Goodwill and Intangibles, Net

9 Months Ended

Sep. 30, 2013

3. Goodwill and Intangibles, net

Goodwill

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

	Gross Carrying Amount		Accumulated Impairment Losses			Net Carrying Amount
Goodwill as of December 31, 2012	$	88,116	$	(304	)	$	87,812
Estimated increase in goodwill due to preliminary allocation of acquisition price for subsidiary acquisition (Note 4)		1,177		—			1,177
Goodwill as of September 30, 2013	$	89,293		(304	)	$	88,989

During the nine months ended September 30, 2013, goodwill related to Procurian was reclassified to the line item, “Assets held for sale / assets of discontinued operations” on ICG’s Consolidated Balance Sheets for all periods presented as a result of the execution of a definitive merger agreement by and among ICG, Procurian and Accenture on October 2, 2013. The impact of the expected sale of Procurian to Accenture is detailed in Note 5, “Discontinued Operations.” Additionally, during the nine months ended September 30, 2013, ICG revised its initial estimates of its allocation of value related to the 2012 consolidation of Bolt. Based on those revisions, ICG retrospectively increased the value of goodwill as of December 31, 2012 by $10.2 million, which was primarily offset by a decrease in intangible assets. During the three months ended September 30, 2013, ICG recorded a decrease to goodwill and Additional paid-in capital of $0.8 million to correct an adjustment that had been recorded during the three months ended June 30, 2013 related to ICG’s revisions of its initial estimates related to the allocated value of Bolt. The revised allocation of value related to the 2012 consolidation of Bolt is detailed in Note 4, “Consolidated Core Businesses.” Based on the reclassification of goodwill related to Procurian as assets held for sale (which resulted in a decrease to goodwill of $30.2 million), and the revisions to initial estimates related to the allocated value of Bolt (which resulted in an increase to goodwill of $10.2 million), ICG retrospectively decreased the value of goodwill as of December 31, 2012 by $20.0 million.

During the three and nine months ended September 30, 2013, Bolt acquired Superior Access Insurance Services, Inc. (“Superior Access”). ICG is in the process of completing its purchase price allocation related to that acquisition and has included an estimate of $1.2 million in its consolidated goodwill as of September 30, 2013. The preliminary purchase price allocation related to the Superior Access acquisition is detailed in Note 4, “Consolidated Core Businesses.”

As of September 30, 2013 and December 31, 2012, all of ICG’s goodwill was allocated to its consolidated core businesses.

Intangible Assets

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

		As of September 30, 2013
Intangible Assets	Useful Life	Gross Carrying Amount			Accumulated Amortization				Net Carrying Amount
Customer relationships	2-11 years	$	46,229	$		(7,992	)	$		38,237
Trademarks/trade names	5-11 years		16,013			(1,965	)			14,048
Technology	5-10 years		9,131			(1,744	)			7,387
Non-compete agreements	2-3 years		3,666			(1,867	)			1,799
			75,039			(13,568	)			61,471
Other intellectual property	Indefinite		400			—				400
		$	75,439	$		(13,568	)	$		61,871

		As of December 31, 2012
Intangible Assets	Useful Life	Gross Carrying Amount			Accumulated Amortization				Net Carrying Amount
Customer relationships	2-11 years	$	40,197	$		(4,961	)	$		35,236
Trademarks/trade names	5-11 years		14,713			(866	)			13,847
Technology	5-10 years		10,068			(588	)			9,480
Non-compete agreements	2-3 years		3,666			(942	)			2,724
			68,644			(7,357	)			61,287
Other intellectual property	Indefinite		400			—				400
		$	69,044	$		(7,357	)	$		61,687

Amortization expense for intangible assets during the three- and nine-month periods ended September 30, 2013 was $2.2 million and $6.2 million, respectively. Amortization expense for intangible assets during the three- and nine-month periods ended September 30, 2012 was $1.5 million and $3.3 million, respectively. ICG amortizes intangibles using the straight line method.

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

2013	$	2,329
2014		9,290
2015		8,317
2016		7,867
2017		7,549
Thereafter		26,119
Remaining amortization expense	$	61,471

During the nine months ended September 30, 2013, intangible assets related to Procurian were reclassified to the line item, “Assets held for sale / assets of discontinued operations” on ICG’s Consolidated Balance Sheets for all periods presented as a result of the execution of a definitive merger agreement by and among ICG, Procurian and Accenture on October 2, 2013. The impact of the expected sale of Procurian to Accenture is detailed in Note 5, “Discontinued Operations.” Additionally, as previously disclosed in “Goodwill” in this Note 3, during the nine months ended September 30, 2013, ICG revised its initial estimates related to the allocated value of Bolt in connection with the 2012 consolidation of that company. Accordingly, based on the reclassification of intangible assets related to Procurian as assets held for sale (which resulted in a decrease to intangible assets of $12.1 million), and the revisions to initial estimates of its allocation of value related to the 2012 consolidation of Bolt (which resulted in a decrease to intangible assets of $10.9 million), ICG retrospectively decreased intangible assets as of December 31, 2012 by $23.0 million.

Amortization expense for intangible assets recorded in connection with the consolidation of Bolt was $0.6 million and $1.7 million for the three- and nine-month periods ended September 30, 2013, respectively. The impact on amortization expense for each of the three-month periods ended March 31, 2013, June 30, 2013, and September 30, 2013 related to changes in estimates of ICG’s acquisition accounting for the 2012 consolidation of Bolt and was immaterial to each of those periods. Amortization recorded for the nine-month period ended September 30, 2013 is based on ICG’s revised allocation of value related to the 2012 Bolt consolidation.

Impairment

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- and nine-month periods ended September 30, 2013 and 2012.

- 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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