Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2017

7. Intangible Assets and Goodwill

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


	Weighted
	Average	As of December 31, 2017						As of December 31, 2016
	Amortization	Initial		Accumulated		Net		Initial		Accumulated		Net
	Period	Cost		Amortization		Balance		Cost		Amortization		Balance
Franchise agreements	12.5	$	181,567	$	(62,218)	$	119,349	$	224,167	$	(115,027)	$	109,140
Other intangible assets:
Software (a)	4.6	$	13,762	$	(8,111)	$	5,651	$	13,207	$	(7,154)	$	6,053
Trademarks	10.2		1,539		(902)		637		3,102		(1,782)		1,320
Non-compete	10.0		2,500		(312)		2,188		2,500		(62)		2,438
Total other intangible assets	6.4	$	17,801	$	(9,325)	$	8,476	$	18,809	$	(8,998)	$	9,811

(a)

As of December 31, 2017 and December 31, 2016, capitalized software development costs of $0.6 million and $0.4 million, respectively, were recorded in “Other intangible assets” in the accompanying 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 was $19.6 million, $15.2 million and $14.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. Amounts for the year ended December 31, 2017 include the franchise agreement measurement period adjustment of $0.8 million. Refer to Note 5, Acquisitions and Dispositions for additional information.

As of December 31, 2017, the estimated future amortization expense for the next five years related to intangible assets with definite lives is as follows (in thousands):


Year ending December 31:
2018	$	17,614
2019		17,482
2020		17,288
2021		16,775
2022		14,511
	$	83,670

The following table presents changes to goodwill for the period from January 1, 2016 to December 31, 2017 (in thousands):


Balance, January 1, 2016	$	71,871
Goodwill recognized related to acquisitions		54,665
Effect of changes in foreign currency exchange rates		97
Balance, December 31, 2016		126,633
Goodwill recognized related to current year acquisitions		12,220
Adjustments to acquisition accounting during the measurement period		(3,865)
Effect of changes in foreign currency exchange rates		225
Balance, December 31, 2017	$	135,213

- 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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