Quarterly report pursuant to Section 13 or 15(d)

INTANGIBLE ASSETS AND GOODWILL

v3.22.2.2
INTANGIBLE ASSETS AND GOODWILL
 6 Months Ended
Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL
Intangible Assets, Net
Intangible assets, net consisted of the following as of June 30, 2022 and December 31, 2021:
(in thousands)
June 30, 2022 December 31, 2021
Estimated
Useful
Life in
Years 		Gross
Carrying
Amount 		Accumulated
Amortization		 Net
Carrying
Value 		Gross
Carrying
Amount 		Accumulated
Amortization		 Net
Carrying
Value
Amortizing Intangible Assets:
Customer Relationships
3 to 5
 $ 7,400  $ (7,400) $ —  $ 7,400  $ (7,400) $ — 
Trademarks and Patent
2 to 8
 4,500  (1,876) 2,624  4,500  (750) 3,750 
Operating Licenses 14 100,701  (10,503) 90,198  100,701  (6,864) 93,837 
Total Amortizing Intangible Assets 112,601  (19,779) 92,822  112,601  (15,014) 97,587 
Non-Amortizing Intangible Assets:
Trade Name Indefinite 9,950  —  9,950  32,050  —  32,050 
Total Non-Amortizing Intangible Assets 9,950  —  9,950  32,050  —  32,050 
Total Intangible Assets, Net $ 122,551  $ (19,779) $ 102,772  $ 144,651  $ (15,014) $ 129,637 
Amortization expense for the three months ended June 30, 2022 and 2021 was $2.42 million and $0.18 million, respectively, and for the six months ended June 30, 2022 and 2021 was $4.77 million and $0.38 million, respectively.
During the second quarter of 2022, management noted indicators of impairment of its indefinite-lived assets of certain asset groups. Specifically, changes in circumstances resulted in significant differences in actual revenue compared to projections. The Company used a discount rate under current market conditions to determine a preliminary estimate, noting an impairment of $22.10 million which is included as a component of impairment expense for the three and six months ended June 30, 2022. The Company will conduct its annual impairment assessment on September 30 that may result in additional impairment.
Goodwill
Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities. Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment.
The Company conducts its annual goodwill impairment assessment on September 30, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired.
For the purpose of the goodwill impairment assessment, the Company has the option to perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill or indefinite-lived intangible assets is necessary or a quantitative assessment (“step one”) where the Company estimates the fair value of each reporting unit using a discounted cash flow method (income approach).
During the second quarter of 2022, the Company identified changes in circumstances that would indicate the carrying value of certain reporting units may be impaired. Management performed a preliminary quantitative assessment using a comparison of actual revenues to projections and applied a current discount rate, which resulted in a goodwill impairment loss of $33.63 million for the three and six months ended June 30, 2022. The Company will conduct its annual impairment assessment on September 30 that may result in additional impairment. The balance of goodwill at June 30, 2022 and December 31, 2021 was $14.51 million and $48.13 million, respectively.