Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2019

Goodwill and Other Intangibles

Goodwill and other intangibles

NOTE 6 – GOODWILL AND OTHER INTANGIBLES

Goodwill:

Goodwill is reviewed for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may exist.  Goodwill is not amortizable for financial statement purposes.  The Company did not record any goodwill impairment during the years ended December 31, 2019 or 2018.

The carrying amount of the Company’s goodwill was included in “Goodwill” on the accompanying Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively.  During the years ended December 31, 2019 and 2018, the Company recorded an increase in goodwill of $1.5 million and $18.2 million, respectively, resulting from small acquisitions.  

The preliminary purchase price allocation related to the acquisition of Mayasa resulted in the initial recognition of goodwill and intangible assets in the amount of $128.1 million as of December 31, 2019, including changes resulting from foreign currency translations.  This provisional amount will change as additional information is obtained and valuation work is completed during the initial measurement period.

The following table identifies the changes in goodwill and acquisition intangibles, which were included in “Goodwill” on the accompanying Consolidated Balance Sheets for the years ended December 31, 2019 and 2018 (in thousands):

	2019		2018
Goodwill, balance at January 1,	$	807,260	$	789,058
Change in goodwill related to small acquisitions		1,464		18,202
Provisional goodwill and intangibles related to Mayasa acquisition		128,090		—
Goodwill, balance at December 31,	$	936,814	$	807,260

As of December 31, 2019 and 2018, other than goodwill, the Company did not have any indefinite-lived intangible assets.  Indefinite lived intangible assets related to the acquisition of Mayasa may be identified, valued and recorded during the measurement period.

Intangibles other than goodwill:

The following table identifies the components of the Company’s amortizable intangibles as of December 31, 2019 and 2018 (in thousands):

	Cost of Amortizable				Accumulated Amortization
	Intangibles				(Expense) Benefit				Net Amortizable Intangibles
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2019		2018		2019		2018		2019		2018
Amortizable intangible assets:
Favorable leases	$	—	$	18,930	$	—	$	(12,564)	$	—	$	6,366
Non-compete agreements		2,717		2,757		(928)		(679)		1,789		2,078
Total amortizable intangible assets	$	2,717	$	21,687	$	(928)	$	(13,243)	$	1,789	$	8,444
Unfavorable leases	$	—	$	10,180	$	—	$	8,486	$	—	$	1,694

During the years ended December 31, 2019 and 2018, the Company recorded non-compete agreement assets in conjunction with small acquisitions in the amounts of less than $0.1 million and $0.9 million, respectively.

With the adoption of Accounting Standard Codification 842 – Leases, the Company’s favorable lease assets and unfavorable lease liabilities, from a previous acquisition, were eliminated.  See Note 1 for further information concerning the Company’s adoption of Accounting Standard Codification 842 – Leases.

In prior years, the Company recorded favorable lease assets in conjunction with a previous acquisition; these favorable lease assets represent the values of operating leases acquired with favorable terms.  For the years ended December 31, 2018 and 2017, the Company recorded amortization expense of $1.4 million and $1.6 million, respectively, related to its amortizable intangible assets, which were included in “Other assets, net” on the accompanying Consolidated Balance Sheets as of December 31, 2018.

In prior years, the Company recorded unfavorable lease liabilities in conjunction with a previous acquisition; these unfavorable lease liabilities represent the values of operating leases acquired with unfavorable terms.  For the years ended December 31, 2018 and 2017, the Company recognized an amortized benefit of $0.9 million and $1.5 million, respectively, related to these unfavorable operating leases, which were included in “Other liabilities” on the accompanying Consolidated Balance Sheets as of December 31, 2018.

The following table identifies the estimated amortization expense and benefit of the Company’s intangibles for each of the next five years as of December 31, 2019 (in thousands):

	December 31, 2019
	Amortization Expense
2020	$	296
2021		275
2022		247
2023		218
2024		201
Total	$	1,237