F-17
Goodwill
The balances and changes in amount of goodwill are as follows:
Commercial
Segment
Government
Segment
Total
Balance as of December 31, 2011 ......................................... $
122,454 $
54,023 $
176,477
Adjustments to the purchase price allocation for the
acquisition of Trident ..............................................
—
273
273
Goodwill from acquisition of microDATA..................
22,032
—
22,032
Impairment charge related to the adjusted fair value
of the Navigation reporting unit ..............................
(86,332)
—
(86,332)
Balance as of December 31, 2012 .........................................
58,154
54,296
112,450
Impairment charge related to the adjusted fair value
of the Platforms and Applications reporting unit ....
(8,209)
—
(8,209)
Balance as of December 31, 2013 ......................................... $
49,945 $
54,296 $
104,241
We assess goodwill for impairment in the fourth quarter of each year, or sooner should there be an indicator of impairment. We
periodically analyze whether any such indicators of impairment exist. Such indicators include a sustained, significant decline in the
Company’s stock price and market capitalization, a decline in the Company’s expected future cash flows, a significant adverse change
in legal factors or in the business climate, unanticipated competition, and/or slower expected growth, among others. For goodwill
impairment testing, we have four reporting units. In 2013, we reorganized the Commercial Segment in order to better conform and
integrate the product lines and create efficiencies, so that one management team is now responsible for all Commercial
Platforms &
Applications
other than the 9-1-1
Safety and Security
part of the Commercial Segment. Previously, our Commercial Segment was
comprised of
Navigation
and
Other Commercial
reporting units. Our two Government Segment reporting units, the
Government
Solutions Group
(“GSG”) unit and the
Cyber Intelligence
unit, remain the same.
Goodwill balances by reporting unit:
December 31,
2013
Platforms and Applications .......................................................................................... $
27,912
Safety and Security Group ...........................................................................................
22,033
Government Solutions Group.......................................................................................
26,141
Cyber Intelligence ........................................................................................................
28,155
Total goodwill..................................................................................................... $
104,241
December 31,
2012
Navigation .................................................................................................................... $
22,102
Other Commercial ........................................................................................................
36,052
Government Solutions Group.......................................................................................
26,141
Cyber Intelligence ........................................................................................................
28,155
Total goodwill..................................................................................................... $
112,450
Our fourth quarter 2013 impairment testing resulted in the write-down of our Platforms and Applications reporting unit’s
goodwill from a carrying value of $36,121 to the estimated fair value of $27,912 at December 31, 2013, resulting in an impairment
charge of $8,209. We used a discounted cash flow method to determine to determine the fair value of the goodwill of the Platforms
and Applications Reporting Unit.
In performing our 2013 testing for our Safety and Security and Cyber Intelligence reporting units, we used a discounted cash
flow method as well as a market approach based on observable public comparable company multiples of revenue and earnings before
interest taxes depreciation and amortization (“EBITDA”) and weighted the results from the two methods to estimate the reporting
units’ fair values. For our Government Solutions Group we used only a discounted cash flow method. Determining fair value requires
the exercise of significant judgment, including judgment about appropriate discount rates, the amount and timing of expected future
cash flows, as well as relevant comparable company multiples for the market comparable approach and the relevant weighting of the
methods utilized.
