Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Note 4 — Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows:

(in thousands)	Learning A-Z		Voyager Sopris Learning			ExploreLearning		Total
Balance at December 31, 2013:
Goodwill, gross	$	13,215	$	217,262		$	6,947	$	237,424
Accumulated impairment loss		—		(189,582	)		—		(189,582	)
Goodwill		13,215		27,680			6,947		47,842
Impairment		—		—			—		—
Acquisitions		—		—			—		—
Balance at December 31, 2014:
Goodwill, gross		13,215		217,262			6,947		237,424
Accumulated impairment loss		—		(189,582	)		—		(189,582	)
Goodwill		13,215		27,680			6,947		47,842
Impairment		—		—			—		—
Acquisitions		—		—			—		—
Balance at December 31, 2015:
Goodwill, gross		13,215		217,262			6,947		237,424
Accumulated impairment loss		—		(189,582	)		—		(189,582	)
Goodwill	$	13,215	$	27,680		$	6,947	$	47,842

Impairment Analysis

In accordance with GAAP, goodwill and other indefinite-lived intangible assets are not amortized but are instead reviewed for impairment at least annually and if a triggering event is determined to have occurred in an interim period. Relevant accounting guidance provides entities with the option of performing a qualitative assessment to determine if it is more likely than not that goodwill might be impaired or a quantitative two-step goodwill impairment test.

When the Company elects to perform the qualitative assessment for a reporting unit, management evaluates relevant events and circumstances, such as macroeconomic conditions, industry and market changes, cost changes in key inputs, overall financial performance, and pertinent entity-specific or reporting unit-specific changes. If after assessing the totality of relevant events and circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative two-step goodwill impairment test is unnecessary.

The Company’s performs its annual impairment test on October 1^st each year.

2015 Annual Goodwill Impairment Analysis

The Company performed the 2015 annual goodwill impairment analysis using four reporting units: Learning A-Z, Voyager Sopris Learning, ExploreLearning, and Kurzweil Education.

During 2015, the Company elected to perform the optional qualitative assessment for the each reporting unit. The qualitative assessment did not result in a conclusion that it was more likely than not that the fair value of these reporting units was less than their respective carrying amounts, therefore it was unnecessary to perform the quantitative two-step goodwill impairment test for the any of the Company’s reporting units.

2014 Annual Goodwill Impairment Analysis

The Company performed the 2014 annual goodwill impairment analysis using four reporting units: Learning A-Z, Voyager Sopris Learning, ExploreLearning, and Kurzweil Education.

During 2014, the Company elected to perform the optional qualitative assessment for the Learning A-Z and ExploreLearning reporting units. The qualitative assessment did not result in a conclusion that it was more likely than not that the fair value of these reporting units was less than their respective carrying amounts, therefore it was unnecessary to perform the quantitative two-step goodwill impairment test for the Learning A-Z and ExploreLearning reporting units.

During 2014, the Company elected to perform the quantitative two-step goodwill impairment test for the Voyager Sopris Learning and Kurzweil Education reporting units. The step one calculated fair values of these reporting units exceeded their respective carrying amounts by at least 10%; therefore it was unnecessary to perform the second step of the quantitative impairment test.

Intangible Assets

The Company’s definite lived intangible assets and related accumulated amortization at December 31, 2015 and 2014 consisted of the following:

(in thousands)	December 31, 2013			Additions			Disposals			Impairments		December 31, 2014			Additions			Disposals		Impairments		December 31, 2015
Intangible assets, gross:
Publishing rights	$	26,200		$	—		$	—		$	—	$	26,200		$	—		$	—	$	—	$	26,200
Trademark		5,690			—			(580	)		—		5,110			—			—		—		5,110
Customer relationships		7,717			—			—			—		7,717			—			—		—		7,717
Acquired curriculum and technology		24,828			—			—			—		24,828			—			—		—		24,828
Reseller network		12,300			—			—			—		12,300			—			—		—		12,300
Conference attendees		134			—			(134	)		—		—			—			—		—		—
Total intangible assets, gross		76,869			—			(714	)		—		76,155			—			—		—		76,155
Intangible assets, accumulated amortization:
Publishing rights		(21,495	)		(1,943	)		—			—		(23,438	)		(1,303	)		—		—		(24,741	)
Trademark		(2,066	)		(452	)		325			—		(2,193	)		(419	)		—		—		(2,612	)
Customer relationships		(5,779	)		(699	)		—			—		(6,478	)		(648	)		—		—		(7,126	)
Acquired curriculum and technology		(16,109	)		(3,510	)		—			—		(19,619	)		(2,478	)		—		—		(22,097	)
Reseller network		(11,616	)		(341	)		—			—		(11,957	)		(201	)		—		—		(12,158	)
Conference attendees		(129	)		(5	)		134			—		—			—			—		—		—
Total intangible assets, accumulated amortization		(57,194	)		(6,950	)		459			—		(63,685	)		(5,049	)		—		—		(68,734	)
Intangible assets, net	$	19,675		$	(6,950	)	$	(255	)	$	—	$	12,470		$	(5,049	)	$	—	$	—	$	7,421

2014 Intangible Asset Disposal

During the quarter ended June 30, 2014, the Company disposed of trade names of $0.3 million in conjunction with the sale of the IntelliTools product line.

Estimated Future Amortization Expense

Estimated amortization expense expected for each of the next five years related to intangibles subject to amortization is as follows:

(in thousands)	Cost of Revenues		Operating Expense		Amortization
2016	$	2,339	$	1,081	$	3,420
2017		1,094		426		1,520
2018		380		327		707
2019		253		311		564
2020		124		299		423
Thereafter		—		787		787
	$	4,190	$	3,231	$	7,421

- 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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