Intangible Assets and Acquisitions

12 Months Ended

Dec. 31, 2015

Intangible Assets and Acquisitions [Abstract]

Note E — Intangible Assets and Acquisitions

Goodwill Impairment Charge

In December 2015, we completed step one of our annual goodwill impairment test as of October 1, 2015. We determined the fair value of our Acceptance Now segment significantly exceeded its carrying value (by over 100%), but the fair value of our Core U.S. segment was below its carrying value. We then performed step two of the impairment test for the Core U.S. segment and determined the carrying value of goodwill exceeded its implied fair value. Accordingly, in the fourth quarter of 2015 we recognized an impairment charge of $1,170.0 million.

Based on the results of our 2014 annual goodwill impairment assessment, we concluded no impairment of goodwill existed at December 31, 2014. During 2013, we recorded a goodwill impairment charge of $1.1 million in our Core U.S. segment as a result of the sustained underperformance of certain stores located in Canada.

Intangible Assets

Amortizable intangible assets consist of the following (in thousands):



		December 31, 2015				December 31, 2014
	Avg. Life (years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Non-compete agreements	3	$	6,746	$	5,724	$	5,585	$	5,435
Customer relationships	2	78,887		76,830		76,299		74,182
Vendor relationships	11	7,538		2,840		7,538		2,272
Total		$	93,171	$	85,394	$	89,422	$	81,889

Aggregate amortization expense (in thousands):



Year Ended December 31, 2015	$	3,333
Year Ended December 31, 2014	$	2,955
Year Ended December 31, 2013	$	2,491

Estimated amortization expense, assuming current intangible balances and no new acquisitions, for each of the years ending December 31, is as follows (in thousands):



	Estimated Amortization Expense
2016	$	2,638
2017	1,089
2018	678
2019	678
2020	465
Thereafter	2,229
	$	7,777

At December 31, 2015, the amount of goodwill allocated to the Core U.S. and Acceptance Now segments was approximately $150.8 million and $55.3 million, respectively. At December 31, 2014, the amount of goodwill allocated to the Core U.S. and Acceptance Now segments was approximately $1,316.1 million and $54.4 million, respectively.

A summary of the changes in recorded goodwill follows (in thousands):



	Year Ended December 31,
	2015			2014
Beginning Balance	$	1,370,459		$	1,364,549
Additions from acquisitions	12,942			14,562
Goodwill impairments and write-offs related to stores sold or closed	(1,177,581		)	(8,458		)
Post purchase price allocation adjustments	302			(194		)
Ending Balance	$	206,122		$	1,370,459

Acquisitions

The following table provides information concerning the acquisitions made during the years ended December 31, 2015, 2014 and 2013.



	Year Ended December 31,
	2015		2014		2013
	(Dollar amounts in thousands)
Number of stores acquired remaining open	5		6		47
Number of stores acquired that were merged with existing stores	34		13		38
Number of transactions	24		26		47
Total purchase price	$	25,488	$	26,653	$	44,229
Amounts allocated to:
Goodwill	$	12,942	$	14,562	$	28,282
Non-compete agreements	1,166		—		235
Customer relationships	2,625		1,525		2,959
Rental merchandise	8,755		9,731		11,843
Property and other assets	—		835		910

Purchase prices are determined by evaluating the average monthly rental income of the acquired stores and applying a multiple to the total for rent-to-own store acquisitions. All acquisitions have been accounted for as asset purchases, and the operating results of the acquired stores and accounts have been included in the financial statements since their date of acquisition.

The weighted average amortization period was approximately 21 months months for intangible assets added during the year ended December 31, 2015. Additions to goodwill due to acquisitions in 2015 were tax deductible.

- 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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