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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2014
Goodwill and Other Intangible Assets [Abstract] |
Goodwill and Other Intangible Assets |
4. | Goodwill and Other Intangible Assets
Goodwill represents the excess of the purchase price and related acquisition costs over the fair value assigned to the net tangible and other intangible assets acquired in a business acquisition. Other intangible assets include patents, technology, license agreements, non-compete agreements and trademarks. Amounts assigned to these intangible assets have been determined by management. Management considered a number of factors in determining the allocations, including valuations and independent appraisals. Trademarks have indefinite lives and are reviewed for impairment on an annual basis. Other intangible assets, excluding trademarks, are being amortized over 2 to 24 years. The changes in the carrying value of goodwill classified by reportable operating segment for the years ended December 31, 2014 and 2013 are as follows:
|  | Total |  |  | North America |  |  | Asia |  |  | Europe |
Balance at January 1, 2013: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  |  | 40,500 |  |  |  | 15,293 |  |  |  | 12,875 |  |  |  | 12,332 |
Accumulated impairment charges |  |  | (26,941 | ) |  |  | (14,066 | ) |  |  | (12,875 | ) |  |  | - |
Goodwill, net |  | $ | 13,559 |  |  | $ | 1,227 |  |  | $ | - |  |  | $ | 12,332 |
Goodwill allocation related to acquisitions |  |  | 4,812 |  |  |  | 3,572 |  |  |  | 1,240 |  |  |  | - |
Foreign currency translation |  |  | 119 |  |  |  | - |  |  |  | (8 | ) |  |  | 127 |
Balance at December 31, 2013: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  |  | 45,431 |  |  |  | 18,865 |  |  |  | 14,107 |  |  |  | 12,459 |
Accumulated impairment charges |  |  | (26,941 | ) |  |  | (14,066 | ) |  |  | (12,875 | ) |  |  | - |
Goodwill, net |  | $ | 18,490 |  |  | $ | 4,799 |  |  | $ | 1,232 |  |  | $ | 12,459 |
Goodwill allocation related to acquisitions |  |  | 100,016 |  |  |  | 50,118 |  |  |  | 35,486 |  |  |  | 14,412 |
Measurement period adjustments |  |  | (496 | ) |  |  | (496 | ) |  |  | - |  |  |  | - |
Foreign currency translation |  |  | (437 | ) |  |  | - |  |  |  | (210 | ) |  |  | (227 | )
Balance at December 31, 2014: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  |  | 144,514 |  |  |  | 68,487 |  |  |  | 49,383 |  |  |  | 26,644 |
Accumulated impairment charges |  |  | (26,941 | ) |  |  | (14,066 | ) |  |  | (12,875 | ) |  |  | - |
Goodwill, net |  | $ | 117,573 |  |  | $ | 54,421 |  |  | $ | 36,508 |  |  | $ | 26,644 |
During the year ended December 31, 2014, the Company recorded $100.0 million of additional goodwill related to the 2014 Acquisitions. During the year ended December 31, 2013, the Company recorded $4.6 million of additional goodwill related to the 2013 Acquisitions. The goodwill related to the acquisition of TRP was assigned to the Company's Asia operating segment and the goodwill related to the acquisition of Array was assigned to the Company's North America operating segment. The Company completed its annual goodwill impairment test during the fourth quarter of 2014, noting no impairment. Management determined that the fair value of the goodwill at December 31, 2014 exceeded its carrying value and that no impairment existed as of that date. The Company tests indefinite-lived intangible assets for impairment using a fair value approach, the relief-from-royalty method (a form of the income approach). At December 31, 2014, the Company's indefinite-lived intangible assets related to the trademarks acquired in the Power Solutions, Connectivity Solutions, Cinch and Fibreco acquisitions. The Company completed its annual indefinite-lived intangible assets impairment test during the fourth quarter of 2014, noting no impairment. Management has concluded that the fair value of these trademarks exceeded the related carrying values at December 31, 2014 and that no impairment existed as of that date. 2014 Annual Impairment Test During the fourth quarter of 2014 and 2013, we completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair values of these reporting units were above their carrying values and, therefore, there was no indication of impairment in either year. We estimated the fair value of these reporting units using a weighting of fair values derived from income and market approaches. Under the income approach, we determine the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit. The excess of estimated fair values over carrying value, including goodwill for each of our reporting units that had goodwill as of the 2014 annual impairment test were the following:
Reporting Unit |  | % by Which Estimated Fair Value Exceeds Carrying Value |
North America |  |  | 10 | %
Asia |  |  | 63 | %
Europe |  |  | 19 | %
As noted above, the fair value determined under step one of the goodwill impairment test completed in the fourth quarter of 2014 exceeded the carrying value for each reporting unit. Therefore, there was no impairment of goodwill. However, if the fair value decreases in future periods, the Company may fail step one of the goodwill impairment test and be required to perform step two. In performing step two, the fair value would have to be allocated to all of the assets and liabilities of the reporting unit. Therefore, any potential goodwill impairment charge would be dependent upon the estimated fair value of the reporting unit at that time and the outcome of step two of the impairment test. The fair values of the assets and liabilities of the reporting unit, including the intangible assets, could vary depending on various factors. The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment. In the event of significant adverse changes of the nature described above, it may be necessary for us to recognize a non-cash impairment of goodwill, which could have a material adverse effect on our consolidated financial condition and results of operations. The components of intangible assets other than goodwill are as follows:
|  | December 31, 2014 |  |  | December 31, 2013 |
|  | Gross Carrying |  |  | Accumulated |  |  | Net Carrying |  |  | Gross Carrying |  |  | Accumulated |  |  | Net Carrying |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Patents, licenses and technology |  | $ | 38,872 |  |  | $ | 4,297 |  |  | $ | 34,575 |  |  | $ | 11,919 |  |  | $ | 1,864 |  |  | $ | 10,055 |
Customer relationships |  |  | 45,836 |  |  |  | 3,062 |  |  |  | 42,774 |  |  |  | 11,923 |  |  |  | 1,191 |  |  |  | 10,732 |
Non-compete agreements |  |  | 2,781 |  |  |  | 1,050 |  |  |  | 1,731 |  |  |  | 787 |  |  |  | 483 |  |  |  | 304 |
Trademarks |  |  | 16,624 |  |  |  | 202 |  |  |  | 16,422 |  |  |  | 8,381 |  |  |  | - |  |  |  | 8,381 |
|  | $ | 104,113 |  |  | $ | 8,611 |  |  | $ | 95,502 |  |  | $ | 33,010 |  |  | $ | 3,538 |  |  | $ | 29,472 |
During the years ended December 31, 2014 and 2013, the Company recorded $73.2 million and $8.9 million, respectively, of various intangible assets in connection with the recent acquisitions. A listing of intangible assets acquired with the 2013 and 2014 Acquired Companies and the related weighted-average lives of those assets is detailed in Note 2. Amortization expense was $5.4 million, $1.9 million and $0.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. Estimated amortization expense for intangible assets for the next five years is as follows:
December 31, |  | Amortization Expense |
2015 |  | $ | 7,481 |
2016 |  |  | 7,181 |
2017 |  |  | 6,848 |
2018 |  |  | 6,556 |
2019 |  |  | 6,515 |

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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