Goodwill And Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. Intangible assets resulting from the acquisitions of entities accounted for using the purchase method of accounting are recorded at the estimated fair value of the assets acquired. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from one to 20 years.

The changes in carrying amounts of goodwill for the year ended December 31, 2013 and 2012 are as follows (in thousands):



Balance as of January 1, 2012	$	279,016
Goodwill acquired	128,532
Foreign Exchange Translation	277
Balance as of December 31, 2012	$	407,825
Goodwill acquired	54,472
Purchase Accounting Adjustments	(5,324		)
Foreign exchange translation	449
Balance as of December 31, 2013	$	457,422

See Note 3 - Business Acquisitions - for a discussion related to purchase accounting adjustments.

Intangible assets are summarized as of December 31, 2013 and 2012 as follows (in thousands):

Intangible Assets with Indefinite Lives:



	2013		2012
Trade name	$	27,379	$	27,379
Other	5,432		5,433
Total	$	32,811	$	32,812

In accordance with ASC 350, the Company performed the annual impairment test for goodwill for fiscal year 2013 using a qualitative assessment primarily taking into consideration macroeconomic, industry and market conditions, overall financial performance and any other relevant company-specific events. The Company performed the annual impairment test for intangible assets with indefinite lives for fiscal 2013 using a quantitative assessment primarily taking into consideration a discounted cash flow analysis of the relief of royalty payments. j2 Global concluded that there were no impairments in 2013, 2012 and 2011. The Company determined that a certain trade name no longer had an indefinite life as of the second quarter 2012. Accordingly, the Company reclassified $0.9 million from intangible assets with indefinite lives to intangible assets subject to amortization during fiscal year 2012. The Company has determined that this intangible asset had a remaining useful life of 1.5 years and is being amortized accordingly.

Intangible Assets Subject to Amortization:

As of December 31, 2013, intangible assets subject to amortization relate primarily to the following (in thousands):



	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	17.0 years	$	66,911	$	11,182	$	55,729
Patent and patent licenses	8.1 years	58,446		29,916		28,530
Customer relationships	8.1 years	139,362		38,382		100,980
Other purchased intangibles	5.0 years	18,149		12,666		5,483
Total		$	282,868	$	92,146	$	190,722

As of December 31, 2012, intangible assets subject to amortization relate primarily to the following (in thousands):



	Weighted-Average Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	17.7 years	$	50,257	$	6,227	$	44,030
Patent and patent licenses	8.2 years	44,048		24,719		19,329
Customer relationships	7.0 years	86,473		21,750		64,723
Other purchased intangibles	4.4 years	13,322		8,900		4,422
Total		$	194,100	$	61,596	$	132,504

Expected amortization expense for intangible assets subject to amortization at December 31, 2013 are as follows (in thousands):



Fiscal Year:
2014	$	34,743
2015	30,186
2016	26,506
2017	23,023
2018	16,118
Thereafter	60,146
Total expected amortization expense	$	190,722

Amortization expense was $30.2 million, $16.0 million and $13.4 million for the years ended December 31, 2013, 2012 and 2011, respectively.

- 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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