Acquisitions, Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Acquisitions, Intangible Assets and Goodwill

Acquisitions

In October 2017, we acquired Newgistics for $471 million, net of cash acquired. The results of Newgistics are included in our consolidated operating results from the date of acquisition. Our consolidated revenue for the three months ended March 31, 2018 includes $131 million from Newgistics. On a supplemental pro forma basis, had we acquired Newgistics on January 1, 2017, our revenues would have been $119 million higher for the three months ended March 31, 2017. The impact on our earnings would not have been material.

Intangible Assets

Intangible assets at March 31, 2018 and December 31, 2017 consisted of the following:



	March 31, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	528,997	$	(303,449	)	$	225,548	$	526,149	$	(292,500	)	$	233,649
Software & technology	174,208		(147,595		)	26,613		173,141		(144,742		)	28,399
Trademarks & other	42,838		(33,681		)	9,157		42,505		(32,367		)	10,138
Total intangible assets	$	746,043	$	(484,725	)	$	261,318	$	741,795	$	(469,609	)	$	272,186

Amortization expense was $11 million and $8 million for the three months ended March 31, 2018 and 2017, respectively.

Future amortization expense as of March 31, 2018 was as follows:



Remaining for year ending December 31, 2018	$	37,598
Year ending December 31, 2019	38,330
Year ending December 31, 2020	33,744
Year ending December 31, 2021	30,119
Year ending December 31, 2022	29,038
Thereafter	92,489
Total	$	261,318

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

Changes in the carrying value of goodwill, by reporting segment, for the three months ended March 31, 2018 are shown in the table below.



	December 31, 2017		Acquisitions		Other⁽¹⁾			March 31, 2018
Global Ecommerce	$	602,461	$	—	$	(653	)	$	601,808
Presort Services	204,781		2,684		—			207,465
Commerce Services	807,242		2,684		(653		)	809,273
North America Mailing	368,905		—		(205		)	368,700
International Mailing	158,203		—		7,127			165,330
Small & Medium Business Solutions	527,108		—		6,922			534,030
Software Solutions	510,605		—		2,924			513,529
Production Mail	107,489		—		1,663			109,152
Total goodwill	$	1,952,444	$	2,684	$	10,856		$	1,965,984

⁽¹⁾Primarily represents foreign currency translation adjustments.

- 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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