Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table summarizes changes in the carrying amount of goodwill for the period September 1 through December 31, 2017, the period January 1 through August 31, 2017, and the year ended December 31, 2016:



(In millions)
Balance as of December 31, 2015 (Predecessor)	$	4,238
Currency Translation Adjustment	(68		)
Other Goodwill Adjustments and Acquisitions	(1		)
Balance as of December 31, 2016 (Predecessor)	4,169
Currency Translation Adjustment	176
Other Goodwill Adjustments and Acquisitions	198
Balance as of August 31, 2017 (Predecessor)	$	4,543

Balance at September 1, 2017 (Successor)	$	45,105
Currency Translation Adjustment	(234		)
Goodwill Recognized for H&N Acquisition	718
Balance as of December 31, 2017 (Successor)	$	45,589

In 2017 and 2016, the company performed impairment tests for goodwill and determined that no goodwill impairments existed.

Other Intangible Assets

The gross carrying amounts and accumulated amortization of other intangible assets by major class are as follows:



	Successor							Predecessor
(In millions)	December 31, 2017							December 31, 2016
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible assets subject to amortization (Definite-lived):
Customer-related	$	9,502	$	(186	)	$	9,316	$	1,574	$	(586	)	$	988
Developed technology	4,364		(144		)	4,220		1,410		(838		)	572
Trademarks/trade names	1,117		(26		)	1,091		53		(15		)	38
Favorable supply contracts¹	495		(17		)	478
Microbial cell factories²	397		(6		)	391
Other³	459		(10		)	449		171		(82		)	89
Total other intangible assets with finite lives	16,334		(389		)	15,945		3,208		(1,521		)	1,687

Intangible assets not subject to amortization (Indefinite-lived):
In-process research and development ("IPR&D")	660		—			660		73		—			73
Microbial cell factories²								306		—			306
Germplasm⁴	6,265		—			6,265		1,053		—			1,053
Trademarks / trade names	4,856		—			4,856		545		—			545
Total other intangible assets	11,781		—			11,781		1,977		—			1,977
Total	$	28,115	$	(389	)	$	27,726	$	5,185	$	(1,521	)	$	3,664


^1.	Upon closing and pursuant to the terms of the FMC Transaction Agreement, DuPont entered into favorable supply contracts with FMC. DuPont recorded these contracts as intangible assets recognized at the fair value of off-market contracts. Refer to Notes 3 and 4 for additional information.

^2.

Microbial cell factories, derived from natural microbes, are used to sustainably produce enzymes, peptides and chemicals using natural metabolic processes. The company recognized the microbial cell factories as intangible assets upon the acquisition of Danisco. As a result of the valuation as part of the Merger, it was determined that this intangible asset now has a definite life and therefore it has been moved from indefinite-lived to definite-lived as of September 1, 2017.


^3.	Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.

^4.

Pioneer germplasm is the pool of genetic source material and body of knowledge gained from the development and delivery stage of plant breeding. The company recognized germplasm as an intangible asset upon the acquisition of Pioneer. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual, or other factors which limit its useful life.

In connection with the Merger, the company recorded $27,221 million of intangible assets, as shown in the table below, representing the preliminary fair values at the Merger date. See Note 3 for additional information regarding the Merger.



Intangible Assets	Gross Carrying Amount		Weighted-average Amortization Period (years)
(In millions)	Gross Carrying Amount		Weighted-average Amortization Period (years)
Intangible assets with finite lives:
Customer-related	$	9,264	17
Developed technology	4,239		12
Trademarks/trade names	1,080		15
Microbial cell factories	400		23
Other	453		17
Total other intangible assets with finite lives	$	15,436
Intangible assets with indefinite lives:
IPR&D	$	660
Germplasm	6,263
Trademarks/trade names	4,862
Total intangible assets	$	27,221

The aggregate pre-tax amortization expense from continuing operations for definite-lived intangible assets was $389 million for the period September 1 through December 31, 2017 and $139 million for the period January 1 through August 31, 2017. The aggregate pre-tax amortization expense from continuing operations for definite-lived intangible assets was $319 million and $362 million for 2016 and 2015, respectively.

Total estimated amortization expense for the next five fiscal years is as follows:



(In millions)
2018	$	1,266
2019	$	1,254
2020	$	1,244
2021	$	1,228
2022	$	1,221

- 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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