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Goodwill And Other Intangible Assets
 12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill And Other Intangible Assets
Goodwill and Other Intangible Assets
We are required to review goodwill and indefinite-lived intangible assets annually for impairment. Goodwill
impairment is tested at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.
Our annual impairment test of goodwill was performed as of December 31, 2014 for all reporting units. The estimated fair values of our reporting units were determined based on the income approach, using assumptions and estimates from the standpoint of potential market participants. Based on these valuations, the fair value for the needle coke reporting unit was below its carrying value resulting in a step two analysis and consequently a goodwill impairment charge of $76.1 million for the year ended December 31, 2014.
We received notice, in March 2015, that the market prices for needle coke were decreasing by an additional 18%, effective for the second quarter of 2015. This decline further compressed our margins for needle coke products versus our annual plan assumptions. We determined that this change, which is driven by over capacity in the market indicated that the needle coke industry is facing a deeper and longer trough than previously expected. As such, we considered the additional price change as a triggering event for our Needle coke reporting unit and tested its goodwill for impairment as of March 31, 2015. In the first step of the analysis, we compared the estimated fair value of the reporting unit to its carrying value, including goodwill. The fair value of the reporting unit was determined based on an income approach, using a discounted cash-flow (“DCF”) model from a market participant’s perspective. The estimated future cash-flows were updated versus the year-end analysis to reflect the expectation of a longer trough. A discount rate of 10.5% was applied to the forecasted cash-flows and is based on a weighted average cost of capital ("WACC"). Company specific beta and mix of debt to equity are inputs into the determination of the WACC, which is then qualitatively assessed from the standpoint of potential market participants. Based on the step one analysis described earlier, the fair value of the needle coke reporting unit was below its carrying value, resulting in a step two analysis and consequently the full impairment of the needle coke goodwill, resulting in a charge of $35.4 million.
As a result of our acquisition by Brookfield, our goodwill and intangibles were revalued as of August 15, 2015. See Note 2 "Preferred Share Issuance and Merger" for description of the Merger and the results of purchase price accounting. The following tables represents the changes in the carrying value of goodwill and intangibles during the predecessor entity period of January 1, 2015 through August 14, 2015 and the successor entity from August 15, 2015 through December 31, 2016:
The changes in the Company’s carrying value of goodwill during the years ended December 31, 2015 and 2016 are as follows:
 
Total
Predecessor
(Dollars in Thousands)
Balance as of December 31, 2014
$
420,129

   Impairment
(35,381
)
   Currency translation effect
(616
)
Balance as of August 14, 2015
$
384,132

 
 
Successor
 
Balance as of August 15, 2015
$
170,418

   Adjustments
1,641

Balance as of December 31, 2015
172,059

   Adjustments (See Note 2)
1,058

   Goodwill transferred to discontinued operations
(2,000
)
Balance as of December 31, 2016
$
171,117

The following table summarizes acquired intangible assets with determinable useful lives by major category :
 
As of December 31, 2015
 
As of December 31, 2016
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization /
Impairment
 
Net
Carrying
Amount
(Dollars in Thousands)
 
(Dollars in Thousands)
Trade name
22,500

 
(889
)
 
21,611

 
22,500

 
(3,235
)
 
19,265

Technology and know-how
55,300

 
(2,900
)
 
52,400

 
55,300

 
(10,397
)
 
44,903

Customer related intangible
64,500

 
(1,688
)
 
62,812

 
64,500

 
(6,177
)
 
58,323

Total finite-lived intangible assets
$
142,300

 
$
(5,477
)
 
$
136,823

 
$
142,300

 
$
(19,809
)
 
$
122,491


Amortization expense of intangible assets in 2014 was $18.4 million. Amortization expense of intangible assets was $10.5 million in the period January 1 through August 14, 2015 and $5.5 million in the period August 15 through December 31, 2015. Amortization expense of intangible assets totaled $14.3 million in 2016. Estimated annual amortization expense for the next five years will approximate $13.6 million in 2017, $12.9 million in 2018, $12.2 million in 2019, $11.4 million in 2020 and $10.7 million in 2021.