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Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 8. Intangibles and Goodwill
Intangible assets at December 31 were as follows:
2006 2005
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
(Amounts in thousands) Value Amortization Value Value Amortization Value
Amortized intangible assets:
Customer lists $ 33,350 $ (21,762) $ 11,588 $ 29,312 $ (19,942) $ 9,370
Patents 13,208 (12,262) 946 13,200 (11,636) 1,564
Trademarks and other 3,751 (832) 2,919 630 (206) 424
50,309 (34,856) 15,453 43,142 (31,784) 11,358
Unamortized intangible assets:
Pension intangible assets — — — 1,890 — 1,890
Total intangible assets $ 50,309 $ (34,856) $ 15,453 $ 45,032 $ (31,784) $ 13,248
During the third quarter of 2004, the Company evaluated the recoverability of certain purchased customer list intangibles due to the expected
departure of a particular customer. To determine recoverability, the Company estimated future cash flows over the remaining useful life and
calculated the fair value. An impairment loss of $2.1 million was recognized for the amount in which the carrying amount exceeded the fair
value amount. This loss is included on the Consolidated Statement of Income in "Transaction and operations support" and relates to our
Payment Systems segment. No impairments were identified during 2006 and 2005.
The Company recorded intangible assets of $7.2 million in connection with the acquisition of MoneyExpress, consisting principally of
customer lists and a noncompetition agreement.
Intangible asset amortization expense for 2006, 2005 and 2004 was $3.1 million, $2.1 million and $2.1 million, respectively. The estimated
intangible asset amortization expense is $3.6 million, $3.2 million, $2.3 million, $1.7 million and $1.0 million for fiscal 2007, 2008, 2009,
2010 and 2011, respectively.
Following is a reconciliation of goodwill:
Global Funds Payment Total
(Amounts in thousands) Transfer Systems Goodwill
Balance as of January 1, 2004 $ 378,451 $ 17,075 $ 395,526
Goodwill acquired 8,744 — 8,744
Impairment losses — — —
Balance as of December 31, 2005 387,195 17,075 404,270
Goodwill acquired 17,046 — 17,046
Impairment losses — — —
Balance as of December 31, 2006 $ 404,241 $ 17,075 $ 421,316
Goodwill acquired in 2006 and 2005 relates to the acquisition of Money Express and ACH Commerce, respectively, and was allocated to the
Global Funds Transfer segment. The amount of goodwill expected to be deductible for tax purposes is not significant. The Company
performed an annual assessment of goodwill during the fourth quarters of 2006, 2005 and 2004 and determined that there was no
impairment.
F-26