Intangible Assets, net

12 Months Ended

Dec. 31, 2017

(7) Intangible Assets, net

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, 2017 and 2016, as well as the changes in the net carrying amounts for the years ended December 31, 2017 and 2016 by segment:


	North America (1)		Europe & Africa (2)		Australia & New Zealand		Total
	(In thousands)
Goodwill, gross as of January 1, 2016	$	452,270	$	146,669	$	—	$	598,939
Accumulated impairment loss		—		(50,003)		—		(50,003)
Goodwill, net as of January 1, 2016	$	452,270	$	96,666	$	—	$	548,936

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

Goodwill, gross as of December 31, 2016	$	452,232	$	130,846	$	—	$	583,078
Accumulated impairment loss		—		(50,003)		—		(50,003)
Goodwill, net as of December 31, 2016	$	452,232	$	80,843	$	—	$	533,075

Acquisitions		107,442		99,465		141,557		348,464
Foreign currency translation adjustments		6,043		16,238		11,157		33,438
Impairment loss		—		—		(140,038)		(140,038)

Goodwill, gross as of December 31, 2017	$	565,717	$	246,549	$	152,714	$	964,980
Accumulated impairment loss		—		(50,003)		(140,038)		(190,041)
Goodwill, net as of December 31, 2017	$	565,717	$	196,546	$	12,676	$	774,939

⁽¹⁾

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

⁽²⁾

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


	Trade Name: Indefinite-lived
	North America (1)		Europe & Africa (2)		Total
	(In thousands)
Balance as of January 1, 2016	$	1,900	$	416	$	2,316
Reclassification to definite-lived trade name		(1,700)		—		(1,700)
Foreign currency translation adjustments		—		3		3
Trade names: indefinite-lived as of December 31, 2016	$	200	$	419	$	619
Foreign currency translation adjustments		—		40		40
Trade names: indefinite-lived as of December 31, 2017	$	200	$	459	$	659

⁽¹⁾

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

⁽²⁾

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

Intangible Assets with Definite Lives

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


	December 31, 2017						December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)
Merchant and bank-branding contracts/relationships	$	490,332	$	(299,801)	$	190,531	$	353,334	$	(248,428)	$	104,906
Trade names: definite-lived		18,480		(7,091)		11,389		11,618		(3,674)		7,944
Technology		10,901		(5,230)		5,671		10,718		(4,781)		5,937
Non-compete agreements		4,438		(4,308)		130		4,351		(4,057)		294
Revolving credit facility deferred financing costs		2,730		(1,248)		1,482		3,770		(2,240)		1,530
Total intangible assets with definite lives	$	526,881	$	(317,678)	$	209,203	$	383,791	$	(263,180)	$	120,611

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, 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, 2017, 2016, and 2015 and totaled $10.0 million, $8.9 million, and $5.9 million, respectively.

The Company’s intangible assets acquired during the years ended December 31, 2017 and 2016 consisted of the following:


	Amount Acquired in 2017		Weighted Average Amortization Period		Amount Acquired in 2016		Weighted Average Amortization Period
	(In thousands)
Merchant and bank-branding contracts/relationships	$	174,210	8.0	years	$	12,551	5.6	years
Trade name: definite-lived		10,693	3.0	years		–
Total	$	184,903			$	12,551

Estimated amortization for the Company’s intangible assets with definite lives as of December 31, 2017, for each of the next five years, and thereafter is as follows (in thousands):


2018	$	55,132
2019		51,182
2020		40,368
2021		32,014
2022		28,107
Thereafter		2,400
Total	$	209,203

- 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.

+ References + Details