XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.20.2

GOODWILL AND LONG-LIVED ASSETS | 6 Months Ended
--- | ---
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND LONG-LIVED ASSETS | GOODWILL AND LONG-LIVED ASSETS In accordance with ASC Topic 350, Intangibles — Goodwill and Other, we evaluate goodwill for impairment annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. We also review our long-lived assets, such as property, equipment and software, right-of-use assets and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. During the first quarter 2020, we determined the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our goodwill and long-lived assets for impairment. During the second quarter 2020, we determined that the actions taken under our restructuring plan changed how we used certain long-lived assets such that the carrying amount of those long-lived assets may not be recoverable, which required us to evaluate those long-lived assets for impairment. Future events and changing market conditions due to the impact of COVID-19 may require us to re-evaluate the estimates used in our fair value measurements, which could result in additional impairment of long-lived assets or goodwill in future periods that may have a material effect on our operating results. Goodwill In order to evaluate goodwill for impairment in the first quarter 2020, we compared the fair values of our three reporting units (North America, EMEA and Asia Pacific) to their carrying values. In determining fair values for our reporting units, we used the discounted cash flow method and the market multiple valuation approach that use Level 3 inputs. The significant estimates used in the discounted cash flow models are the risk-adjusted discount rates; forecasted revenue, cost of revenue and operating expenses; forecasted capital expenditures and working capital needs; weighted average cost of capital; rates of long-term growth; and income tax rates. These estimates considered the recent deterioration in financial performance of the reporting units as well as the anticipated rate of recovery, and implied risk premiums based on the market prices of our equity and debt as of the assessment date. The significant estimates used in the market multiple valuation approach include identifying business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples. As a result of the interim quantitative assessment of goodwill in the first quarter 2020, we identified a partial impairment of goodwill in our EMEA reporting unit within the International segment and recognized goodwill impairment of $109.5 million. We did not recognize any goodwill impairment in our North America or Asia Pacific reporting units during the three months ended March 31, 2020. We determined that we did not have a triggering event that required us to evaluate goodwill for impairment during the second quarter 2020, and therefore did not recognize goodwill impairment for any of our reporting units during the three months ended June 30, 2020. As of June 30, 2020, the EMEA reporting unit had a negative carrying value and remaining goodwill of $26.6 million. The following table summarizes goodwill activity by segment for the six months ended June 30, 2020 (in thousands):
| North America |  | International |  | Consolidated
Balance as of December 31, 2019 | $ | 178,685 |  |  | $ | 146,332 |  |  | $ | 325,017 |
Impairment loss | — |  |  | (109,486) |  |  | (109,486) |
Foreign currency translation | — |  |  | (3,813) |  |  | (3,813) |
Balance as of June 30, 2020 | $ | 178,685 |  |  | $ | 33,033 |  |  | $ | 211,718 |
Long-Lived Assets Following our review of long-lived assets for impairment in the first quarter 2020, we recognized long-lived asset impairment of $22.4 million within our International segment related to our EMEA operations. During the second quarter 2020, we recognized long-lived asset impairment of $13.5 million and $0.4 million within our North America and International segments for certain asset groups due to actions taken under our restructuring plan. See Note 9, Restructuring and Related Charges, for more information. The assets that we deemed impaired were written down to fair value based on the discounted cash flow method that uses Level 3 inputs. The significant estimates used in the discounted cash flow models are the risk-adjusted discount rates; forecasted revenue, cost of revenue and operating expenses; forecasted capital expenditures and working capital needs; weighted average cost of capital; rates of long-term growth; and income tax rates. Impairment charges are presented within the following line items of the condensed consolidated statements of operations for the three and six months ended June 30, 2020 (in thousands):
| Three Months Ended June 30, 2020 |  | Six Months Ended June 30, 2020
Long-lived asset impairment | $ | — |  |  | $ | 22,351 |
Restructuring and related charges | 13,903 |  |  | 13,903 |
Total impairment | $ | 13,903 |  |  | $ | 36,254 |
The following table summarizes impairment for long-lived assets and restructuring and related charges by asset type as of June 30, 2020 (in thousands):
Long-Lived Asset Category | Impairment
Property, equipment and software, net |
Warehouse equipment | $ | — |
Furniture and fixtures | 413 |
Leasehold improvements (1) | 7,558 |
Office equipment | 198 |
Purchased software | 14 |
Computer hardware | 2,842 |
Right-of-use assets - finance leases, net | 1,318 |
Capitalized software | 304 |
Internally-developed software | 2,988 |
Total Property, equipment and software, net | $ | 15,635 |
Right-of-use assets - operating leases, net (2) | 19,645 |
Intangible assets, net | 103 |
Other non-current assets | 871 |
Total long-lived assets | $ | 36,254 |
(1)Includes long-lived asset impairment of $4.8 million presented within Restructuring and related charges during the three and six months ended June 30, 2020. See Note 9, Restructuring and Related Charges, for more information. (2)Includes right-of-use asset impairment of $9.2 million during the three and six months ended June 30, 2020. See Note 9, Restructuring and Related Charges, for more information. The following table summarizes intangible assets as of June 30, 2020 and December 31, 2019 (in thousands):
| June 30, 2020 |  |  |  |  |  | December 31, 2019 |  |  |  |
Intangible Asset Category | Gross Carrying Value |  | Accumulated Amortization |  | Net Carrying Value |  | Gross Carrying Value |  | Accumulated Amortization |  | Net Carrying Value
Customer relationships | $ | 16,200 |  |  | $ | 16,200 |  |  | $ | — |  |  | $ | 16,200 |  |  | $ | 16,200 |  |  | $ | — |
Merchant relationships | 20,857 |  |  | 9,443 |  |  | 11,414 |  |  | 22,193 |  |  | 8,268 |  |  | 13,925 |
Trade names | 9,387 |  |  | 7,604 |  |  | 1,783 |  |  | 9,558 |  |  | 7,369 |  |  | 2,189 |
Developed technology | 2,297 |  |  | 1,729 |  |  | 568 |  |  | 3,651 |  |  | 2,685 |  |  | 966 |
Patents | 24,965 |  |  | 19,243 |  |  | 5,722 |  |  | 23,021 |  |  | 18,167 |  |  | 4,854 |
Other intangible assets | 26,708 |  |  | 14,218 |  |  | 12,490 |  |  | 26,115 |  |  | 12,757 |  |  | 13,358 |
Total | $ | 100,414 |  |  | $ | 68,437 |  |  | $ | 31,977 |  |  | $ | 100,738 |  |  | $ | 65,446 |  |  | $ | 35,292 |
Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years. Amortization expense related to intangible assets was $2.4 million and $3.8 million for the three months ended June 30, 2020 and 2019 and $4.9 million and $7.7 million for the six months ended June 30, 2020 and 2019. As of June 30, 2020, estimated future amortization expense related to intangible assets is as follows (in thousands):
Remaining amounts in 2020 | $ | 4,628 |
2021 | 7,852 |
2022 | 7,256 |
2023 | 6,120 |
2024 | 2,620 |
Thereafter | 3,501 |
Total | $ | 31,977 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration