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Goodwill and Intangible Assets, Net | 12 Months Ended
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Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill Goodwill has an estimated indefinite life and is not amortized; rather, it is reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Subsequent to the sale of True Health, the Company has three reporting units, each with discrete financial information. Our assets and liabilities are employed in and relate to the operations of our reporting units. Therefore, the equity carrying value and future cash flows must be estimated each time a goodwill impairment analysis is performed on a reporting unit. As a result, our assets, liabilities and cash flows are assigned to reporting units using reasonable and consistent allocation methodologies. Our annual goodwill impairment review occurs on October 31 of each fiscal year. We evaluate qualitative factors that could cause us to believe the estimated fair value of each of our reporting units may be lower than the carrying value and trigger a quantitative assessment, including, but not limited to (i) macroeconomic conditions, (ii) industry and market considerations, (iii) our overall financial performance, including an analysis of our current and projected cash flows, revenues and earnings, (iv) a sustained decrease in share price and (v) other relevant entity-specific events including changes in management, strategy, partners, or litigation. 2021 Goodwill Impairment Test On October 31, 2021, the Company performed its annual goodwill impairment review for fiscal year 2021. Based on our qualitative assessment, we did not identify sufficient indicators of impairment that would suggest the fair value of any of our three reporting units was below their respective carrying values. As a result, a quantitative goodwill impairment analysis was not required. 2020 Goodwill Impairment Test As of March 31, 2020, the Company assessed whether there were additional events or changes in circumstances since its 2019 annual goodwill impairment test that would indicate that it was more likely than not that the fair values of the reporting units were less than the reporting units’ carrying amounts that would require an additional interim impairment assessment after October 31, 2019. Considering the sharp decrease in the share price of the Company’s Class A common stock during the three months ended March 31, 2020, the Company determined indicators of an impairment were present and we performed an interim goodwill impairment assessment as of March 31, 2020. As a result of this test, the Company determined that there was no goodwill impairment of the reporting unit which recognized an impairment in the year ended December 31, 2019. During May 2020, the Kentucky Cabinet for Health and Family Services (“CHFS”) announced that EVH Passport was not awarded a Kentucky managed Medicaid contract for the next contract period and the Passport Medicaid Contract would expire on December 31, 2020. As a result of this announcement, the Company determined there were events or changes in circumstances since its 2019 annual goodwill impairment test that indicated it was more likely than not that the fair value of one of its two reporting units in the EHS segment was less than the reporting unit’s carrying amount triggering an interim quantitative assessment. In performing this interim quantitative assessment, we estimated the fair value of the reporting unit by considering a discounted cash flow valuation approach (“income approach”). In determining the estimated fair value in a quantitative analysis, we projected future cash flows based on management’s estimates and long-term plans and applied a discount rate based on the Company’s weighted average cost of capital. This analysis required us to make judgments about revenues, expenses, fixed asset and working capital requirements, capital market assumptions, cash flows and discount rates. As of May 31, 2020, we determined that the reporting unit under review had an estimated fair value less than its carrying value. As a result, we recorded a non-cash goodwill impairment charge of $215.1 million on our consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2020. In addition, the Company reviewed its interim goodwill impairment analysis as of June 30, 2020 and did not identify any additional information or events that would contradict or change the conclusion reached by the Company as of May 31, 2020. During the three months ended September 30, 2020, we evaluated qualitative factors that could indicate the fair value of each of our reporting units may be lower than the carrying value. We did not identify any qualitative factors that would trigger a quantitative goodwill impairment test during the three months ended September 30, 2020. During the Company’s annual impairment analysis as of October 31, 2020, the Company concluded that previous impairment charges of $199.8 million and $215.1 million recorded during the three months ended December 31, 2019 and June 30, 2020, respectively, in one of our two reporting units in the EHS segment left that specific reporting unit with a limited fair value cushion. Therefore, the Company elected to forego the qualitative assessment and proceed directly to the quantitative assessment of the goodwill impairment test for that specific reporting unit. This election does not preclude management from performing the qualitative assessment in any subsequent period. For the remaining reporting units, after assessing the totality of events and circumstances including the results of our previous valuations, the minimal impacts of the Passport loss and COVID-19, the Company does not believe that an event occurred or circumstances changed during the period under consideration that would, more likely than not, reduce the fair value of any reporting unit below their carrying amount. Therefore, the Company concluded that the quantitative assessment was not required. In performing our October 31, 2020 impairment test for one of the specific reporting units referenced above, we estimated the fair value of our reporting units by considering a discounted cash flow valuation approach (“income approach”). In determining the estimated fair value using the income approach, we projected future cash flows based on management’s estimates and long-term plans and applied a discount rate based on the Company’s weighted average cost of capital. This analysis required us to make judgments about revenues, expenses, fixed asset and working capital requirements, capital market assumptions, cash flows and discount rates. As of October 31, 2020, we determined that the specific reporting unit had an estimated fair value greater than its carrying value and as a result, goodwill is not impaired. As of December 31, 2020, the Company assessed whether there were additional events or changes in circumstances since its annual goodwill impairment test that would indicate that it was more likely than not that the fair value of the reporting unit was less than the reporting unit’s carrying amounts that would require an interim impairment assessment after October 31, 2020. The Company determined there had been no such indicators, therefore, we did not perform an interim goodwill impairment assessment as of December 31, 2020. Change in Goodwill The following table summarizes the changes in the carrying amount of goodwill, by reportable segment, for the periods presented (in thousands):
| EHS |  | Clinical Solutions |  | Consolidated
Balance as of December 31, 2019 (1) | $ | 431,684 |  |  | $ | 134,675 |  |  | $ | 566,359 |
Goodwill disposal (2) | (2,200) |  |  | — |  |  | (2,200) |
Impairment | (215,100) |  |  | — |  |  | (215,100) |
Foreign currency translation | (30) |  |  | — |  |  | (30) |
Balance as of December 31, 2020(1) | 214,354 |  |  | 134,675 |  |  | 349,029 |
Goodwill acquired | — |  |  | 77,288 |  |  | 77,288 |
Foreign currency translation | (20) |  |  | — |  |  | (20) |
Balance as of December 31, 2021 | $ | 214,334 |  |  | $ | 211,963 |  |  | $ | 426,297 |
———————— (1)Net of cumulative inception to date impairment of $575.5 million and $360.4 million as of December 31, 2020 and 2019, respectively. (2)Goodwill written-off upon disposal of a consolidated subsidiary. Intangible Assets, Net Details of our intangible assets (in thousands, except weighted-average useful lives) as of December 31, 2021 and December 31, 2020 are presented below:
| December 31, 2021 |  | December 31, 2020
| Weighted- Average Remaining Useful Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Value |  | Weighted- Average Remaining Useful Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Value
Corporate trade name | 12.4 |  | $ | 25,800 |  |  | $ | 7,693 |  |  | $ | 18,107 |  |  | 13.2 |  | $ | 23,300 |  |  | $ | 6,271 |  |  | $ | 17,029 |
Customer relationships (1) | 14.9 |  | 311,019 |  |  | 72,697 |  |  | 238,322 |  |  | 16.2 |  | 278,519 |  |  | 57,716 |  |  | 220,803 |
Technology | 2.0 |  | 87,922 |  |  | 73,378 |  |  | 14,544 |  |  | 1.8 |  | 82,922 |  |  | 63,507 |  |  | 19,415 |
Below market lease, net | 1.3 |  | 1,218 |  |  | 950 |  |  | 268 |  |  | 2.3 |  | 1,118 |  |  | 648 |  |  | 470 |
Provider network contracts (1) | 2.2 |  | 16,417 |  |  | 7,874 |  |  | 8,543 |  |  | 2.9 |  | 12,175 |  |  | 4,900 |  |  | 7,275 |
Total intangible assets, net |  |  | $ | 442,376 |  |  | $ | 162,592 |  |  | $ | 279,784 |  |  |  |  | $ | 398,034 |  |  | $ | 133,042 |  |  | $ | 264,992 |
———————— (1)Amounts exclude $2.2 million and $0.9 million of customer relationships and provider network contracts, respectively, net of accumulated amortization, with weighted average remaining useful lives of 15 years and 10 months reclassified to discontinued operations as of December 31, 2020. Amortization expense related to intangible assets for the years ended December 31, 2021, 2020 and 2019, was $29.4 million, $32.3 million and $37.1 million respectively, excluding $0.2 million, $0.6 million and $0.6 million of amortization expense related to discontinued operations for the years ended December 31, 2021, 2020 and 2019, respectively. Future estimated amortization of intangible assets (in thousands) as of December 31, 2021, is as follows:
2022 | $ | 29,102 |
2023 | 26,798 |
2024 | 20,913 |
2025 | 19,403 |
2026 | 19,153 |
Thereafter | 164,415 |
Total future amortization of intangible assets | $ | 279,784 |
Intangible assets are reviewed for impairment if circumstances indicate the Company may not be able to recover the assets’ carrying value. We did not identify any circumstances during the year ended December 31, 2021, that would require an impairment test for our intangible assets.

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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 http://asc.fasb.org/topic&trid=2144416 + Details
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