5.	Ownership Interests and Cost Method Companies

Equity Method Companies

The following unaudited summarized financial information relates to ICG’s companies accounted for under the equity method of accounting at December 31, 2012 and 2011. This aggregate information has been compiled from the financial statements of those companies.

Balance Sheets (Unaudited)


	As of December 31,
	2012 ⁽¹⁾			2011 ⁽²⁾
	(in thousands)

Cash and cash equivalents	$	5,572		$	13,687
Other current assets		11,268			28,767
Non-current assets		13,218			69,218

Total assets	$	30,058		$	111,672


Current liabilities	$	21,115		$	47,125
Non-current liabilities		1,397			10,770
Long-term debt		12,670			18,959
Stockholders’ equity		(5,124	)		34,818

Total liabilities and stockholders’ equity	$	30,058		$	111,672


Total carrying value	$	13,333		$	39,052

⁽¹⁾	Includes (ICG voting ownership): Acquirgy (25%), Freeborders (31%) and WhiteFence (36%).

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

As of December 31, 2012, ICG’s aggregate carrying value in equity method companies exceeded ICG’s share of the net assets of these equity method companies by approximately $15.3 million. Of this excess, $12.0 million is allocated to goodwill, which is not amortized, and $3.3 million is allocated to intangibles, which are generally being amortized over three to seven years. As of December 31, 2011, this excess was $28.4 million, $19.0 million of which was allocated to goodwill, and $9.4 million of which was allocated to intangibles. Amortization expense of $1.2 million, $2.0 million and $2.7 million associated with these intangibles for the years ended December 31, 2012, 2011 and 2010, respectively, is included in the table below in the line item “Amortization of intangible assets” and is included in “Equity loss” on ICG’s Consolidated Statements of Operations.

Results of Operations (Unaudited)


	Year Ended December 31,
	2012 ⁽¹⁾			2011 ⁽²⁾			2010 ⁽³⁾
	(in thousands)
Revenue	$	89,958		$	176,481		$	243,314


Net income (loss)	$	(20,159	)	$	(31,976	)	$	(29,402	)


Equity income (loss) excluding impairments and amortization of intangible assets	$	(7,518	)	$	(9,946	)	$	(10,452	)
Impairment charge of GoIndustry		—			—			(2,914	)
Amortization of intangible assets		(1,154	)		(2,018	)		(2,656	)

Total equity income (loss)	$	(8,672	)	$	(11,964	)	$	(16,022	)

⁽¹⁾	Includes Acquirgy, CIML (to July 11, 2012, the date of consolidation), Freeborders, GoIndustry (to July 5, 2012, the date of disposition), SeaPass (to December 27, 2012, the date of consolidation), and WhiteFence.

⁽²⁾	Includes Acquirgy, CIML, ClickEquations (to June 14, 2011, the date of its disposition), Freeborders, GoIndustry, Metastorm (to February 17, 2011, the date of disposition), SeaPass, StarCite (to December 30, 2011, the date of its disposition) and WhiteFence.

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

Impairments

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 method companies was not impaired during the year ended December 31, 2012 and 2011. During the year ended December 31, 2010, ICG recorded impairment charges of $2.9 million to reduce its basis in GoIndustry.

ICG determined its carrying value in its cost method companies was not impaired during any of the years ended December 31, 2012, 2011 and 2010. See the “Cost Method Companies” subsection in this Note 5 for additional information regarding ICG’s cost method companies.

Other Equity Method Company Information

During the year ended December 31, 2012, ICG purchased shares of SeaPass preferred stock in an equity financing transaction for $9.0 million, and also acquired $13.2 million of SeaPass preferred stock from existing shareholders during the year, collectively increasing its ownership in SeaPass from 26% to 53% (See Note 4, “Consolidated Core Companies,” subsection “Acquisitions” and Note 13 “Other income (loss).”

Marketable Securities

Marketable securities represent ICG’s holdings of publicly-traded equity securities and are accounted for as available-for-sale securities. On December 30, 2011, StarCite, one of ICG’s prior equity method companies, was acquired by Active. ICG’s portion of the sale proceeds included shares of Active common stock. When the shares of Active common stock issued in connection with the StarCite sale were registered with the SEC on April 5, 2012, ICG recorded an adjustment to increase the value of the Active common stock. ICG also recorded an offsetting increase to other comprehensive income in ICG’s Consolidated Balance Sheets, to reflect the Active shares at fair value based on the closing price of Active common stock on that date. (See Note 13, “Other Income (Loss)”). The fair value of the remaining shares of Active common stock of $0.3 million is reflected in the line item “Marketable Securities” on ICG’s Consolidated Balance Sheets as of December 31, 2012.

Cost Method Companies

ICG’s carrying value of its holdings in cost method companies was $13.0 million and $10.8 million as of December 31, 2012 and 2011, respectively. Those amounts are reflected in the line item “Cost method companies” on ICG’s Consolidated Balance Sheets in the relevant periods. During the years ended December 31, 2011 and 2010, ICG paid $9.5 million and $0.8 million to acquire equity ownership interests in cost method companies.

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 year ended December 31, 2011, ICG received distributions from Anthem in the amount of $1.9 million; this amount is included in the line item “Other income (loss), net” on ICG’s Consolidated Statements of Operations for the year ended December 31, 2011. See Note 13, “Other Income (Loss).”

Escrow Information

As of December 31, 2012, 11,650 shares of Active common stock, valued at $0.1 million (based on the stock’s December 31, 2012 closing price, was the only amount of ICG’s potential proceeds from sales of former equity method and cost method companies that remained in escrow to satisfy potential or ongoing indemnification claims. The release of any of those shares 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.

During 2012, 2011 and 2010, ICG received $2.4 million, $1.6 million and $1.9 million, respectively, of escrow releases in connection with the disposition of other companies in which ICG previously held equity ownership interests and recorded these amounts as gains, which are included in the line item “Other income (loss), net” on ICG’s Consolidated Statement of Operations in the respective periods. See Note 13-“Other Income (Loss).”