Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

In the second quarter of 2014, as a result of regulatory changes impacting Kaplan's operations in China, Kaplan recorded an intangible asset impairment charge of $7.8 million, reported in discontinued operations. The Company estimated the fair value of the student and customer relationships using an income approach.

Amortization of intangible assets for the three months ended September 30, 2014 and 2013 was $7.4 million and $2.5 million, respectively. Amortization of intangible assets for the nine months ended September 30, 2014 and 2013 was $13.1 million and $8.8 million, respectively. Amortization of intangible assets is estimated to be approximately $4 million for the remainder of 2014, $17 million in 2015, $16 million in 2016, $12 million in 2017, $10 million in 2018 and $19 million thereafter.

In July 2014, the cable division sold wireless spectrum licenses that were purchased in 2006; a pre-tax non-operating gain of $75.2 million was recorded in the third quarter of 2014 in connection with these sales.

The changes in the carrying amount of goodwill, by segment, were as follows:



(in thousands)	Education			Cable		Television Broadcasting			Other Businesses			Total
Balance as of December 31, 2013
Goodwill	$	1,073,433		$	85,488	$	203,165		$	34,877		$	1,396,963
Accumulated impairment losses	(102,259		)	—		—			(6,082		)	(108,341		)
	971,174			85,488		203,165			28,795			1,288,622
Acquisitions	14,941			—		—			98,366			113,307
Dispositions	(2,420		)	—		(37,661		)	—			(40,081		)
Foreign currency exchange rate changes	(8,759		)	—		—			—			(8,759		)
Balance as of September 30, 2014
Goodwill	1,077,195			85,488		165,504			133,243			1,461,430
Accumulated impairment losses	(102,259		)	—		—			(6,082		)	(108,341		)
	$	974,936		$	85,488	$	165,504		$	127,161		$	1,353,089

The changes in carrying amount of goodwill at the Company’s education division were as follows:



(in thousands)	Higher Education			Test Preparation			Kaplan International			Total
Balance as of December 31, 2013
Goodwill	$	409,016		$	152,187		$	512,230		$	1,073,433
Accumulated impairment losses	—			(102,259		)	—			(102,259		)
	409,016			49,928			512,230			971,174
Acquisitions	1,343			13,598			—			14,941
Dispositions	—			—			(2,420		)	(2,420		)
Foreign currency exchange rate changes	(95		)	—			(8,664		)	(8,759		)
Balance as of September 30, 2014
Goodwill	410,264			165,785			501,146			1,077,195
Accumulated impairment losses	—			(102,259		)	—			(102,259		)
	$	410,264		$	63,526		$	501,146		$	974,936

Other intangible assets consist of the following:



		As of September 30, 2014						As of December 31, 2013
(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets
Noncompete agreements	2–5 years	$	12,392	$	11,373	$	1,019	$	13,540	$	12,622	$	918
Student and customer relationships	2–10 years	111,354		48,558		62,796		72,050		45,718		26,332
Databases and technology	3–5 years	12,190		8,364		3,826		10,790		6,991		3,799
Trade names and trademarks	2–10 years	26,863		17,956		8,907		22,327		16,052		6,275
Other	1–25 years	9,626		7,943		1,683		9,836		7,572		2,264
		$	172,425	$	94,194	$	78,231	$	128,543	$	88,955	$	39,588
Indefinite-Lived Intangible Assets
Franchise agreements		$	496,321					$	496,321
Wireless licenses		—						22,150
Licensure and accreditation		7,321						7,171
Other		68,567						15,636
		$	572,209					$	541,278

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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