Goodwill And Intangibles Assets

3 Months Ended

Mar. 31, 2012

Goodwill And Intangibles Assets [Abstract]

3. Goodwill and Intangibles Assets

Acquisitions

On March 30, 2012, ICG acquired 96% of the equity of MSDSonline; the acquisition was accounted for under the acquisition method. ICG will allocate the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values at the date of acquisition. The following is an estimate of that allocation, which ICG is currently in the process of finalizing (in thousands):


Net assets acquired:
Goodwill	$	23,039
Customer lists (7 year life)		13,823
Technology (5 year life)		9,215
Other net assets (liabilities)		2,203

		48,280
Redeemable noncontrolling interest		(153	)

	$	48,127

It is expected that each of the components of the above allocation will change upon the finalization of ICG's acquisition accounting. ICG has estimated goodwill and intangible assets related to the acquisition of MSDSonline and included those estimates in its consolidated balance sheet and the tables in this Note 3 as of March 31, 2012. ICG anticipates that its acquisition accounting related to the acquisition of MSDSonline will be complete by June 30, 2012.

Because MSDSonline was acquired on March 30, 2012, the results of its operations for the one-day period from the acquisition date through March 31, 2012 were immaterial to ICG and are therefore not included in ICG's Consolidated Statements of Operations for the three months ended March 31, 2012. If ICG had consolidated MSDSonline for the three months ended March 31, 2012, the revenue, net income (loss) and net income (loss) per diluted share in ICG's Consolidated Statements of Operations for the three months ended March 31, 2012 would have been $40.4 million, $(7.1) million and $(0.20) per diluted share, respectively. If ICG had consolidated MSDSonline for the three months ended March 31, 2011, the revenue, net income (loss) and net income (loss) per diluted share in ICG's Consolidated Statements of Operations for the three months ended March 31, 2011 would have been $36.8 million, $15.8 million and $0.42 per diluted share, respectively.

MSDSonline derives revenues from three sources: (1) subscription fees, (2) professional services fees and (3) compliance solutions project fees. The vast majority of MSDSonline's revenues are derived from subscription fees from customers accessing the company's database and web-based tools; that revenue is recognized ratably over the applicable contract term, beginning on the contract implementation date. MSDSonline also generates (a) professional services fees from compiling its customers' online libraries of material safety data sheet documents and indexing those documents for the customers' use and (b) fees from training and compliance services projects; the revenue derived from those fees is recognized on a percentage of completion basis over the applicable project's timeline.

Goodwill

The following table summarizes the activity related to ICG's goodwill (in thousands):


Goodwill at December 31, 2011	$	22,538
Estimated increase in goodwill due to MSDSonline acquisition on March 30, 2012		23,039

Goodwill at March 31, 2012	$	45,577

As of March 31, 2012 and December 31, 2011, all of ICG's goodwill was allocated to the core segment.

Intangible Assets

The following table summarizes ICG's intangible assets (in thousands):


		As of March 31, 2012
Intangible Assets	Useful Life	Gross Carrying Amount Related to Continuing Operations		Accumulated Amortization			Net Carrying Amount
Customer relationships	3-11 years	$	27,140	$	(2,660	)	$	24,480
Trademarks/trade names	3-11 years		1,714		(289	)		1,425
Technology	5-10 years		10,774		(187	)		10,587
Non-compete agreements	2-5 years		336		(51	)		285
Intellectual property	5 years		41		(6	)		35

			40,005		(3,193	)		36,812
Other intellectual property	Indefinite		400		—			400

		$	40,405	$	(3,193	)	$	37,212


		As of December 31, 2011
Intangible Assets	Useful Life	Gross Carrying Amount Related to Continuing Operations		Accumulated Amortization			Net Carrying Amount
Customer relationships	3-11 years	$	13,317	$	(2,344	)	$	10,973
Trademarks/trade names	3-11 years		1,547		(243	)		1,304
Technology	10 years		1,559		(149	)		1,410
Non-compete agreements	2-5 years		336		(29	)		307
Intellectual property	5 years		41		(4	)		37

			16,800		(2,769	)		14,031
Other intellectual property	Indefinite		400		—			400

		$	17,200	$	(2,769	)	$	14,431

Included in the above information as of March 31, 2012 are estimated intangible assets associated with the acquisition of MSDSonline on March 30, 2012. No amortization expense related to those estimated intangible assets was recorded during the three months ended March 31, 2012 since the amortization expense related to the one-day period from the acquisition date through March 31, 2012 was immaterial.

Amortization expense for intangible assets during the three-month periods ended March 31, 2012 and 2011 was $0.4 million and $0.3 million, respectively. ICG amortizes intangibles using the straight line method.

Remaining estimated amortization expense is as follows (in thousands):


2012 (remaining nine months)	$	4,185
2013	$	5,560
2014	$	5,508
2015	$	5,432
2016	$	5,402
Thereafter	$	10,725

Remaining amortization expense	$	36,812

Impairments

ICG completes its annual impairment testing in the fourth quarter of each year, or more frequently as conditions warrant. There were no impairment charges related to goodwill or intangible assets associated with ICG's consolidated subsidiaries during the three-month periods ended March 31, 2012 and 2011.

- 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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