Goodwill and Other Intangible Assets, Net

12 Months Ended

Dec. 31, 2012

Goodwill and Other Intangible Assets, Net [Abstract]

Goodwill and Other Intangible Assets, Net

4. Goodwill and Other Intangible Assets, Net

The components of goodwill and other intangible assets, net at December 31, 2012 and 2011 were as follows (in thousands):

	2012			2011
Goodwill	$	440,709		$	377,281
Intangibles:
Client lists		168,699			128,537
Other intangibles		9,644			9,826
Total intangibles		178,343			138,363
Total goodwill and other intangibles assets		619,052			515,644
Accumulated amortization:
Client lists		(62,115	)		(50,969	)
Other intangibles		(5,718	)		(6,335	)
Total accumulated amortization		(67,833	)		(57,304	)
Goodwill and other intangible assets, net	$	551,219		$	458,340

Goodwill

Changes in the carrying amount of goodwill by operating segment for the years ended December 31, 2012 and 2011 were as follows (in thousands):

	Financial Services			Employee Services			Medical Management Professionals		National Practices		Total Goodwill
December 31, 2010	$	203,441		$	79,132		$	59,847	$	1,666	$	344,086
Additions		30,002			5,645			—		—		35,647
Divestitures		(280	)		(2,172	)		—		—		(2,452	)
December 31, 2011	$	233,163		$	82,605		$	59,847	$	1,666	$	377,281
Additions		26,620			32,493			4,315		—		63,428
Divestitures		—			—			—		—		—
December 31, 2012	$	259,783		$	115,098		$	64,162	$	1,666	$	440,709

Businesses acquired during 2012 resulted in additions to goodwill of approximately $62.9 million, of which $26.1 million was recorded in the Financial Services practice group, $32.5 million was recorded in the Employee Services practice group and $4.3 million was recorded in the Medical Management Professionals practice group. Businesses acquired during 2011 resulted in additions to goodwill of approximately $16.9 million, of which $11.2 million was recorded in the Financial Services practice group and $5.7 million was recorded in the Employee Services practice group. The remaining increases in goodwill during 2012 and 2011 were a result of contingent purchase price earned by businesses acquired in prior years. Refer to Note 19 for further discussion of acquisition activities. Businesses divested during the year ended December 31, 2011 resulted in decreases to goodwill of $2.5 million. The divestiture of the Company’s individual wealth management business, which was recorded in the Employee Services practice group, resulted in a $2.2 million decrease in goodwill, and the divestiture of a business previously reported in the Financial Services practice group resulted in a $0.3 million decrease in goodwill. No businesses were divested in 2012.

Goodwill Impairment

During the fourth quarter of 2012, CBIZ performed its goodwill impairment testing utilizing a qualitative assessment for each of its reporting units that carried a goodwill balance. The qualitative assessment included an in-depth analysis of many factors, including general economic conditions, industry and market conditions, a broad scope of financial factors, the Company’s weighted average cost of capital, changes in management and key personnel, the Company’s price of its common stock, as well as other drivers of a fair value analysis. As a result of the Company’s qualitative assessment, it was concluded that it was more-likely-than-not that the fair value of each of its reporting units was greater than its carrying value.

Client Lists and Other Intangibles

At December 31, 2012, the weighted average amortization period remaining for total intangible assets was 8.4 years. Client lists are amortized over their expected periods of benefit and had a weighted-average amortization period of 8.6 years remaining at December 31, 2012. Other intangibles, which consist primarily of non-compete agreements and trade-names, are amortized over periods ranging from two to ten years, and had a weighted-average amortization period of 4.0 years remaining at December 31, 2012. Amortization expense related to client lists and other intangible assets for the years ended December 31, 2012, 2011 and 2010 was as follows (in thousands):

	2012		2011		2010
Operating expenses	$	15,242	$	13,750	$	13,016
Corporate general and administrative expenses		16		17		16
Total amortization expense	$	15,258	$	13,767	$	13,032

Amortization expense for existing client lists and other intangible assets for each of the next five years ending December 31 is estimated to be (in thousands):

2013	$	17,122
2014	$	16,569
2015	$	15,219
2016	$	13,337
2017	$	12,309

Future amortization expense excludes the impact of events that may occur subsequent to December 31, 2012, including acquisitions and divestitures.