For the three months ended March 31, 2018, the Company incurred transaction expenses of approximately $120.8 million in conjunction with the acquisition of Legacy Worldpay. All transaction costs incurred for the three months ended March 31, 2018 are included in general and administrative expenses on the accompanying Consolidated Statements of Income.
Under the terms of the Legacy Worldpay transaction agreement, the Company replaced equity awards held by certain employees of Legacy Worldpay. The fair value of the replacement awards was approximately $82.4 million. The portion of the fair value of the replacement awards related to the services provided prior to the acquisition of approximately $44.2 million was part of the consideration transferred to acquire Legacy Worldpay. The remaining portion of the fair value is associated with future service and will be recognized as expense over the future service period.
Pro Forma Results Giving Effect to the Legacy Worldpay Acquisition
The following pro forma combined financial information presents the Company’s results of operations for the three months ended March 31, 2018, as if the acquisition had occurred on January 1, 2017 (in millions, except share amounts).
Three Months Ended March 31, 2018
Net income attributable to Worldpay, Inc.
Net income per share attributable to Worldpay, Inc. Class A common stock:
Shares used in computing net income per share of Class A common stock:
The pro forma results include certain pro forma adjustments that were directly attributable to the acquisition as follows:
additional amortization expense that would have been recognized relating to the acquired intangible assets; and
adjustment to interest expense to reflect the additional borrowings of the Company in conjunction with the acquisition and removal of Legacy Worldpay debt.
Changes in the carrying amount of goodwill for the three months ended March 31, 2019 are as follows (in millions):
Balance as of December 31, 2018
Effect of foreign currency translation
Balance as of March 31, 2019
Intangible assets consist of acquired customer relationships, trade name and customer portfolios and related assets. The useful lives of customer relationships are determined based on forecasted cash flows, which include estimates for customer attrition associated with the underlying portfolio of customers acquired. The customer relationships acquired in conjunction with acquisitions are amortized based on the pattern of cash flows expected to be realized taking into consideration expected revenues and customer attrition, which are based on historical data and the Company's estimates of future performance. These estimates result in accelerated amortization on certain acquired intangible assets.