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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2019
GOODWILL AND INTANGIBLE ASSETS |
GOODWILL AND INTANGIBLE ASSETS | NOTE D – GOODWILL AND INTANGIBLE ASSETS ​ Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired. Goodwill by reportable operating segment consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Total |  | ArcBest |  | FleetNet |
​ | ​ | (in thousands)
Balances December 31, 2017 and 2018 | ​ | $ | 108,320 | ​ | $ | 107,690 | ​ | $ | 630 | ​
Goodwill impairment(1) | ​ | ​ | (20,000) | ​ | ​ | (20,000) | ​ | ​ | — | ​
Balances December 31, 2019 | ​ | $ | 88,320 | ​ | $ | 87,690 | ​ | $ | 630 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accumulated impairment December 31, 2019 | ​ | $ | (20,000) | ​ | $ | (20,000) | ​ | $ | — | ​
(1) | Goodwill impairment charge related to the ArcBest segment further described within this Note.
​ Goodwill is recorded as the excess of an acquired entity’s purchase price over the value of the amounts assigned to identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but rather is evaluated for impairment annually or more frequently if indicators of impairment exist. The fair value estimated for this evaluation is derived with the assistance of a third-party valuation firm and utilizing a combination of valuation methods, including EBITDA and revenue multiples (market approach) and the present value of discounted cash flows (income approach). Significant unobservable inputs into the valuation include forecasted cash flows for the reporting unit and the discount rate (level 3 of the fair value hierarchy). The annual impairment testing on the goodwill balances was performed as of October 1, 2019, and it was determined that the recorded balances of the domestic freight reporting unit within the ArcBest segment exceeded the estimated fair value of the reporting unit. As a result, the Company recorded a noncash goodwill impairment charge of $20.0 million, which was recognized in “Asset impairment” within the ArcBest segment operating expenses for the year ended December 31, 2019. ​ The impairment resulted primarily from underperformance of the truckload and truckload-dedicated businesses within the domestic freight reporting unit of the ArcBest segment during 2019. Current economic conditions, including lack of growth in the industrial and manufacturing sectors, tariff impacts of international trade, and higher customer inventory levels, contributed to uncertainty on projected shipment levels for purposes of these accounting assessments. The goodwill balances for each of the other reporting units was assessed qualitatively and it was determined that it was more likely than not that there was no impairment of goodwill as of the assessment date. ​ The evaluation of goodwill impairment requires management’s judgment and the use of estimates and assumptions to determine the fair value of the reporting unit. Assumptions require considerable judgment because changes in broad economic factors and industry factors can result in variable and volatile fair values. Changes in key estimates and assumptions that impact the fair value of the operations could materially affect the impairment analysis. ​ Intangible assets consisted of the following as of December 31: ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | 2019 | ​ | 2018 |
​ | ​ | Weighted-Average | ​ | ​ | ​ | ​ | Accumulated | ​ | Net | ​ | ​ | ​ | ​ | Accumulated | ​ | Net |
​ |  | Amortization Period |  | Cost |  | Amortization |  | Value |  | ​ | Cost |  | Amortization |  | Value |
​ | ​ | (in years) | ​ | (in thousands) | ​ | (in thousands) |
Finite-lived intangible assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Customer relationships |  | 14 | ​ | $ | 52,721 | ​ | $ | 26,667 | ​ | $ | 26,054 | ​ | $ | 60,431 | ​ | $ | 24,130 | ​ | $ | 36,301 | ​
Other | ​ | 11 | ​ | ​ | 1,294 | ​ | ​ | 816 | ​ | ​ | 478 | ​ | ​ | 1,032 | ​ | ​ | 684 | ​ | ​ | 348 | ​
​ |  | 14 | ​ |  | 54,015 | ​ |  | 27,483 | ​ |  | 26,532 | ​ | ​ | 61,463 | ​ |  | 24,814 | ​ |  | 36,649 | ​
Indefinite-lived intangible assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Trade name |  | N/A | ​ |  | 32,300 | ​ |  | N/A | ​ |  | 32,300 | ​ | ​ | 32,300 | ​ |  | N/A | ​ |  | 32,300 | ​
​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total intangible assets |  | N/A | ​ | $ | 86,315 | ​ | $ | 27,483 | ​ | $ | 58,832 | ​ | $ | 93,763 | ​ | $ | 24,814 | ​ | $ | 68,949 | ​
​ ​ Considering the analysis of truckload and truckload-dedicated shipment levels, pricing, and operating costs previously discussed for our annual goodwill impairment testing, it was determined that potential impairment indicators existed and an impairment test of the asset groups, including our finite-lived intangible assets was performed as of October 1, 2019. It was determined that the estimated undiscounted future cash flows expected from the asset group associated with the acquisition of our truckload-dedicated business did not support the recorded value of the related asset group. As a result, the Company recorded a noncash impairment charge of $6.5 million, which was recognized in “Asset impairment” within the ArcBest segment operating expenses for the year ended December 31, 2019 to record the asset group at fair value. Approximately $6.0 million of the impairment was related to customer relationships and an additional $0.5 million was related to revenue equipment. Significant unobservable inputs into the valuation of the asset group include forecasted cash flows for the asset group and the discount rate (level 3 of the fair value hierarchy). ​ The future amortization for intangible assets and software acquired through business acquisitions as of December 31, 2019 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  |  | Amortization of |
​ | ​ | ​ | Intangible Assets | ​
​ | ​ | ​ | (in thousands) | ​
2020 | ​ | ​ | $ | 3,911 | ​
2021 | ​ | ​ |  | 3,869 | ​
2022 | ​ | ​ |  | 3,842 | ​
2023 | ​ | ​ |  | 3,744 | ​
2024 | ​ | ​ | ​ | 3,695 | ​
Thereafter | ​ | ​ | ​ | 7,471 | ​
Total amortization | ​ | ​ | $ | 26,532 | ​
​

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