Goodwill and Identifiable Intangible Assets, Net

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identifiable Intangible Assets, Net

Goodwill

We review goodwill for impairment on a reporting unit basis annually during the fourth quarter of each year, using a measurement date of October 1st, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company performed a qualitative assessment of the goodwill by reporting unit as of October 1, 2017, during the fourth quarter of 2017, and concluded that it was more likely than not that the fair value of each of the reporting units exceeded its carrying amount. In assessing the qualitative factors, the Company considered the impact of key factors including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity-and reporting unit-specific events. As such, it was not necessary to perform the two-step quantitative goodwill impairment test at that time. In addition, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the qualitative assessment performed in the fourth quarter of the fiscal year ended December 31, 2017. If the qualitative factors had indicated that it was more likely than not that the fair value of the reporting units was less than its carrying amount, the Company would have tested goodwill for impairment at the reporting unit level using a two-step approach.

The goodwill impairment test involves a two-step process. In step one, we compare the fair value of each of our reporting units to its carrying value, including the goodwill allocated to the reporting unit. If the fair value of the reporting unit exceeds its carrying value, there is no indication of impairment and no further testing is required. If the fair value of the reporting unit is less than the carrying value, we must perform step two of the impairment test to measure the amount of impairment loss, if any. In step two, the reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss.

Allocation of Goodwill to Reporting Units

The following table shows our goodwill balances by our segment reporting structure:



(In millions)	Food Care		Product Care		Total
Carrying Value at December 31, 2016	$	510.8	$	1,372.1	$	1,882.9
Acquisition and divestiture	10.1		39.3		49.4
Currency translation	6.0		1.5		7.5
Carrying Value at December 31, 2017	$	526.9	$	1,412.9	$	1,939.8

As noted above, it was determined under a qualitative assessment that it was more likely than not that the fair value of any reporting unit was less than its carrying amount. Therefore, there was no impairment of goodwill. However, if the fair value decreases in future periods, the Company may fail step one of the goodwill impairment test and be required to perform step two. In performing step two, the fair value would have to be allocated to all of the assets and liabilities of the reporting unit. Therefore, any potential goodwill impairment charge would be dependent upon the estimated fair value of the reporting unit at that time and the outcome of step two of the impairment test. The fair values of the assets and liabilities of the reporting unit, including the intangible assets could vary depending on various factors.

The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more likely than not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment. In the event of significant adverse changes of the nature described above, we might have to recognize a non-cash impairment of goodwill, which could have a material adverse effect on our consolidated financial condition and results of operations.

Identifiable Intangible Assets, Net

The following tables summarize our identifiable intangible assets, net with definite and indefinite useful lives:



	December 31, 2017							December 31, 2016
(In millions)	Gross Carrying Value		Accumulated Amortization			Net ⁽¹⁾		Gross Carrying Value		Accumulated Impairment			Net
Customer relationships	$	59.7	$	(19.7	)	$	40.0	$	25.0	$	(17.5	)	$	7.5
Trademarks and tradenames	11.6		(0.5		)	11.1		0.6		(0.2		)	0.4
Capitalized software	50.6		(40.0		)	10.6		42.6		(31.2		)	11.4
Technology	39.2		(27.5		)	11.7		34.4		(24.2		)	10.2
Contracts	10.9		(9.6		)	1.3		10.6		(8.9		)	1.7
Total intangible assets with definite lives	172.0		(97.3		)	74.7		113.2		(82.0		)	31.2
Trademarks and tradenames with indefinite lives	8.9		—			8.9		8.9		—			8.9
Total identifiable intangible assets	$	180.9	$	(97.3	)	$	83.6	$	122.1	$	(82.0	)	$	40.1


⁽¹⁾	As of December 31, 2017, amounts include intangible assets inquired as part of the Fagerdala acquisition. See Note 3, "Discontinued Operations, Divestitures and Acquisitions" to the Notes to Consolidated Financial Statements for additional information related to the Fagerdala acquisition.

The following table shows the remaining estimated future amortization expense at December 31, 2017.



Year	Amount (in millions)
2018	$	11.1
2019	8.1
2020	5.8
2021	5.3
Thereafter	44.4
Total	$	74.7

Amortization expense was $13.1 million in 2017, $15.0 million in 2016 and $11.1 million in 2015.

The following table shows the remaining weighted average useful life of our definite lived intangible assets as of December 31, 2017.



	Remaining weighted average useful lives
Customer relationships	15.3
Trademarks and trade names	14.5
Technology	3.3
Contracts	3.7
Total identifiable intangible assets, net with definite lives	11.5

- 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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