VSE Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill [Abstract]

Goodwill

(9) Goodwill and Intangible Assets

Changes in goodwill for the six months ended June 30, 2011 are as follows (in thousands):

	Supply Chain Management		IT, Energy and Management Consulting		Infrastructure		Total
Balance as of December 31, 2010	$	-	$	29,769	$	6,513	$	36,282
Increase from acquisition of WBI		63,627		-		-		63,627
Earn-out obligation		-		1,114		-		1,114
Balance as of June 30, 2011	$	63,627	$	30,883	$	6,513	$	101,023

Under the terms of the ICRC and G&B acquisitions, additional consideration is due to the sellers if certain financial performance targets are achieved. G&B achieved certain financial performance targets for the final earn-out period ended on March 31, 2011. This resulted in a $1.1 million earn-out, which was recorded as goodwill and paid to the seller in the second quarter of 2011.

Intangible assets consist of the value of contract-related intangible assets, acquired technologies and trade names acquired in the acquisitions of ICRC, G&B, Akimeka and WBI. Intangible assets with indefinite lives not subject to amortization consist of ICRC and G&B trade names of approximately $2.4 million as of June 30, 2011 and December 31, 2010. The trade names acquired in the Akimeka and WBI acquisitions are being amortized over nine years.

Intangible assets consisted of the following (in thousands):

June 30, 2011	Cost		Accumulated Amortization			Net Intangible Assets
Contract-related	$	96,884	$	(8,457	)	$	88,427
Acquired technologies		12,400		(78	)		12,322
Trade names – amortizable		9,170		(210	)		8,960
Trade names – indefinite lived		2,430		-			2,430
Total	$	120,884	$	(8,745	)	$	112,139

December 31, 2010	Cost		Accumulated Amortization			Net Intangible Assets
Contract-related	$	27,484	$	(6,417	)	$	21,067
Trade name – amortizable		1,570		(64	)		1,506
Trade names – indefinite lived		2,430		-			2,430
Total	$	31,484	$	(6,481	)	$	25,003