Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The Company's goodwill by segment is as follows: December 31, 2017 December 31, 2016 Executive Search Americas $ 88,690 $ 88,101 Europe 44,407 42,599 Asia Pacific 9,302 8,893 Total Executive Search 142,399 139,593 Leadership Consulting 6,940 6,534 Culture Shaping 29,317 29,224 Goodwill, gross 178,656 175,351 Accumulated impairment (59,764 ) (23,507 ) Goodwill, net $ 118,892 $ 151,844 Changes in the carrying amount of goodwill by segment for the years ended December 31, 2017 , 2016 , and 2015 were as follows: Executive Search Americas Europe Asia Pacific Leadership Consulting Culture Total Gross balance at December 31, 2014 $ 82,270 $ 23,507 $ 10,255 $ — $ 29,651 $ 145,683 Accumulated goodwill impairment — (23,507 ) — — — (23,507 ) Net balance at December 31, 2014 82,270 — 10,255 — 29,651 122,176 Co Company acquisition — 10,745 — — — 10,745 Exchange rate fluctuations (644 ) — (1,044 ) — (111 ) (1,799 ) Net balance at December 31, 2015 81,626 10,745 9,211 — 29,540 131,122 DSI acquisition 5,673 — — — — 5,673 Philosophy IB acquisition 2,357 — — — — 2,357 JCA acquisition — 15,769 — — — 15,769 Segment reallocation (1) (1,670 ) (4,517 ) (347 ) 6,534 — — Exchange rate fluctuations 115 (2,905 ) 29 — (316 ) (3,077 ) Net balance at December 31, 2016 88,101 19,092 8,893 6,534 29,224 151,844 Philosophy IB acquisition 357 — — 7 — 364 Exchange rate fluctuations 232 1,808 409 399 93 2,941 Impairment — — — (6,940 ) (29,317 ) (36,257 ) Net balance at December 31, 2017 $ 88,690 $ 20,900 $ 9,302 $ — $ — $ 118,892 (1) Due to the Company's change in segment reporting during the year ended December 31, 2016, goodwill amounts included in the Company's Americas, Europe and Asia Pacific segments in the prior year have been reallocated to the Leadership Consulting segment utilizing the relative fair value method. In 2017, the Culture Shaping business continued the transition of senior-level personnel which began in 2016, primarily due to planned retirements. The Company has experienced lower than expected consultant productivity during the transition period. Also, the marketplace for culture shaping services has become increasingly more competitive and the business experienced lengthening sales cycles and decision processes within target client organizations. These events led to a decline in the revenue performance of the business and uncertainty around the timing of improving such performance. As a result, the Company identified a triggering event and performed an interim impairment evaluation on the goodwill related to its Culture Shaping reporting unit during the three months ended June 30, 2017. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of its Culture Shaping reporting unit. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) working capital investments; and (4) other factors. The Company adopted ASU No. 2017-04, Intangibles - Goodwill and Other in conjunction with its impairment evaluation during the three months ended June 30, 2017. Under the adopted guidance, Step 2 of the goodwill impairment test is eliminated. Instead, the goodwill impairment test is completed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value of the reporting unit exceeds its fair value, however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit. Based on the results of the impairment evaluation, the Company determined that the goodwill within the Culture Shaping reporting unit was impaired, which resulted in an impairment charge of $29.3 million to write-off all of the goodwill. The impairment charge is recorded within Impairment charges in the Condensed Consolidated Statement of Comprehensive Income (Loss). The impairment was non-cash in nature and did not affect our current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under our credit agreement. During the 2017 fourth quarter, the Company conducted its annual goodwill impairment evaluation as of October 31, 2017 in accordance with ASU No. 2017-04, Intangibles - Goodwill and Other. The goodwill impairment test is completed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value of the reporting unit exceeds its fair value, however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit. The impairment test is considered for each of the Company’s reporting units that have goodwill as defined in the accounting standard for goodwill and intangible assets. The Company operates five reporting units: Americas; Europe, which includes Africa; Asia Pacific, which includes the Middle East; Leadership Consulting; and Culture Shaping. No annual impairment test was conducted for the Culture Shaping reporting unit as all goodwill associated with this reporting unit was impaired during the three months ended June 30, 2017. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of each of its reporting units with goodwill. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) working capital investments; and (4) other factors. Based on the results of the impairment analysis, the fair values of the Americas, Europe and Asia Pacific reporting units exceeded their carrying values by 180% , 38% and 7% , respectively. The Leadership Consulting impairment analysis indicated that the book value of the reporting unit was in excess of its fair value, which resulted in an impairment charge of approximately $6.9 million to write-off all of the goodwill associated with the reporting unit. Throughout the year, the Company was continually evaluating the results of its Leadership Consulting business, including Philosophy IB failing to achieve targets outlined in its earnout agreement and the potential impact of the conclusion of the Co Company earnout on the reporting unit. In the fourth quarter, the Company finalized its assessment of these events and its forecast for the Leadership Consulting reporting unit in future years. The forecast for the Leadership Consulting reporting unit indicated significant uncertainty around the pace and timing of growth in profitability in the Leadership Consulting reporting unit as the Company invests in talent and service offerings, which resulted in the impairment of the Leadership Consulting goodwill. The impairment was non-cash in nature and did not affect our current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under our credit agreement. The fair value of the Asia Pacific reporting unit may deteriorate and could result in the need to record an impairment charge in future periods. The Company continues to monitor potential triggering events including changes in the business climate in which it operates, the Company’s market capitalization compared to its book value, and the Company’s recent operating performance, specifically in relation to the Asia Pacific reporting unit. Any changes in these factors could result in an impairment charge. Other Intangible Assets, net The Company’s other intangible assets, net by segment, are as follows: December 31, 2017 December 31, 2016 Executive Search Americas $ 252 $ 501 Europe 1,799 2,937 Asia Pacific 107 127 Total Executive Search 2,158 3,565 Leadership Consulting — 6,223 Culture Shaping — 10,902 Total Other Intangible Assets, Net $ 2,158 $ 20,690 As discussed above, the Culture Shaping business was impacted by the transition of senior-level personnel, primarily due to planned retirements, and the Company experienced lower than expected consultant productivity. The Company has also experienced lengthening sales cycles and decision processes within target client organizations. Due to the impact of these events on revenue and earnings when compared to actual and forecasted results, and the impact to the revenue and earnings inputs utilized in the fair value assessment of the intangible assets, the Company identified a triggering event for its Culture Shaping intangible assets and performed an impairment evaluation during the three months ended June 30, 2017. As noted above, due to the uncertainty around the pace and timing of growth in profitability in the Leadership Consulting reporting unit as the Company invests in talent and service offerings, the Company identified a triggering event for its Leadership Consulting intangible assets and performed an impairment evaluation as of October 31, 2017. These analyses were conducted in accordance with accounting guidance on fair value measurements taking into consideration Level 3 inputs, primarily consisting of discounted cash flow and replacement cost methodologies. Based on these evaluations, the Company recorded an impairment charge related to its Culture Shaping client relationships, trade name, software and non-compete intangible assets of $9.9 million during the year ended December 31, 2017. The Company also recorded an impairment charge related to its Leadership Consulting client relationships, software and non-compete intangible assets of $4.6 million during the year ended December 31, 2017. These impairment charges are recorded within Impairment charges in the Condensed Consolidated Statement of Comprehensive Income (Loss) for the year ended December 31, 2017. The impairments were non-cash in nature and did not affect our current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under our credit agreement. The carrying amount of amortizable intangible assets and the related accumulated amortization were as follows: December 31, 2017 December 31, 2016 Weighted Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships 7.9 $ 13,703 $ (11,612 ) $ 2,091 $ 33,299 $ (21,653 ) $ 11,646 Trade name 0.0 459 (459 ) — 9,436 (4,465 ) 4,971 Software 0.0 — — — 7,200 (4,114 ) 3,086 Non-compete 2.0 230 (163 ) 67 974 (423 ) 551 Technology 0.0 — — — 604 (168 ) 436 Total intangible assets 7.7 $ 14,392 $ (12,234 ) $ 2,158 $ 51,513 $ (30,823 ) $ 20,690 Intangible asset amortization expense for the years ended December 31, 2017 , 2016 , and 2015 was $4.4 million , $7.1 million and $4.9 million respectively. The Company's estimated future amortization expense related to intangible assets as of December 31, 2017 for the years ended December 31st is as follows: 2018 $ 968 2019 507 2020 294 2021 194 2022 129 Thereafter 66 Total $ 2,158 |