Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2016

6. Intangible Assets and Goodwill

The following table provides the components of the Company’s intangible assets, other than goodwill (in thousands, except weighted average amortization period in years):


	Weighted
	Average	As of June 30, 2016						As of December 31, 2015
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.7	$	168,067	$	(107,474)	$	60,593	$	162,438	$	(100,499)	$	61,939
Other intangible assets:
Software (a)	3.1	$	11,759	$	(6,843)	$	4,916	$	10,885	$	(7,325)	$	3,560
Trademarks	14.4		3,014		(1,688)		1,326		2,985		(1,604)		1,381
Total other intangible assets	6.4	$	14,773	$	(8,531)	$	6,242	$	13,870	$	(8,929)	$	4,941

(a)

As of June 30, 2016 and December 31, 2015, capitalized software development costs of $4,057,000 and $3,165,000, respectively, were recorded in “Other intangible assets” in the accompanying Condensed Consolidated Balance Sheets. As of these dates, the associated information technology infrastructure projects were not complete and ready for their intended use and thus were not subject to amortization.

Amortization expense for the three months ended June 30, 2016 and 2015 was $3,656,000 and $3,549,000, respectively.

Amortization expense for the six months ended June 30, 2016 and 2015 was $7,170,000 and $7,098,000, respectively.

The estimated future amortization of intangible assets, other than goodwill is as follows (in thousands):


As of June 30:
Remainder of 2016	$	7,641
2017		12,054
2018		8,438
2019		7,997
2020		6,865
Thereafter		23,840
	$	66,835

During 2015, the Company performed its annual assessment of goodwill, and the fair values of the Company’s reporting units significantly exceeded their respective carrying values. No interim indicators of impairment have been identified. The following table presents changes to goodwill for the six months ended June 30, 2016 (in thousands):


Balance, January 1, 2016	$	71,871
Goodwill recognized in acquisition		3,890
Effect of changes in foreign currency exchange rates		216
Balance, June 30, 2016	$	75,977

- 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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