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Other Intangible Assets | 12 Months Ended
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Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract] |
Other Intangible Assets | Note 7. Other Intangible Assets Other intangible assets comprise the following:
(in millions) |  | 2014 |  |  | 2013 |
Gross cost: |  |  |  |  |  |  |  |
– Product rights |  | $ | 34.0 |  |  | $ | 34.0 |
– Brand names |  |  | 8.9 |  |  |  | 2.9 |
– Technology |  |  | 59.9 |  |  |  | 33.9 |
– Customer relationships |  |  | 87.9 |  |  |  | 58.7 |
– Patents |  |  | 2.9 |  |  |  | 2.9 |
– Internally developed software and other costs |  |  | 27.8 |  |  |  | 19.5 |
– Non-compete agreements |  |  | 4.1 |  |  |  | 1.5 |
– Marketing related |  |  | 22.1 |  |  |  | 22.1 |
|  |  | 247.6 |  |  |  | 175.5 |
Accumulated amortization: |  |  |  |  |  |  |  |
– Product rights |  |  | (5.0 | ) |  |  | (1.3 | )
– Brand names |  |  | (0.8 | ) |  |  | (0.1 | )
– Technology |  |  | (10.3 | ) |  |  | (7.9 | )
– Customer relationships |  |  | (21.8 | ) |  |  | (16.8 | )
– Patents |  |  | (2.9 | ) |  |  | (2.6 | )
– Internally developed software and other costs |  |  | (4.8 | ) |  |  | (1.0 | )
– Non-compete agreements |  |  | (1.6 | ) |  |  | (0.7 | )
– Marketing related |  |  | (19.3 | ) |  |  | (18.3 | )
|  |  | (66.5 | ) |  |  | (48.7 | )
|  | $ | 181.1 |  |  | $ | 126.8 |
Product rights Following the acquisition of Chemsil on August 30, 2013, the Company recognized an intangible asset of $34.0 million in respect of Chemsil’s product rights portfolio. This asset has an expected life of 9 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. An amortization expense of $3.7 million was recognized in 2014 (2013 – $1.3 million) in cost of goods sold. Brand names Following the acquisition of Independence on October 27, 2014, the Company recognized an intangible asset of $6.0 million in respect of Independence’s brand name. This asset has an expected life of 10 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Bachman on November 4, 2013, the Company recognized an intangible asset of $2.9 million in respect of Bachman’s brand names. This asset has an expected life of 5 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. An amortization expense of $0.7 million was recognized in 2014 (2013 – $0.1 million) in selling, general and administrative expenses. Technology Following the acquisition of Independence on October 27, 2014, the Company recognized an intangible asset of $26.0 million in respect of Independence’s product formulations. This asset has an expected life of 15 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Bachman on November 4, 2013, the Company recognized an intangible asset of $8.5 million in respect of Bachman’s core chemistry know-how of oilfield chemicals. This asset has an expected life of 15 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Strata on December 24, 2012, the Company recognized an intangible asset of $18.3 million in respect of technological know-how of the mixing and manufacturing process, patents which protect the technology and the associated product branding. This asset has an expected life of 16.5 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. An amortization expense of $2.4 million was recognized in 2014 (2013 – $1.9 million) in cost of goods sold. Customer relationships Following the acquisition of Independence on October 27, 2014, the Company recognized an intangible asset of $29.2 million in respect of Independence’s long-term customer relationships. This asset has a weighted average expected life of 10 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Bachman on November 4, 2013, the Company recognized an intangible asset of $14.5 million in respect of Bachman’s long-term customer relationships. This asset has a weighted average expected life of 14.5 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Strata on December 24, 2012, the Company recognized an intangible asset of $28.2 million in respect of long-term customer relationships. This asset has an expected life of 11.5 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Finetex (now merged into Innospec Active Chemicals LLC) in January 2005, the Company recognized an intangible asset of $4.2 million in relation to customer lists acquired. This asset has an expected life of 13 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. An amortization expense of $5.0 million was recognized in 2014 (2013 – $4.1 million) in selling, general and administrative expenses. Internally developed software and other costs In 2014 we continued with the process of developing our new, company-wide, information system platform, following the successful deployment at the majority of our U.S. sites in the third quarter of 2013. Our next phase of implementation includes the majority of reporting units outside of the U.S.. At December 31, 2014 we had capitalized $27.8 million (2013 – $19.5 million) in relation to this internally developed software. This asset has an expected life of 5 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. An amortization expense of $3.8 million was recognized in 2014 (2013 – $1.0 million) in selling, general and administrative expenses. Non-compete agreements Following the acquisition of Independence on October 27, 2014, the Company recognized an intangible asset of $2.6 million in respect of a non-compete agreement. This asset has an expected life of 3 years and is being amortized on a straight-line basis over this period. No residual value is anticipated. Following the acquisition of Strata on December 24, 2012, the Company recognized an intangible asset of $1.5 million in respect of a non-compete agreement. This asset had an expected life of 2 years and is now fully amortized. An amortization expense of $0.9 million was recognized in 2014 (2013 – $0.7 million) in selling, general and administrative expenses. Marketing related (formerly Ethyl) An intangible asset of $28.4 million was recognized in the second quarter of 2007 in respect of Ethyl Corporation foregoing their entitlement effective April 1, 2007 to a share of the future income stream under the sales and marketing agreements to market and sell TEL. In 2008, contract provisions no longer deemed necessary of $6.3 million were offset against the intangible asset. The amount attributed to the Octane Additives reporting segment was being amortized straight-line to December 31, 2012 and the amount attributed to the Fuel Specialties reporting segment is being amortized straight-line to December 31, 2017. Effective October 1, 2011, the Company extended its estimate for the future life of the Octane Additives segment from December 31, 2012 to December 31, 2013 and therefore prospectively adjusted the amortization period for the amount attributed to the Octane Additives segment. An amortization expense of $1.0 million was recognized in 2014 (2013 – $1.7 million) in cost of goods sold. Amortization expense The aggregate of other intangible asset amortization expense was $17.8 million, $11.1 million and $4.1 million in 2014, 2013 and 2012, respectively, of which $7.4 million, $3.8 million and $2.6 million, respectively, was recognized in cost of goods sold, and the remainder was recognized in selling, general and administrative expenses. Future amortization expense is estimated to be as follows for the next five years:
(in millions) |  |  |
2015 |  | $ | 21.4 |
2016 |  | $ | 24.4 |
2017 |  | $ | 24.2 |
2018 |  | $ | 21.1 |
2019 |  | $ | 18.3 |

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