6. Equity and Cost Method Businesses

Equity Method Businesses

The following unaudited summarized financial information relates to ICG’s businesses accounted for under the equity method of accounting as of September 30, 2013 and December 31, 2012 and for the three- and nine-month periods ended September 30, 2013 and 2012. This aggregate information has been compiled from the financial statements of those businesses.

Balance Sheets (Unaudited)

	September 30, 2013 (1)			December 31, 2012 (2)
	(in thousands)
Cash and cash equivalents	$	6,017		$	5,572
Other current assets		12,121			11,268
Non-current assets		13,193			13,218
Total assets	$	31,331		$	30,058

Current liabilities	$	23,327		$	21,115
Non-current liabilities		6,525			1,397
Long-term debt		10,194			12,670
Stockholders’ deficit		(8,715	)		(5,124	)
Total liabilities and stockholders’ deficit	$	31,331		$	30,058

Total carrying value	$	14,390		$	13,333

(1) Includes (ICG voting ownership): Acquirgy (25%), CIML (38%), Freeborders (31%) and WhiteFence (36%).

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

As of September 30, 2013, ICG’s aggregate carrying value in its equity method businesses exceeded ICG’s share of the net assets of those companies by $16.5 million. Of this excess, $14.3 million is allocated to goodwill, which is not amortized, and $2.2 million is allocated to intangibles, which are generally being amortized over five years. As of December 31, 2012, this excess was $15.3 million, $12.0 million of which was allocated to goodwill, and $3.3 million of which was allocated to intangibles. Amortization expense associated with those intangibles for the three and nine months ended September 30, 2013 was less than $0.1 million and $0.2 million, respectively. Amortization expense associated with those intangibles for the three and nine months ended September 30, 2012 was $0.3 million and $0.9 million, respectively. That 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,
	2013 (1)			2012 (2)			2013 (3)			2012 (2)
	(in thousands)
Revenue	$	15,353		$	16,049		$	40,948		$	75,154

Net income (loss)	$	(750	)	$	(2,993	)	$	(5,938	)	$	(15,554	)

Equity income (loss) excluding impairments and amortization of intangible assets	$	(247	)	$	(1,325	)	$	(1,802	)	$	(6,272	)
Amortization of intangible assets	$	(48	)		(283	)	$	(117	)		(875	)
Total equity income (loss)	$	(295	)	$	(1,608	)	$	(1,919	)	$	(7,147	)

(1) Includes Acquirgy, CIML, Freeborders and WhiteFence.

(2) Includes Acquirgy, Bolt, CIML, Freeborders, GoIndustry-DoveBid plc (“GoIndustry”) (to July 5, 2012, the date of disposition) and WhiteFence.

(3) Includes Acquirgy, CIML (from February 20, 2013, the date of deconsolidation), Freeborders and WhiteFence.

Impairments – Equity Method Businesses

ICG performs ongoing business reviews of its equity method businesses to determine whether ICG’s carrying value in those companies is impaired. ICG determined its carrying value in its equity method businesses was not impaired during the three- and nine-month periods ended September 30, 2013 and 2012.

Other Equity Method Businesses Information

During the nine months ended September 30, 2012, ICG participated in a follow-on financing transaction for Bolt. At that time, ICG acquired $9.0 million of Bolt preferred stock; as a result of the transaction, ICG’s ownership in Bolt 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 intangible assets that were to be amortized over five years and equity method goodwill, which was not amortized.

On July 5, 2012, GoIndustry, previously one of ICG’s equity method businesses, was sold. ICG’s portion of the cash proceeds was $2.9 million. During the three-month period ended September 30, 2012, ICG recorded its share of the sale transaction costs incurred by GoIndustry, and, accordingly, ICG’s carrying value of GoIndustry was reduced to zero as of the date of the transaction. ICG recorded a gain of $2.9 million for the proceeds received during the three months ended September 30, 2012, which is included in the line item “Other income (loss)” on ICG’s Consolidated Statements of Operations for the three and nine months ended September 30, 2012. For the three-and nine-month periods ended September 30, 2012, ICG’s share of GoIndustry’s net loss was $0.2 million and $0.7 million, respectively. Those amounts are included in the line item “Equity income (loss) excluding impairments and amortization of intangible assets” in the table above. Following the sale, ICG’s share of GoIndustry’s results was removed from the venture segment and is included in “Dispositions” in the “Results of Operations” segment information table in Note 9, “Segment Information” for all relevant periods presented.

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, previously one of ICG’s equity method businesses, was acquired by Active. ICG’s portion of the sale proceeds included shares of Active common stock. During the nine months ended September 30, 2013, ICG sold 150,233 shares of Active common stock at an average price of $5.10 per share for total proceeds of $0.8 million. During the nine months ended September 30, 2012, ICG sold 447,057 shares of Active common stock at an average price of $16.88 per share for total proceeds of $7.5 million. ICG recorded a gain on the sale of those securities of less than $0.1 million and $1.4 million in the nine-month periods ended September 30, 2013 and 2012, respectively. Those gains are included in the line item “Other income (loss), net” on ICG’s Consolidated Statements of Operations for the respective three- and nine-month periods. ICG does not hold any marketable securities as of September 30, 2013. The fair value of the shares of Active common stock held by ICG as of December 31, 2012 of $0.7 million is reflected in both the line item “Marketable Securities” ($0.3 million) and the line item “Prepaid expenses and other current assets” ($0.4 million) on ICG’s Consolidated Balance Sheets.

During the three and nine months ended September 30, 2012, ICG received 12,989 shares of Intercontinental Exchange, Inc. (“ICE”), representing the final distribution of escrow proceeds related to the disposition of Creditex Group, Inc. ICG recorded a gain in the three and nine months ended September 30, 2012 of $1.7 million based on the closing stock price of the ICE common stock on the day it was released from escrow. Subsequent to the receipt of those shares of ICE common stock, ICG sold the shares and received total proceeds of $1.8 million. The incremental gain on the sale of those shares of $0.1 million is included in the line item “Other income (loss), net” on ICG’s Consolidated Statement of Operations in the relative period.

Cost Method Businesses

ICG’s carrying value of its holdings in cost method businesses was $15.7 million and $13.0 million as September 30, 2013 and December 31, 2012, respectively. Those amounts are reflected in the line item “Cost and equity method investments” on ICG’s Consolidated Balance Sheets as of the relevant dates.

ICG performs ongoing business reviews of its cost method businesses to determine whether ICG’s carrying value in those companies is impaired. ICG determined its carrying value in its cost method businesses was not impaired during the three- and nine-month periods ended September 30, 2013 and 2012.

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.