GOODWILL AND OTHER ASSETS

The Company’s three reportable operating segments are Eurasia Banking, Americas Banking and Retail. The Company has allocated goodwill to its Eurasia Banking, Americas Banking and Retail reportable operating segments. The changes in carrying amounts, including an immaterial error correction discussed in note 1, of goodwill within the Company's segments are summarized as follows:



	Eurasia Banking			Americas Banking			Retail			Total
Goodwill	$	592.2		$	423.8		$	273.0		$	1,289.0
Accumulated impairment losses	(168.7		)	(122.0		)	—			(290.7		)
Balance at January 1, 2017	423.5			301.8			273.0			998.3
Goodwill acquired	2.2			1.8			1.6			5.6
Goodwill adjustment	(1.2		)	(1.0		)	(0.7		)	(2.9		)
Currency translation adjustment	46.2			38.3			31.6			116.1
Goodwill	639.4			462.9			305.5			1,407.8
Accumulated impairment losses	(168.7		)	(122.0		)	—			(290.7		)
Balance at December 31, 2017	470.7			340.9			305.5			1,117.1
Transferred to assets held for sale	(0.8		)	(0.3		)	(45.9		)	(47.0		)
Currency translation adjustment	(10.0		)	(8.3		)	(7.2		)	(25.5		)
Goodwill	628.6			454.3			252.4			1,335.3
Impairment	(153.0		)	—			(64.5		)	(217.5		)
Accumulated impairment losses	(321.7		)	(122.0		)	(64.5		)	(508.2		)
Balance at December 31, 2018	$	306.9		$	332.3		$	187.9		$	827.1

Goodwill. In the fourth quarter of 2018 in connection with the annual goodwill impairment test, the Company elected to assess goodwill for impairment based on a qualitative assessment, which resulted in a conclusion that no events or changes in circumstance resulted in a situation that would more likely than not reduce the carrying value of a reporting unit below its reported amount. Accordingly, no impairment resulted from the annual goodwill impairment test in any of the Company's reporting units.

During the second quarter of 2018, the Company performed an impairment test of goodwill for all of its LoB reporting units due to the change in its reportable operating segments. Based on the results of the LoB testing, the fair values of each of the Company's reporting units exceed their carrying values except for the Services-AP and Software-EMEA reporting units which resulted in a non-cash impairment loss of $90.0 during the second quarter 2018. During the fourth quarter of 2018, the Company corrected an immaterial error related to the allocation of goodwill as discussed in Note 1, which decreased the second quarter non-cash impairment loss to $83.1.

The Company identified four reporting units, which are Eurasia Banking, Americas Banking, EMEA Retail and Rest of World Retail. Management determined that the Americas Banking and EMEA Retail reporting unit had a cushion of approximately 20 percent and 10 percent, respectively, when compared to their carrying amounts. The Eurasia Banking had minimal excess fair value or cushion when compared to their carrying amounts, but primarily due to the reporting unit's improved performance, it did not indicate any impairment during the qualitative annual goodwill impairment test. Rest of World Retail had no carrying value as of December 31, 2018. 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.

During the second and third quarters 2018, the Company estimated the fair value of its reporting units using a combination of the income valuation and market approach methodologies. The determination of the fair value of a 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.

As a result of certain impairment triggering events, the Company performed an interim impairment test of goodwill for its four reporting units during the third quarter of 2018. Based on the results of the impairment testing, the Company recorded a non-cash goodwill impairment loss of $109.3 related to the Eurasia Banking, EMEA Retail and Rest of World Retail reporting units during the third quarter of 2018. During the fourth quarter of 2018, the Company corrected an immaterial error related to the allocation of goodwill as discussed in Note 1, which increased the third quarter non-cash impairment loss for Eurasia Banking, reduced the non-cash impairment loss for Rest of World Retail and eliminated the non-cash impairment loss for the EMEA Retail reporting unit. This resulted in an additional $25.1 non-cash impairment loss for the third quarter of 2018 for a non-cash impairment loss of $134.4 for the three months ended September 30, 2018 which related to the Eurasia Banking and Rest of World Retail. For the nine months ended September 30, 2018 the Company recorded a $217.5 non-cash goodwill impairment loss.

The Company reclassified $47.0 of goodwill based on relative fair value to assets held for sale in December 2018 related to certain non-core businesses in Europe and the Americas.

During 2017, the $5.6 acquired goodwill from Moxx and Visio primarily related to anticipated synergies achieved through increased scale and higher utilization of the service organization.

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.

During the fourth quarter of 2017, the Company recorded a $3.1 impairment charge related to redundant legacy Diebold internally-developed software and an indefinite-lived trade name in North America as a result of the Acquisition.

The following summarizes information on intangible assets by major category:



		December 31, 2018							December 31, 2017
	Weighted-average remaining useful lives	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships, net	6.7 years	$	712.2	$	(179.1	)	$	533.1	$	741.5	$	(108.2	)	$	633.3

Internally-developed software	1.6 years	189.6		(118.9		)	70.7		192.9		(99.8		)	93.1
Development costs non-software	0.9 years	52.5		(44.3		)	8.2		55.3		(35.1		)	20.2
Other	0.7 years	79.5		(66.9		)	12.6		84.5		(57.3		)	27.2
Other intangible assets, net		321.6		(230.1		)	91.5		332.7		(192.2		)	140.5

Total		$	1,033.8	$	(409.2	)	$	624.6	$	1,074.2	$	(300.4	)	$	773.8

The decrease in the gross carrying amount of intangible assets was due primarily to the impact of the euro. Amortization expense on capitalized software of $33.7, $34.6 and $24.4 was included in cost of sales for 2018, 2017 and 2016, respectively. The Company's total amortization expense, including deferred financing costs, was $153.4, $159.3 and $73.0 for the years ended December 31, 2018, 2017 and 2016, respectively. The increase from 2016 to 2017 related to the incremental amortization related to acquired intangibles in connection with the Acquisition. The expected annual amortization expense is as follows:



	Estimated amortization
2019	$	128.0
2020	108.8
2021	96.2
2022	92.0
2023	88.6
	$	513.6