Goodwill and Other Intangibles

3 Months Ended

Mar. 31, 2012

NOTE 3—GOODWILL AND OTHER INTANGIBLES

Goodwill:

Goodwill is reviewed annually on November 30 for impairment, or more frequently if events or changes in business conditions indicate that impairment may exist. Goodwill is not amortizable for financial statement purposes. During the three months ended March 31, 2012, the Company recorded an increase in goodwill of less than $0.1 million, resulting from adjustments to purchase price allocations related to small acquisitions, slightly offset by the excess tax benefit related to exercises of stock options acquired in the acquisition of CSK Auto Corporation ("CSK"). The Company did not record any goodwill impairment during the three months ended March 31, 2012.

As of March 31, 2012, and December 31, 2011, other than goodwill, the Company did not have any unamortizable assets.

Intangibles other than goodwill:

The following table identifies the components of the Company's amortizable intangibles as of March 31, 2012, and December 31, 2011 (in thousands):


	Cost				Accumulated Amortization (Expense) Benefit
	March 31, 2012		December 31, 2011		March 31, 2012		December 31, 2011
Amortizable intangible assets:
Favorable leases	$	51,660	$	51,660	$	(25,284)	$	(23,969)
Non-compete agreements		682		793		(350)		(427)
Total amortizable intangible assets	$	52,342	$	52,453	$	(25,634)	$	(24,396)

Unfavorable leases	$	49,380	$	49,380	$	28,028	$	26,560

The Company recorded favorable lease assets in conjunction with the acquisition of CSK; these favorable lease assets represent the values of operating leases acquired with favorable terms. These favorable leases had an estimated weighted-average remaining useful life of approximately 10.1 years as of March 31, 2012. For the three months ended March 31, 2012 and 2011, the Company recorded amortization expense of $1.3 million, and $1.5 million, respectively, related to its amortizable intangible assets, which are included in "Other assets, net" on the accompanying Condensed Consolidated Balance Sheets.

The Company recorded unfavorable lease liabilities in conjunction with the acquisition of CSK; these unfavorable lease liabilities represent the values of operating leases acquired with unfavorable terms. These unfavorable leases had an estimated weighted-average remaining useful life of approximately 5.6 years as of March 31, 2012. For the three months ended March 31, 2012 and 2011, the Company recognized an amortization benefit of $1.5 million, and $1.7 million, respectively, related to these unfavorable operating leases, which are included in "Other liabilities" on the accompanying Condensed Consolidated Balance Sheets. These unfavorable lease liabilities are not included as a component of the Company's closed store reserves, which are discussed in Note 5.

- 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.

+ References+ Details