Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS

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GOODWILL AND INTANGIBLE ASSETS
9 Months Ended
Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS
 
Goodwill.   Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. 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 reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment tests as of September 30.
 
Our annual goodwill impairment testing was completed during the third quarter of 2015. The estimated fair value for all reporting units exceeded the carrying value of those units as of September 30, 2015. As a result, no goodwill impairment was recorded. Refer to our methodology of fair value estimates as discussed in the “Application of Critical Accounting Policies” section in this Form 10-Q.
 
In January 2015, the Personal Solutions business in the United Kingdom was consolidated into the North America Personal Solutions segment. The change was 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 Personal Solutions operating activities into one segment called Personal Solutions. To reflect this new organizational structure, we have reallocated goodwill from the Europe reporting unit to the Personal Solutions 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 the first quarter of 2015, we performed a goodwill impairment test prior to and following the reallocation of goodwill for Europe and Personal Solutions, which resulted in no impairment.

Changes in the amount of goodwill for the nine months ended September 30, 2015, are as follows:
 
 
 
U.S.
Information
Solutions
 
International
 
Workforce
Solutions
 
Personal
Solutions
 
Total
 
 
(In millions)
Balance, December 31, 2014(1)
 
$
1,120.6

 
$
487.0

 
$
907.6

 
$
91.6

 
$
2,606.8

Acquisitions
 

 

 

 

 

Adjustments to initial purchase price allocation
 

 

 

 

 

Foreign currency translation
 

 
(24.1
)
 

 
(1.7
)
 
(25.8
)
Tax benefits of stock options exercised
 

 

 

 

 

Balance, September 30, 2015
 
$
1,120.6

 
$
462.9

 
$
907.6

 
$
89.9

 
$
2,581.0

 
(1)The December 31, 2014 balances have been recast to reflect the new organizational structure. As of December 31, 2014, the Personal Solutions goodwill includes $75.0 million of goodwill from the Europe reporting unit.
 

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. The estimated fair value of our indefinite-lived intangible assets exceeded the carrying value as of September 30, 2015. As a result, no impairment was recorded. Our indefinite-lived intangible asset carrying amounts did not change materially during the three and nine months ended September 30, 2015.  
 
Purchased Intangible Assets.   Purchased intangible assets represent the estimated acquisition date fair value of acquired intangible assets used in our business. Purchased data files represent the estimated acquisition date fair value of consumer credit files acquired primarily through the purchase of independent credit reporting agencies in the U.S. and Canada. We expense the cost of modifying and updating credit files in the period such costs are incurred. Our reacquired rights represent the value of rights which we had granted to Computer Sciences Corporation that were reacquired in connection with the acquisition of certain assets of CSC Credit Services (“CSC Credit Services Acquisition”) in the fourth quarter of 2012. These reacquired rights are being amortized over the remaining term of the affiliation agreement on a straight-line basis until August 1, 2018. We amortize all of our purchased intangible assets on a straight-line basis. For additional information about the useful lives related to our purchased intangible assets, see Note 1 of the Notes to Consolidated Financial Statements in our 2014 Form 10-K.

Purchased intangible assets at September 30, 2015 and December 31, 2014 consisted of the following:
 
 
 
September 30, 2015
 
December 31, 2014
 
 
Gross
 
Accumulated
Amortization
 
Net
 
Gross
 
Accumulated
Amortization
 
Net
Definite-lived intangible assets:
 
(In millions)
Purchased data files
 
$
668.4

 
$
(231.6
)
 
$
436.8

 
$
692.0

 
$
(218.8
)
 
$
473.2

Acquired software and technology
 
53.1

 
(33.7
)
 
19.4

 
53.9

 
(26.4
)
 
27.5

Customer relationships
 
567.9

 
(230.0
)
 
337.9

 
570.7

 
(204.3
)
 
366.4

Reacquired rights
 
73.3

 
(36.1
)
 
37.2

 
73.3

 
(26.3
)
 
47.0

Proprietary database
 
7.4

 
(5.7
)
 
1.7

 
7.4

 
(5.4
)
 
2.0

Non-compete agreements
 
26.3

 
(17.3
)
 
9.0

 
27.0

 
(11.8
)
 
15.2

Trade names and other intangible assets
 
50.4

 
(32.7
)
 
17.7

 
51.1

 
(28.5
)
 
22.6

Total definite-lived intangible assets
 
$
1,446.8

 
$
(587.1
)
 
$
859.7

 
$
1,475.4

 
$
(521.5
)
 
$
953.9


 
Amortization expense from continuing operations related to purchased intangible assets was $30.5 million and $33 million during the three months ended September 30, 2015 and 2014, respectively. Amortization expense from continuing operations related to purchased intangible assets was $93 million and $98.3 million during the nine months ended September 30, 2015 and 2014, respectively.