Mercury Insurance 2010 Annual Report Download - page 96

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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair value of the financial assets acquired includes cash, prepaid expenses, and receivables from
customers. The acquired receivables of $6.6 million at fair value were fully collected during the three-month
period ended March 31, 2009. The fair value of the liabilities assumed includes accounts payable and other
accrued liabilities. The following table reflects the amount of revenue and net income of AIS, which are included
in the Company’s consolidated statements of operations for the years ended December 31, 2010 and 2009, and
the revenue of the combined entity for the year ended December 31, 2008, had the acquisition date been
January 1, 2008.
2010 2009 2008
(Amounts in thousands)
AIS
Revenues(1) ................................. $ 13,926 $ 11,846 N/A
Net income(1) ................................ $ 3,367 $ 1,228 N/A
Combined entity
Revenues(2) ................................. $2,775,885 $3,121,493 $2,425,414
Net income(3) ................................ $ 152,198 $ 403,072 N/A
(1) Excludes intercompany transactions with the Company’s insurance subsidiaries.
(2) Includes net premiums earned, net investment income, net realized investment gains/losses and commission
revenues.
(3) 2008 pro forma net income for the combined entity is not available as AIS was previously consolidated into
its parent company and separate financial statements were not available.
9. Goodwill and Other Intangible Assets
Goodwill
There were no changes in the carrying amount of goodwill for the year ended December 31, 2010. Goodwill
is reviewed for impairment on an annual basis and more frequently if potential impairment indicators exist. No
impairment indications were identified during any of the periods presented.
The changes in the carrying amount of goodwill for the year ended December 31, 2009 are as follows
(amounts in thousands):
Balance as of January 1 $41,557
Purchase price adjustments ............................................... 1,293
Balance as of December 31 $42,850
Other Intangible Assets
The following table presents the components of other intangible assets as of December 31, 2010 and 2009.
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(Amounts in thousands)
As of December 31, 2010:
Customer relationships ..................................... $51,755 $ (9,767) $41,988
Trade names ............................................. 15,400 (1,283) 14,117
Software and technology .................................... 4,850 (1,410) 3,440
Favorable leases .......................................... 1,725 (1,146) 579
Total intangible assets, net .............................. $73,730 $(13,606) $60,124
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