XML 34 R23.htm IDEA: XBRL DOCUMENT v3.19.2
Goodwill and Other Intangible Assets
 6 Months Ended
Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Disclosure [Text Block] GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill
The following table summarizes changes in the carrying amount of goodwill by segment for the six months ended June 30, 2019:

(In millions)
Agriculture
Crop Protection
Seed
Total
Balance as of December 31, 20181
$
10,193

$
—

$
—

$
10,193

Currency translation adjustment
(28
)
—

—

(28
)
Other goodwill adjustments and acquisitions2
14

—

—

14

Realignment of segments
(10,179
)
4,726

5,453

—

Balance as of June 1, 2019
—

4,726

5,453

10,179

Currency translation adjustment
—

33

37

70

Balance as of June 30, 2019
$
—

$
4,759

$
5,490

$
10,249

1. 
Net of accumulated impairment losses of $4,503 million.
2. 
Primarily consists of the acquisition of a distributor in Greece.

The company tests goodwill for impairment annually (during the fourth quarter), or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value. As mentioned in Note 2 - Summary of Significant Accounting Policies, as a result of the Internal Reorganizations and Realignments, the company changed its reportable segments to Seed and Crop Protection to reflect the manner in which the company's chief operating decision maker assesses performance and allocates resources.  The change in reportable segments resulted in changes to the company's reporting units for goodwill impairment testing to align with the level at which discrete financial information is available for review by management. The company’s reporting units include Seed, Crop Protection and Digital.

In connection with the change in reportable segments and reporting units, goodwill was reassigned from the former Agriculture reporting unit to the Seed, Crop Protection and Digital reporting units using a relative fair value allocation approach. As a result, the company performed a goodwill impairment analysis for the former Agriculture reporting unit immediately prior to the realignment and the newly created reporting units immediately after the realignment. The impairment analysis was performed using a discounted cash flow model (a form of the income approach), utilizing Level 3 unobservable inputs or a market approach. The company’s significant estimates in this analysis include, but are not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate. The company believes the current assumptions and estimates utilized are both reasonable and appropriate. Based on the goodwill impairment analysis performed both immediately prior to and immediately subsequent to the realignment, the company concluded the fair value of the former Agriculture reporting unit and the newly created reporting units exceeded their carrying value, and no goodwill impairment charge was necessary.

Other Intangible Assets
The gross carrying amounts and accumulated amortization of other intangible assets by major class are as follows: 
(In millions)
June 30, 2019
December 31, 2018
June 30, 2018
 
Gross
Accumulated
Amortization
Net
Gross
Accumulated
Amortization
Net
Gross
Accumulated
Amortization
Net
Intangible assets subject to amortization (Definite-lived):
 

 

 

 

 

 

 
 
 
Customer-related
$
1,981

$
(211
)
$
1,770

$
1,985

$
(154
)
$
1,831

$
1,990

$
(97
)
$
1,893

Developed technology1
1,467

(297
)
1,170

974

(163
)
811

924

(97
)
827

Trademarks/trade names
166

(83
)
83

180

(92
)
88

180

(79
)
101

Favorable supply contracts
475

(159
)
316

475

(111
)
364

475

(64
)
411

Other2
429

(218
)
211

538

(300
)
238

530

(282
)
248

Total other intangible assets with finite lives
4,518

(968
)
3,550

4,152

(820
)
3,332

4,099

(619
)
3,480

 
 
 
 
 
 
 
 
 
 
Intangible assets not subject to amortization (Indefinite-lived):
 

 

 

 

 

 

 
 
 
In-process research and development ("IPR&D")1
146

—

146

576

—

576

691

—

691

Germplasm3
6,265

—

6,265

6,265

—

6,265

6,265

—

6,265

Trademarks / trade names
1,871

—

1,871

1,871

—

1,871

1,871

—

1,871

Other
—

—

—

11

—

11

11

—

11

Total other intangible assets
8,282

—

8,282

8,723

—

8,723

8,838

—

8,838

Total
$
12,800

$
(968
)
$
11,832

$
12,875

$
(820
)
$
12,055

$
12,937

$
(619
)
$
12,318

1. 
During the first quarter of 2019, the company announced an expanded launch of its Qrome® corn hybrids following the receipt of regulatory approval from China. As a result, the company reclassified the amounts from indefinite-lived IPR&D to developed technology.
2. 
Primarily consists of sales and farmer networks, marketing and manufacturing alliances and noncompetition agreements.
3. 
Germplasm is the pool of genetic source material and body of knowledge gained from the development and delivery stage of plant breeding. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual, or other factors which limit its useful life.

The aggregate pre-tax amortization expense from continuing operations for definite-lived intangible assets was $113 million and $214 million for the three and six months ended June 30, 2019, respectively, and $107 million and $196 million for the three and six months ended June 30, 2018, respectively. The estimated aggregate pre-tax amortization expense from continuing operations for the remainder of 2019 and each of the next five years is approximately $211 million, $406 million, $395 million, $373 million, $292 million and $277 million, respectively.