Intangible Assets

12 Months Ended

Dec. 31, 2016

(7) Intangible Assets

Intangible Assets with Indefinite Lives

The following tables present the net carrying amount of the Company’s intangible assets with indefinite lives as of December 31, 2016 and 2015, as well as the changes in the net carrying amounts for the years ended December 31, 2016 and 2015 by segment:


	Goodwill
	North America (1)		Europe (2)		Corporate & Other (3)		Total
	(In thousands)
Balance as of January 1, 2015
Gross balance	$	398,977	$	162,989	$	—	$	561,966
Accumulated impairment loss		—		(50,003)		—		(50,003)
	$	398,977	$	112,986	$	—	$	511,963

Acquisitions		52,719		—		—		52,719
Divestitures		—		(13,995)		—		(13,995)
Purchase price adjustments		1,051		1,204		—		2,255
Foreign currency translation adjustments		(477)		(3,529)		—		(4,006)

Balance as of December 31, 2015
Gross balance	$	452,270	$	146,669	$	—	$	598,939
Accumulated impairment loss		—		(50,003)		—		(50,003)
	$	452,270	$	96,666	$	—	$	548,936

Intersegment allocation (4)		(6,650)		—		6,650		—
Foreign currency translation adjustments		(38)		(15,823)		—		(15,861)

Balance as of December 31, 2016
Gross balance	$	445,582	$	130,846	$	6,650	$	583,078
Accumulated impairment loss		—		(50,003)		—		(50,003)
	$	445,582	$	80,843	$	6,650	$	533,075

⁽¹⁾

The North America segment is comprised of the Company’s operations in the U.S., Canada, Mexico, and Puerto Rico.

⁽²⁾

The Europe segment is comprised of the Company’s operations in the U.K., Ireland, Germany, Poland, Spain, and its ATM advertising business, i-design group plc (“i-design”).

⁽³⁾

The Corporate & Other segment is comprised of the Company’s transaction processing activities and the Company’s corporate general and administrative functions.

⁽⁴⁾

In the year ended December 31, 2016, the Company allocated $6.7 million of the goodwill stemming from the 2015 acquisition of CDS to the Corporate & Other segment in conjunction with the segment reorganization as discussed in Note 20. Segment Information.


	Trade Name: Indefinite-lived
	North America (1)		Europe (2)		Corporate & Other (3)		Total
	(In thousands)
Balance as of January 1, 2015	$	200	$	528	$	—	$	728
Acquisitions		—		—		1,700		1,700
Foreign currency translation adjustments		—		(112)		—		(112)
Balance as of December 31, 2015	$	200	$	416	$	1,700	$	2,316
Reclassification to definite-lived trade name		—		—		(1,700)		(1,700)
Foreign currency translation adjustments		—		3		—		3
Balance as of December 31, 2016	$	200	$	419	$	—	$	619

⁽¹⁾

The North America segment is comprised of the Company’s operations in the U.S., Canada, Mexico, and Puerto Rico.

⁽²⁾

The Europe segment is comprised of the Company’s operations in the U.K., Ireland, Germany, Poland, Spain, and i-design business.

⁽³⁾

The Corporate & Other segment is comprised of the Company’s transaction processing activities and the Company’s corporate general and administrative functions.

Intangible Assets with Definite Lives

The following table presents the Company’s intangible assets that were subject to amortization:


	December 31, 2016						December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)
Merchant and bank-branding contracts/relationships	$	353,334	$	(248,428)	$	104,906	$	350,211	$	(219,498)	$	130,713
Trade names: definite-lived		11,618		(3,674)		7,944		11,646		(2,859)		8,787
Technology		10,718		(4,781)		5,937		10,751		(3,750)		7,001
Non-compete agreements		4,351		(4,057)		294		4,454		(3,935)		519
Revolving credit facility deferred financing costs		3,770		(2,240)		1,530		2,896		(1,452)		1,444
Total	$	383,791	$	(263,180)	$	120,611	$	379,958	$	(231,494)	$	148,464

The majority of the Company’s intangible assets with definite lives are being amortized over the assets’ estimated useful lives utilizing the straight-line method. Estimated useful lives range from four to ten years for merchant and bank-branding contracts/relationships, two to ten years for exclusive license agreements, one to fifteen years for finite-lived trade names, three years for acquired technology, and one to five years for non-compete agreements. Deferred financing costs relating to the Company’s revolving credit facility are amortized through interest expense over the contractual term of the revolving credit facility utilizing the effective interest method. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a reduction in fair value or a revision of those estimated useful lives.

Amortization of definite-lived intangible assets is recorded in the Amortization of intangible assets line item in the accompanying Consolidated Statements of Operations, including any impairment charges, except for deferred financing costs related to the revolving credit facility and certain exclusive license agreements. Amortization of the revolving credit facility deferred financing costs is combined with the amortization of note discount related to other debt instruments and is recorded in the Amortization of deferred financing costs and note discount line item in the accompanying Consolidated Statements of Operations. Certain exclusive license agreements that were effectively prepayments of merchant fees were amortized through the cost of ATM operating revenues line item in the accompanying Consolidated Statements of Operations during the years ended December 31, 2016, 2015, and 2014 and totaled $8.9 million, $5.9 million, and $3.9 million, respectively.

The Company’s intangible assets acquired during the year ended December 31, 2016 consisted of the following:


	Amount Acquired in 2016		Weighted Average Amortization Period
	(In thousands)
Merchant and bank-branding contracts/relationships	$	12,551	5.6	years
Total	$	12,551

Estimated amortization for the Company’s intangible assets with definite lives as of December 31, 2016, for each of the next five years, and thereafter is as follows (in thousands):


2017	$	33,004
2018		27,698
2019		23,748
2020		16,651
2021		8,962
Thereafter		10,548
Total	$	120,611

- 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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