Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

(7) Intangible Assets

Goodwill

For the goodwill impairment evaluation as of December 31, 2019, the Company elected to perform the optional qualitative assessment allowed under the applicable guidance to determine if it was necessary to perform a quantitative assessment for any reporting unit. Based on the results of the qualitative assessment, the Company determined that it was not more likely than not that the carrying value of its U.S., U.K., Australia & New Zealand, South Africa, Germany and Mexico reporting units exceeded their fair value. As such, the Company determined that a quantitative assessment was not necessary for these reporting units. The Company did, however, identify impairment indicators associated with the Canada reporting unit, which required the Company to complete a quantitative impairment assessment.

For the quantitative assessment prepared for the Canada reporting unit as of December 31, 2019, the Company prepared a 5-year cash flow forecast, that incorporated assumptions on operating efficiencies and increased resulting cash flows over time at a discount rate of 10%. Based on this estimation, the carrying value of the reporting unit exceeded its fair value by $7.3 million. Therefore, consistent with the early adoption of ASU 2017-4, the Company recognized a goodwill impairment of $7.3 million, the amount by which the carrying amount of the Canada reporting unit exceeded its fair value. This impairment was recognized during the three months ended December 31, 2019 in the Loss on disposal and impairment of assets line of the Company's Consolidated Statements of Operations together with certain unrelated disposals in the ordinary course of business. After the impairment, the Canada reporting unit's goodwill was approximately $104 million at December 31, 2019.

During the three months ended March 31, 2020, and in response to the global economic impact of the Pandemic, the Company performed an additional qualitative assessment and determined that it was not more likely than not that the carrying value of its U.S., U.K., Australia & New Zealand, South Africa, Germany and Mexico reporting units exceeded their fair value. As such, the Company determined that a quantitative assessment was not necessary for these reporting units. For the Canada reporting unit, the Company bypassed the optional qualitative assessment and performed an updated quantitative assessment as of March 31, 2020. For this quantitative assessment, the Company prepared a revised cash flow forecast that incorporated the estimated Pandemic impact, assumptions on operating efficiencies and resulting cash flows over time at a discount rate of 9.7%. Based on this quantitative test, the fair value of the reporting unit marginally exceeded its carrying value and no additional goodwill impairment was recognized.

During the three months ended June 30, 2020, the Company's reporting units, including Canada, performed consistent with the forecasts used as of March 31, 2020, and therefore, the Company did not identify impairment indicators. The Canada reporting unit's goodwill was approximately $99 million at June 30, 2020. To the extent that the Company is unable to meet its forecasts in the future or there are changes in the discount rate, further impairment charges are possible.

The following table presents the net carrying amounts of the Company’s Goodwill as of June 30, 2020 and December 31, 2019, as well as the changes in the net carrying amounts for the six months ended June 30, 2020 by segment. As of June 30, 2020, the Company held no significant indefinite-lived assets. For additional information related to the Company’s segments, see Note 17. Segment Information.


	North America		Europe & Africa		Australia & New Zealand		Total
	(In thousands)
Goodwill, gross as of December 31, 2019	$	561,513	$	236,992	$	151,431	$	949,936
Accumulated impairment loss	(7,303)		(50,003)		(140,038)		(197,344)
Goodwill, net as of December 31, 2019	$	554,210	$	186,989	$	11,393	$	752,592

Foreign currency translation adjustments	(4,859)		(17,771)		(222)		(22,852)

Goodwill, gross as of June 30, 2020	556,654		219,221		151,209		927,084
Accumulated impairment loss	(7,303)		(50,003)		(140,038)		(197,344)
Goodwill, net as of June 30, 2020	$	549,351	$	169,218	$	11,171	$	729,740

Intangible Assets with Definite Lives

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


	June 30, 2020										December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In thousands)
Merchant and bank-branding contracts/relationships	$	480,852	$	(398,945)	$	81,907	$	489,363	$	(388,598)	$	100,765
Trade names	17,628		(12,555)		5,073		18,391		(12,792)		5,599
Technology	11,934		(8,322)		3,612		12,389		(7,952)		4,437
Non-compete agreements	4,348		(4,348)		—		4,408		(4,408)		—
Revolving credit facility deferred financing costs	5,355		(1,995)		3,360		5,256		(2,132)		3,124
Total intangible assets with definite lives	$	520,117	$	(426,165)	$	93,952	$	529,807	$	(415,882)	$	113,925

During the three months ended June 30, 2020, the Company expensed approximately $0.8 million of deferred financing costs associated with its revolving credit facility upon entering into a third amendment to the revolving credit facility agreement, which reduced the borrowing capacity of the facility. This expense was recognized in the Amortization of deferred financing costs and note discount line of the Consolidated Statements of Operations. See Note 9. Current and Long-Term Debt.