Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

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. 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 20 years.

The changes in carrying amounts of goodwill for the years ended December 31, 2020 and 2019 are as follows (in thousands):


	Fax and Martech		Voice, Backup, Security and CPP		Total Cloud Services		Digital Media		Consolidated
Balance as of January 1, 2019	$	366,270	$	300,718	$	666,988	$	713,388	$	1,380,376
Goodwill acquired (Note 4)	31,672		179,293		210,965		42,131		253,096

Purchase Accounting Adjustments (1)	177		—		177		(858)		(681)
Foreign exchange translation	(331)		73		(258)		500		242

Balance as of December 31, 2019	$	397,788	$	480,084	$	877,872	$	755,161	$	1,633,033
Goodwill acquired (Note 4)	21,738		19,056		40,794		177,951		218,745
Goodwill written off related to sale of a business (2)	—		(4,751)		(4,751)		—		(4,751)
Purchase accounting adjustments (1)	—		(2,130)		(2,130)		9,721		7,591
Foreign exchange translation	5,945		6,766		12,711		101		12,812

Balance as of December 31, 2020	$	425,471	$	499,025	$	924,496	$	942,934	$	1,867,430

(1) Purchase accounting adjustments relate to adjustments to goodwill in connection with prior year business acquisitions (see Note 4 - Business Acquisitions).

(2) On August 31, 2020, in a cash transaction, the Company sold certain of its Voice assets in Australia and New Zealand which resulted in $4.8 million of goodwill being written off (see Note 6 - Sale of Assets).

Intangible assets are summarized as of December 31, 2020 and 2019 as follows (in thousands):

Intangible Assets with Indefinite Lives:


	2020		2019
Trade names	$	27,460	$	27,379
Other	4,329		4,306
Total	$	31,789	$	31,685

Intangible Assets Subject to Amortization:

As of December 31, 2020, 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	$	260,715	$	100,273	$	160,442
Patent and patent licenses	5.5 years	67,980		66,964		1,016
Customer relationships (1)	8.0 years	848,875		471,681		377,194
Other purchased intangibles	4.3 years	436,352		265,224		171,128
Total		$	1,613,922	$	904,142	$	709,780

(1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four to five years, despite the overall life of the asset.

During the year ended December 31, 2020, the Company acquired RetailMeNot, Inc. (see Note 4 - Business Acquisitions). The identified intangible assets were recognized as part of the acquisition and their respective estimated weighted average amortizations were as follows (in thousands):


	Weighted-Average Amortization Period	Fair Value
Trade names	10.0 years	$	62,940
Customer relationships	7.0 years	198,840

Other purchased intangibles	3.0 years	42,610
Total		$	304,390

During the year ended December 31, 2020, the Company completed acquisitions which were individually immaterial. The identified intangible assets were recognized as part of all 2020 acquisitions and their respective estimated weighted average amortizations were as follows (in thousands):


	Weighted-Average Amortization Period	Fair Value
Trade names	9.7 years	$	67,670
Customer relationships	6.9 years	222,582

Other purchased intangibles	3.3 years	56,802
Total		$	347,054

As of December 31, 2019, intangible assets subject to amortization relate primarily to the following (in thousands):


	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	10.2 years	$	193,202	$	82,552	$	110,650
Patent and patent licenses	6.5 years	67,921		63,143		4,778
Customer relationships (1)	8.5 years	630,730		392,228		238,502
Other purchased intangibles	4.3 years	383,195		212,257		170,938
Total		$	1,275,048	$	750,180	$	524,868

Expected amortization expenses for intangible assets subject to amortization at December 31, 2020 are as follows (in thousands):


Fiscal Year:
2021	$	181,679
2022	134,289
2023	108,410
2024	77,965
2025	55,118
Thereafter	152,319
Total expected amortization expense	$	709,780

Amortization expense was $164.9 million, $180.6 million and $145.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.