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Goodwill and Identifiable Intangible Assets | 12 Months Ended
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Dec. 31, 2016
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Identifiable Intangible Assets | Note 7 Goodwill and Identifiable Intangible Assets Goodwill We review goodwill for impairment on a reporting unit basis annually during the fourth quarter of each year, using a measurement date of October 1st, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. While we are permitted to conduct a qualitative assessment to determine whether it is necessary to perform a two-step quantitative goodwill impairment test, for our annual goodwill impairment test in the fourth quarter of 2016, 2015 and 2014, we performed a quantitative test for all of our reporting units that have goodwill allocated. The goodwill impairment test involves a two-step process. In step one, we compare the fair value of each of our reporting units to its carrying value, including the goodwill allocated to the reporting unit. If the fair value of the reporting unit exceeds its carrying value, there is no indication of impairment and no further testing is required. If the fair value of the reporting unit is less than the carrying value, we must perform step two of the impairment test to measure the amount of impairment loss, if any. In step two, the reporting unit’s fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit’s goodwill is less than the carrying value, the difference is recorded as an impairment loss. 2016, 2015 and 2014 Annual Impairment Test During the fourth quarters of 2016, 2015 and 2014, we completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair values of these reporting units were above their carrying values and, therefore, there was no indication of impairment in either year. We estimated the fair value of these reporting units using a weighting of fair values derived from an income and market approaches. Under the income approach, we determine the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The market approaches estimate fair value based on market multiples of current and forward 12-month operating performance results, as applicable derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit. Allocation of Goodwill to Reporting Units The following table shows our goodwill balances by our segment reporting structure:
(In millions) |  | Food Care |  |  | Diversey Care |  |  | Product Care |  |  | Other(1) |  |  | Total |
Gross Carrying Value at December 31, 2015 |  | $ | 804.3 |  |  | $ | 1,820.9 |  |  | $ | 1,373.7 |  |  | $ | 1.6 |  |  | $ | 4,000.5 |
Accumulated impairment |  |  | (208.0 | ) |  |  | (883.0 | ) |  |  | — |  |  |  | — |  |  |  | (1,091.0 | )
Carrying Value at December 31, 2015 |  | $ | 596.3 |  |  | $ | 937.9 |  |  | $ | 1,373.7 |  |  | $ | 1.6 |  |  | $ | 2,909.5 |
Acquisition |  |  | 8.4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8.4 |
Dispositions |  |  | — |  |  |  | — |  |  |  | (1.1 | ) |  |  | — |  |  |  | (1.1 | )
Currency translation |  |  | (14.3 | ) |  |  | (46.2 | ) |  |  | (0.5 | ) |  |  | (0.2 | ) |  |  | (61.2 | )
Gross Carrying Value at December 31, 2016 |  |  | 798.4 |  |  |  | 1,774.7 |  |  |  | 1,372.1 |  |  |  | 1.4 |  |  |  | 3,946.6 |
Accumulated impairment |  |  | (208.0 | ) |  |  | (883.0 | ) |  |  | — |  |  |  | — |  |  |  | (1,091.0 | )
Carrying Value at December 31, 2016 |  | $ | 590.4 |  |  | $ | 891.7 |  |  | $ | 1,372.1 |  |  | $ | 1.4 |  |  | $ | 2,855.6 |
(1) | Represents goodwill of our Medical Applications reporting unit.
The excess of estimated fair values over carrying value, including goodwill for each of our reporting units that had goodwill as of the 2016 annual impairment test were the following:
|  | % by Which Estimated Fair value |
Reporting Unit |  | exceeds Carrying Value |
Food Care — Packaging Solutions |  |  | 451 | %
Food Care — Hygiene Solutions |  |  | 247 | %
Diversey Care |  |  | 92 | %
Product Care |  |  | 124 | %
Medical Applications(1) |  |  | 539 | %
(1) | Included in the “Other” category for segment reporting purposes – See Note 4, “Segments,” of the Notes to Consolidated Financial Statements for a description of our reportable segments.
As noted above, the fair value determined under step one of the goodwill impairment test completed in the fourth quarter of 2016 exceeded the carrying value for each reporting unit. Therefore, there was no impairment of goodwill. However, if the fair value decreases in future periods, the Company may fail step one of the goodwill impairment test and be required to perform step two. In performing step two, the fair value would have to be allocated to all of the assets and liabilities of the reporting unit. Therefore, any potential goodwill impairment charge would be dependent upon the estimated fair value of the reporting unit at that time and the outcome of step two of the impairment test. The fair values of the assets and liabilities of the reporting unit, including the intangible assets could vary depending on various factors. The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment. In the event of significant adverse changes of the nature described above, we might have to recognize a non-cash impairment of goodwill, which could have a material adverse effect on our consolidated financial condition and results of operations. Identifiable Intangible Assets The following tables summarize our identifiable intangible assets with definite and indefinite useful lives:
|  | December 31, 2016 |  |  | December 31, 2015 |
|  | Gross |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Gross |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Accumulated |  |  |  |  |  |  | Carrying |  |  | Accumulated |  |  | Accumulated |  |  |  |  |
(In millions) |  | Value |  |  | Amortization |  |  | Impairment |  |  | Net |  |  | Value |  |  | Amortization |  |  | Impairment |  |  | Net |
Customer relationships(1) |  | $ | 828.7 |  |  | $ | (299.9 | ) |  | $ | (148.9 | ) |  | $ | 379.9 |  |  | $ | 846.2 |  |  | $ | (249.4 | ) |  | $ | (148.9 | ) |  | $ | 447.9 |
Trademarks and tradenames |  |  | 1.8 |  |  |  | (0.8 | ) |  |  | — |  |  |  | 1.0 |  |  |  | 1.7 |  |  |  | (0.4 | ) |  |  | — |  |  |  | 1.3 |
Capitalized software |  |  | 165.9 |  |  |  | (137.4 | ) |  |  | — |  |  |  | 28.5 |  |  |  | 143.0 |  |  |  | (125.3 | ) |  |  | — |  |  |  | 17.7 |
Technology |  |  | 141.2 |  |  |  | (78.1 | ) |  |  | (22.2 | ) |  |  | 40.9 |  |  |  | 141.9 |  |  |  | (65.0 | ) |  |  | (22.2 | ) |  |  | 54.7 |
Contracts |  |  | 42.3 |  |  |  | (33.6 | ) |  |  | — |  |  |  | 8.7 |  |  |  | 42.8 |  |  |  | (31.2 | ) |  |  | — |  |  |  | 11.6 |
Total intangible assets with definite lives |  |  | 1,179.9 |  |  |  | (549.8 | ) |  |  | (171.1 | ) |  |  | 459.0 |  |  |  | 1,175.6 |  |  |  | (471.3 | ) |  |  | (171.1 | ) |  |  | 533.2 |
Trademarks and tradenames with indefinite lives(2) |  |  | 881.3 |  |  |  | — |  |  |  | (630.2 | ) |  |  | 251.1 |  |  |  | 881.3 |  |  |  | — |  |  |  | (630.2 | ) |  |  | 251.1 |
Total identifiable intangible assets |  | $ | 2,061.2 |  |  | $ | (549.8 | ) |  | $ | (801.3 | ) |  | $ | 710.1 |  |  | $ | 2,056.9 |  |  | $ | (471.3 | ) |  | $ | (801.3 | ) |  | $ | 784.3 |
(1) | As of December 31, 2016 this amount includes $4.3 million related to the accelerated amortization of intangible assets related to ceasing operations in Venezuela. Refer to Note 2 “Summary of Significant Accounting Policies and Recently Issued Accounting Standards “ of the Notes to Consolidated Financial Statements for further details.
(2) | The intangible assets include $251.1 million of trademarks and trade names that we have determined to have indefinite useful lives, primarily acquired in connection with the acquisition of Diversey.
The following table shows the remaining estimated future amortization expense at December 31, 2016.
Year |  | Amount (in millions) |
2017 |  | $ | 87.7 |
2018 |  |  | 70.1 |
2019 |  |  | 56.3 |
2020 |  |  | 53.8 |
Thereafter |  |  | 191.1 |
Total |  | $ | 459.0 |
Amortization expense was $94.9 million in 2016, $88.7 million in 2015 and $118.9 million in 2014. The following table shows the remaining weighted average useful life of our definite lived intangible assets as of December 31, 2016.
|  | Remaining weighted average useful lives |
Customer relationships |  |  | 8.2 |
Trademarks and trade names |  |  | 5.1 |
Technology |  |  | 3.2 |
Contracts |  |  | 7.2 |
Total intangible assets with definite lives |  |  | 7.4 |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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