XML 117 R17.htm IDEA: XBRL DOCUMENT v3.20.1
Goodwill And Other Intangible Assets
 12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill And Other Intangible Assets
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
The components of goodwill and identifiable intangibles at December 31, 2019 and 2018, and related amortization periods for continuing operations are as follows:
(In thousands)
 
2019
 
2018
 
Amortization Periods
Goodwill
$
81,404

 
$
81,404

 
Not amortized
Identifiable intangible assets:
 
 
 
 
 
Customer relationships (cost basis of $29,550 in 2019 and $29,568 in 2018)
20,198

 
22,785

 
10-12 years
Proprietary technology (cost basis of $6,181 in 2019 and $6,185 in 2018)
895

 
1,093

 
Not more than 15 years
Trade names (cost basis of $13,645 in 2019 and $13,690 in 2018)
1,543

 
12,417

 
5 - 13 years
Total carrying value of identifiable intangibles
22,636

 
36,295

 
 
Total carrying value of goodwill and identifiable intangible assets
$
104,040

 
$
117,699

 
 

 
In the third quarter of 2019, the Company implemented a rebranding initiative at Bonnell Aluminum whereby the use of the AACOA and Futura trade names was discontinued as of December 31, 2019. The associated trade names assets, with a remaining net book value of $10.2 million, were amortized over the last four months of 2019.
A reconciliation of the beginning and ending balance of goodwill for each of the two years in the period ended December 31, 2019 is as follows:
(In thousands)
 
 
Aluminum Extrusions
 
PE Films
 
Total
Net carrying value of goodwill at January 1, 2018
 
$
24,066

 
$
104,142

 
$
128,208

Goodwill impairment charge
 
—

 
(46,792
)
 
(46,792
)
Increase (decrease) due to foreign currency translation
 
—

 
(12
)
 
(12
)
Net carrying value of goodwill at December 31, 2018
 
24,066

 
57,338

 
81,404

Goodwill impairment charge
 
—

 
—

 
—

Increase (decrease) due to foreign currency translation
 
—

 
—

 
—

Net carrying value of goodwill at December 31, 2019
 
$
24,066

 
$
57,338

 
$
81,404

The goodwill of Aluminum Extrusions is carried by the reporting units AACOA and Futura, in the amounts of $13.7 million and $10.4 million, respectively, as of December 31, 2019. The goodwill of PE Films is carried by its Surface Protection component in the amount of $57.3 million as of December 31, 2019.
The Company recorded a goodwill impairment charge of $46.8 million ($38.2 million after taxes) for goodwill associated with the acquisition of certain components of PE Films. During the third quarter of 2018, the Company performed a goodwill impairment analysis related to the Personal Care reporting unit of PE Films. This review was undertaken as a result of the expected loss of business from a key customer and revised projections for PE Films. Based on an evaluation of projections under various business planning scenarios, the Company concluded that the fair value of the Personal Care reporting unit of PE Films was less than its carrying value.
A reconciliation of the beginning and ending balance of identifiable intangibles for each of the two years in the period ended December 31, 2019 is as follows:
(In thousands)
 Customer Relationships
 
 Proprietary Technology
 
 Trade Names
 
 Total
Aluminum Extrusions:
 
 
 
 
 
 
 
 
Net carrying value at January 1, 2018
$
24,613

 
$
495

 
$
11,071

 
$
36,179

 
 
Amortization expense
(2,489
)
 
(420
)
 
(516
)
 
(3,425
)
 
Net carrying value at December 31, 2018
22,124

 
75

 
10,555

 
32,754

 
 
Amortization expense
(2,480
)
 
(20
)
 
(10,555
)
 
(13,055
)
 
Net carrying value at December 31, 2019
$
19,644

 
$
55

 
$
—

 
$
19,699

 
 
 
 
 
 
 
 
 
 
PE Films:
 
 
 
 
 
 
 
 
Net carrying value at January 1, 2018
$
—

 
$
845

 
$
—

 
$
845

 
 
Amortization expense
—

 
(115
)
 
—

 
(115
)
 
Net carrying value at December 31, 2018
—

 
730

 
—

 
730

 
 
Amortization expense
—

 
(120
)
 
—

 
(120
)
 
Net carrying value at December 31, 2019
$
—

 
$
610

 
$
—

 
$
610

 
 
 
 
 
 
 
 
 
 
Flexible Packaging Films:
 
 
 
 
 
 
 
 
Net carrying value at January 1, 2018
$
831

 
$
360

 
$
2,337

 
$
3,528

 
 
Amortization expense
(82
)
 
(55
)
 
(299
)
 
(436
)
 
 
Increase (decrease) due to foreign currency translation
(88
)
 
(17
)
 
(176
)
 
(281
)
 
Net carrying value at December 31, 2018
661

 
288

 
1,862

 
2,811

 
 
Amortization expense
(91
)
 
(55
)
 
(280
)
 
(426
)
 
 
Increase (decrease) due to foreign currency translation
(16
)
 
(3
)
 
(39
)
 
(58
)
 
Net carrying value at December 31, 2019
$
554

 
$
230

 
$
1,543

 
$
2,327

 
 
 
 
 
 
 
 
 
 
Total net carrying value of identifiable intangibles at December 31, 2019
$
20,198

 
$
895

 
$
1,543

 
$
22,636


During the fourth quarter of 2017, in conjunction with annual business planning as well as valuation activities and other efforts, the Company determined that the carrying value of Terphane’s remaining long-lived assets were impaired (Terphane’s goodwill was written off in 2015).  Accordingly, the Company wrote down these assets based on an enterprise valuation for all of Terphane of approximately $30 million. This write-down resulted in a non-cash asset impairment loss recognized during the fourth quarter of 2017 of $101 million ($87 million after non-cash tax benefits). As part of this write-down, customer relationships, proprietary technology and trade names were impaired by $9.4 million, $4.1 million and $4.0 million, respectively, reducing their values to $0.8 million, $0.4 million and $2.4 million, respectively. The remaining part of this write-down was related to property, plant and equipment. Also, Terphane’s trade names were assigned estimated useful lives of 5 to 13 years, a change from the previous designation of an indefinite life.
Amortization expense for continuing operations over the next five years is expected to be as follows:
Year
Amount
(In thousands)
2020
$
3,070

2021
3,070

2022
2,935

2023
2,309

2024
2,269