Intangible Assets

A reconciliation of the activity affecting intangible assets for each of 2014, 2015, and 2016 is as follows:



	Year Ended March 31, 2014
(In thousands)	Indefinite Lived Trademarks		Finite Lived Trademarks and Customer Relationships		Non Compete Agreement			Totals
Gross Amount
Balance – March 31, 2013	$	1,243,718	$	203,066	$	158		$	1,446,942
Additions	29,845		1,657		—			31,502
Reductions	—		—		(158		)	(158		)
Effects of foreign currency exchange rates	315		17		—			332
Balance – March 31, 2014	$	1,273,878	$	204,740	$	—		$	1,478,618

Accumulated Amortization
Balance – March 31, 2013	$	—	$	73,544	$	158		$	73,702
Additions	—		10,256		—			10,256
Reductions	—		—		(158		)	(158		)
Effects of foreign currency exchange rates	—		1		—			1
Balance – March 31, 2014	—		83,801		—			83,801

Intangibles, net – March 31, 2014	$	1,273,878	$	120,939	$	—		$	1,394,817

Intangible Assets, net by Reportable Segment:
North American OTC Healthcare	$	1,123,897	$	93,242	$	—		$	1,217,139
International OTC Healthcare	30,161		1,530		—			31,691
Household Cleaning	119,820		26,167		—			145,987
Intangible assets, net – March 31, 2014	$	1,273,878	$	120,939	$	—		$	1,394,817



	Year Ended March 31, 2015
(In thousands)	Indefinite Lived Trademarks			Finite Lived Trademarks and Customer Relationships			Non Compete Agreement		Totals
Gross Amount
Balance – March 31, 2014	$	1,273,878		$	204,740		$	—	$	1,478,618
Additions	673,180			124,774			—		797,954
Reclassifications	(46,506		)	46,506			—		—
Reductions	(9,548		)	(17,674		)	—		(27,222		)
Effects of foreign currency exchange rates	(17,600		)	(280		)	—		(17,880		)
Balance – March 31, 2015	$	1,873,404		$	358,066		$	—	$	2,231,470

Accumulated Amortization
Balance – March 31, 2014	$	—		$	83,801		$	—	$	83,801
Additions	—			12,995			—		12,995
Effects of foreign currency exchange rates	—			(26		)	—		(26		)
Balance – March 31, 2015	$	—		$	96,770		$	—	$	96,770

Intangibles, net – March 31, 2015	$	1,873,404		$	261,296		$	—	$	2,134,700

Intangible Assets, net by Reportable Segment:
North American OTC Healthcare	$	1,676,991		$	235,642		$	—	$	1,912,633
International OTC Healthcare	86,141			1,231			—		87,372
Household Cleaning	110,272			24,423			—		134,695
Intangible assets, net – March 31, 2015	$	1,873,404		$	261,296		$	—	$	2,134,700



	Year Ended March 31, 2016
(In thousands)	Indefinite Lived Trademarks			Finite Lived Trademarks and Customer Relationships			Non Compete Agreement		Totals
Gross Amount
Balance – March 31, 2015	$	1,873,404		$	358,066		$	—	$	2,231,470
Additions	179,800			26,900			—		206,700
Reclassifications	(32,918		)	32,918			—		—
Reductions	—			—			—		—
Effects of foreign currency exchange rates	(240		)	(4		)	—		(244		)
Balance – March 31, 2016	$	2,020,046		$	417,880		$	—	$	2,437,926

Accumulated Amortization
Balance – March 31, 2015	$	—		$	96,770		$	—	$	96,770
Additions	—			18,430			—		18,430
Effects of foreign currency exchange rates	—			3			—		3
Balance – March 31, 2016	$	—		$	115,203		$	—	$	115,203

Intangibles, net – March 31, 2016	$	2,020,046		$	302,677		$	—	$	2,322,723

Intangible Assets, net by Reportable Segment:
North American OTC Healthcare	$	1,823,873		$	277,762		$	—	$	2,101,635
International OTC Healthcare	85,901			2,237			—		88,138
Household Cleaning	110,272			22,678			—		132,950
Intangible assets, net – March 31, 2016	$	2,020,046		$	302,677		$	—	$	2,322,723

As discussed in Note 2, on July 1, 2013, we completed the acquisition of Care Pharma. In connection with this acquisition, we allocated $31.5 million to intangible assets based on our analysis.

As discussed in Note 2, we completed two acquisitions during the year ended March 31, 2015. On September 3, 2014, we completed the acquisition of Insight and allocated $724.4 million to intangible assets based on our analysis. Additionally, on April 30, 2014, we completed the acquisition of the Hydralyte brand and allocated $73.6 million to intangible assets based on our preliminary analysis. Furthermore, on September 3, 2014, we sold one of the brands that we acquired from Insight, for which we had allocated $17.7 million to intangible assets.

As discussed in Note 2, on February 5, 2016, we completed the acquisition of DenTek. In connection with this acquisition, we allocated $206.7 million to intangible assets based on our analysis.

Under accounting guidelines, indefinite-lived assets are not amortized, but must be tested for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below the carrying amount. Additionally, at each reporting period, an evaluation must be made to determine whether events and circumstances continue to support an indefinite useful life. Intangible assets with finite lives are amortized over their respective estimated useful lives and are also tested for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable and exceeds its fair value.

We utilized the discounted cash flow method to estimate the fair value of our reporting units as part of the goodwill impairment test and the excess earnings method to estimate the fair value of our individual indefinite-lived intangible assets. The discount rate utilized in the analyses, as well as future cash flows, may be influenced by such factors as changes in interest rates and rates of inflation. Additionally, should the related fair values of goodwill and intangible assets be adversely affected as a result of declining sales or margins caused by competition, changing consumer preferences, technological advances or reductions in advertising and promotional expenses, we may be required to record impairment charges in the future. In addition, we considered our market capitalization at February 29, 2016, which was the date of our annual review, as compared to the aggregate fair values of our reporting units, to assess the reasonableness of our estimates pursuant to the discounted cash flow methodology. As a result of our analysis, we determined that the fair values exceeded the carrying values and as such, no impairment charge was recorded in 2016.

Based on our analysis, the aggregate fair value of our reporting units exceeded the carrying value by 76.4%, with no reporting unit's fair value exceeding the carrying value by less than 10%. The aggregate fair value of the indefinite-lived intangible assets exceeded the carrying value by 55.8%. Three of the individual indefinite-lived trade names exceeded their carrying values by less than 10%. The fair value of Beano, New Skin and Debrox, exceed their carrying values of $78.4 million, $37.2 million and $76.3 million, by 9.0%, 8.2% and 5.1%, respectively.

Given the competitive landscape, including private label, Beano has experienced declines in revenues in recent periods. However, we continue to believe that the fair value exceeds the carrying value of Beano. The significant assumptions supporting the fair value of Beano include a discount rate of 9.5%, and returning to revenue growth, coupled with advertising and promotion investments that are in line with historical performance. A decrease in the annual cash flow of approximately 21.6% compared to the projected cash flow utilized in our analysis, or an increase in the discount rate of approximately 82 basis points could result in the carrying value of our trade name exceeding its fair value, which would result in an impairment charge.

The significant assumptions supporting the fair value of New Skin and Debrox include a discount rate of 9.5%, coupled with modest revenue growth, and advertising and promotion investments that are in line with historical performance. Revenue declines in each of the brands or changes in assumptions utilized in our quantitative indefinite lived asset impairment analysis may result in the fair value no longer exceeding their respective carrying values. For example, a decrease in the annual cash flow of approximately 19.6% and 12.6% for New Skin and Debrox, respectively, compared to the projected cash flow utilized in our analysis, or an increase in the discount rate of approximately 73 and 45 basis points, respectively, could result in the carrying value of our trade name exceeding its fair value, which would result in an impairment charge. We will continue to review our results against forecasts and assess our assumptions to ensure they continue to be appropriate.

Based on recent declines in the business and a strategic review of our brands during the fourth quarter ended March 31, 2016 and our annual impairment review, we have reassessed the useful life of the Ecotrin brand as of February 29, 2016 and determined it to be 20 years. As such, we have reclassified $32.9 million from an indefinite-lived to a finite lived intangible asset. At the time of this change in useful life, the fair value exceeded its carrying value.

Although we experienced revenue declines in Pediacare and in certain other brands in the past, we continue to believe that the fair value of our brands exceed their carrying values. However, sustained or significant future declines in revenue, profitability, lost distribution, other adverse changes in expected operating results, and / or unfavorable changes in economic factors used to estimate fair value of certain brands could indicate that the fair value no longer exceeds the carrying in which case a non-cash impairment charge may be recorded in future periods.

The weighted average remaining life for finite-lived intangible assets at March 31, 2016 was approximately 14.4 years, and the amortization expense for the year ended March 31, 2016 was $18.4 million. At March 31, 2016, finite-lived intangible assets are expected to be amortized over their estimated useful life, which ranges from a period of 10 to 30 years, and the estimated amortization expense for each of the five succeeding years and periods thereafter is as follows (in thousands):



Year Ending March 31,
2017	21,236
2018	21,072
2019	21,072
2020	21,072
2021	20,650
Thereafter	197,575
	$	302,677

Sale of asset

Historically, we received royalty income from the licensing of the name of certain of our brands in geographic areas or markets in which we do not directly compete. We have had a royalty agreement for our Comet brand for several years, which included an option on behalf of the licensee to purchase the rights in certain geographic areas and markets in perpetuity. In December 2014, we amended the agreement to allow the licensee to buy out a portion of the agreement early, but retaining the remaining stream of royalty payments. In December 2014, in connection with this amendment, we sold rights to use of the Comet brand in certain Eastern European countries to a third-party licensee and received $10.0 million as a partial early buyout. As a result, we recorded a gain on sale of $1.3 million, and reduced the carrying value of our intangible assets and goodwill. The licensee will continue to make quarterly payments at least through June 30, 2016 of approximately $1.0 million. The licensee has the option to purchase (which we expect the licensee will elect to exercise such option) the remaining territories and markets, as defined in the agreement, at any time after July 1, 2016.