Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets [Text Block]

GOODWILL AND INTANGIBLE ASSETS

The following table summarizes changes to goodwill by reportable segment:



	ALLETE Clean Energy			U.S. Water Services		Total
Millions
Balance as of December 31, 2015		$3.3			$127.3		$130.6
Acquired Goodwill (a)	—			3.9		3.9
Impairment Charge (b)	(3.3		)	—		(3.3		)
Balance as of December 31, 2016	—			131.2		131.2
Acquired Goodwill (a)	—			16.9		16.9
Other Adjustments (c)	—			0.2		0.2
Balance as of December 31, 2017	—				$148.3		$148.3


(a)	See Note 6. Acquisitions.

(b)

The facts and circumstances that led to an impairment of ALLETE Clean Energy’s goodwill primarily relate to lower estimated energy prices in periods not under PSAs. Impairment Charge is included in Operating Expenses – Other on the Consolidated Statement of Income. (See Note 1. Operations and Significant Accounting Policies.) ALLETE Clean Energy’s goodwill was primarily related to the acquisition of Storm Lake II in 2014.


(c)	Finalization of purchase price accounting for U.S. Water Services’ acquisition of WEST was completed in 2017 resulting in an adjustment to the goodwill recorded at the time of the initial acquisition.

The following table summarizes changes to intangible assets, net, for the year ended December 31, 2017:



	December 31, 2016		Additions (a)		Amortization	December 31, 2017
Millions
Intangible Assets
Definite-Lived Intangible Assets
Customer Relationships		$59.3	—		$(4.6)		$54.7
Developed Technology and Other (b)	6.3			$0.9	(0.9)	6.3
Total Definite-Lived Intangible Assets	65.6		0.9		(5.5)	61.0
Indefinite-Lived Intangible Assets
Trademarks and Trade Names	16.6		—		n/a	16.6
Total Intangible Assets		$82.2		$0.9	$(5.5)		$77.6


(a)	Additions resulting from the September 1, 2017, acquisition of Tonka Water. (See Note 6. Acquisitions.)


(b)	Developed Technology and Other includes patents, non-compete agreements, land easements and trade names with finite lives.

Customer relationships have a remaining useful life of approximately 20 years, and developed technology and other have remaining useful lives ranging from approximately 1 year to approximately 11 years (weighted average of approximately 7 years). The weighted average remaining useful life of all definite-lived intangible assets as of December 31, 2017, is approximately 19 years.

Amortization expense of intangible assets for the year ended December 31, 2017, was $5.5 million ($5.2 million in 2016; $4.0 million in 2015). Accumulated amortization was $14.8 million and $9.3 million as of December 31, 2017, and December 31, 2016, respectively. Estimated amortization expense for definite-lived intangible assets is $5.3 million in 2018, $5.0 million in 2019, $4.7 million in 2020, $4.6 million in 2021, $4.3 million in 2022 and $37.1 million thereafter.

- 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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