Goodwill and Intangibles

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 3 – Goodwill and Intangibles

We account for goodwill and other intangible assets under GAAP. Under GAAP, goodwill and intangible assets with indefinite useful lives are not amortized, but are instead tested for impairment (i) on at least an annual basis and (ii) when changes in circumstances indicate that the fair value of goodwill may be below its carrying value. Our goodwill totaled $39,805,349 at September 30, 2014 and December 31, 2013.    

As required by GAAP, we do not amortize goodwill and other intangible assets with indefinite lives, but test for impairment on an annual basis or earlier if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying amount. These circumstances include, but are not limited to (i) a significant adverse change in the business climate, (ii) unanticipated competition or (iii) an adverse action or assessment by a regulator. Determining impairment involves estimating the fair value of a reporting unit using a combination of (i) the income or discounted cash flows approach and (ii) the market approach that utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds its fair value, the amount of the impairment loss must be measured. The impairment loss is calculated by comparing the implied fair value of the reporting unit’s goodwill to its carrying amount. In calculating the implied fair value of the reporting unit’s goodwill, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied value of goodwill. We recognize impairment loss when the carrying amount of goodwill exceeds its implied fair value.

In 2013 and 2012, we engaged an independent valuation firm to complete our annual impairment testing for goodwill. For 2013 and 2012, the testing results indicated no impairment charge to goodwill as the determined fair value was sufficient to pass the first step of the impairment test.   

Our intangible assets subject to amortization consist of acquired customer relationships, regulatory rights, trade name and a non-competition agreement. We amortize intangible assets with finite lives over their respective estimated useful lives. Identifiable intangible assets that are subject to amortization are evaluated for impairment. In addition, we periodically reassess the carrying value, useful lives and classifications of our identifiable intangible assets. The components of our identified intangible assets are as follows:

			September 30, 2014			December 31, 2013
		Gross Carrying Amount				Gross Carrying Amount
	Useful Lives			Accumulated Amortization				Accumulated Amortization
Definite-Lived Intangible Assets
Customers Relationships	14-15 yrs	$	29,278,445	$	10,564,424	$	29,278,445	$	8,996,498
Regulatory Rights	15 yrs		4,000,000		1,799,985		4,000,000		1,599,987
Non-Competition Agreement	5 yrs		-		-		800,000		800,000
Trade Name	3-5 yrs		570,000		199,500		1,370,000		914,000
Indefinitely-Lived Intangible Assets
Video Franchise			3,000,000		-		3,000,000		-
Total		$	36,848,445	$	12,563,909	$	38,448,445	$	12,310,485
Net Identified Intangible Assets				$	24,284,536			$	26,137,960

Amortization expense related to the definite-lived intangible assets was $1,853,425 for both the nine months ended September 30, 2014 and 2013.  

Amortization expense for the remaining three months of 2014 and the five years subsequent to 2014 is estimated to be:

(October 1 – December 31) -	$617,808
2015 -	$2,471,233
2016 -	$2,469,256
2017 -	$2,469,083
2018 -	$2,355,083
2019 -	$2,355,083