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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | 12. Goodwill and Other Intangible Assets Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Our reporting units are consistent with our operating segments. Determining the fair value of a reporting unit requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others. Goodwill and other long-lived assets are reviewed for impairment whenever events, such as significant changes in the business climate, plant closures, changes in product offerings, or other circumstances indicate that the carrying amount may not be recoverable. To determine fair value, we utilize two market-based approaches and an income approach. Under the market-based approaches, we utilize information regarding the Company as well as publicly available industry information to determine earnings multiples and sales multiples. Under the income approach, we determine fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn. On April 8, 2016, the Company acquired the outstanding shares of Harris Corporation’s composite aerostructures business. The assets acquired include amortizable intangible assets of $71.6 million and goodwill of $95.7 million. As of December 31, 2016, the amount of goodwill acquired was still provisional because the Company is waiting for information needed to finalize the amount. Prior to the acquisition, the entire balance of goodwill on our books was attributable to the Machine Clothing business. In the second quarter of 2016, the Company applied the qualitative assessment approach in performing its annual evaluation of goodwill and concluded that no impairment provision was required. There were no Machine Clothing amounts at risk due to the large spread between the fair and carrying values. We are continuing to amortize certain patents, trade names, customer contracts and technology assets that have finite lives. The changes in intangible assets and goodwill from December 31, 2014 to December 31, 2016, were as follows:
|  | Amortization life |  | Balance at |  |  |  |  |  | Currency |  | Balance at
(in thousands, except for years) |  | in years |  | December 31, 2015 |  | Acquisition |  | Amortization |  | Translation |  | December 31, 2016
Amortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AEC trade names |  | 15 |  |  | $25 |  |  | $- |  |  | ($5 | ) |  | $- |  |  | $20 |
AEC technology |  | 15 |  |  | 129 |  |  | - |  |  | (25 | ) |  | - |  |  | 104 |
AEC customer contracts |  | 6 |  |  | - |  |  | 20,420 |  |  | (2,561 | ) |  | - |  |  | 17,859 |
AEC customer relationships |  | 15 |  |  | - |  |  | 49,490 |  |  | (2,481 | ) |  | - |  |  | 47,009 |
AEC other intangibles |  | 5 |  |  | - |  |  | 1,720 |  |  | (258 | ) |  | - |  |  | 1,462 |
Total amortized intangible assets |  |  |  |  | $154 |  |  | $71,630 |  |  | ($5,330 | ) |  | $- |  |  | $66,454 |
Unamortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MC Goodwill |  |  |  |  | $66,373 |  |  | $- |  |  | $- |  |  | ($1,728 | ) |  | $64,645 |
AEC Goodwill |  |  |  |  | - |  |  | 95,730 |  |  | - |  |  | - |  |  | 95,730 |
Total amortized intangible assets |  |  |  |  | $66,373 |  |  | $95,730 |  |  | $- |  |  | ($1,728 | ) |  | $160,375 |
|  | Balance at |  |  |  | Currency |  | Balance at
(in thousands) |  | December 31, 2014 |  | Amortization |  | Translation |  | December 31, 2015
Amortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
AEC trade names |  | $29 |  |  | ($4 | ) |  | $- |  |  | $25 |
AEC customer contracts |  | 202 |  |  | (202 | ) |  | - |  |  | - |
AEC technology |  | 154 |  |  | (25 | ) |  | - |  |  | 129 |
Total amortized intangible assets |  | $385 |  |  | ($231 | ) |  | $- |  |  | $154 |
Unamortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $71,680 |  |  | $- |  |  | ($5,307 | ) |  | $66,373 |
As of December 31, 2016, the cost and accumulated amortization of amortized intangible assets was $72.1 million and $5.6 million, respectively. As of December 31, 2015, the cost and accumulated amortization of amortized intangible assets was $0.5 million and $0.3 million, respectively. In 2016, amortization expense related to intangible assets was reported in the Consolidated Statements of Income as follows: $2.6 million in Cost of goods sold and $2.7 million in Selling, general and administrative expenses. In 2015 and 2014, all intangible amortization expense was included in Cost of goods sold. Estimated amortization expense of intangibles for the years ending December 31, 2017 through 2021, is as follows:
|  | Annual amortization
Year |  | (in thousands)
2017 |  | $7,076
2018 |  | 7,076
2019 |  | 7,076
2020 |  | 7,076
2021 |  | 6,796

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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=66006027&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=66006027&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=66006027&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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