

(in thousands)	North America			Europe			Asia Pacific			Total
Balance as of January 1, 2017
Goodwill	$	96,154		$	51,031		$	1,375		$	148,560
Accumulated impairment losses	(10,666		)	(13,415		)	—			(24,081		)
	85,488			37,616			1,375			124,479
Goodwill acquired	10,066			—			—			10,066
Foreign exchange	198			2,472			114			2,784
Reclassifications ⁽¹⁾	3			(192		)	—			(189		)
Balance as of December 31, 2017										0
Goodwill	106,421			53,311			1,489			161,221
Accumulated impairment losses	(10,666		)	(13,415		)	—			(24,081		)
	95,755			39,896			1,489			137,140
Goodwill acquired	913			—			—			913
Foreign exchange	(233		)	(738		)	(145		)	(1,116		)
Balance as of December 31, 2018										0
Goodwill	107,101			52,573			1,344			161,018
Accumulated impairment losses	(10,666		)	(20,102		)	—			(30,768		)
	$	96,435		$	32,471		$	1,344		$	130,250

The Company tests goodwill for impairment at the reporting unit level on an annual basis (in the fourth quarter for the Company). The Company also reviews goodwill for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or disposition or relocation of a significant portion of a reporting unit.

The Company determined that the United States reporting unit includes four components: Northwest United States, Southwest United States, Northeast United States and Southeast United States (collectively, the “U.S. Components”). The Company aggregates the U.S. Components into a single reporting unit because management concluded that they are economically similar and that the goodwill is recoverable from the U.S. Components working in concert. The U.S. Components are economically similar because of a number of factors, including selling similar products to shared customers and sharing assets and services such as intellectual property, manufacturing assets for certain products, research and development projects, manufacturing processes, management of inventory excesses and shortages and administrative services. These activities are managed centrally at the U.S. Components level and costs are allocated among the four U.S. Components.

The Company determined that the Australia reporting unit includes three components: Australia, New Zealand, and United Arab Emirates (collectively, the “AU Components”). The Company aggregates the AU Components into a single reporting unit because management concluded that they are economically similar and that the goodwill is recoverable from the AU Components working in concert. The AU Components are economically similar because of a number of factors, including that New Zealand, and United Arab Emirates operate as extensions of their Australian parent company selling similar products and sharing assets and services such as intellectual property, manufacturing assets for certain products, management of inventory excesses and shortages and administrative services. These activities are managed centrally at the AU Components level and costs are allocated among the AU Components.

The Company determined that the S&P Clever reporting unit includes ten components: S&P Switzerland, S&P Poland, S&P Austria, S&P The Netherlands, S&P Portugal, S&P Germany, S&P France, Socom, S&P Nordic and S&P Spain (collectively, the "S&P Components”). The Company aggregates the S&P Components into a single reporting unit because management concluded that they are economically similar and that the goodwill is recoverable from the S&P Components working in concert. The S&P Components are economically similar because of a number of factors, including sharing assets and services such as intellectual property, manufacturing assets for certain products, research and development projects, manufacturing processes, management

The Company may first assess qualitative factors related to the goodwill of the reporting unit to determine whether it is necessary to perform an impairment test. If the Company judges that it is more likely than not that the fair value of the reporting unit is greater than the carrying amount of the reporting unit, including goodwill, no further testing is required. This assessment method was not utilized in our 2018 annual goodwill impairment test.

For all reporting units, the Company compares the fair value of the reporting unit to its carrying value. The fair value calculation uses both the income approach (discounted cash flow method) and the market approach, equally weighted. If the Company judges that the carrying value of the net assets assigned to the reporting unit, including goodwill, exceeds the fair value of the reporting unit, the Company would record an impairment charge equal to the difference between the implied fair value of the goodwill and the carrying value, not to exceed the goodwill asset's carrying amount.

Determining the fair value of a reporting unit, or an indefinite-lived purchased intangible asset, requires significant estimates and assumptions. These estimates and assumptions include revenue growth rates, operating margins and working capital requirements used to calculate projected future cash flows, risk-adjusted discount rates, selected multiples, control premiums and future economic and market conditions (Level 3 fair value inputs). The Company bases its fair value estimates on assumptions that it believes to be reasonable, but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.

Assumptions about a reporting unit’s operating performance in the first year of the discounted cash flow model used to determine whether or not the goodwill related to that reporting unit is impaired are derived from the Company’s budget. The fair value model considers such factors as macro-economic conditions, revenue and expense forecasts, product line changes, material, labor and overhead costs, tax rates, working capital levels and competitive environment. Future estimates, however derived, are inherently uncertain but the Company believes that this is the most appropriate source on which to base its fair value calculations.

The Company uses these parameters only to provide a basis for the determination of whether or not the goodwill related to a reporting unit is impaired. No inference whatsoever should be drawn from these parameters about the Company’s future financial performance and they should not be taken as projections or guidance of any kind.

The 2018 annual testing of goodwill for impairment resulted in an impairment charge. The carrying value of the Denmark reporting unit exceeded its fair value in an amount that approximated the carrying value of its goodwill, primarily due to the reporting unit not meeting management's pre-tax operating profit objectives. As a result, the Company impaired all of the Denmark reporting unit’s goodwill, which was $6.7 million at December 31, 2018.

Intangible assets from acquired businesses are recognized at their estimated fair values at the date of acquisition and consist of patents, unpatented technology, non-compete agreements, trademarks, customer relationships and other intangible assets. Finite-lived intangibles are amortized to expense over the applicable useful lives, ranging from three to 21 years, based on the nature of the asset and the underlying pattern of economic benefit as reflected by future net cash inflows. The Company performs an impairment test of finite-lived intangibles whenever events or changes in circumstances indicate their carrying value may be impaired.

The total gross carrying amount and accumulated amortization of definite-lived intangible assets at December 31, 2018 were $53.2 million and $28.8 million, respectively. The aggregate amount of amortization expense of intangible assets for the years ended December 31, 2018, 2017 and 2016 was $6.2 million, $6.0 million and $6.1 million, respectively.

The annual changes in the carrying amounts of patents, unpatented technologies, customer relationships and non-compete agreements and other intangible assets subject to amortization for the years ended December 31, 2018 and 2017 were as follows:



(in thousands)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Patents	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Balance at January 1, 2017	$	1,718		$	(528	)	$	1,190
Acquisition	800			—			$	800
Amortization	—			(187		)	(187		)
Foreign exchange	2			—			2
Removal of fully amortized assets	(170		)	170			—
Balance at December 31, 2017	2,350			(545		)	1,805
Amortization	—			(107		)	(107		)
Removal of fully amortized assets	(241		)	241			—
Balance at December 31, 2018	$	2,109		$	(411	)	$	1,698



(in thousands)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Unpatented Technology	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Balance at January 1, 2017	$	21,162		$	(9,003	)	$	12,159
Amortization	—			(1,976		)	(1,976		)
Foreign exchange	505			—			505
Balance at December 31, 2017	21,667			(10,979		)	10,688
Amortization	—			(2,557		)	(2,557		)
Reclassifications⁽¹⁾	277			—			277
Foreign exchange	(90		)	$	—		(90		)
Removal of fully amortized assets	(1,192		)	1,192			—
Balance at December 31, 2018	$	20,662		$	(12,344	)	$	8,318



(in thousands)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Non-Compete Agreements, Trademarks and Other
Non-Compete Agreements, Trademarks and Other
Balance at January 1, 2017	$	6,727		(4,100		)	2,627
Acquisition	9,260			—			9,260
Amortization	—			(2,495		)	(2,495		)
Foreign exchange	16			—			16
Removal of fully amortized assets	(3,778		)	3,778			—
Balance at December 31, 2017	12,225			(2,817		)	9,408
Acquisition	879			—			879
Amortization	—			(1,757		)	(1,757		)
Reclassifications	(24		)	—			(24		)
Removal of fully amortized asset	(855		)	855			—
Balance at December 31, 2018	$	12,225		$	(3,719	)	$	8,506



(in thousands)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Customer Relationships	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Balance at January 1, 2017	$	21,217		(14,945		)	6,272
Acquisition	1,091			—			1,091
Amortization	—			(1,574		)	(1,574		)
Reclassifications⁽¹⁾	626			—			626
Foreign exchange	394			—			394
Removal of fully amortized assets	(5,650		)	5,650			—
Balance at December 31, 2017	17,678			(10,869		)	6,809
Amortization	—			(1,430		)	(1,430		)
Foreign exchange	(115		)	—			(115		)
Balance at December 31, 2018	$	17,563		$	(12,299	)	$	5,264



	December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
(in thousands)
Total Intangible Assets
North America	$	30,775	$	(13,732	)	$	17,043
Europe	23,762		(11,479		)	12,283
Total	$	54,537	$	(25,211	)	$	29,326



	At December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
(in thousands)
Total Intangible Assets
North America	$	30,825	$	(16,002	)	$	14,823
Europe	22,353		(12,774		)	9,579
Total	$	53,178	$	(28,776	)	$	24,402