Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2013

3. Goodwill and Intangible Assets

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
Increase in goodwill due to Bolt’s acquisition of Superior Access		2,540		—			2,540
Goodwill as of December 31, 2013	$	90,656		(304	)	$	90,352

During the year ended December 31, 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. See Note 4, “Consolidated Business” for additional information regarding the transactions impacting goodwill detailed in the table above.

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

Intangible Assets

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

	Useful Life	As of December 31, 2013
Intangible Assets	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	1-11 years	$	45,601	$	(9,546	)	$	36,055
Trademarks/trade names	3-11 years		15,813		(2,373	)		13,440
Technology	5-10 years		9,527		(2,161	)		7,366
Non-compete agreements	2-5 years		3,666		(2,172	)		1,494
			74,607		(16,252	)		58,355
Other intellectual property	Indefinite		400		—			400
		$	75,007	$	(16,252	)	$	58,755

	Useful Life	As of December 31, 2012
Intangible Assets	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	3-11 years	$	40,622	$	(5,386	)	$	35,236
Trademarks/trade names	3-11 years		14,713		(866	)		13,847
Technology	10 years		10,068		(588	)		9,480
Non-compete agreements	2-5 years		3,666		(942	)		2,724
			69,069		(7,782	)		61,287
Other intellectual property	Indefinite		400		—			400
		$	69,469	$	(7,782	)	$	61,687

Amortization expense for intangible assets during the years ended December 31, 2013, 2012 and 2011 was $8.5 million, $4.8 million and $1.4 million, respectively. ICG amortizes intangible assets using the straight line method.

During the year ended December 31, 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 those revisions, ICG retrospectively decreased the value of intangible assets as of December 31, 2012 by $10.9 million. See Note 4, “Consolidated Business” for additional information regarding the transactions impacting intangibles detailed in the table above.

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

2014	$	9,169
2015		8,246
2016		7,844
2017		7,429
2018		6,175
Thereafter		19,492
Remaining amortization expense	$	58,355

Impairment

ICG completed its annual impairment testing in the fourth quarter of each of 2013, 2012 and 2011. The completion of ICG’s annual impairment testing did not result in an impairment charge related to ICG’s consolidated businesses in any of those years; 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 8, “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 Businesses.” ICG also performs ongoing business reviews of its equity method companies and cost method companies. See Note 7, “Equity and Cost Method Businesses.”

During the year ended December 31, 2012, GovDelivery decreased its liability related to contingent consideration payments for an 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 $5.4 million accumulated amortization balance for customer relationships as of December 31, 2012 in the table above. In addition to the $0.7 million of impairments recorded by GovDelivery in 2012, GovDelivery also recorded a gain of $0.7 million to reverse a contingent consideration liability, which is also included in “Impairment related and other” on ICG’s Consolidated Statement of Operations during the year ended December 31, 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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