Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Changes in the carrying amount of goodwill for the years ended December 31, 2013 and December 31, 2012 are as follows:



	U.S. Residential Products		U.S. Commercial Products		European Roll Coated Aluminum		European Engineered Products		Consolidated
Balance at December 30, 2011	$	71,987	$	9,067	$	103,292	$	12,340	$	196,686
Acquisition of Cleveland Tubing, Inc.	256		—		—		—		256
Foreign currency translation	—		—		1,873		560		2,433
Balance at December 31, 2012	72,243		9,067		105,165		12,900		199,375
Adjustment to Cleveland Tubing, Inc.	48		—		—		—		48
Foreign currency translation	—		—		4,384		246		4,630
Balance at December 31, 2013	$	72,291	$	9,067	$	109,549	$	13,146	$	204,053

Accumulated impairment losses as of December 31, 2013 were $150.9 million for U.S. Residential Products, $58.7 million for U.S. Commercial Products, $60.2 million for European Roll Coated Aluminum Products and $10.2 million for European Engineered Products. Accumulated impairment losses as of December 31, 2012 were $151.2 million for U.S. Residential Products, $58.7 million for U.S. Commercial Products, $57.8 million for European Roll Coated Aluminum and $10.0 million for European Engineered Products. Changes in accumulated impairment losses resulted from foreign currency translation adjustments related to goodwill in the Company's foreign reporting units.

Annual Impairment Test

Goodwill is tested for impairment annually on the first day of the fourth quarter or more frequently if events or circumstances indicate the potential for impairment. For impairment testing purposes, five reporting units have been identified at the operating segment level, primarily based upon the nature of discrete businesses comprising the Company's operations. As of December 31, 2013, goodwill has been allocated to four of the identified reporting units. Two operating segments are below the required quantitative thresholds and have been aggregated into one reporting segment, European Engineered Products.

The impairment test for goodwill is a two step process. If the carrying value of the reporting unit exceeds its fair value, the goodwill is potentially impaired and the implied fair value of goodwill must be determined by estimating the fair value of the reporting units and allocating such value to the tangible and identifiable intangible assets of each reporting unit. If the carrying amount of a reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized equal to the excess of the carrying amount of goodwill over its implied fair value. The Company determine the fair value of each reporting unit based on an income approach, using a discounted cash flow analysis, and a market valuation approach, using market multiples of publicly traded guideline companies. The discounted cash flow analysis requires various judgmental assumptions about future cash flows, growth rates, and weighted average cost of capital. The assumptions about future cash flows and growth rates are based on an assessment of the business plans of each reporting unit. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units.

Various assumptions, including assumptions regarding future cash flows, market multiples, growth rates and discount rates, are made in the assessment of goodwill for impairment. The assumptions about future cash flows and growth rates are based on the current business plans of the reporting unit. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the reporting unit. These assumptions and estimates are complex and often subjective. They are sensitive to changes in underlying assumptions and can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company's business strategy and internal forecasts.

No impairment charges were recorded based upon impairment testing performed in 2013, 2012 or 2011.

Intangible Assets

Intangible assets consisted of the following:



	As of December 31, 2013							As of December 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets subject to amortization:
Customer relationships	$	215,922	$	(175,291	)	$	40,631	$	212,532	$	(157,943	)	$	54,589
Patents	5,993		(5,020		)	973		5,800		(4,425		)	1,375
	221,915		(180,311		)	41,604		218,332		(162,368		)	55,964
Intangible assets not subject to amortization:
Trade names	6,100		—			6,100		6,100		—			6,100
Total intangible assets	$	228,015	$	(180,311	)	$	47,704	$	224,432	$	(162,368	)	$	62,064

The aggregate amortization expense for intangible assets for 2013, 2012, and 2011 was $15.2 million, $16.1 million, and $18.1 million, respectively. The average useful lives of the Company's customer relationships and patents are 12 years and 10 years, respectively. Based on the carrying value of identified intangible assets recorded at December 31, 2013, and assuming no subsequent impairment of the underlying assets, the aggregate annual amortization expense for the next 5 years is expected to be as follows:



	Amortization of Intangible Assets
2014	$	13,482
2015	11,900
2016	10,578
2017	4,427
2018	478

- 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