First Data 2013 Annual Report Download - page 69
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ranges from three to 25 years. The intangible amortization expense associated with customer relationships and other intangibles, including amortization
associated with investments in affiliates, was as follows:
2013 $923.5
2012 $1,046.4
2011 $1,052.1
The value of the First Data trade name is $603.5 million as of December 31, 2013 and 2012. Upon consideration of many factors, including the
determination that there are no legal, regulatory or contractual provisions that limit the useful life of the First Data trade name, the Company determined that
the First Data trade name had an indefinite useful life. The Company also considered the effects of obsolescence, demand, competition, other economic factors
and ability to maintain and protect the trade name without significant expenditures. The First Data trade name is expected to contribute directly or indirectly to
the future cash flows of the Company for an indefinite period. As an indefinite lived asset, the First Data trade name is not amortized but is reviewed annually
for impairment until such time as it is determined to have a finite life. The First Data trade name was not impaired as of December 31, 2013 or 2012.
The following table provides the components of other intangibles:
Customer relationships $7,580.6 $(4,418.3) $ 3,162.3 $ 7,595.3 $(3,839.0) $ 3,756.3
Other intangibles:
Conversion costs $166.6 $(71.3) $ 95.3 $154.3 $(56.7) $ 97.6
Contract costs 218.0 (110.8)107.2 222.2 (119.6) 102.6
Software 1,649.4 (1,264.3) 385.1 1,544.7 (1,098.0)446.7
Other, including trade names 1,429.1 (297.1) 1,132.0 1,451.4 (269.7)1,181.7
Total other intangibles $3,463.1 $(1,743.5)$1,719.6 $ 3,372.6 $ (1,544.0)$1,828.6
The estimated future aggregate amortization expense for the next five years is as follows:
2014 $779.7
2015 $ 689.9
2016 $ 526.0
2017 $439.1
2018 $383.0
The Company tests contract and conversion costs greater than $1 million for recoverability on an annual basis by comparing the remaining expected
undiscounted cash flows under the contract to the net book value. Any assets that are determined to be unrecoverable are written down to their fair value. In
addition to this annual test, these assets and all other long lived assets are tested for impairment upon an indicator of potential impairment. The Company
recorded impairment charges relating to other intangibles in 2012 as described in Note 7 of these Consolidated Financial Statements.
Inventories are stated at lower of cost or market and consist primarily of POS terminals, forms and envelopes. The cost of inventory is determined using
average cost for POS terminals and first-in first-out (“FIFO”) for forms.
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