Goodwill, Trademarks, and Other Intangible Assets

3 Months Ended

Mar. 31, 2013

Goodwill, Trademarks, and Other Intangible Assets

Goodwill, Trademarks, and Other Intangible Assets

(6) Goodwill, Trademarks, and Other Intangible Assets

Intangible assets other than goodwill and indefinite-lived trademarks are amortized on a straight-line basis over their estimated useful lives. Deferred financing costs are amortized over the repayment periods of the underlying debt. Goodwill and indefinite-lived trademarks are not amortized but are subject to impairment testing. We conduct our annual impairment test on July 31st each year, and also when events and circumstances indicate that the fair value of any of our reporting units may be below the unit’s carrying value. We consider our band division, piano division, and our online music business to be separate reporting units.

Our annual impairment testing date of July 31st was selected to coincide with the timing of our fall budgeting and planning process, which provides multi-year cash flows that are used to conduct our annual impairment testing. No other events or circumstances occurred subsequent to our 2012 annual impairment test which would have indicated that our assets may be impaired.

The changes in carrying amounts of goodwill and trademarks are as follows:

	Piano			Band		Total
Goodwill:
Balance, January 1, 2013	$	22,916		$	—	$	22,916
Foreign currency translation impact	(384		)	—		(384		)
Balance, March 31, 2013	$	22,532		$	—	$	22,532

Trademarks:
Balance, January 1, 2013	$	8,846		$	4,574	$	13,420
Foreign currency translation impact	(121		)	—		(121		)
Balance, March 31, 2013	$	8,725		$	4,574	$	13,299

Our cumulative impairment losses are $8.8 million associated with band division goodwill, $1.3 million related to band division trademarks, $2.7 million attributable to online music business goodwill, and $1.2 million associated with online music business trademarks.

We also carry certain intangible assets that are amortized. Once fully amortized, these assets are removed from both the gross and accumulated amortization balances. These assets consist of the following:

	March 31, 2013			December 31, 2012
Gross deferred financing costs	$	3,932		$	3,932
Accumulated amortization	(3,231		)	(3,130		)
Deferred financing costs, net	$	701		$	802

Gross non-compete agreements	$	250		$	250
Accumulated amortization	(244		)	(231		)
Non-compete agreements, net	$	6		$	19

Gross customer relationships	$	854		$	843
Accumulated amortization	(546		)	(506		)
Customer relationships, net	$	308		$	337

Gross website and developed technology	$	2,176		$	2,176
Accumulated amortization	(2,115		)	(2,006		)
Website and developed technology, net	$	61		$	170

Total gross other intangibles	$	7,212		$	7,201
Accumulated amortization	(6,136		)	(5,873		)
Total other intangibles, net	$	1,076		$	1,328

The weighted-average amortization period for deferred financing costs is six years, and the weighted-average amortization period for all other amortizable intangibles is approximately five years. The remaining weighted-average amortization period for deferred financing costs is approximately two years and the remaining weighted-average amortization period for all other amortizable intangibles is approximately one year. Total amortization expense, which includes amortization of deferred financing costs, is as follows:

	Three Months Ended March 31,
	2013		2012
Amortization expense	$	263	$	262

The following table shows the total estimated amortization expense for the remainder of 2013 and beyond:

Remainder of 2013	$	446
2014	323
2015	239
2016	51
2017	13
Thereafter	4
Total	$	1,076

- 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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