Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

v3.7.0.1
Intangible Assets
6 Months Ended
Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets
INTANGIBLE ASSETS
The following table presents details related to our intangible assets:
 
 
 
June 30, 2017
 
December 31, 2016
 
Estimated Useful Life
 
Gross Carrying Amount
 
Accumulated Amortization
 
Gross Carrying Amount
 
Accumulated Amortization
Long-lived intangible assets
 
 
 
 
 
 
 
 
Contractual arrangements
Various
 
$
38.4

 
$
1.2

 
$
5.1

 
$
0.7

Intellectual property
Various
 
6.5

 
1.7

 
5.8

 
1.6

Subtotal
 
 
44.9

 
$
2.9

 
10.9

 
$
2.3

Indefinite-lived intangible assets
 
 
 
 
 
 
 
 
Trademarks and brand names
Indefinite
 
34.1

 
 
 
34.0

 
 
Total
 
 
$
79.0

 
 
 
$
44.9

 
 


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2017
 
2016
 
2017
 
2016
Amortization expense
$
0.5

 
$
0.1

 
$
0.6

 
$
0.2



In June 2017, we acquired vinyl composition tile ("VCT") assets for $36.1 million, consisting of equipment and trademarks of Mannington Mills, Inc. ("Mannington Mills") under an agreement that included non-compete provisions. We allocated $33.4 million of the purchase price to intangible assets and the remainder to inventories and equipment. The assigned intangible asset classes were contractual arrangements, $33.1 million, with an estimated useful life of five years, and intellectual property, $0.3 million, with an estimated useful life of two years. Amortization expense on the acquired intangibles was $0.4 million for the three and six months ended June 30, 2017.

In addition, Mannington Mills, Inc. is eligible for contingent consideration of up to $9.0 million based on sales of our VCT flooring products for the twelve month periods ending June 30, 2019 and June 30, 2020 (“measurement periods”) compared to a base period of combined AFI and Mannington Mills sales for the 12 month period ending June 30, 2017.  The contingent consideration is tiered for each of the separate twelve month measurement periods ranging from consideration of zero to a maximum of $4.5 million in each measurement period.  No contingent liability has been recognized as we concluded that such liability is not probable and estimable; this conclusion will be reevaluated at each subsequent reporting period. Any contingent liability recognized will be recorded as an adjustment to the value of the acquired assets.