Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2012

NOTE 6. Goodwill and Other Intangible Assets

In accordance with the FASB issued guidance in the Intangibles-Goodwill and Other Topic of the Codification, we completed the required annual impairment tests. We performed a qualitative assessment on the Hub segment goodwill and a quantitative assessment on the Hub segment indefinite lived intangible asset and the Mode segment goodwill. No impairment charges were recognized based on the results of the annual goodwill and indefinite lived intangible assessments and there were no accumulated impairment losses at the beginning of the period.

The following table presents the carrying amount of goodwill (in thousands):


	Hub			Mode		Hub Group Total
Balance at January 1, 2011	$	233,029		$	—	$	233,029
Acquisition		1,270			29,389		30,659
Other		(218	)		—		(218	)

Balance at December 31, 2011	$	234,081		$	29,389	$	263,470
Other		(219	)		—		(219	)

Balance at December 31, 2012	$	233,862		$	29,389	$	263,251

The changes in the carrying amount of Hub goodwill for 2011 are due to the purchases of Domestic Transport and Challenge Transport. The purchase of Mode in 2011 created the additional goodwill of $29.4 million in the Mode segment. The changes noted as “other” in the table above for both 2012 and 2011 refer to the amortization of the income tax benefit of tax goodwill in excess of financial statement goodwill.

The components of the “Other intangible assets” are as follows (in thousands):


As of December 31, 2012:	Gross Amount		Accumulated Amortization			Net Carrying Value		Life
Hub
Customer relationships	$	5,181	$	(2,015	)	$	3,166	7-15 years
Trade name		2,904		—			2,904	Indefinite
Relationships with owner operators		1,179		(1,050	)		129	2-6 years
Information technology		500		(500	)		—	6 years
Backlog/open orders		20		(20	)		—	1 month

Hub Total	$	9,784	$	(3,585	)	$	6,199

Mode
Agency/customer relationships	$	15,362	$	(1,493	)	$	13,869	18 years

Hub Group Total	$	25,146	$	(5,078	)	$	20,068


As of December 31, 2011:	Gross Amount		Accumulated Amortization			Net Carrying Value		Life
Hub
Customer relationships	$	5,181	$	(1,547	)	$	3,634	7-15 years
Trade name		2,904		—			2,904	Indefinite
Relationships with owner operators		1,179		(786	)		393	2-6 years
Information technology		500		(486	)		14	6 years
Backlog/open orders		20		(20	)		—	1 month

Hub Total	$	9,784	$	(2,839	)	$	6,945

Mode
Agency/customer relationships	$	15,362	$	(640	)	$	14,722	18 years

Hub Group Total	$	25,146	$	(3,479	)	$	21,667

The above intangible assets are amortized using the straight-line method. Amortization expense for each of the years ended December 31, 2012, 2011 and 2010 was $1.6 million, $1.3 million and $0.5 million, respectively. The remaining weighted average life of all definite lived intangible assets as of December 31, 2012 was 7.06 years and 16.25 years for Hub and Mode, respectively. Amortization expense for the next five years is as follows (in thousands):


	Hub		Mode		Hub Group Total
2013	$	582	$	853	$	1,435
2014		442		853		1,295
2015		442		853		1,295
2016		442		853		1,295
2017		442		853		1,295

- 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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