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GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended
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Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The balances and changes in the carrying amount of Goodwill by segment, including cumulative goodwill impairment charges are as follows (in thousands of dollars):
|  | United States |  | Canada |  | Other businesses |  | Total
Balance at January 1, 2017 |  | $ | 202,020 |  |  | $ | 122,140 |  |  | $ | 202,990 |  |  | $ | 527,150 |
Divestiture |  | (3,316 | ) |  | — |  |  | — |  |  | (3,316 | )
Impairment |  | (7,169 | ) |  | — |  |  | — |  |  | (7,169 | )
Translation |  | — |  |  | 8,282 |  |  | 18,956 |  |  | 27,238 |
Balance at December 31, 2017 |  | 191,535 |  |  | 130,422 |  |  | 221,946 |  |  | 543,903 |
Divestiture |  | — |  |  | — |  |  | — |  |  | — |
Impairment |  | — |  |  | — |  |  | (104,461 | ) |  | (104,461 | )
Translation |  | — |  |  | (3,304 | ) |  | (6,320 | ) |  | (9,624 | )
Balance at September 30, 2018 |  | $ | 191,535 |  |  | $ | 127,118 |  |  | $ | 111,165 |  |  | $ | 429,818 |
Cumulative goodwill impairment charges, December 31, 2017 |  | $ | 24,207 |  |  | $ | 32,265 |  |  | $ | 70,299 |  |  | $ | 126,771 |
Impairment |  | — |  |  | — |  |  | 104,461 |  |  | 104,461 |
Cumulative goodwill impairment charges, September 30, 2018 |  | $ | 24,207 |  |  | $ | 32,265 |  |  | $ | 174,760 |  |  | $ | 231,232 |
The balances and changes in Intangible assets, net are as follows (in thousands of dollars):
|  |  | September 30, 2018 |  | December 31, 2017
| Weighted average life |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount
Customer lists and relationships | 14.3 years |  | $ | 413,216 |  |  | $ | 199,645 |  |  | $ | 213,571 |  |  | $ | 430,026 |  |  | $ | 195,842 |  |  | $ | 234,184 |
Trademarks, trade names and other | 14.5 years |  | 24,073 |  |  | 14,945 |  |  | 9,128 |  |  | 25,886 |  |  | 16,054 |  |  | 9,832 |
Non-amortized trade names and other |  |  | 99,172 |  |  | — |  |  | 99,172 |  |  | 137,491 |  |  | — |  |  | 137,491 |
Capitalized software | 4.2 years |  | 652,501 |  |  | 494,851 |  |  | 157,650 |  |  | 632,431 |  |  | 444,823 |  |  | 187,608 |
Total intangible assets | 8.2 years |  | $ | 1,188,962 |  |  | $ | 709,441 |  |  | $ | 479,521 |  |  | $ | 1,225,834 |  |  | $ | 656,719 |  |  | $ | 569,115 |
The Company tests goodwill and intangible assets for impairment annually during the fourth quarter and more frequently if impairment indicators exist. Qualitative assessments of significant events or changes in circumstances are performed quarterly to determine the existence of impairment indicators and assess if it is more likely than not that the carrying value of these assets may not be recoverable and determine if quantitative impairment tests are necessary. Factors evaluated include declines in stock price, market capitalization and reporting units' historical and projected results, deteriorations of industry growth assumptions, declining economic indicators and other structural variables. For the quantitative impairment tests for goodwill, the Company compares reporting units’ carrying values with their fair values and records an impairment charge for any excess of carrying value over fair value. Reporting unit fair values are estimated primarily using the income-based discounted cash flow (DCF) method. Value indicators from a market-based approach are used to evaluate overall reasonableness. The DCF method incorporates various assumptions including the amount and timing of reporting unit future expected cash flows, including revenues, gross margins, operating expenses, capital expenditures and working capital based on reporting units’ budgets, long-range strategic plans and other estimates, plus a terminal value that estimates the perpetual growth for the reporting units. Estimates of market-participant risk-adjusted weighted average cost of capital are used to discount reporting units’ future expected cash flows and terminal value to net present value. For the quantitative tests for indefinite-lived intangible assets, which are primarily trade names, the Company compares the assets' carrying values with their fair values and records an impairment charge for any excess of carrying value over fair value. Trade name fair values are estimated using the relief from royalty method, which estimates the expected royalty savings attributable to the ownership of the trade name asset. The key assumptions when valuing trade names are revenue, royalty rate and discount rate. For the quantitative tests for amortizable intangible assets, the Company first estimates the future undiscounted cash flows through the useful lives of the assets and compares them to the assets’ carrying value. If carrying values exceed future undiscounted cash flows, then a second step is performed whereas the assets’ fair value is estimated and an impairment charge is recorded for any excess of carrying value over fair value. Third Quarter 2018 Qualitative Tests During the quarter ended September 30, 2018, the Company performed qualitative goodwill and intangible asset assessments. With the exception of the Cromwell reporting unit, the Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators, and as such quantitative impairment tests were not required. However, changes in assumptions, judgments and estimates regarding reporting unit performance and structural economic conditions may have a significant impact on the fair value of reporting units and intangible assets in the future. If future earnings and cash flow projections are not achieved or structural economic conditions are unfavorable, future impairments of goodwill or intangible assets could result. Cromwell Goodwill and Intangible Assets The operating performance of the Cromwell reporting unit has deteriorated from the second quarter of 2018 and the Company lowered its short-term forecasts and long-term outlook projections. These factors, combined with sustained economic uncertainty in the U.K market and higher interest rates, led the Company to conclude that it was more likely than not that the carrying value of Cromwell’s goodwill and intangible assets may not be recoverable. Accordingly, quantitative tests were performed during the quarter ended September 30, 2018. In the quantitative test for goodwill performed in 2017, the fair value of the Cromwell reporting unit exceeded its carrying value by 15%. During the third quarter 2018 test, the Company considered the impact of the prolonged softness and uncertainty in the U.K. market due to Brexit and other unfavorable structural economic conditions, as well as Cromwell’s underperformance compared to expectations, prior year quantitative test assumptions and future performance projections. The revised outlook and uncertainty beyond 2018 were factored into lower revenues, earnings and cash flow projections which, combined with an increase in the discount rate, resulted in the calculated fair value of the Cromwell reporting unit below its carrying value. Accordingly, during the quarter ended September 30, 2018, the Company recorded a full goodwill impairment charge of $105 million with no tax benefit due to the nondeductibility of goodwill in the relevant taxing jurisdictions. The revised revenue and gross margin projections also resulted in the reduction of royalty rate and value attributable to the Cromwell trade name for which the Company recorded a $34 million impairment charge during the same period. The cumulative indefinite-lived intangible impairment charge of $34 million was recorded in other businesses as of September 30, 2018 and there were none as of December 31, 2017. The goodwill and intangible asset impairment charges were recorded in SG&A. The Company also performed an impairment test on Cromwell’s intangible assets subject to amortization and long-lived assets using the undiscounted cash flows method and no impairment charge was required during the quarter ended September 30, 2018.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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