5. Ownership Interests and Cost Method Investments

Equity Method Companies

The following unaudited summarized financial information relates to ICG's companies accounted for under the equity method of accounting as of March 31, 2012 and December 31, 2011 and for the three-month periods ended March 31, 2012 and 2011. This aggregate information has been compiled from the financial statements of those companies.

Balance Sheets (Unaudited)


	March 31, 2012⁽¹⁾		December 31, 2011⁽²⁾
	(in thousands)
Cash and cash equivalents	$	20,254	$	13,687
Other current assets		29,254		28,767
Non-current assets		69,890		69,218

Total assets		119,398	$	111,672


Current liabilities	$	50,981	$	47,125
Non-current liabilities		7,078		10,770
Long-term debt		20,980		18,959
Stockholders' equity		40,359		34,818

Total liabilities and stockholders' equity	$	119,398	$	111,672

Total carrying value	$	46,362	$	39,052

⁽¹⁾	Includes (ICG voting ownership): Acquirgy (25%), Channel Intelligence (49%), Freeborders (31%), GoIndustry (26%), SeaPass (38%) and WhiteFence (36%).

⁽²⁾	Includes (ICG voting ownership): Acquirgy (25%), Channel Intelligence (49%), Freeborders (31%), GoIndustry (26%), SeaPass (26%) and WhiteFence (36%).

As of March 31, 2012, ICG's aggregate carrying value in equity method companies exceeded ICG's share of the net assets of those equity method companies by approximately $34.3 million. Of this excess, $28.5 million was allocated to equity method goodwill, which is not amortized, and $5.8 million was allocated to equity method intangibles, which are generally being amortized over three to seven years. As of December 31, 2011, ICG's aggregate carrying value in equity method companies exceeded ICG's share of the net assets of these equity method companies by approximately $28.4 million. Of this excess, $24.6 million was allocated to equity method goodwill, which is not amortized, and $3.8 million was allocated to equity method intangibles, which are generally being amortized over three to seven years.

Results of Operations (Unaudited)


	Three Months Ended March 31,
	2012⁽¹⁾			2011 ⁽²⁾
	(in thousands)
Revenue	$	31,007		$	50,112

Net income (loss)	$	(5,467	)	$	(9,896	)

Equity income (loss) excluding impairments and amortization of intangible assets	$	(2,038	)	$	(2,990	)
Amortization of intangible assets		(265	)		(586	)

Total equity income (loss)	$	(2,303	)	$	(3,576	)

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

⁽²⁾	Includes Acquirgy, Channel Intelligence, ClickEquations, Inc. ("ClickEquations"), Freeborders, GoIndustry, Metastorm Inc. ("Metastorm") (to February 17, 2011, the date of disposition), SeaPass, StarCite, Inc. ("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 those companies is impaired. ICG determined its carrying value in its equity and cost method companies was not impaired during the three months ended March 31, 2012 and 2011.

Other Equity Company Information

During the three months ended March 31, 2012, ICG participated in a follow-on financing transaction for SeaPass. At that time, ICG acquired $9.0 million of SeaPass preferred stock; as a result of the transaction, ICG's ownership in SeaPass increased from 26% to 38%. ICG completed a purchase price allocation related to this transaction, which resulted in an allocation of the purchase price to equity method intangibles that will be amortized over five years and equity method goodwill, which is not amortized.

On February 17, 2011, Metastorm, one of ICG's equity core companies, was sold to Open Text Corporation. 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. ICG recorded a gain on the Metastorm sale of $24.9 million; that gain is included in the line item "Other income (loss), net" on ICG's Consolidated Statements of Operations for the year ended December 31, 2011. In November 2011, ICG received $1.1 million of escrowed proceeds, which ICG recorded as a gain during the year ended December 31, 2011. In March 2012, ICG received $0.2 million of escrowed proceeds, representing the final distribution of escrowed proceeds. ICG recorded that amount as a gain, which is included in the line item "Other income (loss), net" in ICG's Consolidated Statements of Operations for the three months ended March 31, 2012.

On December 30, 2011, StarCite, one of ICG's equity method companies, was sold to The Active Network, Inc. ("Active") (NYSE: ACTV) for consideration consisting of $15.8 million of cash and 668,755 shares of Active common stock valued at $9.1 million, based on the $13.60 closing price of the stock on December 30, 2011. Approximately $0.1 million of the cash consideration and 102,199 shares of the stock consideration were placed in escrow to satisfy potential indemnity claims. Additionally, 52,893 shares of the stock consideration would have been received if the closing price of Active's stock did not exceed certain thresholds following the closing; ICG will not receive that contingent stock consideration since the stipulated price thresholds were achieved.

As of December 31, 2011, ICG had not received the consideration related to this transaction. Accordingly, ICG recorded a receivable in the amount of $22.7 million that is reflected in the line item "Other receivables" on ICG's Consolidated Balance Sheets as of December 31, 2011. That amount represented cash of $15.7 million and Active common stock valued at $7.0 million, based on the $13.60 closing stock price of Active on December 30, 2011. During the three months ended March 31, 2012, ICG received the cash consideration of $15.7 million and 513,663 unregistered shares of Active common stock. The value of the unregistered shares of Active common stock of $7.0 million, based on the $13.60 closing stock price on the transaction date, was included in the line item "Other assets from former equity company sale" in ICG's Consolidated Balance Sheets as of March 31, 2012.

On April 5, 2012, the previously unregistered shares of Active common stock were registered with the SEC, and ICG recorded an adjustment to reflect those shares at fair value based on the closing price of Active common stock of $16.84 on that date. That adjustment resulted in an increase in the value of the Active common stock and an increase in accumulated other comprehensive income as of the date of registration that will be recorded in the three and six months ending June 30, 2012. Following the registration of the shares of Active common stock, ICG sold the majority of those shares and will recognize a gain that will be included in the line item "Other income (loss), net" in the Consolidated Statements of Operations for the three and six months ended June 30, 2012. ICG expects to sell its remaining holdings in Active common stock in the near term.

Cost Method Investments

ICG's carrying value of its holdings in cost method companies was $10.8 million as of both March 31, 2012 and December 31, 2011. Those amounts are reflected in the line item "Cost method investments" on ICG's Consolidated Balance Sheets as of the relevant dates.

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. ICG currently has no carrying value in Anthem. Accordingly, the receipt of distributions from Anthem by ICG, if any, would result in a gain at the time ICG receives those distributions.

Escrow Information

As of March 31, 2012, ICG had 101,476 unregistered shares of Active common stock remaining in escrow; the stock was valued at $1.4 million, based on the closing price of Active common stock on December 30, 2011, the transaction date. As of March 31, 2012, ICG also had 13,069 shares of IntercontinentalExchange, Inc. ("ICE") common stock remaining in escrow related to the sale of a former cost method company in 2008; the stock was valued at $1.8 million based on the March 31, 2012 closing price of ICE common stock. Additionally, ICG had outstanding aggregate cash proceeds, subject to ongoing indemnity claims, of $0.7 million associated with escrowed proceeds from sales of other former equity method and cost method companies. 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.