GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 9—GOODWILL AND OTHER INTANGIBLE ASSETS

The Company recorded $4.7 million of goodwill in connection with the Breakwater Acquisition during the year ended December 31, 2023. See “Note 3—Acquisitions” for additional information. Goodwill is evaluated for impairment annually, or more frequently if indicators of impairment exist. The annual impairment tests are based on Level 3 inputs (see “Note 13—Fair Value Measurement”). During the fourth quarter of 2023, the Company performed its annual impairment test of goodwill and determined there was no impairment of the carrying value of goodwill.

The changes in the carrying amounts of goodwill by reportable segment for the year ended December 31, 2023 and 2022 is as follows:

	Water		Water
	Services		Infrastructure		Total
	(in thousands)
Balance as of December 31, 2022	$	—	$	—	$	—
Additions		1,438		3,245		4,683
Balance as of December 31, 2023	$	1,438	$	3,245	$	4,683

The components of other intangible assets as of December 31, 2023 and 2022 are as follows:

	As of December 31, 2023								As of December 31, 2022
	Gross				Accumulated		Net		Gross		Accumulated		Net
	Value		Abandonment		Amortization		Value		Value		Amortization		Value
	(in thousands)								(in thousands)
Definite-lived
Customer relationships	$	164,600	$	—	$	(61,216)	$	103,384	$	158,232	$	(48,123)	$	110,109
Patents and other intellectual property		12,772		—		(7,090)		5,682		12,772		(5,701)		7,071
Trademarks		14,360		(11,106)		(3,254)		—		—		—		—
Other		2,803		—		(2,711)		92		2,803		(2,574)		229
Total definite-lived		194,535		(11,106)		(74,271)		109,158		173,807		(56,398)		117,409
Indefinite-lived
Water rights		7,031		—		—		7,031		7,031		—		7,031
Trademarks		—		—		—		—		14,360		—		14,360
Total indefinite-lived		7,031		—		—		7,031		21,391		—		21,391
Total other intangible assets, net	$	201,566	$	(11,106)	$	(74,271)	$	116,189	$	195,198	$	(56,398)	$	138,800

For a discussion of the abandonment of the trademark, See “Note 4—Abandonments and Other Costs.”

During the year ended December 31, 2023, the Company added $6.4 million in customer relationships in connection with finalizing the Breakwater purchase price allocation and an asset acquisition adjacent to the BSRS facility. During the year ended December 31, 2022, the Company added $41.7 million in customer relationships in connection with the Breakwater, Cypress and asset acquisition adjacent to the BSRS facility (See “Note 3—Acquisitions”). The weighted-average amortization period for customer relationships, patents and other intellectual property and other definite-lived intangible assets as of December 31, 2023 was 9.1 years, 4.6 years and 0.7 years, respectively.

The indefinite-lived water rights and trademarks are generally subject to renewal every five to ten years.

Amortization expense of $17.9 million, $11.4 million and $10.6 million was recorded for the years ended December 31, 2023, 2022 and 2021, respectively. Annual amortization of intangible assets for the next five years and beyond is as follows:

Year Ending December 31,	Amount
	(in thousands)
2024	$	14,676
2025		14,513
2026		14,425
2027		13,923
2028		12,194
Thereafter		39,427
Total	$	109,158