GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Predecessor

In the second quarter of 2022, the Company reorganized its reportable segments in connection with the new and simplified operating model implemented by the recently appointed Chief Executive Officer. This organizational change is consistent with how the Chief Executive Officer, the chief operating decision maker (CODM), makes key operating decisions, allocates resources, and assesses the performance of the business.

Prior to reorganization, the Company had four reporting units: Eurasia Banking, Americas Banking, EMEA Retail, and Rest of World Retail. The Company's new reporting units, determined in accordance with ASC 350, "Intangibles - goodwill and other", are the same as the operating and reportable segments, which are global Banking and global Retail. The Banking reporting unit is the summation of the legacy Eurasia Banking and Americas Banking reporting units and Retail is the summation of the legacy EMEA Retail and Rest of World Retail reporting units.

The sustained decline in the Company’s stock price during the Predecessor Period and its market capitalization, in addition to substantial doubt about the Company's ability to continue as a going concern (refer to Note 2) were in combination considered a triggering event indicating that it was possible that the fair value of the reporting units could be less than their carrying amounts, including goodwill. This trigger was identified as of March 31, 2023 and the facts and circumstances continued to be present through the date the Company emerged from the Restructuring Proceedings. The Predecessor performed an interim quantitative goodwill impairment test as of March 31, 2023 using a combination of the income valuation and market approach methodologies. The determination of the fair value of the reporting units 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.

No impairment resulted from the interim quantitative goodwill impairment test. As of the interim impairment testing date of March 31, 2023, the indicated fair value was in excess of carrying value for both the Banking and Retail segments by approximately 43 percent and 34 percent, respectively.

The filing of the Chapter 11 Cases and Chapter 15 Proceedings were considered a continuation of the triggering event identified at March 31, 2023 in which it was indicated that it was possible that the fair value of the reporting units could be less than their carrying amounts, including goodwill. A quantitative analysis was performed and no impairment resulted in the Predecessor Period.

Successor

The excess of the Successor’s reorganization value over the fair value of identified tangible and intangible assets as of the Effective Date is reported separately on the Company’s consolidated balance sheets as goodwill. Refer to Note 3 for additional information on Fresh Start Accounting Adjustments.

We performed a qualitative assessment of our Banking and Retail reporting units as of October 1, 2023. As part of this analysis, we evaluated factors including, but not limited to, our market capitalization and stock price performance, macro-economic conditions, market and industry conditions, cost factors, the competitive environment, and the operational stability and overall financial performance of the reporting units. The assessment indicated that it was more likely than not that the fair value of the Banking and Retail reporting units exceeded their respective carrying values.

The changes in the carrying amount of goodwill are as follows:


	Legacy Reporting Units				New Reporting Units
	Eurasia Banking		Americas Banking		Banking		Retail		Total
Goodwill	$	561.4	$	440.1	$	—	$	213.0	$	1,214.5
Accumulated impairment losses	(291.7)		(122.0)		—		(57.2)		(470.9)
Balance at January 1, 2022 (Predecessor)	$	269.7	$	318.1	$	—	$	155.8	$	743.6
Currency translation adjustment	(6.3)		(1.0)		(18.6)		(15.4)		(41.3)
Goodwill reassignment	(555.1)		(439.1)		922.2		72.0		—
Goodwill	$	—	$	—	$	903.6	$	269.6	$	1,173.2
Accumulated impairment reassignment	291.7		122.0		(413.7)		—		—
Accumulated impairment losses	—		—		(413.7)		(57.2)		(470.9)
Balance at December 31, 2022 (Predecessor)	$	—	$	—	$	489.9	$	212.4	$	702.3
Currency translation adjustment	—		—		8.5		3.5		12.0
Fresh Start adjustment goodwill	—		—		(440.7)		(123.5)		(564.2)
Fresh Start adjustment accumulated impairment losses	—		—		413.7		57.2		470.9
Goodwill	—		—		471.4		149.6		621.0
Accumulated impairment losses	—		—		—		—		—
Balance as of August 12, 2023 (Successor)	$	—	$	—	$	471.4	$	149.6	$	621.0
Currency translation adjustment	—		—		—		(0.1)		(0.1)
Divestitures	—		—		—		(4.2)		(4.2)
Balance at December 31, 2023 (Successor)	$	—	$	—	$	471.4	$	145.3	$	616.7

Goodwill. We performed the required annual impairment tests of goodwill at October 1, 2023 on our two reporting units. We assessed qualitative factors and determined it was less likely than not that the fair value of either reporting unit was less than its carrying amount, including goodwill. 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.

Intangible Assets. Intangible assets consists of net capitalized software development costs, patents, trademarks and other intangible assets. Where applicable, intangible 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.

The following summarizes information on intangible assets by major category:


		Successor						Predecessor
		December 31, 2023						December 31, 2022
	Weighted-average remaining useful lives	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships, net	17.1 years	$	555.5	$	(12.5)	$	543.0	$	662.3	$	(448.7)	$	213.6

Trademarks and trade names	18.0 years	118.8		(2.6)		116.2		—		—		—
Capitalized software development	8.1 years	22.0		(1.1)		20.9		245.2		(202.7)		42.5
Technology know-how and development costs non-software	6.0 years	193.3		(12.5)		180.8		48.7		(48.7)		—
Other	1.5 years	40.6		(10.2)		30.4		48.7		(47.2)		1.5
Other intangible assets, net		374.7		(26.4)		348.3		342.6		(298.6)		44.0
Total		$	930.2	$	(38.9)	$	891.3	$	1,004.9	$	(747.3)	$	257.6

Costs incurred for the development of external-use software that will be sold, leased or otherwise marketed are capitalized when technological feasibility has been established. These costs are included within other assets and are amortized on a straight-line basis over the estimated useful lives ranging from three to five years. Amortization begins when the product is available for general release. Costs capitalized include direct labor and related overhead costs. Costs incurred prior to technological feasibility or after general release are expensed as incurred. The Company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenue. If future revenue does not support the unamortized program costs, the amount by which the unamortized capitalized cost of a software product exceeds the net realizable value is impaired.

The following table identifies the activity relating to total capitalized software development:


	Successor		Predecessor
	Period from 08/12/2023 through 12/31/2023		Period from 01/01/2023 through 08/11/2023		Years ended December 31,
					2022		2021
Beginning balance	$	13.8	$	42.5	$	43.2	$	38.0
Capitalization	9.8		13.1		28.7		31.1
Amortization	(1.8)		(12.4)		(14.1)		(23.3)
Impairment	—		—		(9.8)		—
Other	(0.9)		(6.1)		(5.5)		(2.6)
Fresh Start Accounting Adjustments	—		(23.3)		—		—
Ending balance	$	20.9	$	13.8	$	42.5	$	43.2

The Company's total amortization expense, excluding deferred financing costs, was $42.8, $59.0, $96.2 and $102.7 for the Successor Period from August 12, 2023 through December 31, 2023, the Predecessor Period from January 1, 2023 through August 11, 2023, and the years ended December 31, 2022 and 2021, respectively. The expected annual amortization expense is as follows:


	Estimated amortization
2024	$	100.3
2025	76.8
2026	73.8
2027	73.8
2028	73.8
Thereafter	492.8
	$	891.3