Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2021, 2020 and 2019 are as follows:


(in thousands)	Trade		Renewables		Plant Nutrient		Total
Balance at January 1, 2019	$	1,171	$	—	$	686	$	1,857
Acquisitions	126,610		2,726		—		129,336

Balance at December 31, 2019	127,781		2,726		686		131,193
Reorganization	(5,714)		5,714		—		—
Acquisitions	—		349		—		349

Balance at December 31, 2020	122,067		8,789		686		131,542


Disposals (a)	(2,200)		—		—		(2,200)
Balance at December 31, 2021	$	119,867	$	8,789	$	686	$	129,342

(a) Removal of allocated goodwill due to the sale of the grain asset location in Champaign, Illinois.

Goodwill for the Trade segment is $119.9 million as of December 31, 2021 which is net of prior years' accumulated impairment losses of $46.4 million. Goodwill for the Plant Nutrient segment is $0.7 million, net of accumulated impairment losses of $68.9 million as of December 31, 2021.

The Company had goodwill of approximately $129.3 million at December 31, 2021, which includes approximately $78.5 million related to the Company's Grain Storage and Merchandising ("GSM") reporting unit, approximately $41.3 million related to the Company's Food and Specialty Ingredients ("FSI") reporting unit, approximately $8.8 million related to the Company's Renewables reporting unit and approximately $0.7 million is related to the Lawn reporting unit.

Goodwill is tested for impairment annually as of October 1, or more frequently if impairment indicators arise. The Company uses a one-step quantitative approach that compares the business enterprise value ("BEV") of each reporting unit with its carrying value. The BEV was computed based on both an income approach (discounted cash flows) and a market approach. The income approach uses a reporting unit's estimated future cash flows, discounted at the weighted-average cost of capital ("WACC") of a hypothetical third-party buyer. The WACC is the rate used to discount each reporting unit’s estimated future cash flows. The WACC is calculated based on the proportionate weighting of the cost of debt and equity. The cost of equity is based on a risk-free interest rate and an equity risk factor, which is derived from public companies similar to the reporting units and which captures the perceived risks and uncertainties associated with the reporting unit's cash flows. The cost of debt is the rate that a prudent investor would require to lend money to the reporting units on an after tax basis and is estimated based on a market-derived analysis of corporate bond yields. The cost of debt and equity is weighted based on the debt to market capitalization ratio of publicly traded companies with similarities to the reporting units being tested. The WACC applied in each reporting unit's last quantitative test ranged from 8.50% to 11.25%, which includes a company specific risk premium range from 2.0% to 4.0%. Differences in the WACC used between reporting units is primarily due to distinct risks and uncertainties regarding the cash flows of the different reporting units.

The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics to the reporting unit. Any excess of the carrying value of the goodwill over the BEV will be recorded as an impairment loss. The calculation of the BEV is based on significant unobservable inputs, such as price trends, customer demand, material costs and discount rates, and are classified as Level 3 in the fair value hierarchy.

There can be no assurance that anticipated financial results will be achieved and the goodwill balances remain susceptible to future impairment charges. The goodwill related to the GSM and FSI reporting units are determined to have the greatest risk of future impairment charges given the difference (approximately 26% and 24%, respectively) between the BEV and carrying value of these reporting units as of the Company's annual impairment test date. The BEVs of the Company's other reporting units more substantially exceed their carrying values. If the Company's projected future cash flows were lower, or if the assumed weighted-average cost of capital were higher, the testing performed at year-end may have indicated an impairment of the goodwill related to one or more of the Company's reporting units. Any impairment charges that the Company may take in the future could be material to its Consolidated statements of operations and financial condition.

No goodwill impairment charges were incurred in the years ended December 31, 2021, 2020 or 2019 as a result of our annual impairment testing.

The Company's other intangible assets are as follows:


				December 31,
				2021						2020
(in thousands)	Useful Life (in years)			Original Cost		Accumulated Amortization		Net Book Value		Original Cost		Accumulated Amortization		Net Book Value
Intangible asset class
Customer lists	3	to	10	$	136,311	$	58,047	$	78,264	$	131,032	$	45,546	$	85,486
Non-compete agreements	1	to	7	21,796		21,124		672		21,096		15,461		5,635
Supply agreement	10	to	10	8,721		7,450		1,271		9,060		6,988		2,072
Technology	10	to	10	13,400		8,878		4,522		13,400		7,538		5,862
Trademarks and patents	7	to	10	15,810		12,020		3,790		15,810		10,764		5,046
Software	2	to	10	89,956		61,920		28,036		88,844		53,461		35,383
Other	3	to	5	1,011		429		582		1,009		409		600
				$	287,005	$	169,868	$	117,137	$	280,251	$	140,167	$	140,084

Amortization expense for intangible assets was $30.3 million, $30.7 million and $33.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. Expected future annual amortization expense for the assets above is as follows: 2022 -- $23.4 million; 2023 -- $22.8 million; 2024 -- $19.7 million; 2025 -- $13.5 million; and 2026 -- $11.5 million.

In 2019, the Company recorded impairment charges of $2.5 million for intangibles in the Trade segment related to a frac sand non-compete agreement. The Company also recorded a $2.2 million impairment charge for brand related intangibles within the Plant Nutrient segment.