Note 13 - Intangible Assets

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

13. Intangible Assets

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets primarily consist of goodwill. The following table presents the goodwill balance by reportable segment (in thousands):

December 31,	2019		2018
Transportation	$	19,798	$	19,798
Water		149,127		144,319
Specialty		40,866		40,866
Materials		54,488		54,488
Total goodwill	$	264,279	$	259,471

The changes in the goodwill balance in our Water segment as of December 31, 2019 when compared to  December 31, 2018 were primarily from acquired assets and equipment of Lametti & Sons, Inc, a Minnesota-based company with expertise in cured-in-place pipe rehabilitation and trenchless renewal. 

Subsequent period goodwill impairment charges

During 2020, we performed two interim goodwill impairment tests due to an adverse change in the business climate, exasperated by economic disruption and market conditions associated with the COVID-19 pandemic, of our Midwest Group Specialty and Water and Mineral Services Group Water, Specialty and Materials reporting units. The goodwill impairment tests resulted in an impairment charge of an initial $14.8 million associated with our Water and Mineral Services Group Materials reporting unit during the three months ended March 31, 2020 and a subsequent additional $14.4 million with our Water and Mineral Services Group Material reporting unit and an initial $117.9 million with our Water and Mineral Services Group Water reporting unit, during the three months ended September 30, 2020. The goodwill impairment tests for the Midwest Group Specialty and Water and Mineral Services Group Specialty reporting units indicated that their estimated fair values exceeded their net book values (i.e., headroom) by nearly 15%; therefore, no impairment charge was recorded. Interim goodwill impairment tests were not performed on our remaining reporting units as there was no indication of a possible goodwill impairment. We completed our 2020 goodwill impairment tests and as a result no additional impairment charge was recorded. 

Amortized Intangible Assets

The following is the breakdown of our amortized intangible assets that are included in other noncurrent assets in the consolidated balance sheets (in thousands):

			Accumulated
December 31, 2019	Gross Value		Amortization			Net Value
Assets
Customer relationships	$	39,541	$	(16,944	)	$	22,597
Permits		23,959		(12,484	)		11,475
Backlog		10,201		(9,247	)		954
Developed technologies		9,354		(3,752	)		5,602
Trademarks/trade name		8,993		(3,667	)		5,326
Favorable contracts, covenants not to compete and other		5,898		(4,795	)		1,103
Intangible assets		97,946		(50,889	)		47,057
Liabilities
Unfavorable contracts and leases	$	6,773	$	(6,339	)	$	434
Intangible liabilities		6,773		(6,339	)		434
Total net amortized intangible assets	$	91,173	$	(44,550	)	$	46,623

			Accumulated
December 31, 2018	Gross Value		Amortization			Net Value
Assets
Customer relationships	$	38,137	$	(7,640	)	$	30,497
Permits		25,959		(13,494	)		12,465
Backlog		9,713		(5,795	)		3,918
Developed technologies		9,233		(1,384	)		7,849
Trademarks/trade name		9,075		(1,381	)		7,694
Favorable contracts, covenants not to compete and other		5,781		(2,489	)		3,292
Intangible assets		97,898		(32,183	)		65,715
Liabilities
Unfavorable contracts and leases	$	7,000	$	(4,726	)	$	2,274
Intangible liabilities		7,000		(4,726	)		2,274
Total net amortized intangible assets	$	90,898	$	(27,457	)	$	63,441

The net amortization expense related to amortized intangible assets for the years ended December 31, 2019, 2018 and 2017 was $18.9 million, $15.2 million and $1.7 million, respectively, and was primarily included in cost of revenue and selling, general and administrative expenses in the consolidated statements of operations. Amortization expense based on the amortized intangible assets balance at December 31, 2019 is expected to be recorded in the future as follows: $13.5 million in 2020; $10.3 million in 2021; $6.4 million in 2022; $4.4 million in 2023; $4.1 million in 2024; and $7.9 million thereafter.