Goodwill and Intangible Assets



	U.S.		Canada			Europe			International			Consolidated
Changes in Goodwill:			(In millions)
As of December 31, 2017	$	5,928.5	$	932.1		$	1,538.0		$	6.9		$	8,405.5
Business acquisition⁽¹⁾	—		—			9.8			—			9.8
Adjustments to preliminary purchase price allocation⁽²⁾	—		(2.9		)	—			—			(2.9		)
Foreign currency translation	—		(24.3		)	(54.3		)	(0.8		)	(79.4		)
As of September 30, 2018	$	5,928.5	$	904.9		$	1,493.5		$	6.1		$	8,333.0


(1)	During the first quarter of 2018, we completed the acquisition of Aspall Cyder Limited, an established premium cider business in the U.K. As part of the preliminary purchase price accounting in the first quarter of 2018, goodwill generated in conjunction with this acquisition has been recorded within our Europe segment, subject to normal purchase accounting adjustments.


(2)	During the second quarter of 2018, we recorded adjustments to the preliminary purchase price allocation related to our acquisition of Le Trou du Diable, which was completed in the fourth quarter of 2017.

The following table presents details of our intangible assets, other than goodwill, as of September 30, 2018:



	Useful life	Gross		Accumulated amortization			Net
	(Years)	(In millions)
Intangible assets subject to amortization:
Brands	10 - 50	$	5,115.6	$	(647.9	)	$	4,467.7
License agreements and distribution rights	15 - 28	223.1		(97.7		)	125.4
Other	2 - 40	129.4		(29.0		)	100.4
Intangible assets not subject to amortization:
Brands	Indefinite	8,181.6		—			8,181.6
Distribution networks	Indefinite	783.7		—			783.7
Other	Indefinite	337.6		—			337.6
Total		$	14,771.0	$	(774.6	)	$	13,996.4

The following table presents details of our intangible assets, other than goodwill, as of December 31, 2017:



	Useful life	Gross		Accumulated amortization			Net
	(Years)	(In millions)
Intangible assets subject to amortization:
Brands	10 - 50	$	5,215.3	$	(516.0	)	$	4,699.3
License agreements and distribution rights	15 - 28	236.3		(103.9		)	132.4
Other	2 - 40	148.3		(42.4		)	105.9
Intangible assets not subject to amortization:
Brands	Indefinite	8,216.6		—			8,216.6
Distribution networks	Indefinite	804.7		—			804.7
Other	Indefinite	337.6		—			337.6
Total		$	14,958.8	$	(662.3	)	$	14,296.5

The changes in the gross carrying amounts of intangibles from December 31, 2017, to September 30, 2018, are primarily driven by the impact of foreign exchange rates, as a significant amount of intangibles are denominated in foreign currencies.

Based on foreign exchange rates as of September 30, 2018, the estimated future amortization expense of intangible assets is as follows:



Fiscal year	Amount
	(In millions)
2018 - remaining	$	55.9
2019	$	223.4
2020	$	222.4
2021	$	216.1
2022	$	211.5

Amortization expense of intangible assets was $55.8 million for each of the three months ended September 30, 2018, and September 30, 2017, and $168.6 million and $166.1 million for the nine months ended September 30, 2018, and September 30, 2017, respectively. This expense is primarily presented within marketing, general and administrative expenses on the unaudited condensed consolidated statements of operations.

Annual Goodwill Impairment Testing

We completed our required annual goodwill and indefinite-lived intangible impairment testing as of October 1, 2017, the first day of our fourth quarter, and concluded there were no impairments of goodwill within our reporting units or our indefinite-lived intangible assets.

Key Assumptions

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. The key assumptions used to derive the estimated fair values of our reporting units and indefinite-lived intangibles are discussed in Part II—Item 8 Financial Statements, Note 11, "Goodwill and Intangible Assets" in our Annual Report.

Based on known facts and circumstances, we evaluate and consider recent events and uncertain items, as well as related potential implications, as part of our annual assessment and incorporate into the analyses as appropriate. These facts and circumstances are subject to change and may impact future analyses. For example, subsequent to the completion of our annual impairment testing, we considered the implications of the enactment of the 2017 Tax Act on our U.S. reporting unit and indefinite-lived brand valuations. The results of our preliminary analysis indicated that the implications are expected to be favorable, keeping all other assumptions constant. Separately, the recent interest rate environment has resulted in an increase in the risk-free rate expected to be included in our current year discount rate calculations. Additionally, recent changes in market conditions may result in lower earnings multiples of comparable public companies within our market-based valuations. These factors, which are utilized within our annual impairment testing, could adversely impact the results of our analyses that are currently in progress.

While historical performance and current expectations have resulted in fair values of our reporting units and indefinite-lived intangible assets in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.

Indefinite and Definite-Lived Intangibles

Regarding indefinite and definite-lived intangibles, we continuously monitor the performance of the underlying assets for potential triggering events suggesting an impairment review should be performed. No such triggering events were identified in the first three quarters of 2018 that resulted in an impairment.