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The Company has classified its short-term investments in commercial paper and corporate bonds as held-to-maturity and as such, has recorded them at amortized cost. Interest earned on these debt securities is recorded to “Other expense (income), net” within the Consolidated Statements of Operations. The gross unrecognized holding gains and losses for the years ended December 31, 2012 and 2011 were not material.

The following tables summarize these short-term investments as of December 31, 2012 and 2011:

2012

Security Type Maturity Consolidated Balance SheetClassification AmortizedCost Interest CarryingAmount

Corporate Bonds 44 to 72 Days Cash and cash equivalents $ 2,509 $ 48 $ 2,557

Commercial Paper 363 Days Investments (short-term) 2,493 — 2,493

Corporate Notes 152 to 365 Days Investments (short-term) 29,056 298 29,354

2011

Security Type Maturity Consolidated Balance SheetClassification AmortizedCost Interest CarryingAmount

Commercial Paper 84 Days Cash and cash equivalents $ 1,300 — 1,300

Commercial Paper 115 to 269 Days Investments (short-term) 12,489 — 12,489

Corporate Notes 128 to 366 Days Investments (short-term) 19,631 317 19,948

Agency Bonds 366 Days Investments (short-term) 4,000 2 4,002

37,420 319 37,739

The fair value framework under the FASB’s guidance requires the categorization of assets and liabilities into three levels based upon the assumptions used to measure the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under the fair value measurement requirements are as follows:

• Level 1: Fair value measurement of the asset or liability using observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2: Fair value measurement of the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

• Level 3: Fair value measurement of the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.

During the year ended December 31, 2012, there were no other transfers in or out of the Company’s Level 1 or Level 2 assets or liabilities.

The following table summarizes the assets measured at fair value on a recurring basis as of December 31, 2012:

Total Level 1 Level 2 Level 3

Asset:

Money market funds as cash equivalents $ 5,642 5,642 — —

The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of December 31, 2011:

Total Level 1 Level 2 Level 3

Asset:

Money market funds as cash equivalents $ 7,197 7,197 — —

Liability:

Interest rate swap(a) $ 1,455 — 1,455 —

(a) Based on one-month U.S. Dollar LIBOR index, inclusive of a $23 credit valuation adjustment (see Note 10). 4. Goodwill and Other Intangibles

Goodwill

At December 31, 2012, the Company had $215,478 of goodwill recorded as a result of the Merger that occurred on June 15, 2007. Goodwill is evaluated for impairment on an annual basis (October 1), or more frequently if events or changes in circumstances indicate that an impairment loss may have occurred. The Company’s operations consist of one reporting unit, which is evaluated during each goodwill impairment test.

INTRALINKS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, Except Share and per Share Data)

In the second quarter of 2012, the Company performed a goodwill impairment test as a result of the continued depressed stock price and the market capitalization of the Company relative to net book value.

Step 1 of the goodwill impairment test was performed using a combination of a discounted cash flow, or DCF, analysis and a market-based approach. The forecasted cash flows employed in the DCF analysis were based on the Company’s most recent forecast and business plans and represent the Company’s best estimate of future results as of June 30, 2012 within a range of possible outcomes. In addition, the Company made the following assumptions in its DCF analysis: (i) a 5% growth factor to calculate the terminal value of its reporting unit and (ii) a 15% discount rate to calculate the terminal value of its reporting unit, both of which are consistent with rates used in the 2011 annual impairment test. The Step 1 valuation also considered the market capitalization of the Company as of the second quarter of 2012, adjusted for an estimated equity control premium of 28%. The Company completed its most recent qualitative impairment analysis as of October 1, 2012. Among the factors included in the Company's qualitative assessment were general economic conditions and the competitive environment, actual and expected financial performance, including consideration of the Company's revenue growth and improved operating results year-over-year, forward-looking business measurements, external market conditions, the Company's stock-price performance compared to overall market and industry peers, market capitalization, and other relevant entity-specific events. Based on the results of the qualitative assessment, the Company concluded that it is more likely than not that the fair value of its reporting unit is higher than its carrying amount, and therefore performance of the two-step quantitative impairment test was not necessary. There were no impairments of goodwill in any of the periods presented in the consolidated financial statements.

Based on the results of the Company’s most recent goodwill impairment tests, management concluded that goodwill was not impaired. However, the Company’s most recent goodwill impairment test showed that the Company could be at risk of recording a goodwill impairment in the future if, for example, the Company’s stock price remained at a depressed level or the Company has a negative change in its future cash flow projections.

As of December 31, 2012, Other intangibles consists of the following:

Definite – Lived Intangible Assets

TechnologyDeveloped RelationshipsCustomer ContractualBacklog Trade Name Non-CompeteAgreement Total

Acquired value at June 15, 2007 $ 132,369 $ 141,747 $ 9,219 $ 14,618 $ 728 $ 298,681

Amortization (60,118) (36,027) (9,219) (3,096) (617) (109,077)

Net book value at December 31, 2009 $ 72,251 $ 105,720 $ — $ 11,522 $ 111 $ 189,604

Amortization $ (13,236) $ (14,176) $ — $ (1,218) $ (111) $ (28,741)

Net book value at December 31, 2010 $ 59,015 $ 91,544 $ — $ 10,304 $ — $ 160,863

Amortization $ (13,237) $ (14,175) $ (1,218) $ — $ (28,630)

Net book value at December 31, 2011 $ 45,778 $ 77,369 $ — $ 9,086 $ — $ 132,233

Acquisition during 2012 85 132 — — 61 279

Amortization (10,369) (14,175) — (1,218) — (25,762)

Net book value at December 31, 2012 $ 35,494 $ 63,326 $ — $ 7,868 $ 61 $ 106,750

The Company has not identified impairment for any of the definite-lived intangible assets through December 31, 2012.

INTRALINKS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, Except Share and per Share Data)

Total intangible amortization expense is classified in each of the operating expense categories for the periods included below as follows:

Year Ended December 31,

2012 2011 2010

Cost of revenue $ 10,369 $ 13,237 $ 13,237

Sales and marketing 14,175 14,175 14,175

General and administrative 1,230 1,218 1,329

Total $ 25,774 $ 28,630 $ 28,741

Estimated intangible amortization expense on an annual basis for the succeeding five years is as follows:

For the year ending December 31, Amount

2013 $ 23,377 2014 23,377 2015 23,377 2016 23,357 2017 11,377 Thereafter 1,885 Total $ 106,750 5. Fixed Assets

Fixed assets consisted of the following at:

December 31,

2012 December 31,2011

Computer and office equipment and software $ 26,710 $ 21,586

Furniture and fixtures 2,036 1,515

Leasehold improvements 4,321 1,939

Total fixed assets 33,067 25,040

Less: Accumulated depreciation and amortization (22,422) (17,405)

Fixed assets, net $ 10,645 $ 7,635

The Company holds fixed assets in seven locations: the United States, United Kingdom, Brazil, France, Germany, Australia and the Netherlands. No country outside of the United States holds greater than 10% of the Company’s total fixed assets. Depreciation expense relating to fixed assets for the years ended December 31, 2012, 2011 and 2010 was $5,011, $5,893 and $5,796, respectively. On March 5, 2010, the Company entered into an equipment sales agreement to purchase previously leased equipment from the lessor for $3,424, thereby releasing the Company from any further commitment or obligation for continued operating lease payments. The Company made the final payment for the purchase of the equipment in April 2010, at which time title of the assets that were previously subject to the lease arrangement passed to the Company. The cost of the purchased equipment is being depreciated over the remaining useful lives of the respective assets. During the year ended December 31, 2010 the Company recorded $1,999 of depreciation expense related to the purchased equipment.

INTRALINKS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Thousands, Except Share and per Share Data)