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Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2011
Goodwill and Intangible Assets [Abstract]  
GOODWILL AND INTANGIBLE ASSETS

(6) GOODWILL AND INTANGIBLE ASSETS

(a) Goodwill

We evaluate the recoverability of goodwill in the fourth quarter of each year or sooner if events or changes in circumstances indicate that the carrying amount may exceed its fair value. These analyses did not result in an impairment charge during the periods presented. Goodwill in our Recovery Audit Services — Americas segment was $12.4 million at December 31, 2011 and $4.6 million at December 31, 2010. The $4.6 million of goodwill at December 31, 2010 consists of gross goodwill of $364.5 million less total accumulated impairment losses of $359.9 million recorded through 2005. In addition, we recorded goodwill of $7.8 million in our Recovery Audit Services — Americas segment in conjunction with our December 2011 acquisition of Business Strategy, Inc. (“BSI”) (see Note 14Business Acquisitions below). We also recorded goodwill of $0.2 million in our Recovery Audit Services — Europe Asia/Pacific segment in 2011 relating to our acquisition of a third-party audit firm to which we had subcontracted a portion of our audit services (an “associate migration”). In conjunction with our 2010 acquisition of TJG Holdings, LLC, we recorded goodwill of $0.6 million in our New Services segment (see Note 14Business Acquisitions below).

(b) Intangible Assets

Intangible assets consist principally of amounts we assigned to customer relationships, trademarks, non-compete agreements and trade names in conjunction with business acquisitions. Changes in intangible assets in 2011 relate primarily to our December 2011 BSI acquisition and an associate migration. Changes in intangible assets in 2010 relate primarily to the acquisitions of Etesius Limited (“Etesius”) and TJG Holdings LLC (“TJG”). The acquisitions in both 2011 and 2010 are described in more detail in Note 14Business Acquisitions below. Intangible assets associated with the Etesius acquisition and the associate migration are denominated in British pounds sterling and are subject to movements in foreign currency rates (“FX adjustments”). We present the amounts below in United States dollars utilizing foreign currency exchange rates as of December 31, 2011.

As of January 21, 2010, the Company changed its trade name from PRG-Schultz International, Inc. to PRGX Global, Inc. and is using the previous trade name only in limited circumstances. We intend to maintain the legal rights to the former name but, for accounting purposes, have reclassified the intangible asset associated with this trade name from an indefinite lived intangible asset to one with a definite life and began amortizing the trade name in January 2010.

Amortization expense relating to intangible assets was $4.6 million in 2011, $4.0 million in 2010 and $2.6 million in 2009. Based on our current amortization methods, we project amortization expense for the next five years will be $5.3 million in 2012, $4.8 million in 2013, $3.5 million in 2014, $2.6 million in 2015 and $1.7 million in 2016.

Changes in noncurrent intangible assets during 2011 and 2010 were as follows (in thousands):

 

                                         
    Customer
Relationships
    Trademarks     Non-compete
Agreements
    Trade
Names
    Total  

Gross carrying amount:

                                       

Balance, January 1, 2010

  $ 34,181     $ 523     $ 773     $ 2,200     $ 37,677  

Acquisition of Etesius

    1,565       —         —         —         1,565  

Acquisition of TJG

    829       —         808       665       2,302  

FX adjustments and other

    (70     (18     (28     —         (116
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, December 31, 2010

    36,505       505       1,553       2,865       41,428  

Associate migration

    —         —         98       —         98  

Acquisition of BSI

    2,836       555       650       —         4,041  

FX adjustments and other

    (35     (2     (8     —         (45
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, December 31, 2011

  $ 39,306     $ 1,058     $ 2,293     $ 2,865     $ 45,522  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated amortization:

                                       

Balance, January 1, 2010

  $ (13,454   $ (40   $ (79   $ —       $ (13,573

Amortization expense

    (3,158     (83     (197     (567     (4,005

FX adjustments and other

    3       —         2       —         5  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, December 31, 2010

    (16,609     (123     (274     (567     (17,573

Amortization expense

    (3,236     (104     (519     (747     (4,606

FX adjustments and other

    52       3       8       —         63  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, December 31, 2011

  $ (19,793   $ (224   $ (785   $ (1,314   $ (22,116
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net carrying amount:

                                       

Balance, December 31, 2010

  $ 19,896     $ 382     $ 1,279     $ 2,298     $ 23,855  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, December 31, 2011

  $ 19,513     $ 834     $ 1,508     $ 1,551     $ 23,406  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Estimated useful life (years)

    6–20 years       6 years       1–5 years       4–5 years