XML 31 R11.htm IDEA: XBRL DOCUMENT

Ownership Interests

9 Months Ended

Sep. 30, 2011

5. Ownership Interests

Equity Method Companies

The following unaudited summarized financial information relates to ICG's core and venture companies accounted for under the equity method of accounting as of September 30, 2011 and December 31, 2010, and for the three and nine months ended September 30, 2011 and 2010, and has been compiled from the financial statements of those core and venture companies.

Balance Sheets (Unaudited)


	September 30, 2011 ⁽¹⁾		December 31, 2010 ⁽²⁾
	(in thousands)
Cash and cash equivalents	$	12,728	$	53,160
Other current assets		42,444		63,299
Non-current assets		102,707		157,160

Total assets	$	157,879	$	273,619


Current liabilities	$	73,911	$	119,293
Non-current liabilities		9,877		22,586
Long-term debt		22,687		16,971
Stockholders' equity		51,404		114,769

Total liabilities and stockholders' equity	$	157,879	$	273,619

Total carrying value	$	49,635	$	83,829

⁽¹⁾	Includes (ICG voting ownership): Acquirgy (25%), Channel Intelligence (49%), Freeborders (31%), GoIndustry (26%), SeaPass (26%), StarCite (36%) and WhiteFence (36%).

⁽²⁾	Includes (ICG voting ownership): Acquirgy (25%), Channel Intelligence (50%), ClickEquations, Inc. ("ClickEquations") (33%), Freeborders (31%), GoIndustry (26%), Metastorm Inc. ("Metastorm") (33%), SeaPass (26%), StarCite (36%) and WhiteFence (36%).

As of September 30, 2011, ICG's aggregate carrying value in its equity method companies exceeded ICG's share of the net assets of those companies by approximately $33.5 million. Of this excess, $23.6 million has been allocated to goodwill, which is not amortized, and $9.9 million has been allocated to intangibles, which are generally being amortized over periods ranging from three to seven years. As of December 31, 2010, this excess was $47.9 million, $36.5 million of which was allocated to goodwill, and $11.4 million of which was allocated to intangibles. Amortization expense associated with these intangibles was $0.4 million and $1.6 million for the three and nine months ended September 30, 2011, respectively. Amortization expense associated with these intangibles was $0.6 million and $2.0 million for the three and nine months ended September 30, 2010, respectively. This amortization expense is included in the table below in the line item "Amortization of intangible assets" and is included in the line item "Equity loss" on ICG's Consolidated Statements of Operations.

Results of Operations (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011 ⁽¹⁾			2010 ⁽³⁾			2011⁽²⁾			2010 ⁽³⁾
	(in thousands)						(in thousands)
Revenue	$	39,808		$	59,718		$	132,377		$	174,403

Net income (loss)	$	(8,765	)	$	(7,935	)	$	(26,579	)	$	(26,253	)

Equity loss excluding impairments and amortization of intangible assets	$	(2,797	)	$	(2,308	)	$	(8,436	)	$	(8,904	)
Impairment charge of GoIndustry		—			—			—			(2,914	)
Amortization of intangible assets		(448	)		(644	)		(1,570	)		(2,049	)

Total equity loss	$	(3,245	)	$	(2,952	)	$	(10,006	)	$	(13,867	)

⁽¹⁾	Includes Acquirgy, Channel Intelligence, Freeborders, GoIndustry, SeaPass, StarCite and WhiteFence.

⁽²⁾	Includes Acquirgy, Channel Intelligence, ClickEquations (to June 14, 2011, the date of disposition), Freeborders, GoIndustry, Metastorm (to February 17, 2011, the date of disposition), SeaPass, StarCite and WhiteFence.

⁽³⁾	Includes Acquirgy, Channel Intelligence, ClickEquations, Freeborders, GoIndustry, Metastorm, SeaPass, StarCite and WhiteFence.

Impairments – Equity Companies

ICG performs ongoing business reviews of its equity and cost method companies to determine whether ICG's carrying value in these companies is impaired. ICG determined its carrying value in its equity and cost method companies was not impaired during the three and nine months ended September 30, 2011. During the nine months ended September 30, 2010, ICG recorded impairment charges of $2.9 million to reduce its basis in GoIndustry, a venture company accounted for under the equity method, as a result of declines in the fair value of ICG's equity holdings in that company during the relevant period. The carrying value of ICG's ownership interest in GoIndustry was $0.8 million and $2.3 million as of September 30, 2011 and December 31, 2010, respectively. The fair value of ICG's equity holdings in GoIndustry was $2.1 million and $3.5 million as of September 30, 2011 and December 31, 2010, respectively, based upon the per share closing price for GoIndustry's common stock on those respective dates.

Other Equity Company Information

On February 17, 2011, Metastorm, one of ICG's equity core companies, was sold to Open Text Corporation ("Open Text"). ICG's portion of the sale proceeds was $53.0 million; $51.3 million of those proceeds were received at closing on February 17, 2011, and the remaining proceeds were placed in escrow in connection with a customary indemnification holdback. As a result of this transaction, ICG recorded a gain of $24.9 million during the nine months ended September 30, 2011 that is included in the line item "Other income (loss)" on ICG's Consolidated Statements of Operations. During the three months ended September 30, 2011, $0.4 million of escrowed proceeds was paid to Open Text; ICG's share of this amount would have been $0.1 million. ICG will record a gain in the amount of the escrowed proceeds received, if any, in the period in which ICG is entitled to receive such proceeds, the amount is fixed or determinable and realization is assured.

On June 14, 2011, Channel Intelligence acquired substantially all of the assets of ClickEquations, primarily in exchange for Channel Intelligence preferred stock that was distributed to ClickEquations' stockholders, including ICG. The transaction diluted ICG's ownership in Channel Intelligence and, accordingly, ICG recorded a dilution gain of $0.5 million. Based on the difference between the specified value of the Channel Intelligence preferred stock received by ICG in the transaction and ICG's carrying value of ClickEquations on the transaction date, ICG recorded a loss on the sale of ClickEquations in the amount of $0.8 million. Both the dilution gain and the loss on the sale transaction are included in the line item "Other income (loss)" on ICG's Consolidated Statements of Operations for the nine months ended September 30, 2011.

In connection with the Channel Intelligence/ClickEquations transaction, ICG and Channel Intelligence entered into a loan agreement under which Channel Intelligence borrowed $1.0 million from ICG on June 14, 2011. The loan, which matures on June 14, 2014, bears interest at an annual rate of 15% and requires quarterly principal and interest payments beginning in the second quarter of 2012. Under the loan agreement, Channel Intelligence is entitled to borrow an additional $1.5 million from ICG on or before June 11, 2013 to facilitate its operations.

Other

During the three months ended September 30, 2011, ICG paid $5.5 million to acquire a 13% equity ownership interest in a cost method company. ICG's carrying value of its holdings in cost method companies was $9.7 million and $1.3 million as of September 30, 2011 and December 31, 2010, respectively. Those amounts are reflected in the line item "Cost method investments" on ICG's Consolidated Balance Sheets in the relevant periods.

ICG owns approximately 9% of Anthem Ventures Fund, L.P. (formerly eColony, Inc.) and Anthem Ventures Annex Fund, L.P. (collectively, "Anthem"), which invest in technology companies. ICG acquired its interest in Anthem in 2000 and currently has no carrying value in Anthem. Accordingly, the receipt of distributions from Anthem by ICG would result in a gain at the time ICG receives those distributions. During the nine months ended September 30, 2011, ICG received a distribution from Anthem in the amount of $1.4 million. See Note 10, "Other Income (Loss)."

Escrow Information

During the nine months ended September 30, 2011, ICG received a distribution of $0.5 million of previously escrowed funds that related to a sale of ICG's equity holdings in a former cost method company. See Note 10, "Other Income (Loss)."

As of September 30, 2011, ICG had 13,069 outstanding shares of Intercontinental Exchange, Inc. ("ICE") common stock remaining in escrow; the stock was valued at $1.5 million based on the September 30, 2011 closing stock price of ICE's common stock. Additionally, ICG had outstanding aggregate cash proceeds, subject to ongoing indemnity claims, of $2.2 million associated with escrowed proceeds from sales of former equity method and cost method companies, including the Metastorm sale. The release of additional escrowed proceeds, if any, to ICG would result in additional gains at the time ICG is entitled to such proceeds, the amount is fixed or determinable and realization is assured.