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Other Intangible Assets, net
 9 Months Ended
Sep. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
Other Intangible Assets, net

6. Other Intangible Assets, net

The components of other intangible assets, net, at September 30, 2020 (unaudited) and December 31, 2019 were as follows:

 

 

 

 

 

 

 

September 30, 2020

 

 

December 31, 2019

 

(millions)

 

Weighted

Average

Life (Years)

 

 

Intangible

Assets,

Gross

 

 

Accumulated

Amortization

 

 

Intangible

Assets,

Net

 

 

Intangible

Assets,

Gross

 

 

Accumulated

Amortization

 

 

Intangible

Assets,

Net

 

Covenant not to compete

 

 

2.3

 

 

$

2.9

 

 

$

(1.1

)

 

$

1.8

 

 

$

2.9

 

 

$

(0.3

)

 

$

2.6

 

Trade names and trademarks

 

 

3.2

 

 

 

0.9

 

 

 

(0.1

)

 

 

0.8

 

 

 

5.6

 

 

 

(1.2

)

 

 

4.4

 

Proprietary know how

 

 

3.9

 

 

 

3.8

 

 

 

(0.2

)

 

 

3.6

 

 

 

10.4

 

 

 

(2.0

)

 

 

8.4

 

Management contract rights

 

 

8.3

 

 

 

81.0

 

 

 

(41.3

)

 

 

39.7

 

 

 

81.0

 

 

 

(37.4

)

 

 

43.6

 

Customer relationships

 

 

13.2

 

 

 

21.5

 

 

 

(2.1

)

 

 

19.4

 

 

 

100.4

 

 

 

(7.2

)

 

 

93.2

 

Other intangible assets, net (1)

 

 

9.4

 

 

$

110.1

 

 

$

(44.8

)

 

$

65.3

 

 

$

200.3

 

 

$

(48.1

)

 

$

152.2

 

 

(1)  Intangible assets have estimated remaining lives between one and fourteen years.

The table below shows the amortization expense related to intangible assets for the three and nine months ended September 30, 2020 and 2019, respectively, and is included in Depreciation and amortization within the Condensed Consolidated Statements of Income:

 

 

 

Three Months Ended

 

Nine Months Ended

 

(millions) (unaudited)

 

September 30, 2020

 

 

September 30, 2019

 

September 30, 2020

 

 

September 30, 2019

 

Amortization expense

 

$

3.3

 

 

$

3.8

 

$

11.1

 

 

$

11.4

 

 

As discussed in Note 1. Significant Accounting Policies and Practices, the Company determined impairment testing triggers had occurred for certain intangible assets. The fair value of these intangible assets were classified as Level 3 in the fair value hierarchy. See Note 1. Significant Accounting Policies and Practices for additional detail on the Company's policy for assessing Other Intangible Assets, net, for impairment.   

 

Due to the impact of COVID-19 on the Company's expected future operating cash flows, the Company analyzed undiscounted cash flows as of June 30, 2020 and determined the carrying value for a proprietary know how asset was higher than its projected undiscounted cash flows. As a result, the Company recorded $3.7 million of impairment charges within the Aviation segment during the nine months ended September 30, 2020 that are recognized in Impairment of goodwill and intangible assets in the Condensed Consolidated Statements of Income.

 

Additionally, due to the termination of certain contracts within the Aviation segment during August 2020 and the impact of COVID-19 on the Company's expected future operating cash flows, the Company analyzed undiscounted cash flows as of August 31, 2020 and determined the carrying values for the customer relationships and trade names and trademarks were higher than their projected undiscounted cash flows. As a result, the Company recorded $72.1 million of impairment charges within the Aviation segment during the three months ended September 30, 2020 that are recognized in Impairment of goodwill and intangible assets in the Condensed Consolidated Statements of Income.

 

Additional information on the impairment analysis and the impairment charge recognized during the three and nine months ended September 30, 2020 is provided below:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(millions) (unaudited)

 

September 30, 2020

 

September 30, 2019

 

 

September 30, 2020

 

September 30, 2019

 

Customer relationships (1)

 

$

69.2

 

$

—

 

 

$

69.2

 

$

—

 

Trade names and trademarks (1)

 

 

2.9

 

 

—

 

 

 

2.9

 

 

—

 

Proprietary know how (2)

 

 

—

 

 

—

 

 

 

3.7

 

 

—

 

Total impairment of intangible assets

 

$

72.1

 

$

—

 

 

$

75.8

 

$

—

 

 

(1)

In connection with the analysis performed on August 31, 2020, customer relationships were valued using the multi-period earnings method and determined to have a carrying value of $73.8 million and a fair value of $4.6 million, while trade names and trademarks were valued using the royalty savings approach and determined to have a carrying value of $3.4 million and a fair value of $0.5 million, respectively.

(2)

In connection with the analysis performed on June 30, 2020, Proprietary know how were valued using the multi-period excess earnings method and determined to have a carrying value of $7.6 million and a fair value of $3.9 million, respectively.

No impairment charges were recorded during the three and nine months ended September 30, 2019.