GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company:



	2018								2017
	Distribution		Aerospace			Total			Distribution		Aerospace			Total
In thousands
Gross balance at beginning of period	$	149,204	$	218,765		$	367,969		$	149,204	$	204,942		$	354,146
Accumulated impairment	—		(16,252		)	(16,252		)	—		(16,252		)	(16,252		)
Net balance at beginning of period	149,204		202,513			351,717			149,204		188,690			337,894
Change in goodwill due to disposals⁽¹⁾	—		(447		)	(447		)	—		—			—
Foreign currency translation	—		(5,905		)	(5,905		)	—		13,823			13,823
Net balance at end of period	$	149,204	$	196,161		$	345,365		$	149,204	$	202,513		$	351,717

Accumulated impairment at end of period	$	—	$	(16,252	)	$	(16,252	)	$	—	$	(16,252	)	$	(16,252	)

⁽¹⁾The Company sold its U.K. Tooling business and substantially all of the assets and liabilities of its Engineering Services business in the fourth quarter of 2018. This amount reflects the proportionate goodwill based on these businesses' relative fair value of the Aerosystems reporting unit.

2018 Analysis

In accordance with ASC 350, the Company evaluates goodwill for possible impairment on at least an annual basis. Upon completion of the 2018 qualitative assessment of events and circumstances affecting recorded goodwill as described in Note 1, Summary of Significant Accounting Policies, the Company concluded that the Aerosystems and Distribution reporting units should receive a Step 1 analysis, while qualitative assessments should be performed for the Specialty Bearings and Engineered Products and KPP - Orlando reporting units.

The qualitative assessment performed for Specialty Bearings and Engineered Products and KPP - Orlando took into consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of the reporting unit, the assessment of assumptions used in the previous fair value calculation and changes in transaction multiples. The results of these analyses indicated that it is more likely than not that goodwill is not impaired and these reporting units did not need to proceed to the two-step impairment test.

A Step 1 analysis was performed for the Distribution and Aerosystems reporting units. The results of the Step 1 analyses indicated that the Company did not need to proceed to Step 2, as the fair values of the reporting units exceeded the respective carrying values. The Company performed a sensitivity analysis relative to the discount rate and growth rate selected and determined a decrease of one percentage point in the terminal growth rate or an increase of one percentage point in the discount rate would not result in a fair value calculation less than the carrying value for both reporting units.

2017 Analysis

Upon completion of the 2017 qualitative assessment of events and circumstances affecting recorded goodwill as described in Note 1, Summary of Significant Accounting Policies, the Company concluded that the Aerosystems and Distribution reporting units should receive a Step 1 analysis, while qualitative assessments should be performed for the Specialty Bearings and Engineered Products and KPP - Orlando reporting units.

10. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED)

Goodwill - continued

2017 Analysis - continued

The qualitative assessment performed for Specialty Bearings and Engineered Products and KPP - Orlando took into consideration the following factors: general economic conditions, industry specific performance, changes in carrying values of the reporting unit, the assessment of assumptions used in the previous fair value calculation and changes in transaction multiples. The results of these analyses indicated that these reporting units did not need to proceed to the two-step impairment test.

A Step 1 analysis was performed for the Distribution and Aerosystems reporting units. The results of the Step 1 analyses indicated that the Company did not need to proceed to Step 2, as the as the fair values of the reporting units exceeded the respective carrying values. The increase in fair value for these reporting units, as compared to 2016, was partially driven by a benefit to future cash flows as a result of the enactment of Tax Reform during the fourth quarter of 2017. The Company performed a sensitivity analysis relative to the discount rate and growth rate selected and determined a decrease of one percentage point in the terminal growth rate or an increase of one percentage point in the discount rate would not result in a fair value calculation less than the carrying value for both reporting units.

Other Intangible Assets

Other intangible assets consisted of:



		At December 31,					At December 31,
		2018					2017
	Amortization Period	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
In thousands
Customer lists / relationships	6-26 years	$	132,661	$	(61,968	)	$	159,592	$	(65,036	)
Developed technologies	10-20 years	19,729		(3,998		)	20,148		(2,790		)
Trademarks / trade names	3-15 years	8,747		(4,322		)	8,995		(3,905		)
Non-compete agreements and other	1-9 years	7,607		(7,527		)	8,345		(8,319		)
Patents	17 years	523		(445		)	523		(435		)
Total		$	169,267	$	(78,260	)	$	197,603	$	(80,485	)

The decrease in the other intangible assets, net balance at December 31, 2018, as compared to December 31, 2017, was primarily due to the write-off of $10.0 million for a certain asset group at the U.K. business discussed below and amortization. Intangible asset amortization expense was $13.5 million, $14.6 million and $15.6 million in 2018, 2017 and 2016, respectively.

10. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED)

Other Intangible Assets - continued

2018 Analysis

In accordance with ASC 360 - Property, Plant, and Equipment ("ASC 360"), the Company is required to evaluate long-lived assets for possible impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. During the third quarter of 2018, management identified a triggering event for possible impairment at a certain asset group in its U.K. business based on a review of its historical performance, the current forecast for the remainder of the year and the loss of future orders from one of its significant customers, requiring the Company to evaluate the intangible assets for impairment. The Company performed a recoverability test as defined under ASC 360 by comparing the undiscounted cash flows of the asset group to its carrying value. The estimated undiscounted cash flows of the business did not exceed the carrying value of the assets. Based on these results, the Company calculated the fair value of the asset group, using an income approach based on the estimated future cash flows, discounted to present value using a rate commensurate with the risks associated with the asset group's weighted average cost of capital. This calculation resulted in a write-off of $10.0 million for a certain asset group at the U.K. business, which was included in other intangible assets impairment on the Company's Consolidated Statements of Operations. This charge has been included in the operating results of the Company's Aerospace segment. Other intangible assets, gross, and accumulated amortization decreased by $21.0 million and $11.0 million, respectively, as a result of the $10.0 million impairment of customer lists/relationships at the asset group within the Company's U.K. business incurred in the year ended December 31, 2018.

2017 Analysis

As a result of operating losses at a certain asset group in the U.K. business and the Engineering Services asset group, the Company identified a triggering event during the fourth quarter of 2017. The Company evaluated certain long-lived assets associated with these asset groups, for which the primary assets within the asset groups were intangible assets. The total amount of intangible assets at the U.K. and Engineering Services businesses at December 31, 2017 was $11.3 million and $1.2 million, respectively. The Company compared the carrying amount of these long-lived assets to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. The carrying value did not exceed the fair value, indicating there was no impairment of long-lived assets held by the U.K. and Engineering Services businesses.

Estimated amortization expense for the next five years associated with intangible assets existing as of December 31, 2018, is as follows:



In thousands
2019	$	11,363
2020	$	10,828
2021	$	10,664
2022	$	9,321
2023	$	8,581

In order to determine the useful life of acquired intangible assets, the Company considers numerous factors, most importantly the industry considerations associated with the acquired entities. The Company determines the amortization period for acquired intangible assets, such as customer relationships, based primarily on an analysis of their historical customer sales attrition information and the period over which the assets are expected to deliver meaningful cash flow generation in support of the fair value of the asset.