Ameresco, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The following table presents goodwill balances included in total assets by segment. Goodwill consisted of the following at December 31, 2012 and 2011:



	2010		Acquisitions		Foreign Currency Translation and Other Adjustments		2011		Acquisitions		Foreign Currency Translation and Other Adjustments			2012
U.S. Federal	$	3,374,967	$	—	$	—	$	3,374,967	$	—	$	—		$	3,374,967
Central U.S. Region	1,972,415		—		—		1,972,415		—		—			1,972,415
Other U.S. Regions	4,906,875		16,545,434		283,831		21,736,140		—		—			21,736,140
Canada	2,680,933		—		193,450		2,874,383		1,886,945		(934,216		)	3,827,112
All Other	7,645,805		10,277,636		—		17,923,441		134,315		—			18,057,756
Total	$	20,580,995	$	26,823,070	$	477,281	$	47,881,346	$	2,021,260	$	(934,216	)	$	48,968,390

The measurement periods for purchase price allocations end as soon as information on the facts and circumstances becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a recasting of the amounts allocated to goodwill retroactive to the periods in which the acquisitions occurred.

In accordance with ASC 360, goodwill was tested for impairment as of December 31, 2012 at the reporting unit level using a discounted cash flow method under the income approach and with a peer-based, risk-adjusted weighted average cost of capital.

For the year ended December 31, 2012, a $1,016,325 goodwill impairment charge is included in “Foreign Currency Translation and Other Adjustments” in the above table, as discussed further below. This goodwill impairment charge also represents the accumulated goodwill impairment as of December 31, 2012.

Upon completion of the annual qualitative assessment, Canada goodwill related to the Byrne acquisition (acquired in November 2009), was determined to be likely impaired. The impairment was the result of its fair value at the measurement date being less than its carrying amount. As the annual assessment indicated that Byrne’s carrying value exceeded its estimated fair value, a second phase of the goodwill impairment test (”Step 2”) was performed specific to Byrne. Under Step 2, the fair value of all Byrne’s assets and liabilities were estimated, including tangible and intangible assets. The implied fair value of the goodwill being a residual was then compared to the recorded goodwill to determine the amount of impairment.

No other instances of impairment were identified in the December 31, 2012 assessments.

Customer contracts are amortized ratably over the period of the acquired customer contracts (ranging in periods from approximately one to five years). All other intangible assets are amortized over periods ranging from approximately four to fourteen years, as defined by the nature of the respective intangible asset.

The following table presents intangible asset balances included in total assets by segment. Intangible assets, net, consisted of the following at December 31, 2012 and 2011:



	2011		Acquisitions		Accumulated Amortization			Foreign Currency Translation		2012
Other U.S. Regions:
Customer contracts	$	1,060,433	$	—	$	(1,060,433	)	$	—	$	—
Customer relationships	3,240,593		—		(1,101,624		)	—		2,138,969
Non-compete agreements	1,393,575		—		(550,340		)	—		843,235
Technology	200,582		—		(51,920		)	—		148,662
Canada:
Customer contracts	—		776,875		(147,331		)	4,845		634,389
Customer relationships	—		310,317		(6,338		)	1,498		305,477
Non-compete agreements	—		282,115		(73,730		)	2,759		211,144
Technology	—		655,924		(71,996		)	6,438		590,366
Trade names	—		74,759		(5,310		)	740		70,189
All Other:
Customer contracts	2,551,124		—		(1,242,414		)	—		1,308,710
Customer relationships	2,073,478		—		(157,144		)	—		1,916,334
Non-compete agreements	398,222		87,250		(99,556		)	—		385,916
Technology	1,386,506		94,000		(546,738		)	—		933,768
Trade names	423,015		—		(167,296		)	—		255,719
Total	$	12,727,528	$	2,281,240	$	(5,282,170	)	$	16,280	$	9,742,878

Amortization expense for the years ended December 31, 2012 and 2011 related to customer contracts was $2,450,178 and $1,364,443, respectively, and is included in energy efficiency expenses in the consolidated statements of income. Amortization expense for the years ended December 31, 2012 and 2011 related to customer relationships, non-compete agreements, technology and trade names was $2,831,992 and $388,029, respectively, and is included in general, administrative and other expenses in the consolidated statements of income. No amortization expense related to intangible assets was recorded for the year ended December 31, 2010.

- 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 + Details