Intangible Assets And Goodwill

12 Months Ended

Aug. 31, 2014

Intangible Assets And Goodwill [Abstract]

4.INTANGIBLE ASSETS AND GOODWILL

Our intangible assets were comprised of the following (in thousands):



		Gross Carrying		Accumulated		Net Carrying
AUGUST 31, 2014		Amount		Amortization		Amount
Definite-lived intangible assets:
License rights	$	27,000	$	(14,915)	$	12,085
Acquired curriculum		58,555		(39,009)		19,546
Customer lists		16,827		(15,953)		874
Internally developed software		2,049		(1,025)		1,024
Trade names		1,250		(602)		648
		105,681		(71,504)		34,177
Indefinite-lived intangible asset:
Covey trade name		23,000		-		23,000
	$	128,681	$	(71,504)	$	57,177

AUGUST 31, 2013
Definite-lived intangible assets:
License rights	$	27,000	$	(13,978)	$	13,022
Acquired curriculum		58,427		(37,550)		20,877
Customer lists		16,685		(15,426)		1,259
Internally developed software		2,049		(341)		1,708
Trade names		1,219		(431)		788
		105,380		(67,726)		37,654
Indefinite-lived intangible asset:
Covey trade name		23,000		-		23,000
	$	128,380	$	(67,726)	$	60,654

Our intangible assets are amortized over the estimated useful life of the asset. The range of remaining estimated useful lives and weighted-average amortization period over which we are amortizing the major categories of definite-lived intangible assets at August 31, 2014 were as follows:


Category of Intangible Asset	Range of Remaining Estimated Useful Lives	Weighted Average Original Amortization Period

License rights	12 years	30 years
Curriculum	5 to 12 years	26 years
Customer lists	3 to 5 years	14 years
Internally developed software	2 years	3 years
Trade names	3 to 5 years	5 years

On April 10, 2014, we acquired the assets of Red Tree, Inc. (Red Tree, and refer to Note 18). Through the acquisition of Red Tree, we acquired customer lists and content that we believe will be synergistic with our existing offerings. Based on the allocation of the purchase price, acquired intangible assets consisted of the following, which are being amortized over five years (in thousands):



Category of			Estimated Useful
Intangible Asset	Amount		Life

Tradename	$	31	5 years
Customer lists		142	5 years
Content		232	5 years
	$	405

Our goodwill balance at August 31, 2014 was generated from the fiscal 2009 acquisition of CoveyLink Worldwide, LLC (CoveyLink), the fiscal 2013 acquisition of NinetyFive 5, and the fiscal 2014 acquisition of Red Tree, Inc. The previous owners of CoveyLink, which includes a brother of one of our executive officers, were entitled to earn annual contingent payments based upon earnings growth over the subsequent five years. These contingent payments were classified as goodwill on our consolidated balance sheets when paid according to previously existing business combination guidance. Our consolidated goodwill changed as follows during fiscal 2014 and 2013 (in thousands):



Balance at August 31, 2012	$	9,172
Contingent earn out payment on
CoveyLink acquisition		2,235
Acquisition of NinetyFive 5		4,728
Accumulated impairments		-
Balance at August 31, 2013		16,135
Contingent earn out payment on
CoveyLink acquisition		3,456
Acquisition of Red Tree, Inc.		50
Accumulated impairments		-
Balance at August 31, 2014	$	19,641

The goodwill generated by the Red Tree and NinetyFive 5 acquisitions are primarily attributable to the organization, methodologies, and curriculums that complement our existing practices and content. All of the goodwill generated from the acquisition of Red Tree and NinetyFive 5 is expected to be deductible for income tax purposes.

Our aggregate amortization expense from definite-lived intangible assets totaled $4.0 million, $3.2 million, and $2.5 million for fiscal years 2014, 2013, and 2012. Amortization expense from our intangible assets over the next five years is expected to be as follows (in thousands):



YEAR ENDING
AUGUST 31,
2015	$	3,730
2016		3,266
2017		2,886
2018		2,731
2019		2,491

- 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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