Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill by segment were as follows:



(amounts in millions)	Performance Applications			Agricultural Solutions			Total
December 31, 2014	$	961.2		$	444.1		$	1,405.3
Addition from acquisitions	—			1,697.1			1,697.1
Purchase accounting adjustments	—			62.1			62.1
Foreign currency translation	(58.5		)	(264.0		)	(322.5		)
September 30, 2015	$	902.7		$	1,939.3		$	2,842.0

The carrying value of indefinite-lived intangible assets other than goodwill, which consist solely of tradenames, was $226 million and $69.3 million at September 30, 2015 and December 31, 2014, respectively.

During the second quarter of 2015, as a result of a decline of forecasted cash flows, the Company performed an impairment analysis of the $73.2 million of goodwill assigned to the ASF Americas reporting unit. In performing the impairment test, the Company estimated the fair value of ASF Americas pursuant to an income approach based upon discounted cash flows. For the estimate of fair value, the Company estimated annual revenue growth rates for the initial five year forecast period to range from 4.2% to 5.6% and estimated a long term growth rate in determining the terminal value of the reporting unit of 3.0%. The discount rate for the estimate of fair value was based on a Weighted Average Cost of Capital, or WACC. The WACC combines the required return on equity, based on a Modified Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta, small stock risk premium and a company specific risk premium, with the cost of debt, based on BBB rated corporate bonds, adjusted using an income tax factor. The calculation resulted in a WACC rate of 10.0%. The estimated fair value of ASF Americas exceeded its carrying value by 11.8%. As a result, there was no impairment of goodwill assigned to ASF Americas.

Intangible assets subject to amortization were as follows:



	September 30, 2015							December 31, 2014
(amounts in millions)	Gross Carrying Amount		Accumulated Amortization and Foreign Exchange			Net Book Value		Gross Carrying Amount		Accumulated Amortization and Foreign Exchange			Net Book Value
Customer lists	$	946.8	$	(157.2	)	$	789.6	$	613.6	$	(71.6	)	$	542.0
Developed technology	1,867.1		(322.9		)	1,544.2		760.5		(50.8		)	709.7
Tradenames	19.0		(2.4		)	16.6		19.7		(1.0		)	18.7
Non-compete agreements	1.9		(0.4		)	1.5		1.9		(0.1		)	1.8
Total	$	2,834.8	$	(482.9	)	$	2,351.9	$	1,395.7	$	(123.5	)	$	1,272.2

Useful lives range from 8 to 30 years for customer lists, 5 to 14 years for developed technology, 5 to 20 years for tradenames and 5 years for non-compete agreements, which results in weighted average useful lives of 20 years, 12 years, 20 years and 5 years, respectively, for an aggregate weighted average useful life of approximately 15 years at September 30, 2015.

For the three months ended September 30, 2015 and 2014, the Company recorded amortization expense on intangible assets of $50.4 million and $14.3 million, respectively. For the nine months ended September 30, 2015, and 2014, the Company recorded amortization expense on intangible assets of $143 million and $43.6 million, respectively.

Annual amortization expense on the Company's intangible assets is estimated to total $195 million in 2015, $208 million in each of the years 2016 through 2019, and $206 million in 2020.

- 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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