Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2018, 2017 and 2016 are as follows:



(in thousands)	Grain		Plant Nutrient			Rail		Total
Balance at January 1, 2016	$	—	$	59,767		$	4,167	$	63,934
Acquisitions	—		—			—		—
Balance at December 31, 2016	—		59,767			4,167		63,934
Acquisitions	1,171		—			—		1,171
Impairments	—		(59,081		)	—		(59,081		)
Balance at December 31, 2017	1,171		686			4,167		6,024
Acquisitions	—		—			—		—
Balance at December 31, 2018	$	1,171	$	686		$	4,167	$	6,024

Goodwill for the Grain segment is $1.2 million and net of accumulated impairment losses of $46.4 million as of December 31, 2018. Goodwill for the Plant Nutrient segment is $0.7 million and net of accumulated impairment losses of $68.9 million as of December 31, 2018.

Goodwill is tested for impairment annually as of October 1, or more frequently if impairment indicators arise. Upon early adoption of ASU No. 2017-04 during the second quarter of 2017, the Company uses a one-step quantitative approach that compares the business enterprise value ("BEV") of each reporting unit with its carrying value. The BEV was computed based on both an income approach (discounted cash flows) and a market approach. The income approach uses a reporting unit's estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party buyer. The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics to the reporting unit. Any excess of the carrying value of the goodwill over the BEV will be recorded as an impairment loss. The calculation of the BEV is based on significant unobservable inputs, such as price trends, customer demand, material costs and discount rates, and are classified as Level 3 in the fair value hierarchy. No goodwill impairment charges were incurred in 2018 as a result of our annual impairment testing.

While performing the annual assessment of goodwill impairment in 2017, the Company recorded an impairment loss related to the Wholesale reporting unit for $17.1 million. The discounted cash flow model used for the income approach assumed discrete period revenue growth through 2022 that was reflective of market opportunities, changes in product mix, and cyclical trends within the Wholesale reporting unit. In the terminal year, the Company assumed a long-term earnings growth rate of 2.0 percent that is believed to be appropriate given the current industry-specific expectations. As of the valuation date, the Company utilized a weighted-average cost of capital of 10.4 percent, which reflects the relative risk and time value of money. This is in addition to the $42.0 million of impairment recorded in the Wholesale reporting unit in the second quarter of 2017. As a result, there is no remaining goodwill in the Wholesale reporting unit as of December 31, 2017. No other impairments were incurred in the remaining reporting units as a result of the annual assessment.

No goodwill impairment charges were incurred in 2016 as a result of our annual impairment testing.

The Company's other intangible assets are as follows:



(in thousands)	Original Cost		Accumulated Amortization		Net Book Value
December 31, 2018
Intangible asset class
Customer list	$	40,570	$	21,706	$	18,864
Non-compete agreement	3,313		2,753		560
Supply agreement	9,060		5,824		3,236
Technology	13,400		4,857		8,543
Trademarks and patents	17,985		7,682		10,303
Lease intangible	11,564		3,602		7,962
Software	86,723		37,112		49,611
Other	419		360		59
	$	183,034	$	83,896	$	99,138
December 31, 2017
Intangible asset class
Customer list	$	41,151	$	18,437	$	22,714
Non-compete agreement	4,665		3,563		1,102
Supply agreement	9,806		5,699		4,107
Technology	15,500		5,616		9,884
Trademarks and patents	18,185		5,882		12,303
Lease intangible	12,420		5,707		6,713
Software	84,339		28,372		55,967
Other	2,023		1,920		103
	$	188,089	$	75,196	$	112,893

Amortization expense for intangible assets was $19.1 million, $18.1 million and $16.8 million for 2018, 2017 and 2016, respectively. Expected future annual amortization expense for the above assets is as follows: 2019 -- $19.5 million; 2020 -- $17.7 million; 2021 -- $16.4 million; 2022 -- $14.4 million; and 2023 -- $12.9 million.

- 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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