Comfort Inn 2014 Annual Report Download - page 84
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Table of Contents
Goodwill relates to the Company's franchising segment and was acquired in the following transactions (i) the purchase price of a minority interest in the
Company for consideration in excess of the recorded minority interest and (ii) the acquisition of 100% of the stock of Suburban Franchise Holding Company,
Inc. and its wholly-owned subsidiary, Suburban Franchise Systems, Inc. (iii) the acquisition of the remaining 60% ownership interest in Choice Hospitality
(India) Ltd. The following table details the carrying amount of our goodwill at December 31, 2014 and 2013:
Goodwill
$ 66,005
Accumulated impairment losses
(192)
Net carrying amount
$ 65,813
The components of franchise rights and other identifiable intangible assets at December 31, 2014 and 2013 are as follows:
Franchise rights, net of accumulated amortization
$ 6,069
Other identifiable intangible assets, net of accumulated
amortization
3,884
Total
$ 9,953
Franchise rights represent the unamortized purchase price assigned to acquire long-term franchise contracts. As of December 31, 2014 and 2013, the
unamortized balance relates primarily to the Econo Lodge, Suburban Extended Stay Hotel and Choice Hotels Australasia franchise rights. The franchise
rights are being amortized over lives ranging from 5 to 25 years. Amortization expense for the years ended December 31, 2014, 2013 and 2012 amounted to
$3.3 million, $3.5 million and $3.7 million, respectively. Franchise rights are net of accumulated amortization of $79.2 million and $76.4 million at
December 31, 2014 and 2013, respectively.
The estimated annual amortization expense related to the Company’s franchise rights for each of the years ending December 31, 2015 through 2019 is
as follows:
2015 $ 2.2
2016 $ 0.3
2017 $ 0.2
2018 $ —
2019 $ —
Other identifiable intangible assets consist of the cost of registering and renewing existing trademarks, acquiring new trademarks and intangible assets
recognized at fair market value and the acquisition of income producing real estate. The intangible assets pertaining to the acquisition of income producing
real estate total $2.2 million and were recognized in conjunction with the acquisition of an office building on December 31, 2014. These amounts represent
costs related to in-place leases which met the separability criterion in that they can be sold, transferred, licensed, rented, or exchanged in combination
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