EFTA01382789.pdf

S- I/A Table of Contents FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company teas goodwill annually for impairment, as well as upon an indicator of impairment, using a fair value approach at the reporting unit level. The Company estimates the fair value of each reporting unit using a discounted cash flow analysis. The Company performed its annual goodwill impairment test in the fourth quarters of 2014 and 2013. As of October I, 2014, the most recent impairment analysis date, the fair value of each reporting unit exceeded its carrying value. The Company did not record any goodwill impairment charges in 2014 or 2013. The following table presents changes to goodwill for the years ended December 31, 2013 and 2014: Global Global Network & BUNIIICSN Financial Security Divested On millions) Solutions Solution% Solution% Operations Totals Balance as of January 1.2013 Goodwill $ 15.909 $ 2.228 $ 2.205 $ 181 $ 20.523 Accumulated impairment losses (1363) (683) (1.013) (181) (3,240) 14.546 1,545 1.192 17.283 Acquisitions 24 24 Other adjustments (primarily foreign currency) (41) (18) (59) Balance as of December 31, 2013 Goodwill 15.892 2,210 2,205 181 20,488 Accumulated impairment losses (1,363) (683) (1,013) (181) (3,240) 14.529 1,527 1.192 - 17,248 Acquisitions 33 33 Other adjustments (primarily foreign currency) (180) (84) (264) Balance as of 134x:ember 31, 2014 Goodwill 15,712 2,126 1.118 181 20,257 Accumulated impairment losses (1.363) (683) (1.013) (181) (3,240) $ 14.349 L443 S 1.225 $ - $ 17,017 Customer relationships represent the estimated value of the Company's relationships with customers, primarily merchants and financial institutions, to which it provides services. Customer relationships are amortized based on the pattern of undiscounted cash flows for the period as a percentage of total projected undiscounted cash flows. The Company selected this amortization method for these customer relationships based on a conclusion that the projected undiscounted cash flows could be reliably &terminal. The Company capitalizes initial payments for new contracts, contract renewals, and conversion costs associated with customer processing relationships to the extent recoverable through future operations, contractual minimums, and/or penalties in the case of early termination. The Company's accounting policy is to limit the amount of capitalized costs for a given contract to the lesser of the estimated ongoing future cash flows from the contract or the termination fees the Company would receive in the event of early temfination of the contract by the customer. The initial payments for new contracts and contract renewals arc amortized over the term of the contract as a reduction of the associated revenue (transaction and processing service fees). Conversion costs are also amortized over the term of the contract but are recorded as an expense in "Depreciation and amortization" in the Consolidated Statements of Operation& The Company develops software that is used in providing processing services to customers. To a lesser extent, the Company also develops software to be sold or licensed to customers. Costs incurred during the F-17 http://www.see.gov/Arehivestedgar/dataht83980/000119312515334479/d31022dsla.html10/14/2015 9:06:38 AM] CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0082281 CONFIDENTIAL SONY GM_00228465 EFTA01382789