INTANGIBLE ASSETS AND GOODWILL
Intangible assets consisted of the following at December 31:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | 2012 |
(in millions) | | Assigned Value | | Accumulated Amortization | | Net Book Value | | Assigned Value | | Accumulated Amortization | | Net Book Value |
Amortizable Intangible Assets: | | | | | | | | | | | | |
Clearing firm, market data and other customer relationships | | $ | 2,838.8 |
| | $ | (563.2 | ) | | $ | 2,275.6 |
| | $ | 2,838.8 |
| | $ | (467.4 | ) | | $ | 2,371.4 |
|
Lease-related intangibles | | 2.2 |
| | (0.6 | ) | | 1.6 |
| | 25.4 |
| | (8.2 | ) | | 17.2 |
|
Technology-related intellectual property | | 33.8 |
| | (19.8 | ) | | 14.0 |
| | 29.4 |
| | (14.4 | ) | | 15.0 |
|
Trade name | | 0.2 |
| | (0.2 | ) | | — |
| | 0.2 |
| | (0.1 | ) | | 0.1 |
|
Total amortizable intangible assets | | $ | 2,875.0 |
|
| $ | (583.8 | ) | | 2,291.2 |
| | $ | 2,893.8 |
| | $ | (490.1 | ) | | 2,403.7 |
|
| | | | | | | | | | | | |
Indefinite-Lived Intangible Assets: | | | | | | | | | | | | |
Trade names | | | | | | 450.0 |
| | | | | | 450.0 |
|
Total intangible assets—other, net | | | | | | $ | 2,741.2 |
| | | | | | $ | 2,853.7 |
|
Trading products (1) | | | | | | $ | 17,175.3 |
| | | | | | $ | 17,175.3 |
|
_______________
| |
(1) | Trading products represent futures and options products acquired in our business combinations with CBOT Holdings, Inc. (CBOT Holdings), KCBT and NYMEX Holdings, Inc. (NYMEX Holdings). Clearing and transaction fees revenues are generated through the trading of these products. These trading products, most of which have traded for decades, require authorization from the CFTC. Product authorizations from the CFTC have no term limits. |
As part of its sale of its building in New York in November 2013, the company sold the rights to lease agreements with tenants occupying space within the building. The lease agreements, which are included in lease-related intangibles, had a net book value of $13.8 million on the date of sale.
As part of its sale of two buildings in Chicago in April 2012, the company sold the rights to lease agreements with tenants occupying space within the buildings. The lease agreements, which are included in lease-related intangibles, had a net book value of $14.4 million on the date of sale.
In June 2012, the company contributed the DJI asset group to S&P/DJI. Contributed intangible assets with an aggregate net book value of $336.3 million included rights to customer agreements, technology-related intellectual property and trade names. In addition, the company sold CMA-related intangible assets with a net book value of $9.4 million.
In July 2012, the company recognized $17.0 million of intangible assets related to the acquisition of Pivot, Inc., including customer relationships and technology-related intellectual property. In connection with the acquisition of KCBT in November 2012, the company acquired trading products, which are classified as indefinite-lived intangible assets, in the amount of $134.8 million.
The originally assigned useful lives for the amortizable intangible assets as of December 31, 2013 are as follows:
|
| |
| |
Clearing firm, market data and other customer relationships | 5-30 years |
Lease-related intangible assets | 24.5 years |
Technology-related intellectual property | 4-5 years |
Trade name | 3 years |
Total amortization expense for intangible assets was $103.0 million, $116.2 million and $132.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013, the future estimated amortization expense related to amortizable intangible assets is expected to be as follows:
|
| | | |
(in millions) | |
2014 | $ | 100.8 |
|
2015 | 100.6 |
|
2016 | 97.2 |
|
2017 | 96.3 |
|
2018 | 94.7 |
|
Thereafter | 1,801.6 |
|
Goodwill activity consisted of the following for the years ended December 31, 2013 and 2012:
|
| | | | | | | | | | | | | | | | | | | | |
(in millions) | | Balance at December 31, 2012 | | Business Combinations | | Divestitures | | Other Activity | | Balance at December 31, 2013 |
CBOT Holdings | | $ | 5,035.7 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 5,035.7 |
|
NYMEX Holdings | | 2,462.2 |
| | — |
| | — |
| | — |
| | 2,462.2 |
|
Other | | 69.0 |
| | — |
| | — |
| | 2.1 |
| | 71.1 |
|
Total Goodwill | | $ | 7,566.9 |
| | $ | — |
| | $ | — |
| | $ | 2.1 |
| | $ | 7,569.0 |
|
(in millions) | | Balance at December 31, 2011 | | Business Combinations | | Divestitures | | Other Activity | | Balance at December 31, 2012 |
CBOT Holdings | | $ | 5,035.7 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 5,035.7 |
|
NYMEX Holdings | | 2,462.2 |
| | — |
| | — |
| | — |
| | 2,462.2 |
|
Index Services | | 434.5 |
| | — |
| | (434.5 | ) | | — |
| | — |
|
Other | | 51.6 |
| | 46.3 |
| | (28.9 | ) | | — |
| | 69.0 |
|
Total Goodwill | | $ | 7,984.0 |
| | $ | 46.3 |
| | $ | (463.4 | ) | | $ | — |
| | $ | 7,566.9 |
|
In 2012, the company recognized goodwill in connection with the acquisitions of KCBT and Pivot, Inc. and divested goodwill allocated to the Index Services and CMA reporting units in conjunction with the formation of S&P/DJI.
