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Goodwill and Acquired Intangible Assets
 9 Months Ended
Sep. 29, 2019
Goodwill and Intangible Assets
O. GOODWILL AND ACQUIRED INTANGIBLE ASSETS
Goodwill
Teradyne performs its annual goodwill impairment test as required under the provisions of ASC
350-10,
“Intangibles—Goodwill and Other”
on December 31 of each fiscal year unless interim indicators of impairment exist. Goodwill is considered impaired when the net book value of a reporting unit exceeds its estimated fair value.
The changes in the carrying amount of goodwill by reportable segments for the nine months ended September 29, 2019 were as follows:
 
  
Industrial
Automation
 
  
System
Test
 
  
Wireless
Test
 
  
Semiconductor
Test
 
  
Total
 
 
  
(in thousands)
  
Balance at December 31, 2018
   
     
     
     
     
 
Goodwill
  $
363,358
    $
158,699
    $
361,819
    $
260,540
    $
1,144,416
 
Accumulated impairment losses
   
—  
      
(148,183
 )    
(353,843
 )    
(260,540
 )    
(762,566
 )
                                         
    
363,358
     
10,516
     
7,976
     
—  
      
381,850
 
Lemsys acquisition
   
—  
      
—  
      
—  
      
1,428
     
1,428
 
Foreign currency translation adjustment
   
(12,572
 )    
—  
      
—  
      
11
     
(12,561
 )
                                         
Balance at September 29, 2019
   
     
     
     
     
 
Goodwill
   
350,786
     
158,699
     
361,819
     
261,979
     
1,133,283
 
Accumulated impairment losses
   
—  
      
(148,183
 )    
(353,843
 )    
(260,540
 )    
(762,566
 )
                                         
   $
350,786
    $
10,516
    $
7,976
    $
1,439
    $
370,717
 
                                         
Intangible Assets
Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.
Amortizable intangible assets consist of the following and are included in intangible assets, net on the balance sheet:
 
September 29, 2019
 
  
Gross
Carrying
Amount
 (1)
 (2)
 
  
Accumulated
Amortization (2)
 
  
Foreign Currency
Translation
Adjustment
 
  
Net
Carrying
Amount
 
  
(in thousands)
 
Developed technology
  $
337,198
    $
(272,317
 )   $
(6,461
 )   $
 
 
58,420
 
Customer relationships
   
100,313
     
(89,540
 )    
(562
 )    
10,211
 
Tradenames and trademarks
   
64,670
     
(35,368
 )    
(1,360
 )    
27,942
 
                                 
Total intangible assets
  $
502,181
    $
(397,225
 )   $
(8,383
 )   $
96,573
 
                                 
 
  
December 31, 2018
  
 
  
Gross
Carrying
Amount
 
  
Accumulated
Amortization
 
  
Foreign Currency
Translation
Adjustment
 
  
Net
Carrying
Amount
 
 
  
(in thousands)
  
Developed technology
  $
 
 
 
 
 
336,308
    $
 
 
 
 
 
 
 
(252,080
 )   $
(4,079
 )   $
80,149
 
Customer relationships
   
97,153
     
(83,448
 )    
(340
 )    
13,365
 
Tradenames and trademarks
   
64,420
     
(31,653
 )    
(799
 )    
31,968
 
Non-compete
agreement
    
320
     
(320
 )    
—  
      
—  
  
Backlog
   
30
     
(30
 )    
—  
      
—  
  
                                 
Total intangible assets
  $
498,231
    $
(367,531
 )   $
(5,218
 )   $
125,482
 
                                 
 
(1) $4.6 million of intangible assets from Lemsys acquisition
 have been added in January 2019
.
(2) $0.7 million of amortizable intangible assets became fully amortized and have been
removed
from the gross carrying amount and accumulated amortization.
 
Aggregate intangible asset amortization expense was $9.6 million and $30.4 million, respectively, for the three and nine months ended September 29, 2019 and $11.1 million and $28.6 million, respectively, for the three and nine months ended September 30, 2018.
Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:
 
  
Amortization Expense
 
Year
  
(in thousands)
 
2019 (remainder)
   
8,694
 
2020
   
24,232
 
2021
   
14,340
 
2022
   
13,447
 
2023
   
12,976
 
Thereafter
   
22,884