Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 6 — Intangible Assets

Intangible Assets

Intangible assets as of December 31, 2017 consist of intangible assets acquired when we closed the Capacity and Services Transaction with Clinton on February 2, 2017. The Capacity and Services Transaction allows for GBAM to place up to $1 billion of investment capacity under Clinton’s management within Clinton’s quantitative equity strategy for an initial term of five years, for which the Company issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of its common stock as consideration. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We are amortizing the $10.1 million on a straight-line basis over the five-year term. See Note 16 - Related Party Transactions for additional information.

In 2018, our fund underperformed, and our only third-party investor redeemed its investment in the second quarter. During an investor earnings call on November 13, 2018, we informed shareholders that “In light of recent underperformance in the overall quantitative space and resultant headwinds, we are currently conducting a complete business review. This involves all areas of our business including implementing cost-reduction programs, evaluating the viability of certain initiatives as well as pursuing strategic transactions that can complement or supplement our existing businesses.”

In the fourth quarter, after our internal business review and deliberations the management team decided to temporarily close the GlassBridge Quantitative Equity Fund to save operating costs. The decision was discussed in a board meeting on November 28, 2018. While the Company will continue to pursue the quantitative fund business in Asia and Europe, the decision to temporarily close the fund had a significant impact on the asset management business’ revenue projection. This resulted in a triggering event which required us to review our intangible asset for impairment.

In assessing recoverability of the intangible assets, we compared the carrying amount of the intangible asset with its estimated fair value with fair value calculated using estimated undiscounted future cash flows. The fair value of the intangible is zero. Consequently, we recorded a full impairment charge of $6.3 million for the net remaining intangible assets balance related to the Clinton Capacity transaction in the fourth quarter of 2018.

The following table presents the remaining intangible assets balance as of December 31, 2018 and 2017:

	2018		2017
	(In millions)
Cost	$	—	$	10.1
Accumulated amortization		—		(1.9	)
Intangible assets, net	$	—	$	8.2

The following table presents the changes in intangible assets:

	Intangible Assets
	(In millions)
December 31, 2017	$	8.2
Amortization		(1.9	)
Impairment charges		(6.3	)
December 31, 2018	$	—

Amortization expense from continuing operations for intangible assets consisted of the following:

	Years Ended December 31,
	2018		2017
	(In millions)
Amortization expense	$	1.9	$	1.9

Based on the intangible assets in service as of December 31, 2018, estimated amortization expenses for each of the next five years ending December 31 is as follows:

	2019		2020		2021		2022		2023
		(In millions)
Amortization expense	$	—	$	—	$	—	$	—	$	—