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Goodwill and Intangible Assets
6 Months Ended
Jun. 30, 2017
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

8. GOODWILL AND INTANGIBLE ASSETS

As a result of the changes in organizational structure completed in the first quarter of 2017, the Company has the following five operating segments, which are also its reporting units: Baked Goods, Beverages, Condiments, Meals, and Snacks. See Note 22 for more information.

The Company allocated the goodwill balance as of January 1, 2017 between the new reporting units using a relative fair value allocation approach. The change was considered a triggering event indicating a test for goodwill impairment was required as of January 1, 2017. The Company performed the first step of the impairment test, which did not result in the identification of any impairment losses. Changes in the carrying amount of goodwill for the six months ended June 30, 2017 are as follows:

 

 

 

Baked

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goods

 

 

Beverages

 

 

Condiments

 

 

Meals

 

 

Snacks

 

 

Total

 

 

 

(In millions)

 

Balance at January 1, 2017

 

$

554.2

 

 

$

713.2

 

 

$

433.1

 

 

$

470.6

 

 

$

276.1

 

 

$

2,447.2

 

Purchase price adjustments

 

 

1.4

 

 

 

 

 

 

0.2

 

 

 

1.1

 

 

 

0.3

 

 

 

3.0

 

Foreign currency exchange adjustments

 

 

 

 

 

1.7

 

 

 

2.3

 

 

 

 

 

 

 

 

 

4.0

 

Balance at June 30, 2017

 

$

555.6

 

 

$

714.9

 

 

$

435.6

 

 

$

471.7

 

 

$

276.4

 

 

$

2,454.2

 

The carrying amounts of our intangible assets with indefinite lives, other than goodwill, as of June 30, 2017 and December 31, 2016 are as follows:

 

 

 

June 30,

2017

 

 

December 31,

2016

 

 

 

(In millions)

 

Trademarks

 

$

22.1

 

 

$

21.6

 

Total indefinite lived intangibles

 

$

22.1

 

 

$

21.6

 

 

The increase in the indefinite lived intangibles balance is due to foreign currency translation.

The gross carrying amounts and accumulated amortization of intangible assets, with finite lives, as of June 30, 2017 and December 31, 2016 are as follows:

 

 

 

June 30, 2017

 

 

December 31, 2016

 

 

 

Gross

 

 

 

 

 

 

Net

 

 

Gross

 

 

 

 

 

 

Net

 

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

 

Amount

 

 

Amortization

 

 

Amount

 

 

Amount

 

 

Amortization

 

 

Amount

 

 

 

(In millions)

 

 

(In millions)

 

Intangible assets with finite lives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer-related

 

$

1,260.8

 

 

$

(317.4

)

 

$

943.4

 

 

$

1,284.3

 

 

$

(293.3

)

 

$

991.0

 

Contractual agreements

 

 

3.0

 

 

 

(2.9

)

 

 

0.1

 

 

 

3.0

 

 

 

(2.9

)

 

 

0.1

 

Trademarks

 

 

69.4

 

 

 

(26.0

)

 

 

43.4

 

 

 

69.6

 

 

 

(23.6

)

 

 

46.0

 

Formulas/recipes

 

 

33.8

 

 

 

(15.6

)

 

 

18.2

 

 

 

33.7

 

 

 

(12.8

)

 

 

20.9

 

Computer software

 

 

128.6

 

 

 

(66.4

)

 

 

62.2

 

 

 

115.7

 

 

 

(57.7

)

 

 

58.0

 

Total finite lived intangibles

 

$

1,495.6

 

 

$

(428.3

)

 

$

1,067.3

 

 

$

1,506.3

 

 

$

(390.3

)

 

$

1,116.0

 

 

Total intangible assets, excluding goodwill, as of June 30, 2017 and December 31, 2016 were $1,089.4 million and $1,137.6 million, respectively. Amortization expense on intangible assets for the three months ended June 30, 2017 and 2016 was $28.7 million and $28.5 million, respectively, and $57.3 million and $52.3 million for the six months ended June 30, 2017 and 2016, respectively. Estimated amortization expense on intangible assets for 2017 and the next four years is as follows:

 

 

 

(In millions)

 

2017

 

$

114.2

 

2018

 

 

108.1

 

2019

 

 

105.5

 

2020

 

 

103.0

 

2021

 

 

93.8