Goodwill and Intangible Assets, Net

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

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.

We did not identify any qualitative factors that would trigger a quantitative goodwill impairment test during the three and six months ended June 30, 2022. We will perform our annual impairment test on October 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, 2021(1)	$	214,334	$	211,963	$	426,297
Foreign currency translation	(69)		—		(69)
Balance as of June 30, 2022	$	214,265	$	211,963	$	426,228

Balance as of December 31, 2020(1)	$	214,354	$	134,675	$	349,029
Foreign currency translation	(20)		—		(20)
Balance as of June 30, 2021	$	214,334	$	134,675	$	349,009

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(1)Net of cumulative inception to date impairment of $575.5 million as of both December 31, 2021 and 2020.

Intangible Assets, Net

Details of our intangible assets (in thousands, except weighted-average useful lives) as of June 30, 2022 and December 31, 2021 are presented below:


	June 30, 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	11.9	$	25,800	$	8,466	$	17,334	12.4	$	25,800	$	7,693	$	18,107
Customer relationships	14.4	311,019		81,125		229,894		14.9	311,019		72,697		238,322
Technology	1.7	87,922		77,041		10,881		2.0	87,922		73,378		14,544
Below market lease, net	0.8	1,218		1,050		168		1.3	1,218		950		268
Provider network contracts (1)	1.7	16,236		9,667		6,569		2.2	16,417		7,874		8,543
Total intangible assets, net		$	442,195	$	177,349	$	264,846		$	442,376	$	162,592	$	279,784

Amortization expense related to intangible assets was $7.3 million and $14.8 million for the three and six months ended June 30, 2022, respectively, and $7.2 million and $14.7 million for the three and six months ended June 30, 2021, respectively.

Future estimated amortization of intangible assets (in thousands) as of June 30, 2022, is as follows:


2022	$	14,375
2023	26,760
2024	20,875
2025	19,330
2026	19,153
Thereafter	164,353
Total future amortization of intangible assets	$	264,846

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 three and six months ended June 30, 2022, that would require an impairment test for our intangible assets.