Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets, Net [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

8. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill relates to the acquisitions of MPA, Springhouse, Tracmail, and the company that developed the predecessor to our REALTrans ^® vendor management platform.

Changes in Goodwill during the years ended December 31, 2011 and 2010 are summarized below:

		September 30,		September 30,			September 30,		September 30,
(in thousands)	Mortgage Services		Financial Services			Technology Services		Total
Balance, January 1, 2010	$	—	$	7,706		$	1,618	$	9,324
Acquisition of MPA		10,218		—			—		10,218
Component 2 Amortization (a)		—		(4,890	)		—		(4,890	)
Impairment Loss (b)		—		(2,816	)		—		(2,816	)
Balance, December 31, 2010		10,218		—			1,618		11,836
Acquisition of Springhouse		701		—			—		701
Acquisition of Tracmail		—		2,378			—		2,378
Balance, December 30, 2011	$	10,919	$	2,378		$	1,618	$	14,915

a) See footnote (a) below Intangible Assets table below.

b) Based on the fourth quarter goodwill impairment test, management determined it was prudent to impair $2.8 million of goodwill in the Financial Services segment. This determination was made after considering quantitative and qualitative factors including past performance and execution risk.

Intangible Assets, Net

Intangible assets relate to our acquisitions of MPA (see Note 4) and Nationwide Credit, Inc (“NCI^®”). No impairment charges were taken during the periods presented.

Intangible Assets, net during the years ended December 31, 2011 and 2010 consist of the following:

		September 30,		September 30,		September 30,		September 30,			September 30,		September 30,		September 30,
	Weighted Average Estimated Useful		Gross Carrying Amount				Accumulated Amortization					Net Book Value
	Life		December 31,				December 31,					December 31,
(dollars in thousands)	(Years)		2011		2010		2011			2010		2011		2010
Definite-lived Intangible
Assets
Trademarks		16	$	10,614	$	10,200	$	3,353		$	2,346	$	7,261	$	7,854
Customer Lists		19		38,366		37,700		13,010	(a)		7,447		25,356		30,253
Operating Agreement		20		35,000		35,000		3,354			1,604		31,646		33,396
Non-compete Agreement		4		1,300		1,200		613			275		687		925
Total Intangible Assets			$	85,280	$	84,100	$	20,330		$	11,672	$	64,950	$	72,428

a) Prior to our acquisition of NCI in 2007, NCI completed an acquisition which created tax-deductible goodwill that amortizes for tax purposes over time. When we acquired NCI in 2007, we recorded a lesser amount of goodwill for financial reporting purposes than what had previously been recorded at NCI for tax purposes. This difference between the amount of goodwill recorded for financial reporting purposes and the amount recorded for taxes is referred to as “Component 2” goodwill and it resulted in our recording periodic reductions first to our book goodwill balance in our consolidated financial statements. As our book goodwill balance was fully written off at December 31, 2010 (see Goodwill section above), we continue to amortize the remaining Component 2 goodwill for U.S. tax purposes by reducing certain intangible assets by the remaining tax benefits of the Component 2 goodwill as they are realized in our tax returns. The amount amortized was $3.4 million for the year ended December 31, 2011. The balance of Component 2 goodwill remaining was $5.7 million as of December 31, 2011 which should generate $3.5 million of reductions of intangible assets when the benefit can be realized for U.S. tax purposes.

Amortization expense for definite lived intangible assets was $5.3 million, $4.9 million and $2.7 million for the fiscal years ended December 31, 2011, 2010 and 2009, respectively. Expected annual amortization for years 2012 through 2016, is $5.0 million, $4.8 million, $4.5 million, $4.4 million and $4.3 million, respectively.