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GOODWILL AND INTANGIBLE ASSETS
9 Months Ended
Sep. 30, 2011
GOODWILL AND INTANGIBLE ASSETS 
GOODWILL AND INTANGIBLE ASSETS

(5) GOODWILL AND INTANGIBLE ASSETS

 

The Company reviews goodwill and indefinite-lived intangible assets for impairment at least annually and more often when impairment indicators are present.  The Company performs its annual impairment test during the fourth quarter.  Under the accounting guidance for goodwill and other intangible assets, goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value.

 

Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test is judgmental in nature and often involves the use of significant estimates and assumptions.  These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the extent of such charge.  The Company’s estimates of fair value utilized in the goodwill impairment tests may be based upon a number of factors, including assumptions about the projected future cash flows, discount rate, growth rate, determination of market comparables, economic conditions, or changes to the Company’s business operations.  Such changes may result in impairment charges recorded in future periods.  Also see Note 9 — Fair Value Measurements.

 

The following is a summary of changes in the Company’s goodwill by business segment, for the nine months ended September 30, 2011 and 2010 (in thousands):

 

 

 

Membership
Services

 

Media

 

Retail

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

Gross goodwill

 

$

56,030

 

$

46,884

 

$

47,601

 

$

150,515

 

Impairment prior to January 1, 2011

 

(6,086

)

(46,884

)

(47,601

)

(100,571

)

Balance as of January 1, 2011

 

49,944

 

 

 

49,944

 

Impairments

 

 

 

 

 

Balance as of September 30, 2011

 

$

49,944

 

$

 

$

 

$

49,944

 

 

 

 

 

 

 

 

 

 

 

Gross goodwill

 

$

56,030

 

$

46,884

 

$

47,601

 

$

150,515

 

Impairment prior to January 1, 2010

 

(6,086

)

(46,884

)

(47,601

)

(100,571

)

Balance as of January 1, 2010

 

49,944

 

 

 

49,944

 

Impairments

 

 

 

 

 

Balance as of September 30, 2010

 

$

49,944

 

$

 

$

 

$

49,944

 

 

The Company’s reporting units are generally consistent with the operating segments underlying the reporting segments identified in Note 3 — Disclosures about Segments of an Enterprise and Related Information.

 

Finite-lived intangible assets, related accumulated amortization and weighted average useful life consisted of the following at September 30, 2011 (in thousands, except as noted):

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

Average Useful

 

 

 

Accumulated

 

 

 

 

 

Life (in years)

 

Gross

 

Amortization

 

Net

 

 

 

 

 

 

 

 

 

 

 

Membership and customer lists

 

6

 

$

31,910

 

$

(28,577

)

$

3,333

 

Non-compete and deferred consulting agreements

 

15

 

18,275

 

(17,753

)

522

 

Deferred financing costs

 

6

 

15,396

 

(2,923

)

12,473

 

 

 

 

 

$

65,581

 

$

(49,253

)

$

16,328