Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

In the third quarter of 2015, as a result of continued declines in student enrollments at KHE and the challenging industry operating environment, the Company performed an interim impairment review of its goodwill and long-lived assets at the KHE reporting unit. The KHE reporting unit failed the step one goodwill impairment test. As a result of the step two analysis, the Company recorded a $248.6 million goodwill impairment charge. The Company estimated the fair value of the KHE reporting unit utilizing a discounted cash flow model, supported by a market approach. A substantial portion of the impairment charge is due to the amount of unrecognized intangible assets identified in the step two analysis.

Amortization of intangible assets for the three months ended September 30, 2016 and 2015 was $6.6 million and $4.5 million, respectively. Amortization of intangible assets for the nine months ended September 30, 2016 and 2015 was $19.2 million and $13.9 million, respectively. Amortization of intangible assets is estimated to be approximately $7 million for the remainder of 2016, $24 million in 2017, $22 million in 2018, $19 million in 2019, $18 million in 2020 and $25 million thereafter.

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



(in thousands)	Education			Television Broadcasting		Other Businesses			Total
Balance as of December 31, 2015
Goodwill	$	1,006,096		$	168,345	$	202,814		$	1,377,255
Accumulated impairment losses	(350,850		)	—		(8,892		)	(359,742		)
	655,246			168,345		193,922			1,017,513
Measurement period adjustments	(2,781		)	—		(16,930		)	(19,711		)
Acquisitions	160,894			—		20,334			181,228
Dispositions	—			—		(2,800		)	(2,800		)
Foreign currency exchange rate changes	(25,784		)	—		—			(25,784		)
Balance as of September 30, 2016
Goodwill	1,138,425			168,345		200,608			1,507,378
Accumulated impairment losses	(350,850		)	—		(6,082		)	(356,932		)
	$	787,575		$	168,345	$	194,526		$	1,150,446

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, 2015
Goodwill	$	392,457		$	166,098		$	447,541		$	1,006,096
Accumulated impairment losses	(248,591		)	(102,259		)	—			(350,850		)
	143,866			63,839			447,541			655,246
Measurement period adjustments	(2,781		)	—			—			(2,781		)
Acquisitions	—			—			160,894			160,894
Foreign currency exchange rate changes	104			—			(25,888		)	(25,784		)
Balance as of September 30, 2016
Goodwill	389,780			166,098			582,547			1,138,425
Accumulated impairment losses	(248,591		)	(102,259		)	—			(350,850		)
	$	141,189		$	63,839		$	582,547		$	787,575

Other intangible assets consist of the following:



		As of September 30, 2016						As of December 31, 2015
(in thousands)	Useful Life Range	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets
Student and customer relationships	2–10 years	$	130,264	$	51,902	$	78,362	$	108,806	$	40,280	$	68,526
Trade names and trademarks	2–10 years	55,705		27,929		27,776		53,848		23,941		29,907
Databases and technology	3–5 years	4,617		4,304		313		4,617		4,114		503
Noncompete agreements	2–5 years	1,731		1,273		458		1,381		1,012		369
Other	1–8 years (1)	12,031		4,304		7,727		10,095		2,209		7,886
		$	204,348	$	89,712	$	114,636	$	178,747	$	71,556	$	107,191
Indefinite-Lived Intangible Assets
Trade names and trademarks		$	67,946					$	21,051
Licensure and accreditation		834						834
		$	68,780					$	21,885

____________


(1)	The Company's other amortized intangible assets’ maximum useful life was 7 years as of December 31, 2015.

- 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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