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Goodwill and Intangible Assets, Net | 12 Months Ended
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Dec. 31, 2022
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. 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. 2022 Goodwill Impairment Test On October 31, 2022, the Company performed its annual goodwill impairment test for fiscal year 2022. As a result of BHG announcing its plan to exit its IFP line of business in 2023, thus negatively impacting the Company’s future revenues from such partner, 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. In doing so, we estimated the fair value of the reporting unit by considering an 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. The quantitative analysis of the Evolent Health Services reporting unit showed that the fair value exceeded the carrying value. Contracts with our customers may be cancelled or renegotiated and future revenue growth is dependent on winning new contracts. Further, the impairment analysis is particularly sensitive to changes in the projected revenue growth rates and expenses and the discount rate. Changes in these key assumptions such as a significant unfavorable change to our forecasted cash flows due to being unsuccessful in winning certain contracts or certain of our contracts being cancelled or renegotiated by our customers, could result in a revision of management’s estimates and could result in impairment charges in the future, which could be material to our results of operations. We will continue to monitor for such changes in facts or circumstances, which may be indicators of potential impairment triggers. For the remaining reporting units, after assessing the totality of events and circumstances including the results of our previous valuations, no events 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. For all reporting units, it was determined that as of October 31, 2022, no impairment of goodwill had occurred. As of December 31, 2022, 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 units was less than the reporting unit’s carrying amounts that would require an interim impairment assessment after October 31, 2022. The Company determined there had been no such indicators, therefore, we did not perform an interim goodwill impairment assessment as of December 31, 2022. 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. 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, 2020(1) | $ | 214,354 |  |  | $ | 134,675 |  |  | $ | 349,029 |
Goodwill acquired(2) | — |  |  | 77,288 |  |  | 77,288 |
Foreign currency translation | (20) |  |  | — |  |  | (20) |
Balance as of December 31, 2021 | 214,334 |  |  | 211,963 |  |  | 426,297 |
Goodwill acquired(2) | — |  |  | 296,597 |  |  | 296,597 |
Foreign currency translation | (120) |  |  | — |  |  | (120) |
Balance as of December 31, 2022 | $ | 214,214 |  |  | $ | 508,560 |  |  | $ | 722,774 |
———————— (1)Net of cumulative inception to date impairment of $575.5 million as of December 31, 2020. (2)Goodwill acquired from the addition of Vital Decisions in 2021 and IPG in 2022. Intangible Assets, Net Details of our intangible assets (in thousands, except weighted-average useful lives) are presented below:
| December 31, 2022 |  | December 31, 2021
| 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 | 12.7 |  | $ | 43,600 |  |  | $ | 11,726 |  |  | $ | 31,874 |  |  | 12.4 |  | $ | 25,800 |  |  | $ | 7,693 |  |  | $ | 18,107 |
Customer relationships | 15.8 |  | 465,019 |  |  | 92,760 |  |  | 372,259 |  |  | 14.9 |  | 311,019 |  |  | 72,697 |  |  | 238,322 |
Technology | 2.7 |  | 111,822 |  |  | 80,255 |  |  | 31,567 |  |  | 2.0 |  | 87,922 |  |  | 73,378 |  |  | 14,544 |
Below market lease, net | 0.3 |  | 1,218 |  |  | 1,151 |  |  | 67 |  |  | 1.3 |  | 1,218 |  |  | 950 |  |  | 268 |
Provider network contracts | 1.3 |  | 18,851 |  |  | 11,834 |  |  | 7,017 |  |  | 2.2 |  | 16,417 |  |  | 7,874 |  |  | 8,543 |
Total intangible assets, net |  |  | $ | 640,510 |  |  | $ | 197,726 |  |  | $ | 442,784 |  |  |  |  | $ | 442,376 |  |  | $ | 162,592 |  |  | $ | 279,784 |
Amortization expense related to intangible assets was $35.2 million, $29.4 million and $32.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, excluding $0.2 million and $0.6 million of amortization expense related to discontinued operations for the years ended December 31, 2021 and 2020, respectively. Future estimated amortization of intangible assets (in thousands) as of December 31, 2022, is as follows:
2023 | $ | 41,488 |
2024 | 35,604 |
2025 | 33,057 |
2026 | 32,880 |
2027 | 30,138 |
Thereafter | 269,617 |
Total future amortization of intangible assets | $ | 442,784 |
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, 2022 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 https://asc.fasb.org/topic&trid=2144416 + Details
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