Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS

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GOODWILL AND INTANGIBLE ASSETS
3 Months Ended
Mar. 31, 2012
GOODWILL AND INTANGIBLE ASSETS

3. GOODWILL AND INTANGIBLE ASSETS

 

Goodwill.   Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment tests as of September 30.

 

Changes in the amount of goodwill for the three months ended March 31, 2012, are as follows:

 

    U.S. Consumer           TALX     North America     North America        
    Information           Workforce     Personal     Commercial        
    Solutions     International     Solutions     Solutions     Solutions     Total  
    (In millions)  
Balance, December 31, 2011   $ 638.4     $ 348.5     $ 935.0     $ 1.8     $ 37.5     $ 1,961.2  
Adjustments to initial purchase price allocation     -       -       0.2       -       -       0.2  
Foreign currency translation     -       7.8       -       -       0.1       7.9  
Tax benefits of stock options exercised     -       -       (0.3 )     -       -       (0.3 )
Balance, March 31, 2012   $ 638.4     $ 356.3     $ 934.9     $ 1.8     $ 37.6     $ 1,969.0  

  

Indefinite-Lived Intangible Assets.   Indefinite-lived intangible assets consist of contractual/territorial rights representing the estimated acquisition date fair value of rights to operate in certain territories acquired through the purchase of independent credit reporting agencies in the U.S. and Canada. Our contractual/territorial rights are perpetual in nature and, therefore, the useful lives are considered indefinite. Indefinite-lived intangible assets are not amortized. We are required to test indefinite-lived intangible assets for impairment annually and whenever events or circumstances indicate that there may be an impairment of the asset value. We perform our annual indefinite-lived intangible asset impairment test as of September 30. Our contractual/territorial rights carrying amounts did not change materially during the three months ended March 31, 2012.

 

Purchased Intangible Assets.   Purchased intangible assets represent the estimated acquisition date fair value of acquired intangible assets used in our business. Purchased data files represent the estimated acquisition date fair value of consumer credit files acquired primarily through the purchase of independent credit reporting agencies in the U.S. and Canada. We expense the cost of modifying and updating credit files in the period such costs are incurred. We amortize purchased data files, which primarily consist of acquired consumer credit files, on a straight-line basis. Primarily all of our other purchased intangible assets are also amortized on a straight-line basis. For additional information about the useful lives related to our purchased intangible assets, see Note 1 of the Notes to Consolidated Financial Statements in our 2011 Form 10-K.

 

Purchased intangible assets at March 31, 2012 and December 31, 2011 consisted of the following:

 

    March 31, 2012     December 31, 2011  
          Accumulated                 Accumulated        
    Gross     Amortization     Net     Gross     Amortization     Net  
Definite-lived intangible assets:   (In millions)  
Purchased data files   $ 307.3     $ (235.9 )   $ 71.4     $ 316.2     $ (240.5 )   $ 75.7  
Acquired software and technology     34.7       (9.2 )     25.5       68.3       (41.1 )     27.2  
Customer relationships     518.7       (139.2 )     379.5       518.2       (130.3 )     387.9  
Proprietary database     125.0       (100.6 )     24.4       125.0       (95.5 )     29.5  
Non-compete agreements     9.0       (3.7 )     5.3       9.0       (3.1 )     5.9  
Trade names and other intangible assets     40.8       (18.0 )     22.8       40.7       (16.7 )     24.0  
Total definite-lived intangible assets   $ 1,035.5     $ (506.6 )   $ 528.9     $ 1,077.4     $ (527.2 )   $ 550.2  

 

Amortization expense related to purchased intangible assets was $22.4 million and $23.6 million during the three months ended March 31, 2012 and 2011, respectively.