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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets At December 31, 2021, the Company had $227.9 million of goodwill on its consolidated balance sheet, all of which relates to the HPMC segment. Goodwill decreased $12.8 million in 2021 due to the allocation of $12.2 million to the sale of the Flowform Products business (see Note 6 for further information) and a $0.6 million decrease from the impact of foreign currency translation on goodwill denominated in functional currencies other than the U.S. dollar. The Company performs its annual goodwill impairment evaluations in the fourth quarter of each year. The $227.9 million of goodwill as of December 31, 2021 on the Company’s consolidated balance sheet is comprised of $161.2 million at the Forged Products reporting unit and $66.7 million at the Specialty Materials reporting unit. For the Company’s annual goodwill impairment evaluation performed in the fourth quarter of 2021, quantitative goodwill assessments were performed for these two HPMC reporting units with goodwill. Fair values were determined by using a quantitative assessment that may include discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any, which represents Level 3 unobservable information in the fair value hierarchy. These impairment assessments and valuation methods require the Company to make estimates and assumptions regarding revenue growth, changes in working capital and capital expenditures, selling prices and profitability that drive cash flows, and the weighted average cost of capital. Many of these assumptions are determined by reference to market participants the Company has identified. For example, the weighted average cost of capital used in the discounted cash flow assessment was 11.3% and the long-term growth rates ranged from 3% to 3.5%. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions. The Specialty Materials reporting unit had a fair value that was significantly in excess of carrying value. The Forged Products reporting unit had a fair value that exceeded carrying value by more than 40%, representing an increase in fair value subsequent to the interim goodwill impairment charge recorded for this reporting unit in the second quarter of 2020 as discussed below, and the annual evaluation as of December 31, 2020. As a result, no impairments were determined to exist from the annual goodwill impairment evaluation for the year ended December 31, 2021. In order to validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization was performed using a reasonable control premium. During the second quarter of 2020, the Company performed an interim goodwill impairment analysis on the Forged Products reporting unit and its $460.4 million goodwill balance based on assessed potential indicators of impairment, including recent disruptions to the global commercial aerospace market resulting from the COVID-19 pandemic, and the increasing uncertainty of near-term demand requirements of aero-engine and airframe markets based on government responses to the pandemic and ongoing interactions with customers. In the previous 2019 annual goodwill impairment evaluation, this reporting unit had a fair value that exceeded carrying value by approximately 30%. For the 2020 interim impairment analysis, fair value was determined by a quantitative assessment that used a discounted cash flow technique, which represents Level 3 unobservable information in the fair value hierarchy. The impairment assessment and valuation method require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital. Many of these assumptions are determined by reference to market participants the Company has identified. For example, the weighted average cost of capital used in the discounted cash flow assessment was 11.6%, and the long-term growth rate was 3.5%. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions. As a result of the second quarter 2020 interim goodwill impairment evaluation, the Company determined that the fair value of the Forged Products reporting unit was below carrying value, including goodwill, by $287.0 million. This was primarily due to changes in the timing and amount of expected cash flows resulting from lower projected revenues, profitability and cash flows due to near-term reductions in commercial aerospace market demand. Consequently, during the second quarter of 2020, the Company recorded a $287.0 million impairment charge for the partial impairment of the Forged Products reporting unit goodwill, most of which was assigned from the Company’s 2011 Ladish acquisition that was not deductible for income tax purposes. This goodwill impairment charge was excluded from 2020 HPMC business segment results. No indicators of impairment were observed in 2021 and 2020 associated with any of the Company’s long-lived assets in the HPMC segment. There were no goodwill impairments for the year ended December 31, 2019. Accumulated goodwill impairment losses as of December 31, 2021 and 2020 were $528.0 million and as of 2019 were $241.0 million. Other intangible assets, which are included in Other assets on the accompanying consolidated balance sheets as of December 31, 2021 and 2020 were as follows:
|  | December 31, 2021 |  | December 31, 2020
(in millions) |  | Gross carrying amount |  | Accumulated amortization |  | Gross carrying amount |  | Accumulated amortization
Technology |  | $ | 61.2 |  |  | $ | (32.3) |  |  | $ | 76.8 |  |  | $ | (33.4) |
Customer relationships |  | 24.8 |  |  | (10.6) |  |  | 27.0 |  |  | (10.4) |
Trademarks |  | 48.8 |  |  | (26.0) |  |  | 52.4 |  |  | (24.5) |
Total amortizable intangible assets |  | $ | 134.8 |  |  | $ | (68.9) |  |  | $ | 156.2 |  |  | $ | (68.3) |
During 2021, total amortizable intangible assets net, decreased $14.0 million due to the sale of the Company’s Flowform Products business. This decrease consisted of the sale of $21.4 million gross intangible assets, net of $7.4 million accumulated amortization, associated with the divested business. See Note 6 for further information regarding the Flowform Products sale. Amortization expense related to intangible assets was approximately $8 million, $8 million and $10 million for the years ended December 31, 2021, 2020 and 2019, respectively. For each of the years ending December 31, 2022 through 2026, annual amortization expense is expected to be approximately $7 million.

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