Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

As of December 31, 2015, the gross carrying value of goodwill was $2.2 billion and accumulated goodwill impairment was $2.1 billion. The Company took a goodwill impairment charge of $2.1 billion in 2011 with no goodwill impairment charges in subsequent years.

The changes in the net carrying amount of goodwill as of September 30, 2016 and December 31, 2015 are as follows (in thousands):



Balance at December 31, 2015	$	86,841
Acquisitions (Note 2)	77,002
Balance at September 30, 2016	$	163,843

The gross and net carrying amounts of our intangible assets other than goodwill as of September 30, 2016 and December 31, 2015 were as follows:



	September 30, 2016										December 31, 2015
	Gross Carrying Amount (1)		Impairment			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Impairment			Accumulated Amortization			Net Carrying Amount
	(In thousands)
Intangible assets with indefinite lives:
Trademarks	$	52,000	$	—		$	—		$	52,000	$	—	$	—		$	—		$	—
Intangible assets with finite lives:
Customer-related and other	$	78,925	$	—		$	(35,970	)	$	42,955	$	49,225	$	—		$	(33,700	)	$	15,525
Trademarks	229,777		(109,910		)	(37,749		)	82,118		229,777		(109,910		)	(24,423		)	95,444
Total	$	360,702	$	(109,910	)	$	(73,719	)	$	177,073	$	279,002	$	(109,910	)	$	(58,123	)	$	110,969


(1)	The increase in the carrying amounts of indefinite-lived trademarks and customer-related intangibles from December 31, 2015 to September 30, 2016 is related to the Friendly's acquisition. See Note 2.

Prior to 2015, certain of our trademarks were not amortized as our intent was to continue to use these intangible assets indefinitely. During the first quarter of 2015, we approved the launch of DairyPure^®, our national white milk brand. In connection with the approval of the launch of DairyPure^®, we re-evaluated our indefinite-lived trademarks and determined them to be finite-lived, with remaining useful lives of 5 years. The launch of DairyPure^® resulted in a triggering event for impairment testing purposes. Based upon our testing, we recorded a non-cash impairment charge of $109.9 million and related income tax benefit of $41.2 million in the first quarter of 2015. We estimated the fair value of our trademarks based on an income approach using the relief-from-royalty method. This approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates in the category of intellectual property, discount rates and other variables. We base our fair value estimates on assumptions we believe to be reasonable, but which are unpredictable and inherently uncertain. The impairment charge is reported in the impairment of intangible assets line in our unaudited Condensed Consolidated Statements of Operations.

In the first quarter of 2016, we further evaluated the remaining useful life of our finite-lived trademarks in conjunction with our newly approved strategy around our ice cream brands. Based on our evaluation, we extended the useful lives of certain of our finite-lived trademarks. Our remaining trademark values will be amortized on a straight-line basis over their useful lives, which range from 5 to 10 years. Amortization expense on intangible assets for the three months ended September 30, 2016 and 2015 was $5.2 million and $6.4 million, respectively. Amortization expense on intangible assets for the nine months ended September 30, 2016 and 2015 was $15.6 million and $15.3 million, respectively. The amortization of intangible assets is reported on a separate line item in our unaudited Condensed Consolidated Statements of Operations.

Estimated aggregate intangible asset amortization expense for the next five years is as follows (in millions):



2016	$	20.8
2017	20.6
2018	20.0
2019	20.0
2020	11.9

- 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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