Thrifty Car Rental 2010 Annual Report Download - page 70

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During 2010 and 2009, the Company recorded a $0.4 million and $1.6 million, respectively, non-
cash charge (pretax) related primarily to the impairment of assets at its company-owned stores.
During 2008 upon completion of its long-lived assets impairment testing under ASC Topic 360,
“Property, Plant and Equipment”, the Company concluded that substantially all of the long-lived
assets in its Canadian operation were impaired. The Company recorded a $5.9 million non-cash
charge (pretax) related to this impairment in 2008.
8. SOFTWARE
2010 2009
Software 80,144$ 82,227$
Less accumulated amortization (55,967) (56,156)
24,177$ 26,071$
December 31,
(In Thousands)
Software is amortized over its estimated useful life. The aggregate amortization expense
recognized for software was $7.3 million, $8.0 million and $7.4 million for the years ended
December 31, 2010, 2009 and 2008, respectively. The estimated aggregate amortization
expense for software existing at December 31, 2010 for each of the next five years is as
follows: $7.0 million, $6.1 million, $4.2 million, $2.7 million and $1.8 million.
During 2010, 2009 and 2008, the Company wrote off $0.7 million, $1.0 million and $10.7 million
(pretax), respectively, of software no longer in use or considered impaired ($0.3 million, $0.6
million and $6.6 million after-tax, respectively).
9. GOODWILL AND REACQUIRED FRANCHISE RIGHTS
Under ASC Topic 350, the Company is required on at least an annual basis to perform a
goodwill impairment assessment, which requires, among other things, a reconciliation of
current equity market capitalization to stockholders’ equity. As a result of the decline in the
Company’s stock price during the first quarter of 2008, the Company’s total stockholders’ equity
exceeded its equity market capitalization including applying a reasonable control premium. The
Company was required to place greater emphasis on the current stock price than on
management’s long-range forecast in performing its impairment assessment. Based on this
evaluation, management concluded that the entire amount of goodwill was impaired and the
Company recorded a $281.2 million non-cash charge (pretax) related to the impairment of
goodwill ($223.5 million after-tax) during 2008, which represents the total accumulated
impairment loss. The Company had no goodwill on its balance sheet at December 31, 2010 or
2009.
Historically, when the Company acquired locations from franchisees, it established unamortized
separately identifiable intangible assets, referred to as reacquired franchise rights. Intangible
assets with indefinite useful lives, such as reacquired franchise rights, are not amortized, but
are subject to impairment testing annually or more frequently if events and circumstances
indicate there may be impairment. Based on this testing, management concluded that
reacquired franchise rights were impaired and the Company recorded a $69.0 million non-cash
charge (pretax) related to these impairments ($48.5 million after-tax) during 2008.
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