Goodwill and Other Intangible Assets

3 Months Ended

Mar. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

5.	GOODWILL AND OTHER INTANGIBLE ASSETS: The change in the net carrying amount of goodwill for the three months ended March 30, 2019 by segment was as follows (in thousands):

	Steel Mills		Steel Products			Raw Materials		Total
Balance at December 31, 2018	$	591,986	$	862,773		$	729,577	$	2,184,336
Translation		—		(659	)		—		(659	)
Balance at March 30, 2019	$	591,986	$	862,114		$	729,577	$	2,183,677

Nucor completed its most recent annual goodwill impairment testing during the fourth quarter of 2018 and concluded that as of such time there was no impairment of goodwill for any of its reporting units.

The evaluation performed in 2018 used forward-looking projections and included significant expected improvements in the future cash flows of one of the Company’s reporting units, Rebar Fabrication. The fair value of this reporting unit exceeded its carrying value by approximately

in the most recent evaluation. The operating results of this reporting unit declined significantly and remained depressed throughout 2018. Nucor expects the operating results of this reporting unit to improve when the price of steel in relation to the reporting unit’s backlog pricing stabilizes. If our assessment of the relevant facts and circumstances changes, or the actual performance of this reporting unit falls short of expected results, noncash impairment charges may be required. Total goodwill associated with the Rebar Fabrication reporting unit was

$352.5

million as of March 30, 2019

(

$353.0

million as of December 31, 2018). An impairment of goodwill may also lead us to record an impairment of other intangible assets. Total finite-lived intangible assets associated with the Rebar Fabrication reporting unit were

$74.0

million as of March 30, 2019

(

$76.7

million as of December 31, 2018). There have been no triggering events requiring an interim assessment for impairment since the most recent annual goodwill impairment testing date.

During the first quarter of 2019, the operating results and updated future projections of one of the Company’s reporting units, Grating, decreased from the assumptions used in our most recent impairment assessment. The fair value of this reporting unit exceeded its carrying value by approximately 19% in that assessment. The short-term three-month decline in operating results was determined not to be indicative of a long-term decline representing a triggering event given the amount the fair value of the reporting unit exceeded its carrying amount in the most recent assessment. As of March 30, 2019, total goodwill and finite-lived intangible assets associated with the Grating reporting unit were $36.6 million and $3.6 million, respectively. Management will continue to monitor the Grating reporting unit for potential triggering events that would require an interim assessment for impairment.

Intangible assets with estimated useful lives of five to 22

years are amortized on a straight-line or accelerated basis and were comprised of the following as of March 30, 2019 and December 31, 2018 (in thousands):

	March 30, 2019				December 31, 2018
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Customer relationships	$	1,420,668	$	731,454	$	1,418,250	$	713,656
Trademarks and trade names		177,525		90,234		176,046		87,680
Other		63,807		33,424		67,820		32,276
	$	1,662,000	$	855,112	$	1,662,116	$	833,612

Intangible asset amortization expense for the first quarter of 2019 and 2018 was $21.5 million and $22.5 million, respectively. Annual amortization expense is estimated to be $87.1 million in 2019; $84.7 million in 2020; $83.5 million in 2021; $81.2 million in 2022; and $80.0 million in 2023.