Intangible Assets, Other Assets, Net and Goodwill

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSETS, OTHER ASSETS, NET AND GOODWILL: [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

INTANGIBLE ASSETS, OTHER ASSETS AND GOODWILL:

Intangible Assets

Intangible assets as of December 31, 2013 and 2012 were as follows (dollars in thousands):



	2013
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net		Weighted Average Amortization Period (in Years)
Intangible assets:
Amortizable intangible assets:
Service agreements	$	37,622	$	13,547	$	24,075	28
Customer contracts and relationships	178,603		22,899		155,704		36
Track access agreements	430,241		32,116		398,125		43
Total amortizable intangible assets	$	646,466	$	68,562	$	577,904	40
Non-amortizable intangible assets:
Perpetual track access agreements					35,891
Operating license					138
Total intangible assets, net					$	613,933

	2012
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net		Weighted Average Amortization Period (in Years)
Intangible assets:
Amortizable intangible assets:
Service agreements	$	37,622	$	12,214	$	25,408	28
Customer contracts and relationships	150,532		17,421		133,111		35
Track access agreements	492,494		16,830		475,664		44
Total amortizable intangible assets	$	680,648	$	46,465	$	634,183	41
Non-amortizable intangible assets:
Perpetual track access agreements					35,891
Operating license					132
Total intangible assets, net					$	670,206

The Company expenses costs incurred to renew or extend the term of its track access agreements.

In its final determination of fair values of the assets acquired from RailAmerica, the Company assigned $120.5 million to amortizable customer contracts and relationships and $300.7 million to amortizable track access agreements, which were included in the Company's intangible assets as of December 31, 2013. In its preliminary determination of fair values, the Company had assigned $92.6 million to amortizable customer contracts and relationships and $358.5 million to amortizable track access agreements, which were included in the Company's intangible assets as of December 31, 2012. Based on the Company's estimate of their expected economic life, these intangibles are being amortized on a straight-line basis over a weighted average life of 42 years.

The perpetual track access agreements on one of the Company’s railroads have been determined to have an indefinite useful life and, therefore, are not subject to amortization. However, these assets are tested for impairment annually or in interim periods if events indicate possible impairment.

In the years ended December 31, 2013, 2012 and 2011, the aggregate amortization expense associated with intangible assets was $22.5 million, $6.8 million and $6.8 million, respectively. The Company estimates the future aggregate amortization expense related to its intangible assets as of December 31, 2013 will be as follows for the periods presented (dollars in thousands):



2014	$	22,227
2015	22,158
2016	22,109
2017	22,109
2018	20,303
Thereafter	468,998
Total	$	577,904

Other Assets

Other assets as of December 31, 2013 and 2012 were as follows (dollars in thousands):



	2013
	Gross Carrying Amount		Accumulated Amortization		Other Assets, Net		Weighted Average Amortization Period (in Years)
Other assets:
Deferred financing costs	$	43,650	$	11,930	$	31,720	4
Other assets	52,241		14		52,227		0
Total other assets, net	$	95,891	$	11,944	$	83,947



	2012
	Gross Carrying Amount		Accumulated Amortization		Other Assets, Net		Weighted Average Amortization Period (in Years)
Other assets:
Deferred financing costs	$	42,844	$	2,352	$	40,492	5
Other assets	16,535		14		16,521		0
Total other assets, net	$	59,379	$	2,366	$	57,013

In the years ended December 31, 2013, 2012 and 2011, the Company amortized $10.2 million, $7.0 million and $2.5 million of deferred financing costs as an adjustment to interest expense. Deferred financing costs are amortized as an adjustment to interest expense over the terms of the related debt using the effective-interest method for the term debt and the straight-line method for the revolving credit facility portion of debt. The 2013 amortization amount included $0.5 million associated with the write-off of deferred financing costs as a result of the prepayment of the remaining balance on the Canadian term loan. The 2012 amortization amount included $3.2 million associated with the write-off of deferred financing fees as a result of the October 2012 refinancing of the Company's senior credit facility and senior notes. The 2011 amortization amount included $0.5 million associated with the write-off of deferred financing fees as a result of the July 2011 refinancing of the Company's senior credit facility then in effect.

As of December 31, 2013, the Company estimated the future interest expense related to amortization of its deferred financing costs will be as follows for the periods presented (dollars in thousands):



2014	$	9,202
2015	8,639
2016	8,167
2017	5,712
Total	$	31,720

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012 were as follows (dollars in thousands):



	2013			2012
Goodwill:
Balance at beginning of period	$	634,953		$	160,277
Goodwill acquired	—			474,115
Purchase accounting adjustments	(3,087		)	—
Currency translation adjustment	(1,404		)	561
Balance at end of period	$	630,462		$	634,953

The Company’s goodwill for the years ended December 31, 2013 and 2012 was attributable to the Company’s North American & European operating segment. In its final determination of fair values of the assets and liabilities acquired from RailAmerica, the Company reduced goodwill by $3.1 million during the year ended December 31, 2013. In the preliminary determination of fair values of the assets and liabilities acquired from RailAmerica, the Company had assigned $474.1 million to goodwill as of December 31, 2012. Of the total amount of goodwill acquired from the RailAmerica acquisition, approximately $30 million will be deductible for income tax purposes. The Company tests its goodwill and other indefinite-lived intangibles for impairment annually or in interim periods if events indicate possible impairmen

- 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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