Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Other Intangible Assets

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Goodwill and Other Intangible Assets
9 Months Ended
Sep. 30, 2014
Goodwill and Other Intangible Assets

12. Goodwill and Other Intangible Assets

The Company’s goodwill was as follows:

 

     U.S.
Operating
Segment
     International
Operating
Segment
    Total  

Balance at January 1, 2014 (1)

   $ 1,150,471       $ 137,619      $ 1,288,090   

Foreign currency translation adjustments

     —           (10,756     (10,756
  

 

 

    

 

 

   

 

 

 

Balance at September 30, 2014 (1)

   $ 1,150,471       $ 126,863      $ 1,277,334   
  

 

 

    

 

 

   

 

 

 

 

(1)  Balances are presented net of accumulated impairment losses of $214,031 for the U.S. operating segment and $27,622 for the international operating segment.

The Company evaluates goodwill for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill might exceed its estimated fair value. The Company evaluates goodwill for impairment at the reporting unit level and has allocated goodwill to the reporting unit based on an estimate of its relative fair value. The Company considers the reporting unit to be each of its eighteen regions in the U.S. and each of its eight countries internationally (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are considered one reporting unit). Goodwill impairment is evaluated using a two-step approach requiring the Company to compute the fair value of a reporting unit and compare it with its carrying value. If the carrying value of the reporting unit exceeds the estimated fair value, a second step is performed to measure the potential goodwill impairment. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35, are based on historical and projected operating performance, recent market transactions and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was eight times for the evaluation performed during the fourth quarter of 2013.

No events or changes in circumstances occurred during the nine months ended September 30, 2014 that indicated the carrying value of goodwill might exceed its estimated fair value.

Intangible assets consisted of the following:

 

     Balance at
January 1,
                Balance at
September 30,
 
   2014     Amortization     Other (1)     2014  

Intangible assets with finite lives:

        

Gross carrying amount

   $ 101,617      $      $ (1,309   $ 100,308   

Accumulated amortization

     (46,297     (4,498     (141     (50,936
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net intangible assets with finite lives

     55,320        (4,498     (1,450     49,372   

Intangible assets with indefinite lives:

        

Tradename

     300,824               (170     300,654   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total intangible assets — net

   $ 356,144      $ (4,498   $ (1,620   $ 350,026   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Consists primarily of foreign currency translation adjustments.

 

Estimated aggregate future amortization expense for intangible assets is as follows:

 

For the three months ended December 31, 2014

   $ 1,731   

For the twelve months ended December 31, 2015

     5,988   

For the twelve months ended December 31, 2016

     5,876   

For the twelve months ended December 31, 2017

     5,319   

For the twelve months ended December 31, 2018

     4,240   

Thereafter

     26,218   
  

 

 

 

Total

   $ 49,372