First Data 2012 Annual Report Download - page 68

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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:
The value of the First Data trade name is $603.5 million as of December 31, 2012 and 2011. 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,
2012 or 2011.
The following table provides the components of other intangibles:
The estimated future aggregate amortization expense for the next five years is as follows:
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 and 2010 as described in Note 7 of these Consolidated Financial Statements.
Inventory
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.
Investment Securities
The Company maintains investments in marketable and non-marketable securities, the majority of which are carried at fair
value. These are included in the “Settlement assets”, “Other current assets”, “Long-term settlement assets” and “Other long-term
assets” line items of the Consolidated Balance Sheets.
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Year ended December 31,
(in millions) Amount
2012 $1,046.4
2011 1,052.1
2010 1,205.6
As of December 31,
(in millions)
2012
Cost
2012
Accumulated
Amortization
2012
Net of
Accumulated
Amortization
2011
Cost
2011
Accumulated
Amortization
2011
Net of
Accumulated
Amortization
Customer relationships $ 7,595.3
$(3,839.0)$3,756.3
$7,638.1
$ (3,212.7)$4,425.4
Other intangibles:
Conversion costs $ 154.3 $(56.7) $97.6 $120.9 $ (38.9) $82.0
Contract costs 222.2 (119.6)102.6 189.9 (88.3)101.6
Software 1,544.7 (1,098.0) 446.7 1,402.4 (933.0) 469.4
Other, including trade names 1,451.4 (269.7)1,181.7 1,448.2 (222.0)1,226.2
Total other intangibles
$ 3,372.6 $(1,544.0) $1,828.6
$3,161.4
$ (1,282.2) $1,879.2
Year ended December 31,
(in millions) Amount
2013 $833.7
2014 748.0
2015 662.7
2016 507.5
2017 427.9