Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the activity related to Actua’s goodwill:



(in thousands)	Gross Carrying Amount		Accumulated Impairment Losses			Net Carrying Amount
Goodwill as of December 31, 2015	$	260,115	$	(39,656	)	$	220,459
Acquisitions⁽¹⁾	2,235		—			2,235
Goodwill as of September 30, 2016	$	262,350	$	(39,656	)	$	222,694

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⁽¹⁾	Refer to Note 4, “Consolidated Businesses” for details of acquisitions.

During the nine months ended September 30, 2016, goodwill related to GovDelivery was reclassified to the line item “Assets of discontinued operations” on Actua’s Consolidated Balance Sheets for all periods presented as a result of the execution of the GovDelivery Merger Agreement on September 20, 2016. The impact of the sale of GovDelivery is discussed in Note 5, “Discontinued Operations.” Based on the reclassification of goodwill related to GovDelivery as assets of discontinued operations, Actua retrospectively decreased the value of goodwill as of December 31, 2015 by $5.6 million.

As of September 30, 2016 and December 31, 2015, all of Actua’s goodwill was allocated to its vertical cloud segment.

Impairment

Actua completed its annual impairment testing in the fourth quarter of 2015. During that quarter, Actua reviewed the goodwill balance for impairment in accordance with its accounting policy and identified factors, including the market value of Actua’s Common Stock, indicating that the fair value of Actua’s goodwill could have fallen below its book value. Actua determined that the goodwill associated with the FolioDynamix reporting unit was partially impaired as of December 31, 2015 and recognized an impairment charge of $39.7 million, which was recorded within the “Impairment related and other” line item of the Consolidated Statements of Operations for the year ended December 31, 2015. Please refer to Note 7, “Fair Value Measurements,” for a further discussion of the fair value measurement relating to the FolioDynamix reporting unit impairment charge.

The completion of Actua's 2015 year-end impairment testing resulted in no impairments related to Actua’s other consolidated businesses, because the fair value of the reporting units exceeded their carrying value for each of those reporting units, including goodwill.

Intangible Assets

The following table summarizes Actua’s intangible assets:



(in thousands)		As of September 30, 2016
		Gross Carrying		Accumulated			Net Carrying
Intangible Assets	Useful Life	Amount		Amortization			Amount
Customer relationships	1-11 years	$	63,307	$	(19,947	)	$	43,360
Trademarks/trade names	3-11 years	22,898		(9,240		)	13,658
Technology	5-10 years	25,083		(9,678		)	15,405
Non-compete agreements	2-5 years	3,605		(3,533		)	72
		114,893		(42,398		)	72,495
Other intellectual property ⁽¹⁾	Indefinite	700		—			700
		$	115,593	$	(42,398	)	$	73,195



(in thousands)		As of December 31, 2015
		Gross Carrying		Accumulated			Net Carrying
Intangible Assets	Useful Life	Amount		Amortization			Amount
Customer relationships	1-11 years	$	61,820	$	(14,377	)	$	47,443
Trademarks/trade names	3-11 years	22,898		(6,829		)	16,069
Technology	5-10 years	23,086		(6,945		)	16,141
Non-compete agreements	2-5 years	3,605		(3,515		)	90
		111,409		(31,666		)	79,743
Other intellectual property ⁽¹⁾	Indefinite	700		—			700
		$	112,109	$	(31,666	)	$	80,443

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⁽¹⁾	Included in this line item is a domain name valued at $0.3 million that Actua currently believes has an indefinite life, and a domain name for which Actua estimated the residual value to approximate its carrying value of $0.4 million as of both September 30, 2016 and December 31, 2015.

During the nine months ended September 30, 2016, intangible assets related to GovDelivery were reclassified to the line item “Assets of discontinued operations” on Actua’s Consolidated Balance Sheets for all periods presented as a result of the execution of the GovDelivery Merger Agreement on September 20, 2016. The impact of the sale of GovDelivery is discussed in Note 5, “Discontinued Operations.”

Based on the reclassification of intangible assets related to GovDelivery as assets of discontinued operations, Actua retrospectively decreased net intangible assets as of December 31, 2015 by $9.0 million.

Amortization expense for intangible assets during the three and nine months ended September 30, 2016 was $3.5 million and $10.7 million, respectively. Amortization expense for intangible assets during the three and nine months ended September 30, 2015 was $3.3 million and $10.1 million, respectively.

During the nine months ended September 30, 2016, amortization expense related to GovDelivery was reclassified to the line item “Loss on discontinued operations” on Actua’s Consolidated Statement of Operations for all periods presented because of the execution of the GovDelivery Merger Agreement on September 20, 2016 and other relevant factors. The impact of the sale of GovDelivery is discussed in Note 5, “Discontinued Operations.”

Based on the reclassification of amortization expense related to GovDelivery, Actua retrospectively decreased amortization expense for the three and nine months ended September 30, 2016 and 2015 by $0.5 million, $0.5 million, $1.4 million and $1.3 million, respectively.

The remaining estimated amortization expense for the respective years is set forth as follows:



(in thousands)

2016 (remaining three months)	$	(3,533	)
2017	(13,810		)
2018	(12,345		)
2019	(10,806		)
2020	(9,387		)
Thereafter	(22,614		)
Remaining amortization expense	$	(72,495	)

- 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.

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