Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill for 2019 and 2018, by reportable business segment, were as follows:



	Fluid & Metering Technologies			Health & Science Technologies			Fire & Safety/ Diversified Products			Total
	(In thousands)
Goodwill	$	606,785		$	889,852		$	408,152		$	1,904,789
Accumulated goodwill impairment losses	(20,721		)	(149,820		)	(30,090		)	(200,631		)
Balance at January 1, 2018	586,064			740,032			378,062			1,704,158
Foreign currency translation	(5,023		)	(8,391		)	(6,505		)	(19,919		)
Acquisitions	—			12,399			—			12,399
Acquisition adjustments	—			1,317			—			1,317
Balance at December 31, 2018	581,041			745,357			371,557			1,697,955
Foreign currency translation	(2,116		)	476			(2,509		)	(4,149		)
Acquisitions	—			85,939			—			85,939
Balance at December 31, 2019	$	578,925		$	831,772		$	369,048		$	1,779,745

ASC 350 requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. In 2019 and 2018, there were no events or circumstances that would have required an interim impairment test. Goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed.

Goodwill and other acquired intangible assets with indefinite lives were tested for impairment as of October 31, 2019, the Company’s annual impairment test date. In assessing the fair value of the reporting units, the Company considers both the market approach and the income approach. Under the market approach, the fair value of the reporting unit is determined by the respective trailing twelve month EBITDA and the forward looking 2020 EBITDA (50% each), based on multiples of comparable public companies. The market approach is dependent on a number of significant management assumptions including forecasted EBITDA and selected market multiples. Under the income approach, the fair value of the reporting unit is determined based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions including estimates of operating results, capital expenditures, net working capital requirements, long-term growth rates and discount rates. Weighting was equally attributed to both the market and the income approaches (50% each) in arriving at the fair value of the reporting units.

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at December 31, 2019 and 2018:



	At December 31, 2019								At December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization			Net
			(In thousands)								(In thousands)
Amortized intangible assets:
Patents	$	6,678	$	(5,276	)	$	1,402	12	$	6,468	$	(4,693	)	$	1,775
Trade names	123,062		(64,938		)	58,124		16	115,899		(57,227		)	58,672
Customer relationships	275,575		(96,252		)	179,323		14	256,202		(85,652		)	170,550
Unpatented technology	101,721		(43,561		)	58,160		12	96,922		(35,685		)	61,237
Other	700		(578		)	122		10	700		(507		)	193
Total amortized intangible assets	507,736		(210,605		)	297,131			476,191		(183,764		)	292,427
Indefinite-lived intangible assets:
Banjo trade name	62,100		—			62,100			62,100		—			62,100
Akron Brass trade name	28,800		—			28,800			28,800		—			28,800
Total intangible assets	$	598,636	$	(210,605	)	$	388,031		$	567,091	$	(183,764	)	$	383,327

On June 22, 2018, the Company acquired the intellectual property assets of Phantom Controls (“Phantom”) for cash consideration of $4.0 million. The operational capabilities and innovative pump operation of Phantom’s technology complements our existing water-flow expertise of Hale, Akron Brass and Class 1 to improve fire ground safety and reduce operational complexity during mission critical response. This acquisition of intellectual property assets did not meet the definition of a business under ASU 2017-01 and thus the Company recorded the entire purchase price to the Unpatented technology class of intangible assets on the Consolidated Balance Sheets.

The Banjo trade name and the Akron Brass trade name are indefinite-lived intangible assets which are tested for impairment on an annual basis in accordance with ASC 350 or more frequently if events or changes in circumstances indicate that the assets might be impaired. The Company uses the relief-from-royalty method, a form of the income approach, to determine the fair value of these trade names. The relief-from-royalty method is dependent on a number of significant management assumptions, including estimates of revenues, royalty rates and discount rates.

In the second quarter of 2019, the Company began to evaluate strategic alternatives for one of its businesses in the HST segment. Prior to making a final decision on the options that were presented for this business, the business was informed in the third quarter of 2019 of the loss of its largest customer. As a result, the Company accelerated its restructuring activities for this business and a decision was made to wind down the business over time. This event required an interim impairment test be performed on certain of its definite-lived intangible assets, which resulted in an impairment charge of $7.1 million, consisting of $6.1 million related to customer relationships and $1.0 million related to unpatented technology. This charge was recorded as Restructuring expense in the Consolidated Statements of Operations. See Note 14 for further discussion.

Amortization of intangible assets was $37.3 million, $38.5 million and $45.9 million in 2019, 2018 and 2017, respectively. Based on the intangible asset balances as of December 31, 2019, amortization expense is expected to approximate $38.4 million in 2020, $37.1 million in 2021, $35.2 million in 2022, $32.4 million in 2023 and $30.5 million in 2024.