Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

On November 23, 2016, we acquired DeWAL. For further detail on the goodwill and intangible assets recorded on the acquisition date, see Note 5 - Acquisitions. The changes in the carrying amount of goodwill for the period ending December 31, 2016, by reportable segment, were as follows:



(Dollars in thousands)	Advanced Connectivity Solutions			Elastomeric Material Solutions			Power Electronics Solutions			Other		Total
December 31, 2015	$	51,931		$	56,269		$	65,029		$	2,224	$	175,453
Arlon adjustment	(238		)	—			—			—		(238		)
DeWAL acquisition	—			35,638			—			—		35,638
Foreign currency translation adjustment	—			(376		)	(2,046		)	—		(2,422		)
December 31, 2016	$	51,693		$	91,531		$	62,983		$	2,224	$	208,431

Annual Impairment Testing

We perform our annual goodwill impairment testing in the fourth quarter of the year. In 2016, we estimated the fair value of our reporting units using an income approach based on the present value of future cash flows. We believe this approach yields the most appropriate evidence of fair value as our reporting units are not easily compared to other corporations involved in similar businesses. We further believe that the assumptions and rates used in our annual impairment test are reasonable, but inherently uncertain.

We currently have four reporting units with goodwill - ACS, EMS, curamik^® and the Elastomer Components Division (ECD). No impairment charges resulted from this analysis. The excess of fair value over carrying value for ACS, EMS, curamik^® and ECD was 281.6%, 76.0%, 75.8% and 225.7%, respectively. These valuations are based on a five year discounted cash flow analysis, which utilized discount rates ranging from 12.0% for ACS to 12.9% for curamik^® and a terminal year growth rate of 3% for all four reporting units. The ACS, EMS, curamik^®and ECD reporting units had allocated goodwill of approximately $51.7 million, $91.5 million, $63.0 million and $2.2 million, respectively, at December 31, 2016.

Intangible Assets

The changes in the carrying amount of other intangible assets for the two-year period ending December 31, 2016, were as follows:



	December 31, 2016						December 31, 2015
(Dollars in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and patents	$	6,825	$	1,156	$	5,669	$	2,543	$	718	$	1,825
Developed technology	68,880		24,365		44,515		47,724		19,681		28,043
Covenant-not-to-compete	1,419		932		487		943		943		—
Customer relationships	96,148		14,311		81,837		49,948		9,100		40,848
Total definite lived intangible assets	173,272		40,764		132,508		101,158		30,442		70,716
Indefinite lived intangible assets	4,168		—		4,168		4,303		—		4,303
Total intangible assets	$	177,440	$	40,764	$	136,676	$	105,461	$	30,442	$	75,019

In the table above, gross carrying amounts and accumulated amortization may differ from prior periods due to foreign exchange rate fluctuations.

The indefinite-lived trademark intangible assets were acquired in our acquisition of curamik^® and are assessed for impairment annually or when changes in circumstances indicate that their carrying values may be recoverable. The definite-lived intangibles are amortized using a fair value methodology that is based on the projected economic use of the related underlying asset.

On November 23, 2016, we acquired DeWAL, and on January 22, 2015, we acquired Arlon. For further detail on the goodwill and intangible assets recorded on the acquisition, see Note 5 - Acquisitions.

In November 2015, we entered into a technology license agreement with Saber, Inc., which resulted in a $1.0 million intangible asset that is being amortized on a straight-line basis over 5 years.

Amortization expense was approximately $11.2 million, $10.9 million, and $6.1 million in 2016, 2015 and 2014, respectively. The estimated annual future amortization expense is $15.3 million, $14.7 million, $14.3 million, $10.8 million and $9.9 million in 2017, 2018, 2019, 2020 and 2021, respectively. These amounts could vary based on changes in foreign currency exchange rates.

The weighted average amortization period as of December 31, 2016, by intangible asset class, is presented in the table below:



Intangible Asset Class		Weighted Average Amortization Period
Trademarks and patents		3.4
Developed technology		5.0
Customer relationships		7.7
Covenant not to compete		2.5
Total other intangible assets		6.6

- 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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