Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

The carrying values of intangible assets were as follows:



	December 31, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In thousands)							(In thousands)
Goodwill	$	1,557,653	$	—		$	1,557,653	$	1,478,257	$	—		$	1,478,257
Definite-lived intangible assets subject to amortization:
Developed technology	$	545,982	$	(379,896	)	$	166,086	$	498,649	$	(318,366	)	$	180,283
Customer relationships	331,643		(115,943		)	215,700		320,550		(98,175		)	222,375
Trademarks	57,860		(27,106		)	30,754		56,794		(18,648		)	38,146
In-service research and development	23,833		(16,471		)	7,362		23,428		(13,483		)	9,945
Backlog	15,885		(15,885		)	—		14,535		(14,535		)	—
Total intangible assets subject to amortization	975,203		(555,301		)	419,902		913,956		(463,207		)	450,749
Indefinite-lived intangible assets not subject to amortization:
Trademarks	90,391		—			90,391		92,758		—			92,758
In-process research and development	800		—			800		1,700		—			1,700
Total intangible assets not subject to amortization	91,191		—			91,191		94,458		—			94,458
Intangible assets	$	1,066,394	$	(555,301	)	$	511,093	$	1,008,414	$	(463,207	)	$	545,207

Segment Allocation of Goodwill and Trademarks

The changes in the carrying amount of goodwill assigned to reporting units in our reportable segments are as follows:



	Enterprise Solutions			Industrial Solutions			Consolidated
	(In thousands)
Balance at December 31, 2016	$	617,320		$	768,675		$	1,385,995
Acquisitions and purchase accounting adjustments	71,394			—			71,394
Translation impact	13,557			7,311			20,868
Balance at December 31, 2017	$	702,271		$	775,986		$	1,478,257
Acquisitions and purchase accounting adjustments	105,899			—			105,899
Translation impact	(22,812		)	(3,691		)	(26,503		)
Balance at December 31, 2018	$	785,358		$	772,295		$	1,557,653

The changes in the carrying amount of indefinite-lived trademarks are as follows:



	Enterprise Solutions			Industrial Solutions			Consolidated
	(In thousands)
Balance at December 31, 2016	$	80,350		$	41,622		$	121,972
Translation impact	2,727			1,260			3,987
Reclassify to definite-lived	—			(33,201		)	(33,201		)
Balance at December 31, 2017	$	83,077		$	9,681		$	92,758
Translation impact	(1,893		)	(474		)	(2,367		)
Balance at December 31, 2018	$	81,184		$	9,207		$	90,391

Impairment

The annual measurement date for our goodwill and indefinite-lived intangible assets impairment test is our fiscal November month-end. For our 2018 goodwill impairment test, we performed a quantitative assessment for four of our reporting units and determined the estimated fair values of our reporting units by calculating the present values of their estimated future cash flows using Level 3 inputs. We determined that the fair values of the reporting units were in excess of the carrying values; therefore, we did not record any goodwill impairment for the four reporting units. We performed a qualitative assessment for the remaining seven of our reporting units, and we determined that it was more likely than not that the fair value was greater than the carrying value. Therefore, we did not record any goodwill impairment for the seven reporting units. We also did not recognize any goodwill impairment in 2017 or 2016 based on the results of our annual goodwill impairment testing.

Similar to the quantitative goodwill impairment test, we determined the estimated fair values of our indefinite-lived trademarks by calculating the present values of the estimated cash flows (using Level 3 inputs) attributable to the respective trademarks. We did not recognize any trademark impairment charges in 2018, 2017, or 2016.

Amortization Expense

We recognized amortization expense in income from continuing operations of $101.0 million, $104.0 million, and $98.4 million in 2018, 2017, and 2016, respectively. We expect to recognize annual amortization expense of $90.4 million in 2019, $74.4 million in 2020, $42.1 million in 2021, $38.2 million in 2022, and $29.3 million in 2023 related to our intangible assets balance as of December 31, 2018.

The weighted-average amortization period for our customer relationships, trademarks, developed technology, and in-service research and development is 18.4 years, 7.9 years, 6.5 years, and 5.0 years, respectively.

In connection with a segment change in 2017, we re-evaluated the useful life of the Tripwire trademark and concluded that an indefinite life was no longer appropriate. We estimated a useful life of 10 years and will re-evaluate this estimate if and when our expected use of the Tripwire trademark changes. We began amortizing the Tripwire trademark in 2017, which resulted in amortization expense of $3.1 million for each of the years ended December 31, 2018 and 2017. As of December 31, 2018, the net book value of the Tripwire trademark was $24.8 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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