Asset Impairments

The following tables summarize information about the impairment charges recorded in 2016 and 2015. These charges relate to non-financial assets that were measured at fair value on a non-recurring basis using Level 3 inputs according to the fair value hierarchy as described further in Note 11, Fair Value Measurements.



	December 31, 2016
	Goodwill and Indefinite-lived Intangible Assets		Finite-lived Intangible Assets		Property, Plant & Equipment		Total
Distribution & Storage	—		$	0.5	$	0.7	$	1.2
Consolidated	$	—	$	0.5	$	0.7	$	1.2



	December 31, 2015
	Goodwill and Indefinite-lived Intangible Assets		Finite-lived Intangible Assets		Property, Plant & Equipment		Total
Energy & Chemicals	$	65.0	$	—	$	3.8	$	68.8
Distribution & Storage ⁽¹⁾	0.3		—		1.7		2.0
BioMedical	142.3		38.1		3.9		184.3
Consolidated	$	207.6	$	38.1	$	9.4	$	255.1

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⁽¹⁾	Asset impairments of $1.5 were included in cost of sales on the consolidated statement of operations for the year ended December 31, 2015.

Goodwill and Indefinite-lived Intangible Assets

2017 and 2016 Goodwill and Indefinite-lived Asset Impairments: None.

2015 Goodwill and Indefinite-lived Asset Impairments: We recorded goodwill and indefinite-lived asset impairment charges in the fourth quarter of 2015 as management concluded that the goodwill and certain indefinite-lived intangible assets within certain reporting units were impaired. The total goodwill and indefinite-lived intangible asset impairment charges were $207.6. Management prepares its annual forecast mid-November through December each year. As the 2016 forecast was developed, management considered several factors when assessing the outlook for 2016 and beyond. Because of those factors, management revised its forecasts down significantly which led to the impairment charges described below. In addition to the items considered for each reporting unit below, management also considered the sustained decline in our market capitalization at that time. Our stock price was $95.64 on December 31, 2013, $34.20 on December 31, 2014 and $17.96 on December 31, 2015.

Goodwill and indefinite-lived intangible assets within the E&C reporting unit were impaired $65.0 as a result of revised estimates developed during our annual forecasting process. The revised estimates were the result of the following: 1) continued significant decline in energy prices during the fourth quarter of 2015 which led to a significant reduction in expected order levels as Liquefied Natural Gas (“LNG”) projects were cancelled or deferred, which impacted our longer-term forecasts; 2) in late 2015, we received notification of delays in major projects from several large customers; and 3) concerns with global growth, negative macroeconomic developments at the time and highly competitive market conditions.

Indefinite-lived intangible assets within the D&S reporting unit were impaired $0.3 as a result of revised estimates developed during our annual forecasting process.

Goodwill and indefinite-lived intangible assets within the BioMedical reporting unit were impaired $142.3 as a result of revised estimates developed during the annual forecasting process. The revised estimates were the result of the following: 1) realization that the effects of Medicare competitive bidding, including the reduction of reimbursement rates and the subsequent consolidation of our customers, were no longer considered temporary and would have lasting negative impacts on the growth of the homecare industry and their suppliers; 2) increased rivalry with competitive technology; and 3) concerns with global growth and negative macroeconomic developments at the time.

Long-lived Asset Impairments

2017 Long-lived Asset Impairments: None.

2016 Long-lived Asset Impairments: During the third quarter of 2016, we identified impairment indicators that suggest the carrying value of a certain asset group in China within the D&S segment may not be recoverable. The primary impairment indicators included projections of future cash flows and the associated impact on the long-range strategic plan forecasts, lower than expected cash flows attributed to this asset group, and poor market conditions. An undiscounted cash flow test performed for this asset group indicated it was not recoverable. The fair value of the asset group was established using a discounted cash flow model which utilized Level 3 inputs in the fair value hierarchy. As a result of the long-lived asset impairment assessment performed, we recorded long-lived asset impairment charges on our D&S reporting unit as described further below. There were no remaining long-lived assets recorded on the consolidated balance sheet for this asset group as of December 31, 2016.

Additionally, during the third quarter of 2016, events and circumstances indicated that other tangible property, plant and equipment in China within the D&S segment might be impaired. However, our estimate of undiscounted cash flows indicated that such carrying values were expected to be recovered.

2015 Long-lived Asset Impairments: During the fourth quarter of 2015, we identified impairment indicators described above in the Goodwill and Indefinite-Lived Intangible Assets section that suggest the carrying values of certain asset groups within each reporting unit may not be recoverable. The primary indicators include projections of future cash flows and the associated impact on the long-range strategic plan forecasts, lower than expected cash flows attributed to certain asset groups, increased competition, the continued decline in energy prices, and our lower market capitalization at that time. As a result of the long-lived asset impairment assessments performed, we recorded long-lived asset impairments described further below.

The BioMedical long-lived asset impairment charges were due to declines in estimated fair value resulting from reductions in expected future cash flows associated with the respiratory product lines. The E&C long-lived asset impairment charges were due to reductions in expected future cash flows associated with certain assets in China.

Finite-lived Intangible Assets: For the year ended December 31, 2016, we recorded impairment charges of $0.5 related to finite-lived intangible assets in its D&S reporting unit, attributed to customer relationships, trademarks, technology and patents. For the year ended December 31, 2015, we recorded impairment charges of $38.1 related to finite-lived intangible assets in its BioMedical reporting unit, attributed to customer relationships – $15.7 and unpatented technology – $22.4.

Property, Plant & Equipment: As a result of long-lived asset impairment assessments performed in the third quarter of 2016, we recorded long-lived asset impairment charges for certain tangible property, plant and equipment of $0.7 attributed to D&S. As a result of long-lived asset impairment assessments performed in the fourth quarter of 2015, we recorded long-lived asset impairment charges for certain tangible property, plant and equipment of $7.7; $3.8 attributed to E&C and $3.9 attributed to BioMedical. Additionally, as a result of restructuring activities in 2015 within the D&S segment, we recorded $1.7 of asset impairment charges to record certain property, plant and equipment at fair value.