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Intangible Assets, Goodwill and Acquisitions
12 Months Ended
Sep. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets, Goodwill and Acquisitions

7.

Intangible Assets, Goodwill and Acquisitions

Intangible assets as of September 30, 2018 and September 30, 2017 consist of the following:

 

 

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

 

Useful

Life

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

Customer relationships

 

6-21 yrs.

 

$

622,710

 

 

$

(337,800

)

 

$

600,515

 

 

$

(275,993

)

Trademarks

 

4-12 yrs.

 

 

230,900

 

 

 

(227,520

)

 

 

230,900

 

 

 

(184,151

)

Non-compete agreements

 

5 yrs.

 

 

2,320

 

 

 

(155

)

 

 

 

 

 

 

Total intangible assets

 

 

 

$

855,930

 

 

$

(565,475

)

 

$

831,415

 

 

$

(460,144

)

 

Amortization expense related to intangible assets was $104,943, $92,863 and $131,562 for the year ended September 30, 2018, the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively.

 

The following table shows changes in the carrying amount of goodwill from January 1, 2017 to September 30, 2018 by reportable segment:

 

 

 

Maintenance

Services

 

 

Development

Services

 

 

Total

 

Balance, January 1, 2017

 

$

1,486,640

 

 

$

180,474

 

 

$

1,667,114

 

Acquisitions

 

 

36,659

 

 

 

 

 

 

36,659

 

Balance, September 30, 2017

 

 

1,523,299

 

 

 

180,474

 

 

 

1,703,773

 

Acquisitions

 

 

49,064

 

 

 

13,924

 

 

 

62,988

 

Balance, September 30, 2018

 

$

1,572,363

 

 

$

194,398

 

 

$

1,766,761

 

 

The weighted average amortization period for intangible assets is 14.7 years. Amortization expense is anticipated to be as follows in future years:

 

Year Ended September 30,

 

2019

 

$

55,580

 

2020

 

 

47,551

 

2021

 

 

39,723

 

2022

 

 

32,691

 

2023

 

 

26,505

 

2024 and thereafter

 

 

87,405

 

 

 

$

289,455

 

 

During the year ended September 30, 2018, the Company acquired, through a series of separate transactions, 100% of the operations of five unrelated Maintenance Services companies. The Company paid approximately $104,377 in consideration for the acquisitions, net of cash acquired. The Company accounted for the business combinations under the acquisition method and, accordingly, recorded the assets acquired and liabilities assumed at their estimated fair market values based on management’s preliminary estimates, with the excess allocated to goodwill. The fair values were primarily estimated using Level 3 assumptions within the fair value hierarchy, including estimated future cash flows, discount rates and other factors. The valuation process to determine fair values is not yet complete. The Company will finalize the amounts recognized as it obtains the information necessary to complete the analysis, but no later than one year from the acquisition date. The identifiable assets acquired were primarily intangible assets, including customer relationships and non-compete agreements of $24,515. The amount allocated to goodwill is reflective of the benefits the Company expects to realize from anticipated synergies and the acquired assembled workforce. The Company expects a portion of the goodwill resulting from these acquisitions will be deductible for tax purposes.