Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

4. Goodwill and Other Intangible Assets

Changes in the Company’s goodwill balance for the nine months ended September 30, 2022 are summarized in the table below:


($ in thousands)	Goodwill
Balance at December 31, 2021	$	457,472
Acquired in business combinations	48,768

Adjustment related to prior year business combinations	1,466
Adjustment related to finalization of current year business combinations	508
Foreign currency translation adjustment and other	(28,572)
Balance at September 30, 2022	$	479,642

Goodwill is evaluated for impairment annually in October or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The events and circumstances considered by the Company include the business climate, legal factors, operating performance indicators and competition. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for our products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, we could incur impairment charges in a future period.

Net intangible assets include the estimated acquisition-date fair values of customer relationships, marketing-related assets, developed technology, and non-compete agreements that the Company recorded as part of its business acquisitions.

The following is a summary of the Company’s intangible assets, net (in thousands):


	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
September 30, 2022:
Customer relationships	1-10	$	359,858	$	147,631	$	212,227
Trade name	1.5-10	9,535		6,298		3,237
Developed technology	4-9	90,186		51,848		38,338

Favorable Leases	6.3	270		32		238
Total intangible assets		$	459,849	$	205,809	$	254,040


	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
December 31, 2021:
Customer relationships	1-10	$	358,943	$	126,329	$	232,614
Trade name	1.5-10	9,714		5,752		3,962
Developed technology	4-9	88,548		45,204		43,344
Non-compete agreements	3	1,148		1,148		—
Total intangible assets		$	458,353	$	178,433	$	279,920

The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life.

Management recorded no impairments of intangible assets or goodwill during the three and nine months ended September 30, 2022 or the year ended December 31, 2021.

Total amortization expense was $12.8 million and $13.2 million during the three months ended September 30, 2022 and September 30, 2021, respectively, and $40.1 million and $37.9 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

As of September 30, 2022, the estimated annual amortization expense for the next five years and thereafter is as follows (in thousands):


	Amortization Expense
Year ending December 31:
Remainder of 2022	$	12,409
2023	48,769
2024	46,381
2025	43,178
2026	40,299
2027 and thereafter	63,004
Total	$	254,040