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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination and is assigned to the reporting unit that is expected to benefit from the synergies of the combination. Goodwill is tested for impairment annually on October 1st at the reporting unit level, or more frequently if indicators of impairment exist, or if a decision is made to dispose of a business. The Company’s Digital Media reportable segment is comprised of seven reporting units and the Cybersecurity and Martech reportable segment is comprised of two reporting units. The changes in carrying amounts of goodwill for the years ended December 31, 2022 and 2021 are as follows (in thousands):
| Digital Media |  | Cybersecurity and Martech |  | Consolidated
Balance as of January 1, 2021 | $ | 942,934 |  |  | $ | 582,066 |  |  | $ | 1,525,000 |
Goodwill acquired (Note 4) | 55,704 |  |  | 41,328 |  |  | 97,032 |
Goodwill removed due to sale of businesses (1) | — |  |  | (50,277) |  |  | (50,277) |
Goodwill impairment | — |  |  | (32,629) |  |  | (32,629) |
Purchase accounting adjustments (2) | (1,437) |  |  | 505 |  |  | (932) |
Foreign exchange translation | (542) |  |  | (6,197) |  |  | (6,739) |
Balance as of December 31, 2021 | $ | 996,659 |  |  | $ | 534,796 |  |  | $ | 1,531,455 |
Goodwill acquired (Note 4) | 95,737 |  |  | — |  |  | 95,737 |
Goodwill impairment | (27,369) |  |  | — |  |  | (27,369) |
Purchase accounting adjustments (2) | 4,475 |  |  | (137) |  |  | 4,338 |
Foreign exchange translation | (3,513) |  |  | (9,174) |  |  | (12,687) |
Balance as of December 31, 2022 | $ | 1,065,989 |  |  | $ | 525,485 |  |  | $ | 1,591,474 |
(1)On February 9, 2021, in a cash transaction, the Company sold certain of its Voice assets in the United Kingdom which resulted in $1.3 million of goodwill being removed in connection with this sale and on September 17, 2021, the Company sold certain of its B2B Backup assets which resulted in $49.0 million of goodwill being removed in connection with the sale (see Note 6 - Discontinued Operations and Dispositions). (2)Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 4 - B usiness Acquisitions). During the year ended December 31, 2022, the Company reassessed the fair value of a reporting unit within the Digital Media reportable segment as a result of a forecasted reduction in revenue and operating income in that reporting unit, as well as an increase in interest rates and market volatility that would affect the Company’s assumptions on its discount rate. Based on the quantitative fair value test, the carrying value of the reporting unit exceeded its fair value, and the Company recorded an impairment of approximately $27.4 million during the year ended December 31, 2022. The fair value of the reporting unit was determined using an equal weighting of an income approach that was based on the discounted estimated future cash flows of the reporting unit and a market approach that uses the guideline public company approach. We believe the combination of these approaches provides a reasonable valuation approach because it incorporates the expected cash generation of the reporting unit in addition to how a third-party market participant would value the reporting unit. As the business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value. Determining fair value using a discounted estimated future cash flow analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the discounted cash flow analyses were based on the most recent forecast for the reporting unit. For years beyond the forecast period, the estimates were based, in part, on forecasted growth rates. The discount rate the Company used represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in its reporting unit operations and the rate of return a market participant would expect to earn. Determining fair value using a market approach considers multiples of financial metrics based on trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined, which is applied to financial metrics to estimate the fair value of the reporting unit. Following the impairment, this reporting unit had goodwill of approximately $86.9 million and the carrying value approximated its fair value. During the year ended December 31, 2022, the Company realigned two reporting units within the Digital Media reportable segment. The Company re-allocated goodwill between the two identified reporting units based upon the relative fair value of the respective reporting units. Immediately before and immediately following this change in reporting units, the Company performed a quantitative fair value assessment using the income approach and market approach noted above, and each of these reporting units exceeded their respective carrying values and, therefore, there was no impairment to goodwill. During the year ended December 31, 2021, the Company recorded an impairment of approximately $32.6 million related to the Company’s B2B Backup business (included in the Cybersecurity and Martech reportable segment). In 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of that business less cost to sell was lower than its carrying amount. The fair value of the business was determined based upon the offer price. The fair value of the remaining reporting unit was determined using an equal weighting of an income approach and a market approach, and was in excess of the remaining carrying value of the reporting unit. Goodwill as of December 31, 2022 and 2021 reflects accumulated impairment losses of $27.4 million and $32.6 million, respectively, in the Digital Media reportable segment and the Cybersecurity and Martech reportable segment, respectively. Intangible Assets Subject to Amortization Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies, and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from one to twenty years. As of December 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands):
| Weighted-Average Amortization Period |  | Historical Cost |  | Accumulated Amortization |  | Net
Trade names | 10.0 years |  | $ | 261,614 |  |  | $ | 125,422 |  |  | $ | 136,192 |
Customer relationships (1) | 7.9 years |  | 687,798 |  |  | 479,741 |  |  | 208,057 |
Other purchased intangibles | 8.3 years |  | 481,973 |  |  | 363,407 |  |  | 118,566 |
Total |  |  | $ | 1,431,385 |  |  | $ | 968,570 |  |  | $ | 462,815 |
(1)The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. During the year ended December 31, 2022, the Company completed acquisitions (see Note 4 - Business Acquisitions) which were individually immaterial. The identified intangible assets were recognized as part of all 2022 acquisitions and their respective estimated weighted average amortizations were as follows as of December 31, 2022 (in thousands):
| Weighted-Average Amortization Period |  | Carrying Value
Trade names | 9.6 years |  | $ | 12,423 |
Customer relationships | 7.3 years |  | 18,714 |
Other purchased intangibles | 2.4 years |  | 17,567 |
Total |  |  | $ | 48,704 |
As of December 31, 2021, intangible assets subject to amortization relate primarily to the following (in thousands):
| Weighted-Average Amortization Period |  | Historical Cost |  | Accumulated Amortization |  | Net
Trade names | 9.7 years |  | $ | 250,418 |  |  | $ | 102,657 |  |  | $ | 147,761 |
Customer relationships (1) | 8.1 years |  | 673,847 |  |  | 398,396 |  |  | 275,451 |
Other purchased intangibles | 9.3 years |  | 467,028 |  |  | 317,515 |  |  | 149,513 |
Total |  |  | $ | 1,391,293 |  |  | $ | 818,568 |  |  | $ | 572,725 |
(1)The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. Expected amortization expenses for intangible assets subject to amortization at December 31, 2022 are as follows (in thousands):
Fiscal Year: |
2023 | $ | 139,975 |
2024 | 99,158 |
2025 | 76,614 |
2026 | 68,813 |
2027 | 29,467 |
Thereafter | 48,788 |
Total expected amortization expense | $ | 462,815 |
Amortization expense, included in General and administrative expense on our Consolidated Statements of Operations, approximated $156.7 million, $185.7 million, and $156.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
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