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Goodwill and Acquired Client Relationships | 9 Months Ended
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Sep. 30, 2012
Goodwill and Acquired Client Relationships |
Goodwill and Acquired Client Relationships |
17. Goodwill and Acquired Client Relationships The following table presents the change in goodwill during the nine months ended September 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 |  |  | 2.9 |  |  | 6.7 |  |  | 4.0 |  |  | 13.6 |
Balance, as of September 30, 2012 |  | $ | 935.5 |  | $ | 1,078.3 |  | $ | 339.5 |  | $ | 2,353.3 |
The following table presents the changes in and the components of acquired client relationships at the Company's consolidated Affiliates during the nine months ended September 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 |  |  | — |  |  | (66.9 | ) |  | (66.9 | ) |  | (102.2 | ) |  | (169.1 | )
Foreign currency translation |  |  | 1.3 |  |  | — |  |  | 1.3 |  |  | 9.4 |  |  | 10.7 |
Transfer |  |  | 38.2 |  |  | — |  |  | 38.2 |  |  | (38.2 | ) |  | — |
Balance as of September 30, 2012 |  | $ | 1,141.1 |  | $ | (383.9 | ) | $ | 757.2 |  | $ | 858.1 |  | $ | 1,615.3 |
During the first half of 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 $102.2 million. 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 assets under management (declining 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, in the second quarter of 2012 the Company reclassified the remaining acquired client relationships to definite-lived. No impairment was recognized in the third quarter of 2012. For the Company's Affiliates that are consolidated, definite-lived acquired client relationships are amortized over their expected useful lives. As of September 30, 2012, these relationships were being amortized over a weighted average life of approximately eleven years. The Company recognized amortization expense for these relationships of $22.1 million and $66.3 million, respectively for the three and nine months ended September 30, 2011 as compared to $24.0 million and $66.9 million, respectively for the three and nine months ended September 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.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 + Details
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