Goodwill and Other Assets

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Assets

The Company’s three reportable operating segments are Services, Software and Systems. The Company has allocated goodwill to its Services, Software and Systems reportable operating segments. The changes in carrying amounts of goodwill within the Company's segments are summarized as follows:



	Services			Software			Systems			Total
Goodwill	$	452.2		$	—		$	—		$	452.2
Accumulated impairment losses	(290.7		)	—			—			(290.7		)
Balance at January 1, 2016	$	161.5		$	—		$	—		$	161.5
Goodwill acquired	459.1			238.7			184.8			882.6
Goodwill adjustment	(0.5		)	—			—			(0.5		)
Currency translation adjustment	(20.8		)	(13.8		)	(10.7		)	(45.3		)
Goodwill	$	890.0		$	224.9		$	174.1		$	1,289.0
Accumulated impairment losses	(290.7		)	—			—			(290.7		)
Balance at December 31, 2016	$	599.3		$	224.9		$	174.1		$	998.3
Goodwill acquired	5.6			—			—			5.6
Goodwill adjustment	(1.1		)	(1.0		)	(0.8		)	(2.9		)
Currency translation adjustment	56.9			27.1			20.9			104.9
Goodwill	$	951.4		$	251.0		$	194.2		$	1,396.6
Accumulated impairment losses	(290.7		)	—			—			(290.7		)
Balance at September 30, 2017	$	660.7		$	251.0		$	194.2		$	1,105.9

In August 2016, the Company acquired Diebold Nixdorf AG. During the first quarter of 2017, in connection with the business combination agreement related to the Acquisition, the Company realigned its reportable operating segment to its lines of business to drive greater efficiency and further improve customer service.

The $5.6 acquired goodwill from Moxx and Visio primarily relates to anticipated synergies achieved through increased scale and higher utilization of the service organization.

The acquired Diebold Nixdorf AG goodwill is primarily the result of anticipated synergies achieved through increased scale, a streamlined portfolio of products and solutions, higher utilization of the service organization, workforce rationalization in overlapping regions and shared back office resources. The Company also expects, after completion of the business combination and related integration, to generate strong free cash flow, which would be used to make investments in innovative software and solutions and reduce debt. The Company has allocated goodwill to its Services, Software and Systems reportable operating segments. The goodwill associated with the Acquisition is not deductible for income tax purposes.

In connection with the recasting from geographical regions to lines of business reportable operating segments, the Company has identified nine reporting units, which are summarized below.



Services	Software	Systems
EMEA	EMEA	EMEA
Americas	Americas	Americas
AP	AP	AP

There have been no impairment indicators identified during the nine months ended September 30, 2017.

The following summarizes information on intangible assets by major category:



	September 30, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Internally-developed software	$	184.0	$	(86.9	)	$	97.1	$	151.0	$	(53.2	)	$	97.8
Development costs non-software	53.9		(30.8		)	23.1		48.4		(9.7		)	38.7
Customer relationships	727.7		(86.1		)	641.6		621.7		(25.4		)	596.3
Other intangibles	87.7		(56.0		)	31.7		85.3		(45.2		)	40.1
Total	$	1,053.3	$	(259.8	)	$	793.5	$	906.4	$	(133.5	)	$	772.9

Amortization expense on capitalized software of $8.6 and $6.7 was included in service and software cost of sales for the three months ended September 30, 2017 and 2016, respectively, and $27.9 and $12.5 for the nine months ended September 30, 2017 and 2016, respectively. The Company's total amortization expense, including deferred financing costs, was $42.7 and $24.8 for the three months ended September 30, 2017 and 2016, respectively, and $121.6 and $34.2 for the nine months ended September 30, 2017 and 2016, respectively. The year-over-year increase in amortization expense was primarily related to the identifiable intangibles related to the Acquisition.

- 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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