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	62.7			30.1			23.3			116.1
Goodwill	957.2			254.0			196.6			1,407.8
Accumulated impairment losses	(290.7		)	—			—			(290.7		)
Balance at December 31, 2017	$	666.5		$	254.0		$	196.6		$	1,117.1

Goodwill. In the fourth quarter of 2017, goodwill was reviewed for impairment based on a two-step test, which resulted in no impairment in any of the Company's reporting units. The Company estimated the fair value of its nine reporting unit using a combination of the income valuation and market approach in valuation methodology. The determination of the fair value of the reporting unit requires significant estimates and assumptions, including significant unobservable inputs. The key inputs included, but were not limited to, discount rates, terminal growth rates, market multiple data from selected guideline public companies, management’s internal forecasts which include numerous assumptions such as projected net sales, gross profit, sales mix, operating and capital expenditures and earnings before interest and taxes margins, among others. Management determined that the Services-AP and Software-EMEA reporting units had excess fair value of $15.4 or 8.1 percent and $1.3 or 0.6 percent, respectively, when compared to their carrying amounts. The other reporting units had excess fair value of approximately $50 or greater cushion when compared to their carrying amount. Changes in certain assumptions or the Company's failure to execute on the current plan could have a significant impact to the estimated fair value of the reporting units.

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.

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 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

Other Assets. Other assets consists of net capitalized computer software development costs, patents, trademarks and other intangible assets. Where applicable, other assets are stated at cost and, if applicable, are amortized ratably over the relevant contract period or the estimated life of the assets. Fees to renew or extend the term of the Company’s intangible assets are expensed when incurred.

In 2017, the Company recorded impairments totaling $3.1 related to IT transformation and integration activities. During the fourth quarter of 2016, the Company recorded a $9.8 impairment charge related to redundant legacy Diebold internally-developed software and an indefinite-lived trade name in NA as a result of the Acquisition.

The following summarizes information on intangible assets by major category:



		December 31, 2017							December 31, 2016
	Weighted-average remaining useful lives	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships, net	7.7 years	$	741.5	$	(108.2	)	$	633.3	$	621.7	$	(25.4	)	$	596.3

Internally-developed software	2.6 years	192.9		(99.8		)	93.1		151.0		(53.2		)	97.8
Development costs non-software	1.3 years	55.3		(35.1		)	20.2		48.4		(9.7		)	38.7
Other	1.7 years	84.5		(57.3		)	27.2		85.3		(45.2		)	40.1
Other intangible assets, net		332.7		(192.2		)	140.5		284.7		(108.1		)	176.6

Total	4.1 years	$	1,074.2	$	(300.4	)	$	773.8	$	906.4	$	(133.5	)	$	772.9

The increase in the gross carrying amount of intangible assets was due primarily to the impact of the euro. Amortization expense on capitalized software of $34.6, $24.4 and $14.5 was included in service and software cost of sales for 2017, 2016 and 2015, respectively. The Company's total amortization expense, including deferred financing costs, was $159.3 and $73.0 for 2017 and 2016, respectively. The year-over-year increase in amortization expense was primarily related to the inclusion of a full year of amortization related to the identifiable intangibles related to the Acquisition. The expected annual amortization expense is as follows:



	Estimated amortization
2018	$	147.9
2019	125.1
2020	96.2
2021	86.0
2022	78.2
	$	533.4