changes included in the above table for the years ended December 31, 2020 and 2019 include minor adjustments for the allocation of certain acquisitions still under measurement. For the year ended December 31, 2019, other changes included several immaterial tuck-in acquisitions. For additional information regarding changes to goodwill resulting from acquisitions, see Note 17, Business Combinations.

At October 1, 2020, our measurement date, we tested goodwill for impairment under the updated guidance per ASU 2017-04 "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" by performing a one-step qualitative assessment in conformity with generally accepted accounting principles and determined that no impairment of goodwill was required. As such, no impairment of goodwill was recognized for the year ended December 31, 2020. In addition, no impairment of goodwill was recognized for the years ended December 31, 2019 or 2018. Accumulated impairment losses included within the above table were incurred over multiple periods, with the latest impairment charge being recorded during the year ended December 31, 2010.

Intangibles, net

The following table provides the gross carrying amount, accumulated amortization and net book value for each major class of intangibles (in thousands):


	As of December 31,
	2020						2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized intangibles:
Customer relationships	$	197,641	$	89,137	$	108,504	$	169,334	$	69,388	$	99,946
Covenants not-to-compete	20,309		13,436		6,873		16,959		10,617		6,342
Trademarks and tradenames	79,657		27,245		52,412		69,718		22,609		47,109
Backlog	18,847		15,243		3,604		14,080		13,915		165
	$	316,454	$	145,061	$	171,393	$	270,091	$	116,529	$	153,562

There was no intangible asset impairment loss for the years ended December 31, 2020, 2019 and 2018.

The gross carrying amount of intangibles increased approximately $46.4 million and $28.3 million during the years ended December 31, 2020 and 2019, respectively. Intangibles associated with business combinations accounted for approximately $46.2 million and $28.0 million of the increases during the years ended December 31, 2020 and 2019, respectively. For more information, see Note 17, Business Combinations. Amortization expense on intangible assets totaled approximately $28.5 million and $24.5 million, $25.4 million during the years ended December 31, 2020, 2019 and 2018, respectively. Remaining estimated aggregate annual amortization expense is as follows (in thousands):


2021			$32,357
2022			28,884
2023			25,447
2024			21,934
2025			16,529
Thereafter			46,242