Equity Method Investments |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investments |
Equity Method Investments
In connection with the EMC Acquisition, the Company acquired 49% interests in WMS and in Santander. During the fourth quarter of 2018, in accordance with ASC 323, Investments—Equity Method and Joint Ventures, the Company completed an assessment of the recoverability of its equity method investments. The Company determined that the fair value of its investments in Santander exceeded its respective carrying values; however, the carrying value of its interest in the WMS joint venture exceeded the estimated fair value of its interest, which management concluded was other than temporary, and accordingly recorded an impairment charge of $51.0 million relating to its WMS equity investment. This WMS impairment was primarily the result of slower than expected adoption of growth initiatives, reducing our financial projections for the WMS business for 2019 and beyond.
The Company conducted a similar assessment during the fourth quarter of 2017 and determined that the fair value of its investment in Santander exceeded the carrying value; however, the carrying value of the interest in its WMS joint venture exceeded the estimated fair value of its interest, which management concluded was other than temporary, and accordingly, recorded an impairment charge of $16.7 million relating to its WMS equity investment. This WMS impairment was primarily the result of lower than expected financial performance for year ended December 31, 2017, due to the loss of a roaming partner. This resulted in a decline in revenue and margin which was not expected to recover in the foreseeable future, causing the Company to reduce its financial projections for the WMS business for 2018 and beyond.
Following is the summarized financial information for such equity method investments on an aggregated basis as of and for the years ended December 31, 2018 and 2017 (in thousands):
The carrying values of the Company’s equity interests in WMS and Santander as of December 31, 2018 and 2017 were as follows (in thousands):
As of December 31, 2018, there was an aggregate difference of $60.6 million between the carrying amounts (inclusive of the impact of the impairment losses) of these investments and the amounts of underlying equity in net assets in these investments. The difference was determined by applying the acquisition method of accounting in connection with the EMC Acquisition and is being amortized ratably over the life of the related acquired intangible assets. The weighted-average life of the intangible assets at the time of the EMC Acquisition in total was 14.9 years.
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