GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

7.	GOODWILL AND INTANGIBLE ASSETS:

The changes in the carrying amount of goodwill are as follows:


	Goodwill
	(In Thousands)
Balance at January 1, 2010	$	9,923
Acquisitions consummated and adjustments during 2010		2,126

Balance at December 31, 2010		12,049
Adjustments to goodwill in 2011		-

Balance at December 31, 2011	$	12,049

Significant changes impacting the carrying value of goodwill during the year ended December 31, 2011 and 2010 included the following:

The Company increased the gross carrying value of goodwill by $2.1 million during the year ended December 31, 2010 in connection with the Meridian Acquisition. The Meridian Acquisition and the related fair value allocation of purchase price between assets, liabilities, intangible assets and goodwill is described further detail in Note 4.

As of December 31, 2011, the net carrying amount of intangible assets consists of amounts related to business combination transactions consummated by the Company from 2007 to 2011. These transactions include the Meridian, Fullscope, Vertical Pitch, and Alecian acquisitions.

The Fullscope, Vertical Pitch and Alecian transactions were completed prior to 2010 and are discussed in greater detail in the Company’s previously filed reports with the SEC.

Other net intangibles amounted to $2.1 million and $3.8 million as of December 31, 2011 and 2010, respectively. Following is a summary of the Company’s identifiable intangible assets that are subject to amortization:



	December 31, 2011
	Gross Carrying Amount		Impairment Charges		Accumulated Amortization		Net Carrying Amount

	(In Thousands)
Identifiable intangibles:
Non-compete agreements	$	3,860	$	-	$	3,149	$	711
Customer relationships		10,378		-		9,463		915
Asset purchase agreement		1,400		-		1,400		-
Trade name and trademark		600		-		481		119
Capitalized product development costs		373		-		39		334

	$	16,611	$	-	$	14,532	$	2,079



	December 31, 2010
	Gross Carrying Amount		Impairment Charges		Accumulated Amortization		Net Carrying Amount

	(In Thousands)
Identifiable intangibles:
Non-compete agreements	$	3,860	$	-	$	2,788	$	1,072
Customer relationships		10,378		-		8,459		1,919
Asset purchase agreement		1,400		-		975		425
Trade name and trademark		600		-		307		293
Capitalized product development costs		112		-		-		112

	$	16,350	$	-	$	12,529	$	3,821

The Company increased the gross carrying value of intangible assets by $550 thousand during the year ended December 31, 2010 in connection with the Meridian acquisition. The Meridian Acquisition and the related fair value allocation of purchase price among assets, liabilities, intangible assets and goodwill is described further detail in Note 4.

The intangible assets were identified and valued by the Company. The original estimated useful lives of the acquired identifiable intangible assets are as follows:


Non-compete agreements		4 to 5 years
Customer relationships		4 to 7.5 years
Asset purchase agreement		1.5 years
Trade name and trademark		5 years
Capitalized product development costs		3 years

Intangible assets are amortized assuming no expected residual value over the periods in which the economic benefit of these assets is consumed. The weighted average amortization period for all intangible assets subject to amortization was 3.0 years, 3.5 years and 3.9 years as of December 31, 2011, 2010 and 2009, respectively. Amortization expense related to all intangible assets was $2.0 million, $3.1 million and $1.8 million in 2011, 2010 and 2009, respectively.

Amortization of $39 thousand related to capitalized product development costs were included within cost of revenue (specifically within Software expense) on the consolidated statement of operations for the year ended December 31, 2011. There was no amortization associated with capitalized product development costs during the year ended December 31, 2010.

Estimated annual amortization expense for the next five years ending December 31, which encompasses the remaining useful life of the intangible assets, is as follows:


	Amortization
	Expense
	(In Thousands)
2012	$	1,055
2013		531
2014		378
2015		115
2016		-

- 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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