Goodwill and Other Intangible Assets:
Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired through various business combinations. The cost of acquired entities at the date of the acquisition is allocated to identifiable assets, and the excess of the total purchase price over the amounts assigned to identifiable assets has been recorded as goodwill.
As of January 1, 2013, we determined we had one reporting unit to test for impairment and completed our annual impairment review of goodwill in accordance with authoritative guidance and determined that no write-down in the carrying value was required as of that date. As previously discussed in Note 2, we reassessed our reporting unit structure as of November 30, 2013. Following the disposition of the software business on December 5, 2013, for purposes of performing our annual goodwill impairment test beginning January 1, 2014, we will have four reporting units, including a corporate reporting unit. In conjunction with the reassessment of our reporting unit structure, we assigned goodwill to the reporting units using a relative fair value method.
Intangible assets were as follows at December 31:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | 2012 |
(Millions) | | Gross Cost | | Accumulated Amortization | | Net Carrying Value | | Gross Cost | | Accumulated Amortization | | Net Carrying Value |
Franchise rights | | $ | 1,285.1 |
| | $ | (200.4 | ) | | $ | 1,084.7 |
| | $ | 1,285.1 |
| | $ | (157.6 | ) | | $ | 1,127.5 |
|
Customer lists | | 1,914.0 |
| | (991.9 | ) | | 922.1 |
| | 1,914.0 |
| | (747.6 | ) | | 1,166.4 |
|
Cable franchise rights | | 39.8 |
| | (27.0 | ) | | 12.8 |
| | 39.8 |
| | (25.9 | ) | | 13.9 |
|
Other | | 37.9 |
| | (37.4 | ) | | 0.5 |
| | 37.9 |
| | (34.4 | ) | | 3.5 |
|
Balance | | $ | 3,276.8 |
| | $ | (1,256.7 | ) | | $ | 2,020.1 |
| | $ | 3,276.8 |
| | $ | (965.5 | ) | | $ | 2,311.3 |
|
Intangible asset amortization methodology and useful lives were as follows as of December 31, 2013:
|
| | | | |
Intangible Assets | | Amortization Methodology | | Estimated Useful Life |
Franchise rights | | straight-line | | 30 years |
Customer lists | | sum of years digits | | 9 - 15 years |
Cable franchise rights | | straight-line | | 15 years |
Other | | straight-line | | 1 - 3 years |
Amortization expense for intangible assets subject to amortization was $291.2 million, $342.0 million and $220.6 million in 2013, 2012 and 2011, respectively. Amortization expense for intangible assets subject to amortization estimated as of December 31, 2013 was as follows for the years ended December 31:
|
| | | |
Year | (Millions) |
2014 | $ | 256.2 |
|
2015 | 223.0 |
|
2016 | 185.0 |
|
2017 | 157.1 |
|
2018 | 130.2 |
|
Thereafter | 1,068.6 |
|
Total | $ | 2,020.1 |
|
