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OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2017
OTHER INTANGIBLE ASSETS [Abstract] |
Intangible Assets Disclosure [Text Block] | (7)OTHER INTANGIBLE ASSETS Other intangible assets which are included in Other long-term assets in the accompanying Consolidated Balance Sheets consisted of the following (in thousands):
|  |  |  |  |  |  |  |  |  |  | Acquisitions |  | Effect of |  |  |  |
|  | December 31, |  |  |  |  |  |  |  | and |  | Foreign |  | December 31, |
|  | 2016 |  | Amortization |  | Impairments |  | Adjustments |  | Currency |  | 2017 |
Customer relationships, gross |  | $ | 50,454 |  | $ | — |  | $ | — |  | $ | 72,492 |  | $ | 1,829 |  | $ | 124,775 |
Customer relationships - accumulated amortization |  |  | (25,943) |  |  | (7,213) |  |  | — |  |  | (210) |  |  | (194) |  |  | (33,560) |
Other intangible assets, gross |  |  | 4,589 |  |  | — |  |  | — |  |  | 151 |  |  | 44 |  |  | 4,784 |
Other intangible assets - accumulated amortization |  |  | (3,978) |  |  | (254) |  |  | — |  |  | 1 |  |  | 318 |  |  | (3,913) |
Trade name - indefinite life |  |  | 5,665 |  |  | — |  |  | (5,322) |  |  | — |  |  | (343) |  |  | — |
Other intangible assets, net |  | $ | 30,787 |  | $ | (7,467) |  | $ | (5,322) |  | $ | 72,434 |  | $ | 1,654 |  | $ | 92,086 |
|  |  |  |  |  |  |  |  | Acquisitions |  | Effect of |  |  |  |
|  | December 31, |  |  |  |  |  | and |  | Foreign |  | December 31, |
|  | 2015 |  | Amortization |  | Impairments |  | Adjustments |  | Currency |  | 2016 |
Customer relationships, gross |  | $ | 62,257 |  | $ | — |  | $ | (17,150) |  | $ | 6,588 |  | $ | (1,241) |  | $ | 50,454 |
Customer relationships - accumulated amortization |  |  | (30,180) |  |  | (7,246) |  |  | 6,120 |  |  | 5,097 |  |  | 266 |  |  | (25,943) |
Other intangible assets, gross |  |  | 13,750 |  |  | — |  |  | (5,566) |  |  | (3,701) |  |  | 106 |  |  | 4,589 |
Other intangible assets - accumulated amortization |  |  | (8,755) |  |  | (2,285) |  |  | 3,956 |  |  | 2,929 |  |  | 177 |  |  | (3,978) |
Trade name - indefinite life |  |  | 14,143 |  |  | — |  |  | (8,682) |  |  | — |  |  | 204 |  |  | 5,665 |
Other intangible assets, net |  | $ | 51,215 |  | $ | (9,531) |  | $ | (21,322) |  | $ | 10,913 |  | $ | (488) |  | $ | 30,787 |
The acquisitions and adjustments recorded during 2017 relate to the purchase of Connextions and Motif (see Note 2 for further information) and the impairment of intangible assets during the fourth quarter of 2017 (see below). The acquisitions and adjustments recorded during 2016 relate to the purchase of Atelka (see Note 2 for further information) and the impairment of several intangible assets during the third and fourth quarters of 2016 (see below). CTS - eLoyalty During the fourth quarter of 2017 in connection with the rebranding of the consolidated company, management has determined that it will no longer be using the name of eLoyalty and will be transitioning to TTEC Digital. Based on this change in branding strategy, an evaluation of the indefinite-lived trade name was completed and it was determined that the fair value of the asset was zero. The Company recorded an impairment expense of $3.3 million in the three months ended December 31, 2017 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS - PRG During the fourth quarter of 2017 in connection with the rebranding of the consolidated company and the full integration of the CSS segment, management has determined that it will no longer be using the name of PRG and will be transitioning all CSS entities to TTEC Consulting. Based on this change in branding strategy, an evaluation of the indefinite-lived trade name was completed and it was determined that the fair value of the asset was zero. The Company recorded impairment expense of $2.0 million in the three months ended December 31, 2017 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CTS - Avaya In connection with reduced profitability for the Avaya component of the CTS segment an interim impairment analysis was completed during the third quarter of 2016. The Company modified the sales focus of the Avaya component away from premise product and services towards cloud solutions. The indefinite-lived intangible asset evaluated for impairment consisted of the TSG trade name. The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 0.5%, a discount rate specific to the trade name of 19.0%, which was equal to the reporting unit’s equity risk premium adjusted for its size and company specific risk factors. and a perpetuity growth rate of 3.0%. Based on the calculated fair value of $0.4 million, the Company recorded impairment expense of $0.7 million in the three months ended September 30, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). Additional triggering events occurred related to continued lower than expected financial performance and the bankruptcy filing for Avaya. In connection with this event, the forecasted revenue and operating income for the future years has decreased and thus an impairment analysis was completed during the fourth quarter of 2016 for both the indefinite-lived TSG trade name and the TSG customer relationship asset. The Company completed an asset group recoverability analysis using significant inputs not observable in the market (Level 3 inputs). These included a declining revenue stream from 2017 through 2019 and a negative EBITDA for the next 4 years. The estimated fair value was a negative $0.9 million. Based on this recoverability analysis, an impairment of $9.2 million of customer relationships, $0.4 million of trade name and $0.4 million of non-compete intangible assets was recorded. In addition $1.3 million of fixed assets were also impaired. The total $11.3 million of expense was recorded in the three months ended December 31, 2016 and was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS - rogenSi In connection with reduced profitability of the rogenSi component of the CSS segment, an interim impairment analysis was completed during the third quarter of 2016. The indefinite-lived intangible asset evaluated for impairment consisted of the trade name. The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 2.0%, a discount rate specific to the trade name of 18.2%, which was equal to the reporting unit’s equity risk premium adjusted for its size and company specific risk factors, and a perpetuity growth rate of 3.0%. Based on the calculated fair value of $3.1 million, the Company recorded impairment expense of $1.2 million in the three months ended September 30, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss) During the fourth quarter of 2016 in connection with the full integration of the CSS segment, management has determined that it will no longer be using the name rogenSi and will be transitioning all CSS entities to TTEC Consulting. Based on this change in branding strategy, an evaluation of the indefinite-lived trade name was completed and it was determined that the fair value of the asset was zero. The Company recorded impairment expense of $3.0 million in the three months ended December 31, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). CSS – component held-for-sale The Company calculated the fair value of the trade name using a relief from royalty method based on forecasted revenues sold under the trade name using significant inputs not observable in the market (Level 3 inputs). The valuation assumptions included an estimated royalty rate of 3.75%, a discount rate specific to the trade name of 19.2% and a perpetuity growth rate of 3.0%. Based on the calculated fair value of $2.0 million, the Company recorded impairment expense of $3.3 million in the three months ended September 30, 2016 which was included in Impairment losses in the Consolidated Statements of Comprehensive Income (Loss). Customer relationships are being amortized over the remaining weighted average useful life of 8.8 years and other intangible assets are being amortized over the remaining weighted average useful life of 3.8 years. Amortization expense related to intangible assets was $7.5 million, $9.5 million and $9.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. Expected future amortization of other intangible assets as of December 31, 2017 is as follows (in thousands):
2018 |  | $ | 10,903
2019 |  |  | 10,682
2020 |  |  | 9,381
2021 |  |  | 8,850
2022 |  |  | 8,160
Thereafter |  |  | 44,110
Total |  | $ | 92,086

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