Goodwill and Intangibles, net

12 Months Ended

Dec. 31, 2012

3.	Goodwill and Intangibles, net

Acquisitions

During the year ended December 31, 2012, Procurian completed two acquisitions. The purchase price allocated to goodwill and intangible assets are included in the tables below. Additionally, during the year ended December 31, 2011, GovDelivery completed an acquisition.

Goodwill

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


	Gross Carrying Amount		Accumulated Impairment Losses			Net Carrying Amount
Goodwill at January 1, 2011	$	19,622	$	—		$	19,622
Increase in goodwill due to acquisitions		2,221		—			2,221

Goodwill at December 31, 2011		21,843		—			21,843
Increase in goodwill due to ICG’s acquisition of MSDSonline (Note 4)		15,847		—			15,847
Increase in goodwill due to Procurian’s acquisition of Media IQ (Note 4)		9,490		—			9,490
Increase in goodwill due to Procurian’s acquisition of UAI (Note 4)		2,922		—			2,922
Estimated increase in goodwill due to SeaPass consolidation on December 27, 2012		57,996		—			57,996
Decrease in goodwill for GovDelivery impairment charge		—		(304	)		(304	)

Goodwill at December 31, 2012	$	108,098	$	(304	)	$	107,794

As of December 31, 2012 and 2011, all of ICG’s goodwill was allocated to its consolidated core companies. Of the goodwill balance at December 31, 2012, $30.2 million relates to Procurian and Procurian’s acquisitions. Of the goodwill balance at December 31, 2011, $17.8 million relates to Procurian and Procurian’s acquisitions.

Intangible Assets

The following table summarizes ICG’s intangible assets from continuing operations (in thousands):


		As of December 31, 2012
Intangible Assets	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	1-11 years	$	59,098	$	(5,912	)	$	53,186
Trademarks/trade names	3-11 years		15,643		(930	)		14,713
Technology	5-10 years		11,287		(865	)		10,422
Non-compete agreements	2-5 years		6,854		(1,058	)		5,796
Intellectual property	5 years		235		(37	)		198

			93,117		(8,802	)		84,315
Other intellectual property	Indefinite		400		—			400

		$	93,517	$	(8,802	)	$	84,715


		As of December 31, 2011
Intangible Assets	Useful Life	Gross Carrying Amount		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

Amortization expense for intangible assets during the years ended December 31, 2012, 2011 and 2010 was $5.6 million, $1.4 million and $1.4 million, respectively. ICG amortizes intangibles using the straight line method.

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


2013	$	11,728
2014		11,679
2015		10,767
2016		9,586
2017		8,815
Thereafter		31,740

Remaining amortization expense	$	84,315

Impairments

During the year ended December 31, 2012, GovDelivery decreased its liability related to contingent consideration payments for a recent acquisition because it believed that performance targets related to those contingent payments would not be achieved. As a result, GovDelivery performed an impairment analysis with respect to the associated intangible assets and goodwill recorded related to that acquisition, and recorded an impairment charge of $0.4 million related to the intangible assets and an impairment charge of $0.3 million related to goodwill that are reflected in the line item “Impairment related and other” in ICG’s Consolidated Statements of Operations for the year ended December 31, 2012. The $0.4 million impairment to intangibles is included in the $8.8 million accumulated amortization balance for customer relationships as of December 31, 2012 in the table above.

ICG completed its annual impairment testing in the fourth quarter of each of 2012, 2011 and 2010. The completion of ICG’s annual impairment testing did not result in an impairment charge related to ICG’s consolidated core companies as of December 31, 2012 and 2011; ICG’s fair value of its reporting units, including goodwill, substantially exceeds its carrying value. ICG estimates the fair value of its reporting units using a “Level 3” input (see Note 6, “Financial Instruments,” for the definition of a “Level 3” input) market approach by determining market multiples from comparable publicly-traded companies and applying those approximate multiples to the revenues of the reporting units, which are then compared to the respective carrying values of the reporting units. See Note 4, “Consolidated Core Companies.” ICG also performs ongoing business reviews of its equity method companies and cost method companies. See Note 5, “Ownership Interests and Cost Method Companies.”

The following table reflects the amount of impairments recorded and how ICG presents impairment charges under the various methods of accounting:


	Statement of Operations	Year ended December 31,
	Presentation	2012		2011		2010
Consolidation Method	Impairment related and other(a)	$	728	$	—	$	—
Equity Method (Note 5)	Equity loss		—		—		2,914

		$	728	$	—	$	2,914

(a) – In addition to the $0.7 million of impairments recorded by GovDelivery in 2012 included in the table above, GovDelivery also recorded a $0.7 million gain with respect to the write-off of a certain contingent consideration liability which is also included in “Impairment related and other” on ICG’s Consolidated Statements of Operations during the year ended December 31, 2012 but it is not included in the table above.

- 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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