Goodwill and Other Intangible Assets, Net

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

Movements in goodwill during the years ended December 31, 2016, 2017 and 2018 were as follows:



(DOLLARS IN THOUSANDS)	Goodwill
Balance at January 1, 2016	$	941,389
Acquisitions	67,480
Foreign exchange	(8,746		)
Balance at December 31, 2016	1,000,123
Acquisitions	87,865
Foreign exchange	32,920
Other^(a)	35,380
Balance at December 31, 2017	1,156,288
Acquisitions^(b)	4,253,541
Disposals	(19,069		)
Foreign exchange	(12,372		)
Balance at December 31, 2018	$	5,378,388

_______________________


(a)	Other above principally represents the increase to Goodwill associated with the update of certain customer relationship assumptions in the final purchase price allocation of David Michael, as disclosed in Note 3.


(b)	In 2018, $4.2 billion primarily relates to our acquisition of Frutarom and is subject to change upon completion of the purchase price allocation.

Goodwill by segment was as follows:



	December 31,
(DOLLARS IN THOUSANDS)	2018		2017
Taste	$	525,060	$	525,038
Scent	618,878		631,250
Frutarom	4,224,010		—
Unallocated	10,440		—
Total	$	5,378,388	$	1,156,288

The increase reflected in Taste above represents the finalization of the PowderPure purchase price allocation in 2018. The decrease reflected in Scent above represents the foreign exchange impact on Goodwill consolidated from subsidiary balance sheets in a functional currency other than USD. The increase reflected in Frutarom above represents the preliminary purchase price allocation of Frutarom as disclosed in Note 3.

The unallocated Goodwill above represents the preliminary purchase price allocation of TAA as disclosed in Note 3. The amount is currently unallocated pending further analysis of the use of the technology acquired in the acquisition which is expected to have applications to both Taste and Scent.

Other Intangible Assets

Other intangible assets, net consisted of the following amounts:



	December 31,
(DOLLARS IN THOUSANDS)	2018			2017
Asset Type
Customer relationships	$	2,658,659		$	407,636
Technological know-how	451,016			161,856
Trade names & patents	177,770			38,771
Other	43,766			24,814
Total carrying value	3,331,211			633,077
Accumulated Amortization
Customer relationships	(156,906		)	(104,800		)
Technological know-how	(93,051		)	(76,766		)
Trade names & patents	(19,593		)	(15,241		)
Other	(22,339		)	(20,483		)
Total accumulated amortization	(291,889		)	(217,290		)
Other intangible assets, net	$	3,039,322		$	415,787

Amortization expense was $75.9 million for the year ended December 31, 2018, and $34.7 million and $23.8 million for the years ended December 31, 2017 and 2016, respectively. Amortization expense for the next five years and thereafter, based on preliminary valuations and determinations of useful lives, is expected to be as follows:



	December 31,
(DOLLARS IN THOUSANDS)	2019		2020		2021		2022		2023
Estimated future intangible amortization expense	$	191,175	$	187,034	$	182,203	$	178,250	$	178,137

- 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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