Goodwill and Other Intangible Assets

9 Months Ended

Oct. 01, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

5.	GOODWILL AND OTHER INTANGIBLE ASSETS: The change in the net carrying amount of goodwill for the nine months ended October 1, 2016, by segment is as follows (in thousands):

Steel Mills

Steel Products

Raw Materials

Total

Balance at December 31, 2015

590,634

691,067

729,577

2,011,278

Translation

—

15,563

—

15,563

Balance at October 1, 2016

590,634

706,630

729,577

2,026,841

Nucor completed its most recent annual goodwill impairment testing during the fourth quarter of 2015 and concluded that there was no impairment of goodwill for any of its reporting units. There have been no triggering events requiring an interim assessment for impairment since the most recent annual impairment testing date.

Intangible assets with estimated useful lives of 5 to 22 years are amortized on a straight-line or accelerated basis and are comprised of the following (in thousands):

October 1, 2016

December 31, 2015

Gross
Amount

Accumulated
Amortization

Gross
Amount

Accumulated
Amortization

Customer relationships

1,177,629

551,057

1,185,299

517,817

Trademarks and trade names

156,614

64,877

155,864

57,756

Other

59,375

20,057

23,025

17,943

1,393,618

635,991

1,364,188

593,516

During the third quarter of 2016, Nucor acquired the remaining ownership interest in a former joint venture entity that Nucor accounted for as an equity method investment. As a result of the transaction, Nucor obtained control and began to consolidate that entity. That entity’s intangible assets, the majority of which are patents, are included in other intangible assets, net in the condensed consolidated balance sheet at October 1, 2016. The gross amount and related accumulated amortization of these assets were $36.3 million and $1.0 million, respectively, at October 1, 2016. These amounts are included in the “Other” row in the above table. As a result of the valuation associated with this transaction, we recorded a net gain of approximately $13.6 million which was included in marketing, administrative and other expenses during the third quarter and first nine months of 2016 in the condensed consolidated statements of earnings.

Intangible asset amortization expense for the third quarter of 2016 and 2015 was $18.5 million and $18.8 million, respectively, and was $54.1 million and $55.7 million in the first nine months of 2016 and 2015, respectively. Annual amortization expense is estimated to be $72.0 million in 2016; $72.9 million in 2017; $69.7 million in 2018; $66.9 million in 2019; and $64.5 million in 2020.

- 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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