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GOODWILL AND INTANGIBLES
 6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLES
NOTE 7. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying value of goodwill were as follows:

 
Chlor Alkali Products and Vinyls
 
Epoxy
 
Total
 
($ in millions)
Balance at January 1, 2019
$
1,832.6

 
$
287.0

 
$
2,119.6

Foreign currency translation adjustment
—

 
—

 
—

Balance at June 30, 2019
$
1,832.6

 
$
287.0

 
$
2,119.6

Balance at January 1, 2020
$
1,832.7

 
$
287.0

 
2,119.7

Foreign currency translation adjustment
—

 
—

 
—

Balance at June 30, 2020
$
1,832.7

 
$
287.0

 
$
2,119.7



Goodwill is not amortized, but is reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred. Circumstances that are considered as part of the qualitative assessment and could trigger a quantitative impairment test include, but are not limited to:  a significant adverse change in the business climate; a significant adverse legal judgment; adverse cash flow trends; an adverse action or assessment by a government agency; unanticipated competition; sustained decline in our stock price; and a significant restructuring charge within a reporting unit.  As of June 30, 2020, we do not believe it is more likely than not the carrying value exceeded the estimated fair value of our reporting units. During the three months ended March 31, 2020, we identified triggering events associated with a significant overall decrease in our stock price, a significant adverse change in the business climate and a significant reduction in near-term cash flow projections. As a result of these events, we performed a quantitative goodwill impairment test during the first quarter of 2020. We used a discounted cash flow approach to develop the estimated fair value of our reporting units. Based on the aforementioned analysis, the estimated fair value of our reporting units exceeded the carrying value of the reporting units and no impairment charges were recorded.

The discount rate, profitability assumptions and terminal growth rate of our reporting units and the cyclical nature of the chlor alkali industry were the material assumptions utilized in the discounted cash flow model used to estimate the fair value of each reporting unit.  The discount rate reflects a weighted-average cost of capital, which is calculated based on observable market data.  Some of this data (such as the risk free or treasury rate and the pretax cost of debt) are based on the market data at a point in time.  Other data (such as the equity risk premium) are based upon market data over time for a peer group of companies in the chemical manufacturing or distribution industries with a market capitalization premium added, as applicable.

The discounted cash flow analysis requires estimates, assumptions and judgments about future events.  Our analysis uses our internally generated long-range plan.  Our discounted cash flow analysis uses the assumptions in our long-range plan about terminal growth rates, forecasted capital expenditures and changes in future working capital requirements to determine the implied fair value of each reporting unit.  The long-range plan reflects management judgment, supplemented by independent chemical industry analyses which provide multi-year chlor alkali industry operating and pricing forecasts.

We believe the assumptions used in our goodwill impairment analysis are appropriate and result in reasonable estimates of the implied fair value of each reporting unit.  However, given the economic environment and the uncertainties regarding the impact on our business, there can be no assurance that our estimates and assumptions, made for purposes of our goodwill impairment testing, will prove to be an accurate prediction of the future.  In order to evaluate the sensitivity of the fair value calculation on the goodwill impairment test, we applied three separate sensitivities: a hypothetical 10% decrease to the fair value of each reporting unit, a hypothetical decrease of 100-basis points in our terminal growth rate and an increase of 100-basis points in our weighted-average cost of capital to test the fair value calculation. The hypothetical 10% decrease to the fair value of our Chlor Alkali Products and Vinyls reporting unit exceeded the carrying value of the reporting unit, but was not significantly in excess of the carrying value. In all other cases, the estimated fair value of our Epoxy and Chlor Alkali Products
and Vinyls reporting units derived in these sensitivity calculations did not exceed the carrying value of our reporting units.  If our assumptions regarding future performance are not achieved, we may be required to record goodwill impairment charges in future periods.  It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

Intangible assets consisted of the following:

 
 
June 30, 2020
 
December 31, 2019
 
June 30, 2019
 
 
Gross Amount
 
Accumulated Amortization
 
Net
 
Gross Amount
 
Accumulated Amortization
 
Net
 
Gross Amount
 
Accumulated Amortization
 
Net
 
 
($ in millions)
Customers, customer contracts and relationships
 
$
673.3

 
$
(285.3
)
 
$
388.0

 
$
673.5

 
$
(260.9
)
 
$
412.6

 
$
674.4

 
$
(236.3
)
 
$
438.1

Trade name
 
7.0

 
(6.7
)
 
0.3

 
7.0

 
(6.0
)
 
1.0

 
7.0

 
(5.3
)
 
1.7

Acquired technology
 
85.1

 
(57.7
)
 
27.4

 
85.1

 
(51.8
)
 
33.3

 
85.3

 
(45.7
)
 
39.6

Other
 
1.8

 
(0.6
)
 
1.2

 
1.8

 
(0.6
)
 
1.2

 
1.8

 
(0.6
)
 
1.2

Total intangible assets
 
$
767.2

 
$
(350.3
)
 
$
416.9

 
$
767.4

 
$
(319.3
)
 
$
448.1

 
$
768.5

 
$
(287.9
)
 
$
480.6