Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

3. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of all acquisitions over the estimated fair value of the net assets acquired. The Company evaluates goodwill and intangible assets for impairment at least annually or more frequently whenever events or changes in circumstances indicate that the asset may be impaired, or in the case of goodwill, the fair value of the reporting unit is below its carrying amount. The analysis of potential impairment of goodwill requires a two-step approach that begins with the estimation of the fair value at the reporting unit level. We have four reporting units for our three operating segments. We have one reporting unit for our LTL segment, two reporting units for our TL segment, and one reporting unit for our Global Solutions segment.

For purposes of our impairment analysis, the fair value of our reporting units are estimated based upon an average of an income fair value approach and a market fair value approach, both of which incorporate numerous assumptions and estimates such as company forecasts, discount rates, and growth rates, among others. The determination of fair value requires considerable judgment and is highly sensitive to changes in underlying assumptions. The Company completed its annual impairment analysis as of July 1, 2015, and determined no impairment had occurred, as each reporting unit's calculated fair value exceeded the carrying value by at least 35% at the time of its evaluation. As a result, there is no goodwill impairment for any of the periods presented in the Company's condensed consolidated financial statements.

Subsequent to our annual impairment analysis as of July 1, 2015, a decline in revenues during the quarter ended September 30, 2015, resulted in a triggering event that requires the Company to perform an interim goodwill impairment analysis as of September 30, 2015. Due to the significant effort that is required to determine the implied fair value of the reporting units' goodwill, through assessing revenue growth, operating margin, and discount rate assumptions, as well as the lack of updated market data, the Company has not completed the interim goodwill impairment analysis as of September 30, 2015 and will complete the analysis during the fourth quarter of 2015.

The following is a rollforward of goodwill from December 31, 2014 to September 30, 2015 by reportable segment (in thousands):



	TL		LTL		Global Solutions		Total
Goodwill balance as of December 31, 2014	$	319,051	$	197,312	$	153,289	$	669,652
Adjustments to goodwill for purchase accounting	1,598		—		—		1,598
Goodwill related to acquisitions	15,737		—		—		15,737
Goodwill balance as of September 30, 2015	$	336,386	$	197,312	$	153,289	$	686,987

Intangible assets consist primarily of customer relationships acquired from business acquisitions. Intangible assets as of September 30, 2015 and December 31, 2014 were as follows (in thousands):



	September 30, 2015							December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
TL	$	66,673	$	(12,378	)	$	54,295	$	60,173	$	(8,356	)	$	51,817
LTL	1,358		(1,000		)	358		1,358		(950		)	408
Global Solutions	31,522		(5,936		)	25,586		31,522		(3,869		)	27,653
Total	$	99,553	$	(19,314	)	$	80,239	$	93,053	$	(13,175	)	$	79,878

The customer relationships intangible assets are amortized over their estimated five to 12 year useful lives. Amortization expense was $2.0 million and $1.4 million for the three months ended September 30, 2015 and 2014, respectively, and $6.1 million and $3.3 million for the nine months ended September 30, 2015 and 2014, respectively. Estimated amortization expense for each of the next five years based on intangible assets as of September 30, 2015 is as follows (in thousands):



Remainder 2015	$	2,262
2016	8,855
2017	8,734
2018	8,471
2019	8,168
2020	7,795
Thereafter	35,954
Total	$	80,239

- 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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