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Goodwill and Other Intangible Assets, Net
12 Months Ended
Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets, Net
Goodwill and Other Intangible Assets, Net
Changes in the Company’s goodwill balances recognized during the fiscal years ended December 31, 2012 and January 2 1, 2012 were as follows (in thousands):
 
 
 
January 1, 2012
 
 
Foreign
currency
translation
 
December 31, 2012
U.S. Corrections & Detention
 
$
170,376

 
 
$

 
$
170,376

GEO Community Services
 
319,159

 
 

 
319,159

International Services
 
761

 
 
12

 
773

Total Goodwill
 
$
490,296

 
 
$
12

 
$
490,308



 
 
January 2, 2011
 
 
Acquisitions
Foreign
currency
translation
 
January 1, 2012
U.S. Corrections & Detention
 
$
170,376

 
 
$

$

 
$
170,376

GEO Community Services
 
47,686

 
 
271,473


 
319,159

International Services
 
762

 
 

(1
)
 
761

Total Goodwill
 
$
218,824

 
 
$
271,473

$
(1
)
 
$
490,296

Historically, goodwill included $17.8 million of goodwill related to RTS. In connection with the Company's divestiture of RTS, the goodwill was included in loss from discontinued operations in the accompanying consolidated statement of comprehensive income for the fiscal year ended December 31, 2012. As of January 1, 2012 , goodwill related to RTS has been presented in Non-Current Assets of Discontinued Operations. Refer to Note 1 - Summary of Business Organization, Operations and Significant Accounting Policies and Note 2 - Discontinued Operations for additional information.
Intangible assets consisted of the following as of December 31, 2012 and January 1, 2012 (in thousands):
 
 
 
December 31, 2012
 
January 1, 2012
 
Weighted Average Useful Life (years)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
 
Gross
Carrying
Amount
Accumulated Amortization
Net Carrying Amount
Facility management contracts
13.4
$
151,913

$
(33,141
)
$
118,772

 
$
152,004

$
(21,010
)
$
130,994

Covenants not to compete
2
8,570

(8,495
)
75

 
8,570

(6,348
)
2,222

Technology
7
21,200

(5,729
)
15,471

 
21,200

(2,700
)
18,500

Trade names
Indefinite
44,000


44,000

 
44,000


44,000

Total acquired intangible assets
 
$
225,683

$
(47,365
)
$
178,318

 
$
225,774

$
(30,058
)
$
195,716


The accounting for recognized intangible assets is based on the useful lives to the reporting entity. Intangible assets with finite useful lives are amortized over their useful lives and intangible assets with indefinite useful lives are not amortized. The Company estimates the useful lives of its intangible assets taking into consideration (i) the expected use of the asset by the Company, (ii) the expected useful lives of other related assets or groups of assets, (iii) legal or contractual limitations, (iv) the Company's historical experience in renewing or extending similar arrangements, (v) the effects of obsolescence, demand, competition and other economic factors and (vi) the level of maintenance expenditures required to obtain the expected cash flows from the asset.
Historically, intangible assets included $3.8 million of facility management contracts related to RTS. In connection with the Company's divestiture of RTS, the facility management contracts were included in loss from discontinued operations in the accompanying consolidated statement of comprehensive income for the fiscal year ended December 31, 2012. As of January 1, 2012, the intangible assets related to RTS have been presented in Non-Current Assets of Discontinued Operations. Refer to Note 1 - Summary of Business Organization, Operations and Significant Accounting Policies and Note 2 - Discontinued Operations for additional information.
Amortization expense was $18.1 million, $18.0 million and $4.8 million for the fiscal years ended December 31, 2012, January 1, 2012 and January 2, 2011, respectively, and primarily related to the U.S. Corrections & Detention and GEO Community Services segments’ amortization of intangible assets for acquired management contracts. The Company relies on its historical experience in determining the useful life of facility management contracts. The Company makes assumptions related to acquired facility management contracts based on the competitive environment for individual contracts, our historical success rates in retaining contracts, the supply of available beds in the market, changes in legislation, the projected profitability of the facilities and other market conditions. As of December 31, 2012, the weighted average period before the next contract renewal or extension for the facility management contracts was approximately 1.2 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the contractual periods.
Estimated amortization expense related to the Company’s finite-lived intangible assets for fiscal year 2013 through fiscal year 2017 and thereafter is as follows (in thousands):
 
Fiscal Year
Total  Expense
Amortization
2013
$
14,623

2014
14,547

2015
14,547

2016
14,547

2017
14,515

Thereafter
61,539

 
 
 
$
134,318