Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

In connection with the Company’s reporting, forecasting and analysis of the results of operations during the third quarter of 2015, the Company determined that there were indicators of a decline in fair value of the Company’s Energy and engine products reporting units due to a significant decline in profitability levels, which also may indicate a potential impairment of the recorded goodwill and/or indefinite-lived intangible assets. In addition, the Company’s stock price and resulting market capitalization declined approximately 30% during the third quarter of 2015, which management believes is partially due to the decline in profitability of the aforementioned two reporting units. The Company considers the reduction in total Company market capitalization, which is a significant input to estimated total Company fair value, as an indicator that the fair value of the Energy and engine products reporting units, and/or other reporting units, may be less than the carrying value.

In September 2015, the Company announced a broadly-focused financial improvement plan, to be implemented over the next few quarters and expected to result in improved operational efficiencies, profitability, and cash flow. The plan includes significant cost savings actions within the Energy and engine products reporting units, the impact of which the Company is evaluating in connection with an estimate of fair value.

Given this fact pattern and indicators of potential impairment, the Company determined it would perform an impairment analysis of each of the Company’s reporting units and indefinite-lived trademarks/tradenames, along with a comparison of the estimated aggregate fair value of all reporting units to the Company’s market capitalization. As the financial improvement plan was not announced until mid-September and is an important input to the estimation of the fair value of Company’s reporting units, and the market capitalization continued to be volatile throughout August and September, there was inadequate time within the third quarter to complete the impairment analysis. The Company expects to complete the testing during the fourth quarter of 2015.

Changes in the carrying amount of goodwill for the nine months ended September 30, 2015 are summarized as follows:



	Packaging			Aerospace		Energy			Engineered Components		Total
	(dollars in thousands)
Balance, December 31, 2014	$	169,350		$	210,130	$	73,180		$	7,420	$	460,080
Foreign currency translation and other	(2,560		)	—		(2,090		)	—		(4,650		)
Balance, September 30, 2015	$	166,790		$	210,130	$	71,090		$	7,420	$	455,430

The gross carrying amounts and accumulated amortization of the Company's other intangibles as of September 30, 2015 and December 31, 2014 are summarized below. The Company amortizes these assets over periods ranging from one to 30 years.



	As of September 30, 2015					As of December 31, 2014
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
	(dollars in thousands)
Finite-lived intangible assets:
Customer relationships, 5 – 12 years	$	74,970	$	(24,020	)	$	75,300	$	(18,180	)
Customer relationships, 15 – 25 years	132,230		(36,330		)	132,230		(31,140		)
Total customer relationships	207,200		(60,350		)	207,530		(49,320		)
Technology and other, 1 – 15 years	57,870		(21,800		)	58,040		(18,750		)
Technology and other, 17 – 30 years	43,310		(28,730		)	43,300		(27,150		)
Total technology and other	101,180		(50,530		)	101,340		(45,900		)
Indefinite-lived intangible assets:
Trademark/Trade names	83,730		—			83,770		—
Total other intangible assets	$	392,110	$	(110,880	)	$	392,640	$	(95,220	)

Amortization expense related to intangible assets as included in the accompanying consolidated statement of income is summarized as follows:



	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
	(dollars in thousands)
Technology and other, included in cost of sales	$	1,480	$	1,150	$	4,560	$	3,450
Customer relationships, included in selling, general and administrative expenses	3,730		2,570		11,230		7,450
Total amortization expense	$	5,210	$	3,720	$	15,790	$	10,900

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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