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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The Company conducts its annual goodwill impairment test as of October 1, and as of interim dates whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Due to a significant decline in profitability levels in the Company's Energy and engine products reporting units during 2015 and a decline in the Company's stock price and resulting market capitalization which management believes is partially due to the decline in profitability of the aforementioned two reporting units, the Company determined there were indicators that the fair value of the Energy and engine products reporting units, and/or other units, may be less than the carrying value. As such, the Company performed a Step I quantitative goodwill impairment test for nine out of 10 of its reporting units. For the Allfast reporting unit, the Company performed a Step Zero qualitative analysis, as it was acquired in October 2014 and generated profit levels consistent with those expected in the purchase price valuation completed less than one year prior. In preparing the Step I quantitative analysis, 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 weighted average costs of capital ranging from 11% to 14.5% and an estimated residual growth rate of 3%. In considering the weighted average cost of capital for the reporting units under the income approach, management considered the level of risk inherent in the cash flow projections based on historical attainment of its projections and current market conditions. The use of these unobservable inputs resulted in the fair value estimate being classified as a Level 3 measurement within the fair value hierarchy. Upon completion of the Step I goodwill impairment test, the Company determined that the Energy and engine products reporting units required a Step II test to determine the amount, if any, of an impairment charge. All other reporting units passed the Step I test. Based on the results of the Step II goodwill impairment test, the Company recorded pre-tax goodwill impairment charges in the fourth quarter of 2015 of approximately $70.9 million in its Energy reporting unit and approximately $3.2 million in its engine products reporting unit. As of December 31, 2015, there is no goodwill remaining for the Company's Energy and engine products reporting units. For the Company's 2015 goodwill impairment testing of its Allfast reporting unit, and for purposes of its 2014 and 2013 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. Based on the analysis performed, the Company did not believe that it was more likely than not that the fair value of a reporting unit is less than its carrying amount; therefore, the Company determined that the Step I and Step II tests were not required. Additionally, 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, and as such, the Company conducted a Step I quantitative goodwill impairment analysis. Upon completion of the goodwill impairment test, the Company determined that the fair value of the Energy reporting unit exceeded the carrying value, and thus there was no goodwill impairment. Changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows:
|  |  |  |  |  |  | Engineered |  |
| Packaging |  | Aerospace |  | Energy |  | Components |  | Total
| (dollars in thousands)
Balance, December 31, 2013 | $ | 158,060 |  |  | $ | 61,080 |  |  | $ | 75,920 |  |  | $ | 7,420 |  |  | $ | 302,480 |
Goodwill from acquisitions | 15,810 |  |  | 149,050 |  |  | — |  |  | — |  |  | 164,860 |
Foreign currency translation and other | (4,520 | ) |  | — |  |  | (2,740 | ) |  | — |  |  | (7,260 | )
Balance, December 31, 2014 | $ | 169,350 |  |  | $ | 210,130 |  |  | $ | 73,180 |  |  | $ | 7,420 |  |  | $ | 460,080 |
Goodwill from acquisitions | — |  |  | (3,500 | ) |  | — |  |  | 2,320 |  |  | (1,180 | )
Impairment charge | — |  |  | — |  |  | (70,930 | ) |  | (3,180 | ) |  | (74,110 | )
Foreign currency translation and other | (3,620 | ) |  | — |  |  | (2,250 | ) |  | — |  |  | (5,870 | )
Balance, December 31, 2015 | $ | 165,730 |  |  | $ | 206,630 |  |  | $ | — |  |  | $ | 6,560 |  |  | $ | 378,920 |
During the fourth quarter of 2015, the Company's estimate of the underlying obligation for certain tax amounts related to the acquisition of Allfast was adjusted due to the finalization of the Seller's tax liability, resulting in a $3.5 million decrease to the deferred purchase price liability and goodwill. This measurement period adjustment has been reflected as a current period adjustment to these balances during the year ended December 31, 2015, in accordance with the guidance in ASU 2015-16. See Note 2, "New Accounting Pronouncements," for further details. Other Intangible Assets During the fourth quarter of 2015, as part of the broadly focused restructuring initiative within the Company's Energy reportable segment, it was determined that the Company would discontinue use and wrote-off all of the approximately $1.6 million of carrying value of certain of its Energy-related trade names. Additionally, the Company conducted its annual indefinite-lived intangible asset impairment test as of October 1, 2015. For the purposes of the Company's 2015 indefinite-lived intangible asset impairment tests, the Company performed a quantitative assessment for all of its indefinite-lived intangibles assets except for the Allfast trade name, using a relief-from-royalty method. The Company performed a Step Zero qualitative analysis for the Allfast trade name as it was acquired less than one year prior and has long-term sales projections consistent with those expected in the purchase price valuation. Significant management assumptions used under the relief-from-royalty method were discount rates ranging from 14% to 17.5% and an estimated residual growth rate of 3%. The use of these unobservable inputs resulted in the fair value estimates being classified as a Level 3 measurement within the fair value hierarchy. Upon completion of the quantitative impairment test, the Company determined that the fair value of the Company's indefinite-lived intangible assets exceeded the carrying value, and thus there was no impairment. For the purposes of the Company's 2015 indefinite-lived intangible asset impairment testing of the Allfast trade name, and for purposes of its 2014 and 2013 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. Based on the qualitative assessment performed, the Company did not believe that it was more likely than not that the fair values of each of its indefinite-lived intangible assets were less than the carrying values; therefore, a quantitative assessment was not required. The gross carrying amounts and accumulated amortization of the Company's other intangibles as of December 31, 2015 and 2014 are summarized below. The Company amortizes these assets over periods ranging from one to 30 years.
|  | As of December 31, 2015 |  | As of December 31, 2014
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 |  | $ | 74,890 |  |  | $ | (25,960 | ) |  | $ | 75,300 |  |  | $ | (18,180 | )
Customer relationships, 15 - 25 years |  | 132,230 |  |  | (38,060 | ) |  | 132,230 |  |  | (31,140 | )
Total customer relationships |  | 207,120 |  |  | (64,020 | ) |  | 207,530 |  |  | (49,320 | )
Technology and other, 1 - 15 years |  | 57,860 |  |  | (22,770 | ) |  | 58,040 |  |  | (18,750 | )
Technology and other, 17 - 30 years |  | 43,300 |  |  | (29,250 | ) |  | 43,300 |  |  | (27,150 | )
Total technology and other |  | 101,160 |  |  | (52,020 | ) |  | 101,340 |  |  | (45,900 | )
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |
Trademark/Trade names |  | 81,630 |  |  | — |  |  | 83,770 |  |  | — |
Total other intangible assets |  | $ | 389,910 |  |  | $ | (116,040 | ) |  | $ | 392,640 |  |  | $ | (95,220 | )
Amortization expense related to intangible assets as included in the accompanying consolidated statement of operations is summarized as follows:
|  | Year ended December 31,
|  | 2015 |  | 2014 |  | 2013
|  | (dollars in thousands)
Technology and other, included in cost of sales |  | $ | 6,010 |  |  | $ | 5,030 |  |  | $ | 4,460 |
Customer relationships, included in selling, general and administrative expenses |  | 14,960 |  |  | 11,030 |  |  | 7,830 |
Total amortization expense |  | $ | 20,970 |  |  | $ | 16,060 |  |  | $ | 12,290 |
Estimated amortization expense for the next five fiscal years beginning after December 31, 2015 is as follows:
Year ended December 31, | Estimated Amortization Expense
| (dollars in thousands)
2016 |  | $20,340
2017 |  | $20,090
2018 |  | $19,660
2019 |  | $19,240
2020 |  | $18,310

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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 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 2: 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 3: 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 4: 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 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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