Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company conducted its annual goodwill impairment test as of October 1, 2014. For purposes of its 2014, 2013 and 2012 goodwill impairment tests, the Company performed a Step Zero qualitative assessment of potential goodwill impairment. In performing the Step Zero assessment, the Company considered relevant events and circumstances that could affect the fair value or carrying amount of the Company's reporting units, such as macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events and capital markets pricing. The Company also considered the 2010 annual goodwill impairment quantitative test results, where the estimated fair value of each of the Company's reporting units with goodwill exceeded the carrying value by more than 30%, and subsequent changes in the reporting units' revenues, profitability and carrying values. Based on the Step Zero analysis performed, the Company does not believe that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in 2014, 2013 and 2012; therefore, the Company determined that Steps I and II were not required for the 2014, 2013 and 2012 goodwill impairment tests.

During the third quarter of 2014, based on a few consecutive quarters of revenue and earnings declines compared to historical levels within the Company's Energy reporting unit, the Company determined that there were indicators of a decline in fair value of the Energy reporting unit, which also may indicate a potential impairment of the recorded goodwill. As such, the Company conducted a Step I quantitative goodwill impairment analysis as required by the authoritative accounting literature. The Company utilized both income and market-based approaches, placing a 75% and 25% weighting on each, respectively. Significant management assumptions used under the income approach were a weighted average cost of capital of 13% and an estimated residual growth rate of 3%. In considering the weighted average cost of capital for the reporting unit, management considered the level of risk inherent in the cash flow projections based on historical attainment of its projections and current market conditions. Upon completion of the goodwill impairment test, the Company determined that the fair value of the Energy reporting unit exceeded the carrying value by more than 20%, and thus there was no goodwill impairment. In addition, a 1% reduction in residual growth rate combined with a 1% increase in the weighted average cost of capital would not have changed the conclusions reached under the Step I impairment test.

Changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2013 are as follows:



									Engineered		Cequent		Cequent
	Packaging			Energy			Aerospace		Components		APEA		Americas			Total
	(dollars in thousands)
Balance, December 31, 2012	$	158,980		$	64,210		$	41,130	$	3,180	$	—	$	3,440		$	270,940
Goodwill from acquisitions	—			14,440			19,950		4,240		—		4,410			43,040
Goodwill associated with sold businesses	(2,060		)	—			—		—		—		—			(2,060		)
Foreign currency translation and other	1,140			(2,730		)	—		—		—		(670		)	(2,260		)
Balance, December 31, 2013	$	158,060		$	75,920		$	61,080	$	7,420	$	—	$	7,180		$	309,660
Goodwill from acquisitions	15,810			—			149,050		—		—		—			164,860
Foreign currency translation and other	(4,520		)	(2,740		)	—		—		—		(600		)	(7,860		)
Balance, December 31, 2014	$	169,350		$	73,180		$	210,130	$	7,420	$	—	$	6,580		$	466,660

Other Intangible Assets

The Company conducted its annual indefinite-lived intangible asset impairment test as of October 1, 2014. For the purposes of the Company's 2014, 2013 and 2012 indefinite-lived intangible asset impairment tests, the Company performed a qualitative assessment to determine whether it was more likely than not that the fair values of the indefinite-lived intangible assets are less than the carrying values. In performing the qualitative assessment, the Company considered similar events and circumstances to those considered in the Step Zero analysis for goodwill impairment testing and also considered legal, regulatory and contractual factors that could affect the fair value or carrying amount of the Company's indefinite-lived intangible assets. The Company also considered the 2011 annual indefinite-lived intangible asset impairment quantitative test results, where the estimated fair value of each of the Company's indefinite-lived intangible assets exceeded the carrying value by more than 35%, as well as the Company's results of operations and improved capital structure. Based on the qualitative assessment performed, the Company does not believe that it is more likely than not that the fair values of each of its indefinite-lived intangible assets are less than the carrying values; therefore, a fair value calculation of the indefinite-lived intangible assets is not required for the 2014, 2013 and 2012 annual indefinite-lived intangible asset impairment tests.

The gross carrying amounts and accumulated amortization of the Company's other intangibles as of December 31, 2014 and 2013 are summarized below. The Company amortizes these assets over periods ranging from one to 30 years.



	As of December 31, 2014					As of December 31, 2013
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships, 5 - 12 years	$	109,460	$	(44,370	)	$	105,090	$	(36,260	)
Customer relationships, 15 - 25 years	237,610		(103,390		)	154,610		(94,200		)
Total customer relationships	347,070		(147,760		)	259,700		(130,460		)
Technology and other, 1 - 15 years	71,830		(32,250		)	38,980		(28,940		)
Technology and other, 17 - 30 years	44,120		(27,560		)	43,990		(25,310		)
Total technology and other	115,950		(59,810		)	82,970		(54,250		)
Indefinite-lived intangible assets:
Trademark/Trade names	108,480		—			61,570		—
Total other intangible assets	$	571,500	$	(207,570	)	$	404,240	$	(184,710	)

Amortization expense related to intangible assets as included in the accompanying consolidated statement of income is summarized as follows:



	Year ended December 31,
	2014		2013		2012
	(dollars in thousands)
Technology and other, included in cost of sales	$	5,310	$	4,870	$	4,940
Customer relationships, included in selling, general and administrative expenses	18,400		14,900		14,880
Total amortization expense	$	23,710	$	19,770	$	19,820

Estimated amortization expense for the next five fiscal years beginning after December 31, 2014 is as follows:



Year ended December 31,	Estimated Amortization Expense
	(dollars in thousands)
2015		$28,760
2016		$27,970
2017		$27,600
2018		$24,020
2019		$23,100

- 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+ Details