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Goodwill and Intangible Assets
6 Months Ended
Jun. 30, 2011
Goodwill and Intangible Assets  
Goodwill and Intangible Assets

4.              Goodwill and Intangible Assets

 

Goodwill as of June 30, 2011 and December 31, 2010 was $11.6 million and $8.0 million, respectively.  The change is related to goodwill associated with the Forcelogix, Salesforce Assessments and Litmos acquisitions, as described in Note 2 above.

 

Intangible assets consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

 

June 30,

 

Amortization

 

 

 

2010

 

2010

 

 

 

Impairment

 

Amortization

 

2011

 

Period

 

 

 

Cost

 

Net

 

Additions

 

Charge

 

Expense

 

Net

 

(Years)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased technology

 

$

5,004

 

$

2,994

 

$

2,330

 

$

 

$

(1,068

)

$

4,256

 

5.51

 

Customer relationships

 

2,644

 

1,111

 

730

 

 

(297

)

1,544

 

8.75

 

Tradename

 

302

 

142

 

330

 

 

(23

)

449

 

7.56

 

Favorable Lease

 

40

 

27

 

 

 

(6

)

21

 

4.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total intangible assets, net

 

$

7,990

 

$

4,274

 

$

3,390

 

$

 

$

(1,394

)

$

6,270

 

 

 

 

Intangible assets include third-party software licenses used in the Company’s products, and acquired assets related to various business combinations. Costs incurred to renew or extend the term of a recognized intangible asset are expensed in the period incurred. Amortization expense related to intangible assets was $0.7 million and $1.4 million for the three and six months ended June 30, 2011, as compared to amortization expense of $0.4 million and $1.3 million for the three and six months ended June 30, 2010. Of these amounts, $0.5 million and $1.0 million was included in cost of revenues for the three and six months ended June 30, 2011; and $0.2 million and $0.9 million was included in cost of revenues for the three and six months ended June 30, 2010.

 

The Company’s intangible assets are amortized over their estimated useful lives of one to twelve years. As of June 30, 2011, total future expected amortization is as follows (in thousands):

 

 

 

Purchased

 

Customer

 

 

 

Favorable

 

 

 

Technology

 

Relationships

 

Tradename

 

Lease

 

 

 

 

 

 

 

 

 

 

 

Quarter Ending June 30:

 

 

 

 

 

 

 

 

 

Remainder of 2011

 

$

995

 

$

324

 

$

35

 

$

8

 

2012

 

1,152

 

166

 

68

 

13

 

2013

 

482

 

145

 

68

 

 

2014

 

415

 

145

 

68

 

 

2015

 

412

 

145

 

68

 

 

2016 and beyond

 

800

 

619

 

142

 

 

 

 

 

 

 

 

 

 

 

 

Total expected amortization expense

 

$

4,256

 

$

1,544

 

$

449

 

$

21