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Goodwill and Other Intangible Assets, Net
 12 Months Ended
Dec. 31, 2013
Goodwill And Intangible Assets Disclosure [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, 2013 and 2012 were as follows (in thousands):

 

     2013     2012  
           (As Adjusted)  

Goodwill

    $ 384,697      $ 375,122   

Intangibles:

     

Client lists

      132,637        134,987   

Other intangibles

      7,956        8,501   
  

 

 

    

 

 

  

Total intangibles

      140,593        143,488   
  

 

 

    

 

 

  

Total goodwill and other intangibles assets

      525,290        518,610   

Accumulated amortization:

     
    

Client lists

      (51,016 )      (44,293 ) 

Other intangibles

      (5,191 )      (4,746 ) 
  

 

 

    

 

 

  

Total accumulated amortization

      (56,207 )      (49,039 ) 
  

 

 

    

 

 

  

Goodwill and other intangible assets, net

    $ 469,083      $ 469,571   
  

 

 

    

 

 

  

Goodwill

Changes in the carrying amount of goodwill by operating segment for the years ended December 31, 2013 and 2012 were as follows (in thousands):

 

     Financial
Services		      Employee
Services		      National
Practices		      Total
Goodwill		  

December 31, 2011

    $ 233,163       $ 82,605       $ 1,666       $ 317,434   

Additions (as adjusted)

      25,875         31,813         —         57,688   
  

 

 

     

 

 

     

 

 

     

 

 

  

December 31, 2012

    $ 259,038       $ 114,418       $ 1,666       $ 375,122   

Additions

      1,677         7,898         —         9,575   
  

 

 

     

 

 

     

 

 

     

 

 

  

December 31, 2013

    $ 260,715       $ 122,316       $ 1,666       $ 384,697   
  

 

 

     

 

 

     

 

 

     

 

 

  

Businesses acquired during 2013 resulted in additions to goodwill of approximately $9.3 million, of which $1.4 million was recorded in the Financial Services practice group and $7.9 million was recorded in the Employee Services practice group. Businesses acquired during 2012 resulted in additions to goodwill of approximately $57.2 million, of which $25.4 million was recorded in the Financial Services practice group and $31.8 million was recorded in the Employee Services practice group. These additions include purchase price adjustments made in 2013 that retrospectively adjusted 2012 goodwill by a total of $1.4 million. These purchase price adjustments resulted from finalizing working capital arrangements pertaining to two acquisitions made in 2012. The result of these adjustments was a $0.7 million reduction of goodwill for each of the Financial Services and Employee Services operating segments. The remaining increases in goodwill during 2013 and 2012 were a result of contingent purchase price earned by businesses acquired in prior years. Refer to Note 19 for further discussion of acquisition activities.

 

Goodwill Impairment

During the fourth quarter of 2013, 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 their respective carrying values, thus resulting in no indication of impairment of goodwill.

Client Lists and Other Intangibles

At December 31, 2013, the weighted average amortization period remaining for total intangible assets was 8.3 years. Client lists are amortized over their expected period of benefit and had a weighted-average amortization period of 8.5 years remaining at December 31, 2013. 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 3.1 years remaining at December 31, 2013. Amortization expense related to client lists and other intangible assets for the years ended December 31, 2013, 2012 and 2011 was as follows (in thousands):

 

     2013      2012      2011  

Operating expenses

    $ 14,041       $ 11,967       $ 10,543   

Corporate general and administrative expenses

      15         16         17   
  

 

 

     

 

 

     

 

 

  

Total amortization expense

    $ 14,056       $ 11,983       $ 10,560   
  

 

 

     

 

 

     

 

 

  

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):

 

2014

    $ 13,655   
  

 

 

  

2015

    $ 12,311   
  

 

 

  

2016

    $ 11,437   
  

 

 

  

2017

    $ 10,765   
  

 

 

  

2018

    $ 10,031   
  

 

 

  

Future amortization expense excludes the impact of events that may occur subsequent to December 31, 2013, including acquisitions and divestitures.