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GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2018
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS |
4. | GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill 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. The changes in the carrying value of goodwill classified by our segment reporting structure for the years ended December 31, 2018 and 2017 are as follows:
|  | Total |  |  | North America |  |  | Asia |  |  | Europe |
Balance at January 1, 2017: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  | $ | 146,542 |  |  | S | 63,364 |  |  | $ | 54,508 |  |  | $ | 28,670 |
Accumulated impairment charges |  |  | (128,591 | ) |  |  | (54,474 | ) |  |  | (54,508 | ) |  |  | (19,609 | )
Goodwill, net |  |  | 17,951 |  |  |  | 8,890 |  |  |  | - |  |  |  | 9,061 |
Foreign currency translation |  |  | 2,226 |  |  |  | - |  |  |  | - |  |  |  | 2,226 |
Balance at December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  |  | 148,768 |  |  |  | 63,364 |  |  |  | 54,508 |  |  |  | 30,896 |
Accumulated impairment charges |  |  | (128,591 | ) |  |  | (54,474 | ) |  |  | (54,508 | ) |  |  | (19,609 | )
Goodwill, net |  |  | 20,177 |  |  |  | 8,890 |  |  |  | - |  |  |  | 11,287 |
Goodwill allocation related to acquisition |  |  | 1,290 |  |  |  | - |  |  |  | - |  |  |  | 1,290 |
Foreign currency translation |  |  | (1,650 | ) |  |  | - |  |  |  | - |  |  |  | (1,650 | )
Balance at December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  |  | 148,408 |  |  |  | 63,364 |  |  |  | 54,508 |  |  |  | 30,536 |
Accumulated impairment charges |  |  | (128,591 | ) |  |  | (54,474 | ) |  |  | (54,508 | ) |  |  | (19,609 | )
Goodwill, net |  | $ | 19,817 |  |  | $ | 8,890 |  |  | $ | - |  |  | $ | 10,927 |
As discussed in Note 5, Fair Value Measurements, goodwill is reviewed for impairment on a reporting unit basis annually during the fourth quarter of each year and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The goodwill impairment test involves a two-step process. In the first step, the fair value of each reporting unit is compared to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, the second step of the impairment test must be performed to measure the amount of impairment loss. In the second step, the reporting unit's fair value is allocated to all of the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss and a reduction to goodwill. 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. 2018 Annual Impairment Test During the fourth quarter of 2018, the Company completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair value of each of the Company's reporting units exceeded the respective carrying values and that there was no indication of impairment. The excess of estimated fair values over carrying value, including goodwill for each of our reporting units that had goodwill as of the 2018 annual impairment test were as follows:
Reporting Unit |  | % by Which Estimated Fair Value Exceeds Carrying Value |
North America |  |  | 20.3 | %
Europe |  |  | 23.8 | %
As noted above, the fair value determined under step one of the goodwill impairment test completed in the fourth quarter of 2018 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 an additional non-cash impairment of goodwill, which could have a material adverse effect on our consolidated financial condition and results of operations. 2017 Annual Impairment Test Based on annual impairment tests performed in the prior year, there was no indication of goodwill impairment at the October 1, 2017 testing date. Other Intangible Assets Other identifiable 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 1 to 16 years. 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, 2018, the Company's indefinite-lived intangible assets related to the trademarks acquired in the Power Solutions, Connectivity Solutions, Cinch and Fibreco acquisitions. The components of definite and indefinite-lived intangible assets are as follows:
|  | December 31, 2018 |  |  | December 31, 2017 |
|  | Gross Carrying |  |  | Accumulated |  |  | Net Carrying |  |  | Gross Carrying |  |  | Accumulated |  |  | Net Carrying |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Patents, licenses and technology |  | $ | 38,845 |  |  | $ | 18,281 |  |  | $ | 20,564 |  |  | $ | 39,218 |  |  | $ | 14,926 |  |  | $ | 24,292 |
Customer relationships |  |  | 44,588 |  |  |  | 14,193 |  |  |  | 30,395 |  |  |  | 44,704 |  |  |  | 11,478 |  |  |  | 33,226 |
Non-compete agreements |  |  | 2,683 |  |  |  | 2,683 |  |  |  | - |  |  |  | 2,711 |  |  |  | 2,711 |  |  |  | - |
Trademarks |  |  | 11,770 |  |  |  | 40 |  |  |  | 11,730 |  |  |  | 11,888 |  |  |  | 40 |  |  |  | 11,848 |
|  | $ | 97,886 |  |  | $ | 35,197 |  |  | $ | 62,689 |  |  | $ | 98,521 |  |  | $ | 29,155 |  |  | $ | 69,366 |
Amortization expense was $6.4 million and $6.7 million in 2018 and 2017, respectively. Estimated amortization expense for intangible assets for the next five years is as follows:
December 31, |  | Amortization Expense |
2019 |  | $ | 6,289 |
2020 |  |  | 6,263 |
2021 |  |  | 6,248 |
2022 |  |  | 4,877 |
2023 |  |  | 3,621 |
2018 Annual Impairment Test The Company completed its annual indefinite-lived intangible assets impairment test during the fourth quarter of 2018, noting no impairment. Management has concluded that the fair value of these trademarks exceeded the related carrying values at December 31, 2018 and that there was no indication of impairment.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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