Ameresco, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying value of goodwill attributable to each reportable segment are as follows:



	U.S. Regions		U.S. Federal		Canada			Other			Total
Balance, December 31, 2016	$	24,759	$	3,375	$	3,262		$	26,580		$	57,976
Sale of assets of a business	—		—		—			(2,639		)	(2,639		)
Currency effects	—		—		232			566			798
Balance, December 31, 2017	24,759		3,375		3,494			24,507			56,135
Goodwill acquired during the year	1,611		1,234		—			—			2,845
Currency effects	—		—		(277		)	(371		)	(648		)
Balance, December 31, 2018	$	26,370	$	4,609	$	3,217		$	24,136		$	58,332
Accumulated Goodwill Impairment Balance, December 31, 2017	$	—	$	—	$	(1,016	)	$	—		$	(1,016	)
Accumulated Goodwill Impairment Balance, December 31, 2018	$	—	$	—	$	(1,016	)	$	—		$	(1,016	)

In accordance with ASC 350, goodwill was tested for impairment as of December 31, 2018, 2017 and 2016 at the reporting unit level under the income approach which uses, in part, a discounted cash flow method and a peer-based, and a risk-adjusted weighted average cost of capital. No impairment was recorded in the December 31, 2018, 2017 or 2016 assessments. Based on the Company’s goodwill impairment assessment, all of its reporting units with goodwill had estimated fair values as of December 31, 2018 that exceeded their carrying values by at least 20%.

Based on the Company’s goodwill impairment assessment, all of its reporting units with goodwill had estimated fair values as of December 31, 2017 that exceeded their carrying values by at least 20%. However, during the course of the valuation analysis it was determined that although the fair value of the Company’s Canada reporting unit exceeded the carrying amount of this reporting unit, the carrying value of the reporting unit was negative as of December 31, 2017. The Canada reporting unit had goodwill of $3,494 as of December 31, 2017.

The gross carrying amount and accumulated amortization of intangible assets are as follows:



	As of December 31,
	2018		2017
Gross Carrying Amount
Customer contracts	$	7,818	$	7,786
Customer relationships	12,082		11,863
Non-compete agreements	3,013		3,052
Technology	2,710		2,751
Trade names	541		546
	26,164		25,998
Accumulated Amortization
Customer contracts	7,668		7,786
Customer relationships	10,302		9,557
Non-compete agreements	3,013		3,048
Technology	2,651		2,642
Trade names	526		525
	24,160		23,558
Intangible assets, net	$	2,004	$	2,440

Amortization expense related to customer contracts is included in cost of revenues in the consolidated statements of income (loss). Amortization expense related to customer relationships, non-compete agreements, technology and trade names is included in selling, general and administrative expenses in the consolidated statements of income (loss).

Customer contracts are amortized ratably over the period of the acquired customer contracts ranging in periods from approximately one to eight years. All other intangible assets are amortized over periods ranging from approximately four to fifteen years, as defined by the nature of the respective intangible asset.

Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives. The Company annually assesses whether a change in the life over which the Company’s assets are amortized is necessary or more frequently if events or circumstances warrant. No changes to useful lives were made during the years ended December 31, 2018, 2017 and 2016.

Amortization expense for the years ended December 31, 2018, 2017 and 2016 is as follows:



	Year Ended December 31,
	2018		2017		2016
Customer contracts	$	30	$	31	$	184
Customer relationships	973		1,244		1,809
Non-compete agreements	3		42		116
Technology	47		128		238
Trade names	4		6		11
Total intangible amortization expense	$	1,057	$	1,451	$	2,358

Estimated amortization expense for existing intangible assets for the next five succeeding fiscal years is as follows:



	Estimated Amortization
	Included in Selling, General and Administrative Expenses
2019	$	844
2020	620
2021	247
2022	75
2023	66
Thereafter	152
	$	2,004