Acquisitions, Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Acquisitions, Intangible Assets and Goodwill

Acquisitions

In June 2015, we acquired 100% of the outstanding shares of Borderfree. The results of operations of Borderfree are included in our consolidated results from the date of acquisition. Our consolidated operating results for the three months ended March 31, 2016 include revenue of $25 million from Borderfree operations. On a supplemental pro forma basis, had we acquired Borderfree on January 1, 2015, our revenues would have been $25 million higher for the three months ended March 31, 2015. The impact on our earnings would not have been material.

On January 12, 2016, we acquired Enroute for $14 million in cash plus potential additional payments during the periods 2017-2019 based on the achievement of revenue targets during the periods 2016-2018. Enroute is a software-as-a-service enterprise retail and fulfillment solutions company and is reported within our Global Ecommerce segment.

Intangible Assets

Intangible assets consisted of the following:



	March 31, 2016							December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	445,179	$	(283,209	)	$	161,970	$	437,459	$	(272,353	)	$	165,106
Software & technology	151,337		(137,215		)	14,122		149,591		(135,198		)	14,393
Trademarks & other	36,178		(28,223		)	7,955		35,314		(27,435		)	7,879
Total intangible assets	$	632,694	$	(448,647	)	$	184,047	$	622,364	$	(434,986	)	$	187,378

Amortization expense was $11 million and $8 million for the three months ended March 31, 2016 and 2015, respectively.

Future amortization expense for intangible assets as of March 31, 2016 was as follows:



Remaining for year ending December 31, 2016	$	28,051
Year ending December 31, 2017	28,294
Year ending December 31, 2018	25,695
Year ending December 31, 2019	22,606
Year ending December 31, 2020	17,795
Thereafter	61,606
Total	$	184,047

Actual amortization expense may differ from the amounts above due to, among other things, fluctuations in foreign currency exchange rates, impairments, acquisitions and accelerated amortization.

Goodwill

The changes in the carrying value of goodwill for the three months ended March 31, 2016 were as follows:



	December 31, 2015		Acquisitions		Foreign currency translation			March 31, 2016
North America Mailing	$	296,053	$	—	$	5,497		$	301,550
International Mailing	148,351		—		5,566			153,917
Small & Medium Business Solutions	444,404		—		11,063			455,467
Production Mail	105,757		—		1,178			106,935
Presort Services	196,890				—			196,890
Enterprise Business Solutions	302,647		—		1,178			303,825
Software Solutions	674,976		—		(965		)	674,011
Global Ecommerce	323,930		7,769		—			331,699
Digital Commerce Solutions	998,906		7,769		(965		)	1,005,710
Total goodwill	$	1,745,957	$	7,769	$	11,276		$	1,765,002

- 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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