GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2016

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

NOTE 8. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

The following table summarizes the activity in goodwill for the periods indicated:

	Three Months Ended March 31, 2016
	MIS						MA						Consolidated
	Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill
Balance at beginning of year	$	284.4	$	-	$	284.4	$	704.1	$	(12.2)	$	691.9	$	988.5	$	(12.2)	$	976.3
Additions/adjustments		-		-		-		58.8		-		58.8		58.8		-		58.8
Foreign currency translation adjustments		0.1		-		0.1		15.7		-		15.7		15.8		-		15.8

Ending balance	$	284.5	$	-	$	284.5	$	778.6	$	(12.2)	$	766.4	$	1,063.1	$	(12.2)	$	1,050.9

	Year ended December 31, 2015
	MIS						MA						Consolidated
	Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill
Balance at beginning of year	$	298.7	$	-	$	298.7	$	734.6	$	(12.2)	$	722.4	$	1,033.3	$	(12.2)	$	1,021.1

Additions/adjustments		3.7		-		3.7		5.0		-		5.0		8.7		-		8.7
Foreign currency translation adjustments		(18.0)		-		(18.0)		(35.5)		-		(35.5)		(53.5)		-		(53.5)

Ending balance	$	284.4	$	-	$	284.4	$	704.1	$	(12.2)	$	691.9	$	988.5	$	(12.2)	$	976.3

The 2016 additions/adjustments for the MA segment in the table above relate to the acquisition of GGY. The 2015 additions/adjustments for the MIS segment in the table above relate to the acquisition of Equilibrium. The 2015 additions/adjustments for the MA segment primarily reflect an adjustment to an indemnification asset recognized as part of the Copal acquisition, goodwill acquired from the acquisition of a business from BlackBox Logic and adjustments to deferred revenue balances and deferred tax assets recognized as part of the Lewtan acquisition.

The accumulated impairment charge in the table above reflects an impairment charge recognized in 2012 relating to the FSTC reporting unit within MA. This impairment charge reflected a contraction in spending for training and certification services for many individuals and global financial institutions in 2012 due to macroeconomic uncertainties at the time. The fair value of the FSTC reporting unit utilized in this impairment assessment was estimated using a discounted cash flow methodology and comparable public company and precedent transaction multiples.

Acquired intangible assets and related amortization consisted of:

		March 31,		December 31,
		2016		2015
Customer relationships		$	316.2	$	298.4
Accumulated amortization			(114.8)		(110.0)
	Net customer relationships		201.4		188.4
Trade secrets			30.1		29.7
Accumulated amortization			(23.8)		(23.1)
	Net trade secrets		6.3		6.6
Software			93.6		74.7
Accumulated amortization			(51.4)		(47.7)
	Net software		42.2		27.0
Trade names			76.4		72.4
Accumulated amortization			(17.1)		(16.2)
	Net trade names		59.3		56.2
Other			44.2		44.3
Accumulated amortization			(24.2)		(23.4)
	Net other		20.0		20.9
Total acquired intangible assets, net		$	329.2	$	299.1

Other intangible assets primarily consist of databases, covenants not to compete, and acquired ratings methodologies and models.

Amortization expense relating to acquired intangible assets is as follows:

	Three Months Ended
	March 31,
	2016		2015
Amortization expense	$	7.9	$	8.5

Estimated future amortization expense for acquired intangible assets subject to amortization is as follows:

Year Ending December 31,
2016 (after March 31)	$	25.3
2017		32.3
2018		26.3
2019		23.4
2020		22.3
Thereafter		199.6
Total estimated future amortization	$	329.2

Amortizable intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the estimated undiscounted future cash flows are lower than the carrying amount of the related asset, a loss is recognized for the difference between the carrying amount and the estimated fair value of the asset. There were no impairments to intangible assets during the three months ended March 31, 2016 and 2015.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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