Goodwill and Other Intangible Assets

12 Months Ended

Jan. 01, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The following table reflects our indefinite-lived intangible assets, including goodwill and our definite-lived intangible assets along with related accumulated amortization by major category (U.S. dollars in millions):



	January 1, 2016			December 26, 2014
Goodwill	$	263.7		$	330.5
Indefinite-lived intangible assets:
Trademarks	44.4			44.6
Definite-lived intangible assets:
Definite-lived intangible assets	9.7			9.7
Accumulated amortization	(6.5		)	(5.8		)
Definite-lived intangible assets, net	3.2			3.9
Goodwill and other intangible assets, net	$	311.3		$	379.0

Indefinite-lived and definite-lived intangible assets are included in other noncurrent assets in the Consolidated Balance Sheets.

The following table reflects the changes in the carrying amount of goodwill by business segment (U.S. dollars in millions):



	Bananas			Other fresh produce					Prepared food			Totals
Goodwill	$	65.2		$	285.6				$	78.3		$	429.1
Accumulated impairment losses	—			(22.0		)			(75.7		)	(97.7		)
Balance at December 27, 2013	$	65.2		$	263.6				$	2.6		$	331.4

Acquisitions	—			0.2			⁽¹	⁾	—			0.2
Foreign exchange and other	(0.6		)	(0.5		)			—			(1.1		)

Goodwill	$	64.6		$	285.3				$	78.3		$	428.2
Accumulated impairment losses	—			(22.0		)			(75.7		)	(97.7		)
Balance at December 26, 2014	$	64.6		$	263.3				$	2.6		$	330.5

Tomato and vegetable goodwill impairment	—			(66.1		)			—			(66.1		)
Foreign exchange and other	—			(0.7		)			—			(0.7		)

Goodwill	$	64.6		$	284.6				$	78.3		$	427.5
Accumulated impairment losses	—			(88.1		)			(75.7		)	(163.8		)
Balance at January 1, 2016	$	64.6		$	196.5				$	2.6		$	263.7

⁽¹⁾See Note 6, "Property, Plant and Equipment, Net" for further discussion on acquisitions.

7. Goodwill and Other Intangible Assets (continued)

Results of Impairment Tests

In accordance with the ASC guidance on “Goodwill and Other Intangible Assets”, we review goodwill for impairment on an annual basis or earlier if indicators of impairment arise. Based on the annual impairment review of goodwill performed as of the first day of our fourth quarter in 2015 and due to the failure of the tomato and vegetable business in North America to meet our expectations, we wrote-off $66.1 million of goodwill, which was related to the 2003 tomato and vegetable business acquisition. We determined that there was no remaining implied fair value of goodwill for the tomato and vegetable business utilizing the discounted cash flow method, an income approach valuation method, which indicates the fair value of a business based on the cash flows that the business can be expected to generate. The implied fair value of goodwill, if any, is determined by comparing the value of the business using the discounted cash flow method to the fair value of the net assets of that business.

As a result of our annual impairment test performed during 2013 and due to the failure of the prepared food business to meet our expectations, we recorded $99.6 million of asset impairment charges, of which $75.7 million and $23.9 million related to the impairment of this unit's goodwill and the perpetual, royalty-free licenses to use the DEL MONTE^® brand trademarks, respectively, related to our 2004 acquisition of Prepared Foods in Europe, Africa, the Middle East and the countries formerly part of the Soviet Union. The remaining goodwill in the prepared foods reporting unit of $2.6 million relates to our Poultry business.

The fair value of the banana reporting unit's goodwill and the prepared food unit’s remaining trade names and trademarks are highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. The following table highlights the sensitivities of the goodwill and indefinite-lived intangibles at risk as of January 1, 2016 (U.S. dollars in millions):



	Banana Reporting Unit Goodwill			Remaining DEL MONTE® Trade Names and Trademarks
Carrying value of indefinite-lived intangible assets	$	64.6		$	41.6

Approximate percentage by which the fair value exceeds the carrying value based on annual impairment test as of 1st day of fourth quarter	8.0		%	4.2		%

Amount that a one percentage point increase in the discount rate and a 5% decrease in cash flows would cause the carrying value to exceed the fair value and trigger a fair valuation	$	48.1		$	1.7

See Note 3, “Asset Impairment and Other Charges, Net” and Note 19, "Fair Value Measurements" for further discussion related to impairments of intangible assets occurring during 2015 and 2013.

The estimated amortization expense related to definite-lived intangible assets for the five succeeding years is as follows (U.S. dollars in millions):



2016	$	0.8
2017	0.8
2018	0.4
2019	0.1
2020	0.1

- 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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