Goodwill and Identifiable Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identifiable Intangible Assets

6.	Goodwill and Identifiable Intangible Assets

We had goodwill of $1,800.8 million and $1,467.8 million as of September 30, 2015 and December 31, 2014, respectively. The $333.0 million increase was primarily due to the acquisition of Norcraft, partially offset by other acquisition-related adjustments. The change in the net carrying amount of goodwill by segment was as follows:


(In millions)	Cabinets			Plumbing			Doors		Security			Total Goodwill
Goodwill at December 31, 2014 ^(a)	$	630.1		$	595.6		$	143.0	$	99.1		$	1,467.8
Year-to-date translation adjustments		(3.2	)		—			—		(1.9	)		(5.1	)
Acquisition-related adjustments		355.5			(17.0	)		—		(0.4	)		338.1

Goodwill at September 30, 2015 ^(a)	$	982.4		$	578.6		$	143.0	$	96.8		$	1,800.8

^(a)

Net of accumulated impairment losses of $399.5 million in the Doors segment.

We also had identifiable intangible assets, principally tradenames, of $982.2 million and $656.5 million, net of accumulated amortization, as of September 30, 2015 and December 31, 2014, respectively. The $337.5 million increase in gross identifiable intangible assets was primarily due to the acquisitions of Norcraft and Anaheim.

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of September 30, 2015 and December 31, 2014 were as follows:


(In millions)	As of September 30, 2015							As of December 31, 2014
	Gross					Net		Gross					Net
	Carrying		Accumulated			Book		Carrying		Accumulated			Book
	Amounts		Amortization			Value		Amounts		Amortization			Value
Indefinite-lived tradenames	$	659.3	$	(42.0	)^(a)	$	617.3	$	542.7	$	(42.0	)^(a)	$	500.7

Amortizable intangible assets
Tradenames		16.4		(6.7	)		9.7		14.6		(6.4	)		8.2
Customer and contractual relationships		513.0		(173.5	)		339.5		294.2		(164.0	)		130.2
Patents/proprietary technology		58.0		(42.3	)		15.7		57.7		(40.3	)		17.4

Total		587.4		(222.5	)		364.9		366.5		(210.7	)		155.8

Total identifiable intangibles	$	1,246.7	$	(264.5	)	$	982.2	$	909.2	$	(252.7	)	$	656.5

^(a)

Accumulated amortization prior to the adoption of revised ASC requirements for Intangibles – Goodwill and Other Assets.

Amortizable identifiable intangible assets, principally tradenames and customer relationships, are subject to amortization over their estimated useful life, ranging from 5 to 30 years, based on the assessment of a number of factors that may impact useful life. These factors include historical tradename performance with respect to consumer name recognition, geographic market presence, market share, plans for ongoing tradename support and promotion, customer attrition rates, and other relevant factors.

In the first nine months of 2015, no events or circumstances occurred that would have required us to perform interim impairment tests of goodwill or indefinite-lived intangible assets.

- 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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