TopBuild Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Other Intangibles

Goodwill and Other Intangibles

9 Months Ended

Sep. 30, 2018

3. GOODWILL AND OTHER INTANGIBLES

We have two reporting units which are also our operating and reporting segments: Installation and Distribution. Both reporting units contain goodwill. Assets acquired and liabilities assumed are assigned to the applicable reporting unit based on whether the acquired assets and liabilities relate to the operations of and determination of the fair value of such unit. Goodwill assigned to the reporting unit is the excess of the fair value of the acquired business over the fair value of the individual assets acquired and liabilities assumed for the reporting unit.

The estimated fair values of the two reporting units substantially exceeded their respective carrying values.

Changes in the carrying amount of goodwill for the nine months ended September 30, 2018, by segment, were as follows, in thousands:


	Gross Goodwill				Gross Goodwill		Accumulated		Net Goodwill
	at				at		Impairment		at
	December 31, 2017		Additions		September 30, 2018		Losses		September 30, 2018
Goodwill, by segment:
Installation	$	1,422,920	$	255,465	$	1,678,385	$	(762,021)	$	916,364
Distribution		416,287		30,096		446,383		—		446,383
Total goodwill	$	1,839,207	$	285,561	$	2,124,768	$	(762,021)	$	1,362,747

The following table sets forth our other intangible assets, in thousands:


	As of
	September 30,		December 31,
	2018		2017
Gross definite-lived intangible assets	$	219,382	$	54,872
Accumulated amortization		(14,279)		(21,629)
Net definite-lived intangible assets	$	205,103	$	33,243

The following table sets forth a breakout of our intangible assets as of September 30, 2018, in thousands:


	Gross Definite‑lived Intangible Assets		Accumulated Amortization		Net Definite‑lived Intangible Assets
Trademarks and trade names	$	13,435	$	(979)	$	12,456
Customer relationships		198,428		(11,401)		187,027
Non-competition agreements		7,519		(1,899)		5,620
Total	$	219,382	$	(14,279)	$	205,103

The following table sets forth our amortization expense, in thousands:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Amortization expense	$	5,242	$	1,516	$	10,536	$	1,955