Goodwill and Other Intangible Assets

6 Months Ended

12 Months Ended

Jun. 30, 2013

Dec. 31, 2012

Goodwill and Other Intangible Assets

The following summarizes the changes in our goodwill, by segment (in millions of dollars):



	Car Rental			Equipment Rental			Total
Balance as of January 1, 2013
Goodwill	$	1,287.5		$	775.4		$	2,062.9
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	1,241.4			100.5			1,341.9

Goodwill acquired during the period	9.4			—			9.4
Adjustments to previously recorded purchase price allocation^(a)	15.0			1.7			16.7
Other changes during the period^(b)	(1.6		)	(0.1		)	(1.7		)
	22.8			1.6			24.4

Balance as of June 30, 2013
Goodwill	1,310.3			777.0			2,087.3
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	$	1,264.2		$	102.1		$	1,366.3



	Car Rental			Equipment Rental			Total
Balance as of January 1, 2012
Goodwill	$	419.3		$	693.8		$	1,113.1
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	373.2			18.9			392.1

Goodwill acquired during the year	884.9			82.0			966.9
Adjustments to previously recorded purchase price allocation^(c)	(15.3		)	—			(15.3		)
Other changes during the year^(d)	(1.4		)	(0.4		)	(1.8		)
	868.2			81.6			949.8

Balance as of December 31, 2012
Goodwill	1,287.5			775.4			2,062.9
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	$	1,241.4		$	100.5		$	1,341.9

_______________________________________________________________________________


(a)	Consists of adjustments related to purchase accounting and deferred tax during 2013.


(b)	Primarily consists of changes resulting from the translation of foreign currencies at different exchange rates from the beginning of the period to the end of the period.


(c)	Consists of deferred tax adjustments recorded during 2012.


(d)	Primarily consists of changes resulting from disposals and the translation of foreign currencies at different exchange rates from the beginning of the year to the end of the year.

Other intangible assets, net, consisted of the following major classes (in millions of dollars):



	June 30, 2013
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortizable intangible assets:
Customer-related	$	694.6	$	(468.5	)	$	226.1
Other⁽¹⁾	454.0		(59.8		)	394.2
Total	1,148.6		(528.3		)	620.3
Indefinite-lived intangible assets:
Trade name	3,330.0		—			3,330.0
Other⁽²⁾	18.2		—			18.2
Total	3,348.2		—			3,348.2
Total other intangible assets, net	$	4,496.8	$	(528.3	)	$	3,968.5



	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortizable intangible assets:
Customer-related	$	694.7	$	(434.0	)	$	260.7
Other⁽¹⁾	459.6		(33.8		)	425.8
Total	1,154.3		(467.8		)	686.5
Indefinite-lived intangible assets:
Trade name	3,330.0		—			3,330.0
Other⁽²⁾	15.6		—			15.6
Total	3,345.6		—			3,345.6
Total other intangible assets, net	$	4,499.9	$	(467.8	)	$	4,032.1

_______________________________________________________________________________


(1)	Other amortizable intangible assets primarily include Dollar Thrifty concession agreements, Donlen trade name, reacquired franchise rights, non-compete agreements and technology-related intangibles.


(2)	Other indefinite-lived intangible assets primarily consist of reacquired franchise rights.

Amortization of other intangible assets for the three months ended June 30, 2013 and 2012 was approximately $30.2 million and $19.8 million, respectively. Amortization of other intangible assets for the six months ended June 30, 2013 and 2012 was approximately $60.7 million and $39.0 million, respectively. Based on our amortizable intangible assets as of June 30, 2013, we expect amortization expense to be approximately $60.0 million for the remainder of 2013, $116.4 million in 2014, $113.9 million in 2015, $64.9 million in 2016 and $51.8 million in 2017.

Goodwill and Other Intangible Assets

We account for our goodwill and indefinite-lived intangible assets under ASC 350. Under ASC 350, goodwill impairment is deemed to exist if the carrying value of goodwill exceeds its fair value. In addition, ASC 350 requires that goodwill be tested at least annually using a two-step process. The first step is to identify any potential impairment by comparing the carrying value of the reporting unit to its fair value. We estimate the fair value of our reporting units using a discounted cash flow methodology. The cash flows represent management’s most recent planning assumptions. These assumptions are based on a combination of industry outlooks, views on general economic conditions, our expected pricing plans and expected future savings generated by our ongoing restructuring activities. If a potential impairment is identified, the second step is to compare the implied fair value of goodwill with its carrying amount to measure the impairment loss. Those intangible assets considered to have indefinite useful lives, including our trade name, are evaluated for impairment on an annual basis, by comparing the fair value of the intangible assets to their carrying value. In addition, whenever events or changes in circumstances indicate that the carrying value of intangible assets might not be recoverable, we will perform an impairment review. We estimate the fair value of our indefinite lived intangible assets using the relief from royalty method. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment in accordance with ASC 360-10, "Impairment and Disposal of Long-Lived Assets."

At October 1, 2012, 2011 and 2010, we performed our annual goodwill impairment test and determined that the respective book values of our reporting units did not exceed their estimated fair values and therefore no impairment existed for the years ended December 31, 2012, 2011 and 2010.

The following summarizes the changes in our goodwill, by segment (in millions of dollars):



	Car Rental			Equipment Rental			Total
Balance as of January 1, 2012
Goodwill	$	419.3		$	693.8		$	1,113.1
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	373.2			18.9			392.1

Goodwill acquired during the year	884.9			82.0			966.9
Adjustments to previously recorded purchase price allocation^(a)	(15.3		)	—			(15.3		)
Other changes during the year^(b)	(1.4		)	(0.4		)	(1.8		)
	868.2			81.6			949.8

Balance as of December 31, 2012
Goodwill	1,287.5			775.4			2,062.9
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	$	1,241.4		$	100.5		$	1,341.9



	Car Rental			Equipment Rental			Total
Balance as of January 1, 2011
Goodwill	$	367.9		$	681.7		$	1,049.6
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	321.8			6.8			328.6

Goodwill acquired during the year	53.1			12.3			65.4
Adjustments to previously recorded purchase price allocation	(0.9		)	(0.1		)	(1.0		)
Other changes during the year^(b)	(0.8		)	(0.1		)	(0.9		)
	51.4			12.1			63.5

Balance as of December 31, 2011
Goodwill	419.3			693.8			1,113.1
Accumulated impairment losses	(46.1		)	(674.9		)	(721.0		)
	$	373.2		$	18.9		$	392.1

_______________________________________________________________________________


(a)	Consists of deferred tax adjustments recorded during 2012.


(b)	Primarily consists of changes resulting from disposals and the translation of foreign currencies at different exchange rates from the beginning of the period to the end of the period.

Other intangible assets, net, consisted of the following major classes (in millions of dollars):



	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortizable intangible assets:
Customer-related	$	694.7	$	(434.0	)	$	260.7
Other⁽¹⁾	459.6		(33.8		)	425.8
Total	1,154.3		(467.8		)	686.5
Indefinite-lived intangible assets:
Trade name	3,330.0		—			3,330.0
Other⁽³⁾	15.6		—			15.6
Total	3,345.6		—			3,345.6
Total other intangible assets, net	$	4,499.9	$	(467.8	)	$	4,032.1



	December 31, 2011
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortizable intangible assets:
Customer-related	$	672.6	$	(365.5	)	$	307.1
Other⁽²⁾	74.7		(27.8		)	46.9
Total	747.3		(393.3		)	354.0
Indefinite-lived intangible assets:
Trade name	2,190.0		—			2,190.0
Other⁽³⁾	18.2		—			18.2
Total	2,208.2		—			2,208.2
Total other intangible assets, net	$	2,955.5	$	(393.3	)	$	2,562.2

_______________________________________________________________________________


(1)	Other amortizable intangible assets primarily include Dollar Thrifty concession agreements, Donlen trade name, reacquired franchise rights, non-compete agreements and technology-related intangibles.


(2)	Other amortizable intangible assets primarily consisted of our Advantage trade name and concession rights, Donlen trade name, reacquired franchise rights, non-compete agreements and technology-related intangibles.


(3)	Other indefinite-lived intangible assets primarily consist of reacquired franchise rights.

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate the asset may be impaired.

Generally, our trademarks and trade names are expected to generate cash flows indefinitely. Consequently, these assets were classified as indefinite-lived intangibles and accordingly are not amortized but reviewed for impairment annually, or sooner under certain circumstances. Prior to the goodwill testing discussed above, we tested our intangible assets with indefinite lives. The test for impairment requires us to compare the fair value of our indefinite-lived intangible assets to the carrying value of those assets. In situations where the carrying value exceeds the fair value of the intangible asset, an impairment loss equal to the difference is recognized. We estimate the fair value of our indefinite-lived intangible assets using an income approach; specifically, based on discounted cash flows.

December 31, 2012, 2011 and 2010

At October 1, 2012, 2011 and 2010, we performed our annual test of recoverability of indefinite-lived intangible assets. We determined that the respective book values of our indefinite-lived intangible assets did not exceed their estimated fair values and therefore no impairment existed.

Amortization of other intangible assets for the years ended December 31, 2012, 2011 and 2010 was approximately $84.1 million, $70.0 million and $64.7 million, respectively. Based on our amortizable intangible assets as of December 31, 2012, we expect amortization expense to be approximately $120.5 million in 2013, $116.1 million in 2014, $113.7 million in 2015, $64.8 million in 2016 and $51.8 million in 2017.

- 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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