Intangible Assets and Acquisitions

12 Months Ended

Dec. 31, 2016

Intangible Assets and Acquisitions [Abstract]

Note F — Intangible Assets and Acquisitions

Goodwill Impairment Charge

In February 2017, we completed step one of our annual goodwill impairment test as of December 31, 2016. We determined the fair value of our Acceptance Now segment exceeded its carrying value, 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 2016 we recognized an impairment charge of $151.3 million for the Core U.S. segment.

During 2015, we recorded a goodwill impairment charge of $1,170.0 million in our Core U.S. segment. Based on the results of our 2014 annual goodwill impairment assessment, we concluded no impairment of goodwill existed at December 31, 2014.

Intangible Assets

Amortizable intangible assets consist of the following:



		December 31, 2016				December 31, 2015
(Dollar amounts in thousands)	Avg. Life (years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	2	$	79,106	$	78,707	$	78,887	$	76,830
Vendor relationships	11	7,538		3,408		7,538		2,840
Non-compete agreements	3	6,746		6,023		6,746		5,724
Total other intangible assets		$	93,390	$	88,138	$	93,171	$	85,394

Aggregate amortization expense (in thousands):



Year Ended December 31, 2016	$	2,176
Year Ended December 31, 2015	$	3,333
Year Ended December 31, 2014	$	2,955

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
2017	$	1,195
2018	684
2019	678
2020	465
2021	445
Thereafter	1,785
Total amortization expense	$	5,252

At December 31, 2016, the amount of goodwill attributable to the Acceptance Now segment was approximately $55.3 million. 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.

A summary of the changes in recorded goodwill follows:



	Year Ended December 31,
(In thousands)	2016			2015
Beginning goodwill balance	$	206,122		$	1,370,459
Additions from acquisitions	1,442			12,942
Goodwill impairments and write-offs related to stores sold or closed	(152,239		)	(1,177,581		)
Post purchase price allocation adjustments	(17		)	302
Ending goodwill balance	$	55,308		$	206,122

Acquisitions

The following table provides information concerning the acquisitions made during the years ended December 31, 2016, 2015 and 2014.



	Year Ended December 31,
(Dollar amounts in thousands)	2016		2015		2014
Number of stores acquired remaining open	—		5		6
Number of stores acquired that were merged with existing stores	3		34		13
Number of transactions	3		24		26
Total purchase price	$	2,302	$	25,488	$	26,653
Amounts allocated to:
Goodwill	$	1,442	$	12,942	$	14,562
Non-compete agreements	—		1,166		—
Customer relationships	181		2,625		1,525
Rental merchandise	679		8,755		9,731
Property and other assets	—		—		835

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 for intangible assets added during the year ended December 31, 2016. Additions to goodwill due to acquisitions in 2016 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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