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Goodwill and Acquired Client Relationships

6 Months Ended

Jun. 30, 2012

Goodwill and Acquired Client Relationships

Goodwill and Acquired Client Relationships

16. Goodwill and Acquired Client Relationships

Consolidated

The following table presents the change in goodwill during the six months ended June 30, 2012:

	Mutual Fund			Institutional		High Net Worth		Total

Balance as of December 31, 2011	$	785.0		$	1,071.4	$	260.9	$	2,117.3
Goodwill acquired		147.6			0.2		74.6		222.4
Foreign currency translation		(0.6	)		1.9		1.0		2.3

Balance as of June 30, 2012	$	932.0		$	1,073.5	$	336.5	$	2,342.0

The following table presents the changes in and the components of acquired client relationships at the Company's consolidated Affiliates during the six months ended June 30, 2012:

	Acquired Client Relationships

	Definite-lived								Indefinite-lived			Total
	Gross Book Value		Accumulated Amortization			Net Book Value			Net Book Value			Net Book Value
Balance as of December 31, 2011	$	970.5	$	(317.0	)	$	653.5		$	667.6		$	1,321.1
New investments		131.1		—			131.1			321.5			452.6
Amortization and impairment		—		(42.9	)		(42.9	)		(102.2	)		(145.1	)
Foreign currency translation		0.2		—			0.2			2.4			2.6
Transfer		38.2		—			38.2			(38.2	)		—

Balance as of June 30, 2012	$	1,140.0	$	(359.9	)	$	780.1		$	851.1		$	1,631.2

During 2012, the Company determined that the fair value of the indefinite-lived intangible asset at one of its Affiliates, a manager of growth-oriented U.S. equity mutual funds, had declined below its carrying value and, accordingly, reduced the carrying value by $93.5 million and $102.2 million, in the three and six months ended June 30, 2012, respectively. The fair value of this asset ($38.2 million) was calculated using a discounted cash flow analysis, a Level 3 fair value measurement. The significant assumptions used in the valuation were declining assets under management (approximately 10% annually) and a discount rate of 15%. While the Company generally considers investment advisory contracts between its Affiliates and their sponsored registered investment companies to have an indefinite life, it was determined that the useful life of this asset was no longer indefinite. Accordingly, the Company reclassified the remaining acquired client relationships to definite-lived.

For the Company's Affiliates that are consolidated, definite-lived acquired client relationships are amortized over their expected useful lives. As of June 30, 2012, these relationships were being amortized over a weighted average life of approximately twelve years. The Company recognized amortization expense for these relationships of $22.1 million and $44.2 million, respectively for the three and six months ended June 30, 2011 as compared to $21.2 million and $42.9 million, respectively for the three and six months ended June 30, 2012. The Company estimates that its consolidated annual amortization expense will be approximately $95.0 million for the next five years, assuming no additional investments in new or existing Affiliates.

Equity Method

The definite-lived acquired client relationships attributable to the Company's equity method investments are amortized over their expected useful lives. As of June 30, 2012, these relationships were being amortized over a weighted average life of approximately seven years. The Company recognized amortization expense for these relationships of $8.2 million and $16.6 million, respectively for the three and six months ended June 30, 2011 as compared to $8.2 million and $16.3 million, respectively for the three and six months ended June 30, 2012. Assuming no additional investments in new or existing Affiliates, the Company estimates the annual amortization expense attributable to its current equity- method Affiliates for the next five years as follows:

Year Ending December 31,	Estimated Amortization Expense

2012	$	32.7
2013		32.7
2014		11.2
2015		2.7
2016		0.2

- 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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