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Goodwill and Identified Intangible Assets | 12 Months Ended
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Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Identified Intangible Assets | NOTE 10 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS The changes to the carrying value of goodwill from January 1, 2019 through December 31, 2020 are reflected below (in thousands):
December 31, 2018 |  | $ | 385,784 |
December 31, 2019 |  | $ | 385,784 |
Goodwill acquired through the Mergers (1) |  |  | 461,129 |
Purchase price adjustment related to the Mergers (2) |  |  | 116 |
December 31, 2020 (3) |  | $ | 847,029 |
(1) In connection with the TiVo Merger, the Company recorded $461.1 million of goodwill, representing the preliminary fair value as of the effective date of the Mergers. See “Note 9 – Business Combination” for additional details. (2) Representing measurement period adjustments primarily related to current indirect taxes payable, current and non-current income taxes receivable and payable, and deferred taxes as additional information was received and tax returns were finalized. See “Note 9 – Business Combination” for additional details. (3) Of this amount, approximately $523.8 million is allocated to the Company’s Product reporting segment and approximately $323.2 million is allocated to its IP Licensing reporting segment. Goodwill at each reporting unit is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The process of evaluating goodwill for potential impairment is subjective and requires significant estimates, assumptions and judgments particularly related to the identification of reporting units, the assignment of assets and liabilities to reporting units and estimating the fair value of each reporting unit. During the first quarter of 2020, the COVID-19 pandemic rapidly spread globally and has created unprecedented disruptions in economic activity and financial markets. Due to resulting changes in macroeconomic conditions, industry outlook, and a meaningful decline in the Company’s share price, indicators of potential goodwill impairment were identified. The Company proceeded with a quantitative interim goodwill impairment test as of March 31, 2020. Based on the quantitative assessment, the Company concluded that the fair value of the reporting units exceeded the carrying amount for both Product Licensing and Semiconductor and IP Licensing. As a result, no goodwill impairment charges were recognized in the three months ended March 31, 2020. During the fourth quarter of 2020, the COVID-19 pandemic continued to have a significant and negative impact on business and economic activities in the U.S. and around the world. The resulting global economic downturn had negatively impacted, and was expected to continue to negatively impact, the Company’s consolidated financial results for the remainder of 2020 and into 2021. Due to continued reduction in demand in certain markets and industries, including the automotive market, as well as declines in the Company’s share price, management concluded there were indicators of potential goodwill impairment. The Company proceeded with a quantitative annual goodwill impairment test using the financial information as of September 30, 2020. Based on the quantitative assessment, the Company concluded that the fair value of the reporting units exceeded the carrying amount for both the Product and IP Licensing reporting units. As a result, no goodwill impairment charges were recognized in the three months ended December 31, 2020. In addition, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the impairment testing performed in the fourth quarter of the year ended December 31, 2020. When performing the quantitative goodwill impairment test, the Company first determines the fair value of a reporting unit using weighted results derived from an income approach and a market approach. The fair value using an income approach is estimated through the discounted cash flow method based on assumptions about future conditions such as revenue growth rates, operating expenses, EBITDA, discount rates, and other assumptions. Market approaches used by management include the market comparable method, which estimates the fair value based on revenue multiples from comparable companies in similar lines of business, and the market transaction method, which estimates the fair value of the reporting unit by utilizing comparable transactions and transaction multiples. Identified intangible assets consisted of the following (in thousands):
|  |  |  | December 31, 2020 |  |  | December 31, 2019 |
|  | Average Life (Years) |  | Gross Assets |  |  | Accumulated Amortization |  |  | Net |  |  | Gross Assets |  |  | Accumulated Amortization |  |  | Net |
Finite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquired patents / core technology (1) |  | 3-15 |  | $ | 659,085 |  |  | $ | (167,916 | ) |  | $ | 491,169 |  |  | $ | 151,184 |  |  | $ | (135,952 | ) |  | $ | 15,232 |
Existing technology / content database (2) (3) |  | 5-10 |  |  | 248,110 |  |  |  | (169,326 | ) |  |  | 78,784 |  |  |  | 206,878 |  |  |  | (130,890 | ) |  |  | 75,988 |
Customer contracts and related relationships (4) |  | 3-9 |  |  | 650,171 |  |  |  | (256,199 | ) |  |  | 393,972 |  |  |  | 291,769 |  |  |  | (174,741 | ) |  |  | 117,028 |
Trademarks/trade name |  | 4-10 |  |  | 40,083 |  |  |  | (21,029 | ) |  |  | 19,054 |  |  |  | 40,083 |  |  |  | (16,056 | ) |  |  | 24,027 |
Non-competition agreements |  | 1 |  |  | 2,231 |  |  |  | (2,231 | ) |  |  | — |  |  |  | 2,231 |  |  |  | (2,231 | ) |  |  | — |
Total finite-lived intangible assets |  |  |  |  | 1,599,680 |  |  |  | (616,701 | ) |  |  | 982,979 |  |  |  | 692,145 |  |  |  | (459,870 | ) |  |  | 232,275 |
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
TiVo Tradename/trademarks (5) |  | N/A |  |  | 21,400 |  |  |  | — |  |  |  | 21,400 |  |  |  | — |  |  |  | — |  |  |  | — |
Total intangible assets |  |  |  | $ | 1,621,080 |  |  | $ | (616,701 | ) |  | $ | 1,004,379 |  |  | $ | 692,145 |  |  | $ | (459,870 | ) |  | $ | 232,275 |
| (1) | In June 2020, $457.4 million of patents was acquired through the Mergers. See “Note 9 – Business Combination.”
| (2) | In June 2020, $34.8 million of existing (developed) technology was acquired through the Mergers. See “Note 9 – Business Combination.”
| (3) | In June 2020, $6.2 million of content database was acquired through the Mergers. See “Note 9 – Business Combination.”
| (4) | In June 2020, $358.2 million of customer contracts and related relationships was acquired through the Mergers. See “Note 9 – Business Combination.”
| (5) | In June 2020, $21.4 million of TiVo t radename/trademarks was acquired through the Merger s. See “Note 9 – Business Combination.”
As of December 31, 2020, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands):
2021 |  | $ | 202,453 |
2022 |  |  | 154,014 |
2023 |  |  | 143,134 |
2024 |  |  | 104,330 |
2025 |  |  | 79,862 |
Thereafter |  |  | 299,186 |
|  | $ | 982,979 |

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