Note 4 - Goodwill and Other Intangible Assets

The Company performs its annual assessment for impairment of goodwill at November 30 for all reporting units that have goodwill and tests these balances more frequently if indicators are present or changes in circumstances suggest that impairment may exist. The estimates and assumptions underlying the fair value calculations used in the Company's annual impairment tests are uncertain by their nature and can vary significantly from actual results. Factors that management must estimate include, but are not limited to, industry and market conditions, sales volume and pricing, raw material costs, capital expenditures, working capital changes, cost of capital, and tax rates. These factors are especially difficult to predict when U.S. and global financial markets are volatile. The estimates and assumptions used in its impairment tests are consistent with those the Company uses in its internal planning. These estimates and assumptions may change from period to period. If the Company uses different estimates and assumptions in the future, impairment charges may occur and could be material.

In performing the annual impairment test for goodwill, the Company utilizes the two-step approach. The first step under this guidance requires a comparison of the carrying value of the reporting units to the fair value of these reporting units. Only the Wheels and Brillion reporting units have Goodwill, therefore, the test only applies to those reporting units. The Company uses a blend of the income and market valuation approaches to determine the fair value of each reporting unit. The income approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate and a market approach that uses guideline companies. The market approach uses financial measures from guideline companies to apply to the Company's reporting units' revenue and earnings. If the blended fair value of the reporting unit exceeds the carrying value of the net assets including goodwill assigned to that unit, goodwill is not impaired. If the carrying value of a reporting unit exceeds its fair value, the Company performs the second step of the goodwill impairment test to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of a reporting unit's goodwill to its carrying value.

For 2014 and 2013, we evaluated the value of the goodwill and indefinite lived intangibles for each reporting units and determined there was no impairment indicator. In the most recent test for impairment, the Wheels reporting unit had 7 percent of value in excess of its carrying value. Considering the cyclical nature of the North American commercial vehicle industry and our other end-markets, along with other economic trends, the Company will continue to closely monitor the performance of the Wheels and Brillion reporting units for any indication of potential impairment triggering events.

For 2012, as a result of business developments in the Gunite reporting unit, including a loss of customer market share, evidence of declining aftermarket sales, overall reduced production levels of the commercial vehicle market, operating losses for the past several years, and recent declines in the Company's stock price to an amount below book value, the Gunite reporting unit failed the step one goodwill impairment test. As of December 31, 2012 the Company estimated the fair value of the Gunite reporting unit utilizing a discounted cash flow model as the Company believes it is the most reliable indicator of fair value. Therefore, the second step of the analysis was performed resulting in the Company recognizing goodwill impairment charges of $62.8 million in 2012. The Wheels and Brillion reporting units both passed the step one test.

The Company determines the fair value of other indefinite lived intangible assets, primarily trade names, using the relief-from-royalty method, an income based approach. The approach calculates fair value by applying royalty rates to the after tax cash flows attributable to the asset, and then discounting these after tax cash flows to a present value using a risk-adjusted discount rate. The calculated fair value is compared to the carrying value to determine if any impairment exists. Significant Level 3 inputs included in the valuation of trade names include the selected royalty rate and discount rate.

If events or circumstances change, a determination is made by management to ascertain whether certain indefinite lived intangibles such as customer relationships and technology have been impaired based on the sum of expected future undiscounted cash flows from operating activities. If the estimated net cash flows are less than the carrying amount of such assets, an impairment loss is recognized in an amount necessary to write down the assets to fair value as determined from expected future discounted cash flows.

For 2014 and 2013, we evaluated definite lived intangible assets for potential impairment indicators and determined there were none.

For 2012, we performed a recoverability test of the Gunite's definite lived intangible assets by using an undiscounted cash flow method. We first determined the asset group to be the Gunite reporting unit, which represents the lowest level of identifiable cash flows. Our test concluded that the Gunite asset group was not recoverable as the resulting undiscounted cash flows were less

than the carrying amount of the asset group. Accordingly, we estimated the fair value of the definite lived intangible assets to determine the impairment amount. Determining fair value is judgmental in nature and requires the use of significant estimates and assumptions, considered to be Level 3 inputs.

To determine the estimated fair value of customer relationships, the multi-period excess earnings method was used. This method is based on the concept that cash flows attributable to the assets analyzed are available after deducting costs associated with the business as well as a return on the assets employed in the generation of the cash flows. Significant Level 3 inputs for this valuation model include determining the attrition rate associated with customer revenues, contributory asset charges and required rates of return on tangible and intangible assets, as well as a discount rate for the cash flows. To determine the fair value of technology, the relief-from-royalty method described above was used. In applying this method to technology, significant Level 3 inputs include determining the technology obsolescence rate, a royalty rate, and an appropriate discount rate.

As a result of the fair value measurements for Gunite's trade names, customer relationships and technology, the Company recorded an impairment charge of these intangible assets totaling $36.8 million for the year ended December 31, 2012.

The following represents the carrying amount of goodwill, on a reportable segment basis:

(In thousands)	Wheels		Brillion Iron Works		Total
Balance as of December 31, 2013	$	96,283	$	4,414	$	100,697
Balance as of December 31, 2014	$	96,283	$	4,414	$	100,697

The changes in the carrying amount of other intangible assets for the period December 31, 2012 to December 31, 2014 by reportable segment for the Company, are as follows:

(In thousands)	Wheels			Brillion Iron Works			Corporate			Total
Balance as of December 31, 2012	$	130,668		$	2,833		$	679		$	134,180
Additions		—			—			—			—
Amortization		(7,904	)		(167	)		(679	)		(8,750	)
Balance as of December 31, 2013	$	122,764		$	2,666		$	—		$	125,430
Additions		671			—			—			671
Amortization		(7,970	)		(168	)		—			(8,138	)
Balance as of December 31, 2014	$	115,465		$	2,498		$	—		$	117,963

The summary of goodwill and other intangible assets is as follows:

			As of December 31, 2014						As of December 31, 2013
(In thousands)	Weighted Average Useful Lives		Gross Amount		Accumulated Amortization		Carrying Amount		Gross Amount		Accumulated Amortization		Carrying Amount
Goodwill		—	$	100,697	$	—	$	100,697	$	100,697	$	—	$	100,697
Other intangible assets:
Trade names		—		25,200		—		25,200		25,200		—		25,200
Technology		10		39,169		23,158		16,011		38,849		20,497		18,352
Customer relationships		19.9		127,304		50,552		76,752		129,093		47,215		81,878
			$	191,673	$	73,710	$	117,963	$	193,142	$	67,712	$	125,430

We estimate that the annual aggregate intangible asset amortization expense for the Company will be approximately $8.1 million in 2015 through 2019.