Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

The Company’s goodwill by reportable segment at December 31, 2016 and 2015 is as follows:


	December 31,
	2016		2015
U.S. Debit and Credit	$	64,330	$	64,330
U.K. Limited		5,908		7,089
Other		1,758		1,704
	$	71,996	$	73,123

Goodwill activity is summarized as follows:


Balance as of January 1, 2015	$	73,801
Currency translation		(678)
Balance as of December 31, 2015	$	73,123
Currency translation		(1,127)
Balance as of December 31, 2016	$	71,996

The Company completed its evaluation of the carrying value of goodwill as of October 1, 2016 and 2015 and determined there was no impairment to goodwill. In order to identify potential impairments, CPI compared the fair value of its reporting units with their carrying amounts, including goodwill. As the fair value of the reporting units exceeded their carrying amounts, the Company was not required to complete the second step of the process which would measure the amount of any impairment.

The Company completed its evaluation of the carrying values of its indefinite lived intangible assets as of October 1, 2016 and identified a $2,700 impairment related to a trademark acquired in the EFT Source acquisition. The impairment was a result of the Company’s plans to discontinue its use of the trademark in its sales, marketing and other business practices. Accordingly, the trademark was written down to its fair value of zero. Refer to Note 8 “Fair Value of Financial Instruments” for further definition of valuation inputs. The impaired asset is included in the U.S. Debit and Credit reportable segment, and the impairment charge is recorded in “Selling, general and administrative” expenses within the Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2016. There was no impairment of indefinite-lived intangible assets for the years ended December 31, 2015, and 2014.

During 2016, the Company evaluated the future utilization of its trademarks and updated its estimate to amortize these assets over lives ranging from 7.5 to 10 years.

CPI’s other amortizable intangible assets consist of customer relationships, technology and software, non-compete agreements, and favorable leases. Total intangible assets are being amortized over a weighted-average useful life of 15.6 years. Intangible amortization expense totaled $4,632, $4,577 and $2,893, for the years ended December 31, 2016, 2015 and 2014, respectively.

Intangible assets consist of the following:


		December 31, 2016						December 31, 2015
	Average			Accumulated		Net Book				Accumulated		Net Book
	Life (Years)	Cost		Amortization		Value		Cost		Amortization		Value
Customer relationships	12 to 20	$	58,994	$	(20,972)	$	38,022	$	59,612	$	(17,747)	$	41,865
Technology and software	7 to 10		7,101		(2,167)		4,934		7,101		(1,238)		5,863
Noncompete agreements	5 to 8		491		(331)		160		491		(270)		221
Favorable leases	9.5		111		(111)		—		111		(101)		10
Trademarks	7.5 to 10		3,330		(98)		3,232		6,029		—		6,029
Intangible assets subject to amortization		$	70,027	$	(23,679)	$	46,348	$	73,344	$	(19,356)	$	53,988

The estimated future aggregate amortization expense for the identified amortizable intangibles noted above as of December 31, 2016 is as follows:


2017	$	4,893
2018		4,893
2019		4,873
2020		4,833
2021		4,579
Thereafter		22,277
	$	46,348

- 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.

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