Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

v3.20.2
Intangible Assets
6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

4.   Intangible Assets

We evaluate goodwill and tradenames for impairment annually or more frequently when an event occurs or circumstances change that indicates the carrying value of a reporting unit may not be recoverable. In March 2020, the Company announced a voluntary suspension of all cruise voyages for its three brands, which has subsequently been extended through October 31, 2020. Due to the temporary suspension of operations and decline in our stock price, we performed interim goodwill and tradename impairment tests as of March 31, 2020. We refer you to Note 9 – “Fair Value Measurements and Derivatives” for information on our valuation assumptions.

The changes in the carrying amount of goodwill for each reporting unit for the six months ended June 30, 2020 are as follows (in thousands):

Reporting Unit

Norwegian

Regent

Cruise

Oceania

Seven Seas

Total

Line

    

Cruises

    

Cruises

    

Goodwill

Balance, December 31, 2019

 

$

403,805

$

523,026

$

462,100

$

1,388,931

Impairment loss

 

(403,805)

 

(523,026)

 

(363,966)

 

(1,290,797)

Balance, June 30, 2020

$

$

$

98,134

$

98,134

We also impaired our tradenames for Oceania Cruises and Regent Seven Seas Cruises by $170.0 million and $147.0 million, respectively. Following these impairments, the carrying value of our tradenames was $500.5 million.

The carrying amounts of intangible assets subject to amortization are included within other long-term assets. The gross carrying amounts of intangible assets, the related accumulated amortization, the net carrying amounts and the weighted-average amortization periods of the Company’s intangible assets are listed in the following tables (in thousands, except amortization period):

June 30, 2020

Weighted-

Average

Gross Carrying 

Accumulated

Net Carrying

 Amortization

    

Amount

    

Amortization

    

Amount

    

Period (Years)

Customer relationships

$

120,000

$

(115,716)

$

4,284

 

6.0

License

 

750

 

(369)

 

381

 

10.0

Total intangible assets subject to amortization

$

120,750

$

(116,085)

$

4,665

 

  

December 31, 2019

    

    

    

Weighted-

Average

Gross Carrying

Accumulated

Net Carrying 

Amortization

    

Amount

    

Amortization

    

Amount

    

Period (Years)

Customer relationships

$

120,000

$

(110,169)

$

9,831

 

6.0

Licenses

 

750

 

(331)

 

419

 

10.0

Total intangible assets subject to amortization

$

120,750

$

(110,500)

$

10,250

 

  

The aggregate amortization expense for intangible assets is as follows (in thousands):

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2020

    

2019

    

2020

    

2019

Amortization expense

$

2,792

$

4,622

$

5,585

$

9,244

The following table sets forth the Company’s estimated aggregate amortization expense for each of the five years below (in thousands):

    

Amortization

Year Ended December 31, 

Expense

2021

$

75

2022

75

2023

75

2024

75

2025

44