GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2012

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

NOTE 8

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

The following table summarizes the activity in goodwill:


	Year Ended December 31,

	2012								2011

	MIS		MA			Consolidated			MIS			MA			Consolidated
Beginning balance:
Goodwill	$	11.0	$	631.9		$	642.9		$	11.4		$	454.1		$	465.5
Accumulated impairment charge		—		—			—			—			—			—

Total		11.0		631.9			642.9			11.4			454.1			465.5

Additions/adjustments		—		(4.4	)		(4.4	)		—			198.5			198.5
Impairment charge		—		(12.2	)		(12.2	)		—			—			—
Foreign currency translation adjustments		0.5		10.3			10.8			(0.4	)		(20.7	)		(21.1	)

Ending balance:
Goodwill		11.5		637.8			649.3			11.0			631.9			642.9
Accumulated impairment charge		—		(12.2	)		(12.2	)		—			—			—

Total	$	11.5	$	625.6		$	637.1		$	11.0		$	631.9		$	642.9

The 2012 and 2011 additions/adjustments for the MA segment relate to the acquisitions of Copal and B&H in the fourth quarter of 2011, more fully discussed in Note 7.

The impairment charge above relates to goodwill in the FSTC reporting unit within MA. The Company evaluates its goodwill for potential impairment annually on July 31 or more frequently if impairment indicators arise throughout the year. Projected operating results for the FSTC reporting unit at December 31, 2012 were lower than projections utilized for the annual impairment analysis performed at July 31, 2012 reflecting a contraction in spending for training and certification services for many individuals and global financial institutions amidst current macroeconomic uncertainties. Based on this trend and overall macroeconomic uncertainties, the Company lowered its cash flow forecasts for this reporting unit in the fourth quarter of 2012. Accordingly, the Company performed another goodwill impairment assessment as of December 31, 2012 which resulted in an impairment charge of $12.2 million. The fair value of the FSTC reporting unit utilized in the impairment assessment was estimated using a discounted cash flow methodology and comparable public company and precedent transaction multiples.

Acquired intangible assets consisted of:


	December 31,

	2012			2011
Customer relationships	$	219.6		$	217.9
Accumulated amortization		(74.0	)		(58.6	)

Net customer relationships		145.6			159.3

Trade secrets		31.4			31.3
Accumulated amortization		(16.0	)		(13.4	)

Net trade secrets		15.4			17.9

Software		73.2			70.9
Accumulated amortization		(33.7	)		(25.1	)

Net software		39.5			45.8

Trade names		28.3			28.1
Accumulated amortization		(10.3	)		(9.0	)

Net trade names		18.0			19.1

Other		24.9			24.6
Accumulated amortization		(16.9	)		(13.1	)

Net other		8.0			11.5

Total	$	226.5		$	253.6

Other intangible assets primarily consist of databases and covenants not to compete. Amortization expense relating to intangible assets is as follows:


	Year Ended December 31,

	2012		2011		2010
Amortization expense	$	30.1	$	20.5	$	16.4

Estimated future annual amortization expense for intangible assets subject to amortization is as follows:


Year Ended December 31,
2013	$	28.2
2014		22.9
2015		21.6
2016		20.4
2017		15.5
Thereafter		117.9

Amortizable intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In conjunction with the assessment of goodwill impairment at July 31, 2012, the Company reviewed the recoverability of certain customer lists within its FSTC reporting unit. This review resulted in an impairment of approximately $1 million in the third quarter of 2012 which is recorded in depreciation and amortization expense in the consolidated statement of operations. The fair value of these customer lists was determined using a discounted cash flow analysis. The Company again reviewed the recoverability of these customer lists in the fourth quarter of 2012 in conjunction with the quantitative goodwill impairment test performed at December 31, 2012. Based on this assessment, there was no further impairment of the customer lists in the fourth quarter of 2012. For all other intangible assets, there were no such events or changes during 2012 that would indicate that the carrying amount of amortizable intangible assets in any of the Company’s reporting units may not be recoverable. This determination was made based on improving market conditions for the reporting unit where the intangible asset resides and an assessment of projected cash flows for all reporting units. Additionally, there were no events or circumstances during 2012 that would indicate the need for an adjustment of the remaining useful lives of these amortizable intangible assets.

- 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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