Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

The components of our amortizable intangible assets were as follows:



(In millions)	Trade Names			Software			Customer Relationships			Other			Total
September 30, 2014
Gross carrying amount	$	35.6		$	59.3		$	20.2		$	26.2		$	141.3
Accumulated amortization	(12.8		)	(55.1		)	(3.4		)	(8.8		)	(80.1		)
Intangible assets, net	$	22.8		$	4.2		$	16.8		$	17.4		$	61.2
December 31, 2013
Gross carrying amount	$	34.3		$	58.5		$	20.4		$	26.3		$	139.5
Accumulated amortization	(9.2		)	(53.3		)	(2.1		)	(6.3		)	(70.9		)
Intangible assets, net	$	25.1		$	5.2		$	18.3		$	20.0		$	68.6

Other intangible assets, net as of September 30, 2014 consists primarily of $14.0 million of developed technology.

As noted below under our goodwill disclosure, during the three months ended September 30, 2014, we performed an interim goodwill impairment test for our Storage solutions reporting unit due to lower than expected results. We also determined these factors to be an event that warranted interim tests as to whether any of our $31.6 million of definite-lived intangible assets associated with the storage solutions business were impaired. Based on our impairment analysis performed in the third quarter of 2014, the undiscounted cash flows associated with our Storage Solutions reporting unit (over the life of the primary asset within Storage Solutions) exceeded the carrying value of the asset group and, accordingly, we concluded that we did not have an impairment of our definite-lived intangible assets in the storage solutions asset group for the three months ended September 30, 2014.

Amortization expense for intangible assets consisted of the following:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2014		2013		2014		2013
Amortization expense	$	3.2	$	3.4	$	9.6	$	10.3

Based on the intangible assets in service as of September 30, 2014, estimated amortization expense for the remainder of 2014 and each of the next five years is as follows:



(In millions)	2014 (Remainder)		2015		2016		2017		2018
Amortization expense	$	3.0	$	11.9	$	8.5	$	7.7	$	6.3

Goodwill

We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year and during an interim period if an event occurs or circumstances change that would warrant impairment testing.

For our Storage Solutions reporting unit, our actual results for the three months ended September 30, 2014 were lower than planned. Because of our lower than anticipated results for Storage Solutions, we revised our forecast, which we determined to be a triggering event requiring us to review our goodwill related to Storage Solutions for impairment.

In determining the estimated fair value of the reporting unit, we used the income approach, a valuation technique under which we estimate future cash flows using the reporting unit's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue, gross margin and EBITA (Earnings Before Interest Taxes and Amortization) expectations and the terminal value growth rate. Our analysis utilized discounted forecasted cash flows over a 10 year period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. The assumptions included utilized a discount rate of 16.5 percent and a terminal growth rate of 3.0 percent. Because our Storage Solutions business has not yet been able to achieve its anticipated results, we increased our discount rate by 2.0 percent over the estimated market discount rate of 14.5 percent.

As a result of this assessment, it was determined that the carrying value of our Storage Solutions reporting unit exceeded its estimated fair value. Accordingly, we performed a Step 2 goodwill impairment test which compared the implied value of the goodwill associated with Storage Solutions to the carrying value of such goodwill. Based on this analysis, the carrying value of the Storage Solutions goodwill exceeded its implied value by $35.4 million and, consequently, we recorded an impairment charge of that amount in the Consolidated Statements of Operations. After the impairment charge, the remaining balance of goodwill associated with our Storage Solutions Reporting Unit is $28.1 million as of September 30, 2014.

During the first quarter of 2014, due to lower than anticipated results and a revision to our forecast in March, we determined that a triggering event occurred which required an interim impairment test of the goodwill associated with the Storage Solutions reporting unit. After performing the analysis, it was concluded that goodwill was not impaired as the estimated fair value of the reporting unit exceeded it carrying value. During the second quarter of 2014, we determined that no triggering event had occurred which necessitated the need for an interim goodwill impairment test.

- 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.

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