ARKO Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

9. Goodwill and Intangible Assets

Goodwill

The Company reports revenue and operating results for three operating segments: retail, wholesale and GPMP (see Note 22 for a description of these operating segments). The following summarizes the activity in goodwill, by segment:


	Retail		GPMP		Total
	(in thousands)
Beginning balance, January 1, 2020	$	14,861	$	119,091	$	133,952
Goodwill attributable to acquisitions during the year		—		39,985		39,985
Ending balance, December 31, 2020	$	14,861	$	159,076	$	173,937
Goodwill attributable to acquisitions during the year		—		7,556		7,556
Goodwill adjustment – Empire Acquisition		—		16,155		16,155
Ending balance, December 31, 2021	$	14,861	$	182,787	$	197,648

Intangible Assets

Intangible assets consisted of the following:


	As of December 31,
	2021			2020
	(in thousands)
Wholesale fuel supply agreements	$	198,069		$	198,069
Trade names		34,988			32,494
Options to acquire ownership rights and develop stores		6,372			25,319
Other intangibles		20,641			18,105
Accumulated amortization – Wholesale fuel supply agreements		(23,923	)		(7,566	)
Accumulated amortization – Trade names		(29,583	)		(26,127	)
Accumulated amortization – Options to acquire ownership rights and develop stores		(3,140	)		(6,376	)
Accumulated amortization – Other intangibles		(17,431	)		(15,786	)
	$	185,993		$	218,132

Franchise rights of $0.2 million and $0.3 million as of December 31, 2021 and 2020, respectively, were not currently being amortized. Liquor licenses of $2.3 million and $0.8 million as of December 31, 2021 and 2020, respectively, were not being amortized. Options to acquire ownership rights, which expired in 2021, of $11.3 million as of December 31, 2020 were not being amortized.

As of December 31, 2021, the weighted average remaining amortization period for wholesale fuel supply agreements, trade names, options to acquire ownership rights and develop stores, and franchise rights are approximately 11 years, three years, seven years and 15 years, respectively. Amortization expense related to definite lived intangible assets was $23.6 million, $12.2 million and $9.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Estimated amortization expense for each of the next five years and thereafter is expected to be as follows:


Future Amortization Expense	Amount
	(in thousands)
2022	$	19,841
2023		18,146
2024		17,283
2025		17,021
2026		16,811
Thereafter		94,366
	$	183,468