Annual report pursuant to Section 13 and 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

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GOODWILL AND OTHER INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS
 
Goodwill.  Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. As discussed in Note 1, goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment tests as of September 30 each year. The fair value estimates for our reporting units were determined using a combination of the income and market approaches in accordance with the Company’s methodology. Our annual impairment tests as of September 30, 2017, 2016 and 2015 resulted in no impairment of goodwill.

In the fourth quarter of 2017, we acquired Mercury, for which the acquired goodwill has been allocated to the Asia Pacific reporting unit within the International operating segment. In the third quarter of 2017, we acquired ID Watchdog, Inc., for which the acquired goodwill has been allocated to the Global Consumer Solutions reporting unit and operating segment.

In the first quarter of 2016, we acquired Veda, which operates primarily in Australia and New Zealand. We have included Veda's operations within a newly-created Asia Pacific reporting unit within the International operating segment. Additionally, we moved the TDX Australia and India operations that were included in our Europe reporting unit to the Asia Pacific reporting unit to align with how we manage our business. Our financial results for the year ended December 31, 2015, reflect our new organizational structure. Lastly in 2016, we have renamed our Personal Solutions operating segment Global Consumer Solutions.

To reflect this new organizational structure, we reallocated goodwill from the Europe reporting unit to the Asia Pacific reporting unit based on the relative fair values of the respective portions of Europe. A change in reporting units requires that goodwill be tested for impairment. During 2016, we performed goodwill impairment tests prior to and following the reallocation of goodwill, which resulted in no impairment.
    
In the third quarter of 2016, we acquired Barnett and Computersoft for which the acquired goodwill has been allocated between the Verification Services and Employer Services reporting units within the Workforce Solutions operating segment.
 
In 2015, the personal solutions business in the United Kingdom was consolidated into the North America Global Consumer Solutions operating segment, which was reorganized into the Global Consumer Solutions operating segment. Additionally in 2015, the direct to consumer reseller businesses in the U.S., Canada, and the United Kingdom were also consolidated into the Global Consumer Solutions operating segment. These changes were driven by an enterprise wide strategy to maximize the penetration of our products and services in our targeted markets. We determined that market focus and operating efficiency could be further improved by reorganizing and consolidating the United States, Canada and the United Kingdom Global Consumer Solutions and direct to consumer reseller operating activities into one segment, Global Consumer Solutions.
    
To reflect this new organizational structure, we reallocated goodwill from the USIS, Canada, and Europe reporting units to the Global Consumer Solutions reporting unit based on the relative fair values of the respective portions of USIS, Canada, and Europe. A change in reporting units requires that goodwill be tested for impairment. During 2015, we performed goodwill impairment tests prior to and following the reallocation of goodwill for USIS, Canada, Europe and Global Consumer Solutions, which resulted in no impairment.

Changes in the amount of goodwill for the twelve months ended December 31, 2017 and 2016, are as follows:  
 
U.S.
Information
Solutions
 
International
 
Workforce Solutions
 
Global Consumer Solutions
 
Total
 
(In millions)
Balance, December 31, 2015
$
1,071.3

 
$
441.5

 
$
907.6

 
$
150.6

 
$
2,571.0

Acquisitions

 
1,411.6

 
44.7

 

 
1,456.3

Adjustments to initial purchase price allocation

 
(6.2
)
 
(0.2
)
 

 
(6.4
)
Foreign currency translation

 
(32.3
)
 

 
(14.3
)
 
(46.6
)
Balance, December 31, 2016
1,071.3

 
1,814.6

 
952.1

 
136.3

 
3,974.3

Acquisitions

 
43.9

 

 
48.5

 
92.4

Adjustments to initial purchase price allocation

 
1.0

 

 

 
1.0

Foreign currency translation

 
109.9

 

 
6.4

 
116.3

Balance, December 31, 2017
$
1,071.3

 
$
1,969.4

 
$
952.1

 
$
191.2

 
$
4,184.0



 Indefinite-Lived Intangible Assets.  Indefinite-lived intangible assets consist of indefinite-lived reacquired rights representing the value of rights which we had granted to various affiliate credit reporting agencies that were reacquired in the U.S. and Canada. At the time we acquired these agreements, they were considered perpetual in nature under the accounting guidance in place at that time and, therefore, the useful lives are considered indefinite. Indefinite-lived intangible assets are not amortized. We are required to test indefinite-lived intangible assets for impairment annually and whenever events or circumstances indicate that there may be an impairment of the asset value. We perform our annual indefinite-lived intangible asset impairment test as of September 30. Our 2017 annual impairment test completed during the third quarter of 2017 resulted in no impairment of indefinite-lived intangible assets.
 
Amount
 
(In millions)
Balance, December 31, 2015
$
94.7

Foreign currency translation
0.1

Balance, December 31, 2016
94.8

Foreign currency translation
0.2

Balance, December 31, 2017
$
95.0



Purchased Intangible Assets.  Purchased intangible assets, net, recorded on our Consolidated Balance Sheets at December 31, 2017 and 2016, are as follows:
 
December 31, 2017
 
December 31, 2016
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
Definite-lived intangible assets:
(In millions)
Purchased data files
$
955.7

 
$
(262.2
)
 
$
693.5

 
$
1,012.7

 
$
(276.0
)
 
$
736.7

Acquired software and technology
142.3

 
(66.6
)
 
75.7

 
131.5

 
(36.1
)
 
95.4

Customer relationships
772.4

 
(326.7
)
 
445.7

 
712.7

 
(273.0
)
 
439.7

Reacquired rights
73.3

 
(65.6
)
 
7.7

 
73.3

 
(52.5
)
 
20.8

Proprietary database
22.1

 
(8.7
)
 
13.4

 
21.5

 
(6.7
)
 
14.8

Non-compete agreements
14.1

 
(12.7
)
 
1.4

 
26.8

 
(22.2
)
 
4.6

Trade names and other intangible assets
20.2

 
(10.6
)
 
9.6

 
54.1

 
(42.3
)
 
11.8

Total definite-lived intangible assets
$
2,000.1

 
$
(753.1
)
 
$
1,247.0

 
$
2,032.6

 
$
(708.8
)
 
$
1,323.8


               
Amortization expense related to purchased intangible assets was $172.2 million, $176.5 million, and $122.3 million during the twelve months ended December 31, 2017, 2016, and 2015, respectively.
 
Estimated future amortization expense related to definite-lived purchased intangible assets at December 31, 2017 is as follows:
Years ending December 31,
 
Amount
 
 
(In millions)
2018
 
$
149.7

2019
 
130.1

2020
 
123.6

2021
 
105.9

2022
 
99.9

Thereafter
 
637.8

 
 
$
1,247.0