Goodwill and Other Intangible Assets

Goodwill

The Company performed a Step Zero qualitative assessment as part of its 2018, 2017 and 2016 annual impairment tests for all reporting units, which included a review of the Company’s market capitalization. For purposes of the 2018 annual impairment test, based on the Step Zero assessment, the Company determined there were no indications that the fair value of a reporting unit was less than its carrying amount. Therefore, the Company determined that the Step I and Step II tests were not required. For purposes of the 2017 and 2016 annual impairment tests, for all reporting units with goodwill other than the Aerospace reporting unit, based on the Step Zero assessment, the Company determined that there were no indications that the fair value of a reporting unit was less than its carrying amount. Therefore, the Company determined that the Step I and Step II tests were not required for these reporting units.

For purposes of the 2017 annual impairment test for the Company's Aerospace reporting unit, management elected to perform a Step I quantitative assessment in consideration of the partial goodwill impairment charge recorded during 2016. In preparing the Step I analysis, the Company utilized both income and market-based approaches, placing a 50% weighting on each. Significant management assumptions used under the income approach were a weighted average cost of capital ("WACC") of 9.5% and an estimated residual growth rate of 3%. In determining the WACC, management considered the level of risk inherent in the cash flow projections based on reducing previously utilized sales growth and margin expansion assumptions, as well as historical attainment of its projections and current market conditions. The use of these unobservable inputs resulted in the fair value estimate being classified as a Level 3 measurement within the fair value hierarchy. Upon completion of the Step I test, the Company determined that the fair value of the Aerospace reporting unit exceeded its carrying value by more than 15%.

For purposes of the 2016 annual impairment test for the Company's Aerospace reporting unit, management had been monitoring current and expected operating results since the first quarter of 2016, when sales and margins were significantly lower than expected, to assess whether the reductions were other than temporary. Management established and executed against recovery plans, improving sales and margin levels during the second and third quarters of 2016. However, when considering these recent financial results, plus recognizing that fourth quarter 2016 results would be lower than previously expected, and updating the Company's assessment of future expectations for growth and profit levels, the Company determined that there were indicators that the fair value of the Aerospace reporting unit was less than its carrying value. Therefore, the Company performed a Step I quantitative assessment for its Aerospace reporting unit utilizing both income and market-based approaches, placing a 50% weighting on each. Significant management assumptions used under the income approach were a WACC of 10.3% and an estimated residual growth rate of 3%. In determining the WACC, management considered the level of risk inherent in the cash flow projections and current market conditions. The use of these unobservable inputs resulted in the fair value estimate being classified as a Level 3 measurement within the fair value hierarchy.

Upon completion of the 2016 Step I test, the Company determined that the carrying value of the Aerospace reporting unit exceeded its fair value. The Company then performed a Step II test to determine whether goodwill had been impaired and, if applicable, to calculate the amount of the impairment charge. Based on the results of the Step II goodwill impairment test, the Company recorded a goodwill impairment charge of approximately $60.2 million in its Aerospace reporting unit.

Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows (dollars in thousands):



						Specialty
	Packaging			Aerospace		Products		Total
Balance, December 31, 2016	$	162,090		$	146,430	$	6,560	$	315,080
Foreign currency translation and other	4,310			—		—		4,310
Balance, December 31, 2017	$	166,400		$	146,430	$	6,560	$	319,390
Foreign currency translation and other	(2,740		)	—		—		(2,740		)
Balance, December 31, 2018	$	163,660		$	146,430	$	6,560	$	316,650

Other Intangible Assets

For the purposes of the Company's 2018 indefinite-lived intangible asset impairment tests, the Company performed a qualitative assessment to determine whether it was more likely than not that the fair values of the indefinite-lived intangible assets are less than the carrying values. Based on the qualitative assessment performed, the Company does not believe that it is more likely than not that the fair values of each of its indefinite-lived intangible assets are less than the carrying values; therefore, a fair value calculation of the indefinite-lived intangible assets is not required for the 2018 annual indefinite-lived intangible asset impairment tests.

In 2017, the Company performed a qualitative assessment as part of its annual impairment test to determine whether it was more likely than not that the fair values of the indefinite-lived intangible assets were less than the carrying values. Based on the assessment, the Company determined that there were no indications that the fair values of any of its indefinite-lived intangible assets were less than the carrying values. However, in consideration of the impairment charge recorded during 2016, the Company performed a quantitative assessment for its indefinite-lived intangible assets recorded on its balance sheet as of October 1, 2017 within the Aerospace reportable segment to supplement its qualitative assessment. Using the relief-from-royalty method with a discount rate of 9.5% and an estimated residual growth rate of 3%, the Company determined each of its Aerospace-related trade names had a fair value that exceeded carrying values by more than 9%. The use of unobservable inputs resulted in the fair value estimates being classified as a Level 3 measurement within the fair value hierarchy.

In 2016, the Company performed a qualitative assessment as part of its annual impairment test to determine whether it was more likely than not that the fair values of the indefinite-lived intangible assets were less than the carrying values. Based on the assessment, the Company determined that there were no indications that the fair values of any of its indefinite-lived intangible assets, except for the Aerospace indefinite-lived intangible assets, were less than the carrying values. As such, the Company performed a quantitative assessment for all of its indefinite-lived intangible assets included within the Aerospace reportable segment, using a relief-from-royalty method. Significant management assumptions used under the relief-from-royalty method were a discount rate of 10.3% and an estimated residual growth rate of 3%. The use of these unobservable inputs resulted in the fair value estimates being classified as a Level 3 measurement within the fair value hierarchy. Upon completion of the quantitative impairment test, the Company determined that certain of the Company's Aerospace-related trade names had carrying values that exceeded their fair values, and therefore recorded impairment charges of approximately $38.7 million.

The Company amortizes its other intangible assets over periods ranging from one to 30 years. The gross carrying amounts and accumulated amortization of the Company's other intangibles as of December 31, 2018 and 2017 are summarized below (dollars in thousands):



	As of December 31, 2018					As of December 31, 2017
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships, 5 - 12 years	$	73,450	$	(48,410	)	$	73,910	$	(41,000	)
Customer relationships, 15 - 25 years	132,230		(58,790		)	132,230		(51,880		)
Total customer relationships	205,680		(107,200		)	206,140		(92,880		)
Technology and other, 1 - 15 years	57,020		(31,600		)	57,340		(29,120		)
Technology and other, 17 - 30 years	43,300		(35,600		)	43,300		(33,490		)
Total technology and other	100,320		(67,200		)	100,640		(62,610		)
Indefinite-lived intangible assets:
Trademark/Trade names	42,930		—			42,930		—
Total other intangible assets	$	348,930	$	(174,400	)	$	349,710	$	(155,490	)

Amortization expense related to intangible assets as included in the accompanying consolidated statement of operations is summarized as follows (dollars in thousands):



	Year ended December 31,
	2018		2017		2016
Technology and other, included in cost of sales	$	4,900	$	5,340	$	5,680
Customer relationships, included in selling, general and administrative expenses	14,540		14,580		14,790
Total amortization expense	$	19,440	$	19,920	$	20,470

Estimated amortization expense for the next five fiscal years beginning after December 31, 2018 is as follows (dollars in thousands):



Year ended December 31,	Estimated Amortization Expense
2019		$	19,080
2020		$	18,140
2021		$	15,360
2022		$	11,810
2023		$	9,910