TIPTREE INC
For the period ended Dec 31, 2023. Filed Feb 29, 2024.
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FY2023 · Filed Feb 29, 2024
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(9) Goodwill and Intangible Assets, net
The following table presents identifiable finite and indefinite-lived intangible assets, accumulated amortization, and goodwill by operating segment and/or reporting unit, as appropriate:
| As of December 31, 2023 | As of December 31, 2022 | |||||
|---|---|---|---|---|---|---|
| Finite-Lived Intangible Assets: | Insurance | Other | Total | Insurance | Other | Total |
| Customer relationships | $162,844 | $— | $162,844 | $149,835 | $— | $149,835 |
| Accumulated amortization | (74,776) | — | (74,776) | (60,401) | — | (60,401) |
| Trade names | 16,227 | 800 | 17,027 | 15,028 | 800 | 15,828 |
| Accumulated amortization | (8,452) | (680) | (9,132) | (7,039) | (600) | (7,639) |
| Software licensing | 17,372 | 640 | 18,012 | 12,386 | 640 | 13,026 |
| Accumulated amortization | (9,891) | (640) | (10,531) | (9,084) | (640) | (9,724) |
| Insurance policies and contracts acquired | 36,500 | — | 36,500 | 36,500 | — | 36,500 |
| Accumulated amortization | (36,500) | — | (36,500) | (36,374) | — | (36,374) |
| Other | 1,088 | — | 1,088 | 751 | — | 751 |
| Accumulated amortization | (536) | — | (536) | (276) | — | (276) |
| Total finite-lived intangible assets | 103,876 | 120 | 103,996 | 101,326 | 200 | 101,526 |
| Indefinite-Lived Intangible Assets: (1) | ||||||
| Insurance licensing agreements | 13,761 | — | 13,761 | 13,761 | — | 13,761 |
| Other | — | 1,000 | 1,000 | — | 1,728 | 1,728 |
| Total indefinite-lived intangible assets | 13,761 | 1,000 | 14,761 | 13,761 | 1,728 | 15,489 |
| Total intangible assets, net | $117,637 | $1,120 | $118,757 | $115,087 | $1,928 | $117,015 |
| Goodwill | 204,447 | 1,708 | 206,155 | 184,900 | 1,708 | 186,608 |
| Total goodwill and intangible assets, net | $322,084 | $2,828 | $324,912 | $299,987 | $3,636 | $303,623 |
(1)Impairment tests are performed at least annually on indefinite-lived intangible assets.
Goodwill
The following table presents the activity in goodwill, by operating segment and/or reporting unit, as appropriate, and includes the adjustments made to the balance of goodwill to reflect the effect of the final valuation adjustments made for acquisitions, as well as the reduction to any goodwill attributable to impairment related charges:
| Insurance | Other | Total | |
|---|---|---|---|
| Balance at December 31, 2021 | $177,395 | $1,708 | $179,103 |
| Goodwill acquired (1) | 8,112 | — | 8,112 |
| Foreign currency translation and other | (607) | — | (607) |
| Balance at December 31, 2022 | $184,900 | $1,708 | $186,608 |
| Goodwill acquired (1) | 18,359 | — | 18,359 |
| Foreign currency translation and other | 1,188 | — | 1,188 |
| Balance at December 31, 2023 | $204,447 | $1,708 | $206,155 |
(1)See Note (3) Acquisitions for more information.
The Company conducts annual impairment tests of its goodwill as of October 1. For the years ended December 31, 2023, 2022 and 2021, no impairments were recorded on the Company’s goodwill. There is no accumulated impairment recorded in the goodwill balance as of December 31, 2023 or 2022.
Intangible Assets, net
The following table presents the activity, by operating segment and/or reporting unit, as appropriate, in finite and indefinite-lived other intangible assets and includes the adjustments made to the balance to reflect the effect of any final valuation adjustments made for acquisitions, as well as any reduction attributable to impairment-related charges:
| Insurance | Other | Total | |
|---|---|---|---|
| Balance at December 31, 2021 | $121,308 | $1,450 | $122,758 |
| Intangible assets acquired (1) | 10,964 | 604 | 11,568 |
| Amortization expense | (16,229) | (126) | (16,355) |
| Foreign currency translation and other | (956) | — | (956) |
| Balance at December 31, 2022 | $115,087 | $1,928 | $117,015 |
| Intangible assets acquired (1) | 18,152 | — | 18,152 |
| Amortization expense (2) | (16,921) | (80) | (17,001) |
| Foreign currency translation and other | 1,319 | — | 1,319 |
| Impairment | — | (728) | (728) |
| Balance at December 31, 2023 | $117,637 | $1,120 | $118,757 |
(1)See Note (3) Acquisitions for more information.
(2)Does not include foreign currency translation adjustment of $60 as of December 31, 2023.
The following table presents the amortization expense on finite-lived intangible assets for the following periods:
| For the Year Ended December 31, | |||
|---|---|---|---|
| 2023 | 2022 | 2021 | |
| Amortization expense on intangible assets | $17,001 | $16,355 | $15,581 |
For the year ended December 31, 2023, the Company partially impaired its other indefinite lived intangible assets as a result of oversupply of fishing licenses which has driven valuations lower. For the years ended December 31, 2022 and 2021, no impairments were recorded on the Company’s intangible assets.
The following table presents the amortization expense on finite-lived intangible assets for the next five years and thereafter by operating segment and/or reporting unit, as appropriate:
| As of December 31, 2023 | |||
|---|---|---|---|
| Insurance · Other · Total | |||
| 2024 | $15,354 | $80 | $15,434 |
| 2025 | 13,240 | 40 | 13,280 |
| 2026 | 10,894 | — | 10,894 |
| 2027 | 9,543 | — | 9,543 |
| 2028 | 8,341 | — | 8,341 |
| 2029 and thereafter | 46,101 | — | 46,101 |
| Total (1) | $103,473 | $120 | $103,593 |
(1)Does not include foreign currency translation adjustment of $403 as of December 31, 2023.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.