Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net:

The following table presents changes in the carrying value of goodwill for the periods ended December 31, 2017 and January 1, 2017:



	December 31, 2017		January 1, 2017
	(in thousands)
Balance at beginning of period	$	483,876	$	483,876
Goodwill assigned in acquisition of franchisee ⁽¹⁾	562		—
Balance at end of period	$	484,438	$	483,876

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(1)	Represents goodwill related to two franchise stores the Company acquired in the second quarter of 2017. The acquisition did not have a significant impact on our Consolidated Balance Sheet as of December 31, 2017 or on our Consolidated Statements of Earnings for Fiscal 2017.

The following table presents our indefinite and definite-lived intangible assets at December 31, 2017 and January 1, 2017:



		December 31, 2017							January 1, 2017
	Weighted Average Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(in thousands)
Chuck E. Cheese's tradename	Indefinite	$	400,000	$	—		$	400,000	$	400,000	$	—		$	400,000
Peter Piper Pizza tradename	Indefinite	26,700		—			26,700		26,700		—			26,700
Favorable lease agreements ⁽¹⁾	10	14,880		(7,306		)	7,574		14,880		(5,649		)	9,231
Franchise agreements	25	53,300		(7,197		)	46,103		53,300		(5,148		)	48,152
		$	494,880	$	(14,503	)	$	480,377	$	494,880	$	(10,797	)	$	484,083

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(1)

In connection with the Merger, as defined in Note 17 “Consolidating Guarantor Financial Information”, and the acquisition of Peter Piper Pizza (“PPP”) in October 2014 (the “PPP Acquisition”), we also recorded unfavorable lease liabilities of $10.2 million and $3.9 million, respectively, which are included in “Other current liabilities” and “Other noncurrent liabilities” in our Consolidated Balance Sheets. Such amounts are being amortized over a weighted average life of 10 years, and are included in “Rent expense” in our Consolidated Statements of Earnings.

Our estimated future amortization expense related to the favorable lease agreements and franchise agreements is set forth as follows (in thousands):



	Favorable Lease Agreements		Franchise Agreements
Fiscal 2018	$	1,246	$	2,049
Fiscal 2019	1,102		2,049
Fiscal 2020	1,050		2,088
Fiscal 2021	847		2,049
Fiscal 2022	754		2,049
Thereafter	2,575		35,819
	$7,574		$46,103

Amortization expense related to favorable lease agreements was $1.6 million for Fiscal 2017, $2.0 million for Fiscal 2016 and $2.0 million for Fiscal 2015, respectively, and is included in “Rent expense” in our Consolidated Statements of Earnings. Amortization expense related to franchise agreements was $2.0 million for Fiscal 2017, Fiscal 2016 and Fiscal 2015, respectively, and is included in “Depreciation and amortization” in our Consolidated Statements of Earnings.

- 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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