Intangible Assets, Net and Goodwill

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

A summary of intangible assets, net and goodwill at December 31, 2017 and 2016 is as follows (in thousands):



	2017		2016
Indefinite lived intangibles:
Exchange and clearing organization membership interests and registrations	$	8,551	$	9,041

Amortizable intangibles:
Customer and other relationships, net of accumulated amortization of $230,074 and $198,674	347,767		378,136
Trademarks and tradename, net of accumulated amortization of $95,627 and $78,778	293,851		309,382
Supply contracts, net of accumulated amortization of $57,440 and $47,867	86,160		95,733
Other, net of accumulated amortization of $3,885 and $2,914	4,701		5,672
Total intangible assets, net	741,030		797,964

Goodwill:
National Beef	14,991		14,991
Jefferies	1,703,300		1,696,864
Other operations	3,859		3,859
Total goodwill	1,722,150		1,715,714

Total intangible assets, net and goodwill	$	2,463,180	$	2,513,678

Amortization expense on intangible assets was $58.2 million, $63.4 million and $63.9 million for the years ended December 31, 2017, 2016 and 2015, respectively.

The estimated aggregate future amortization expense for the intangible assets for each of the next five years is as follows (in thousands):



2018	$	58,454
2019	58,454
2020	58,454
2021	58,067
2022	57,984

Goodwill Impairment Testing

The quantitative goodwill impairment test is performed at our reporting unit level and consists of two steps. In the first step, the fair value of the reporting unit is compared with its carrying value, including goodwill and allocated intangible assets. If the fair value is in excess of the carrying value, the goodwill for the reporting unit is considered not to be impaired. If the fair value is less than the carrying value, then a second step is performed in order to measure the amount of the impairment loss, if any, which is based on comparing the implied fair value of the reporting unit’s goodwill to the carrying value of the reporting unit's goodwill.

The estimated fair values are based on valuation techniques that we believe market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. The methodologies we utilize in estimating fair value include price-to-earnings and price-to-book multiples of comparable public companies, multiples of mergers and acquisitions of similar businesses, projected cash flows and/or market capitalization. In addition, as the fair values determined under the market approach represent a noncontrolling interest, we applied a control premium to arrive at the estimated fair value of our reporting units on a controlling basis. An independent valuation specialist was engaged to assist with the valuation process for Jefferies at August 1, 2017. The results of our annual impairment test related to Jefferies, National Beef and other operations indicated goodwill was not impaired.

- 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.

+ References + Details