GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS

As of December 31, 2016, 2015 and 2014, the goodwill amount for CAM was retested for impairment. To perform the first step of the goodwill impairment test, the Company determined the fair value of CAM using industry market multiples and discounted cash flows utilizing a market-derived rate of return (level 3 fair value inputs). The goodwill included in the CAM segment was not impaired.

On December 30, 2016, the Company purchased 100% of the outstanding stock of Pemco World Air Inc., ("Pemco") for cash consideration in a debt-free acquisition. Pemco offers aircraft maintenance, repair, and overhaul services as well as aircraft modification services to airlines. The Company intends to operate Pemco as a division of its existing aircraft maintenance businesses and it is expected to help grow the Company's revenues. The purchase price has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess purchase price over the estimated fair value of net assets acquired was recorded as goodwill and reflects the strategic value of marketing Pemco's aircraft conversion capabilities and current aircraft hangar operations with the Company's air transportation solutions. Identified intangible assets include Supplemental Type Certificates ("STCs") granting approval by FAA for Pemco to market and complete certain aircraft modifications. The Company is in process of refining its estimates of certain assets including goodwill and intangible assets, therefore the allocation of purchase price is preliminary at this time.

The carrying amounts of goodwill are as follows (in thousands):



	CAM		All Other		Total
Carrying value as of December 31, 2014	$	34,395	$	—	$	34,395
Carrying value as of December 31, 2015	$	34,395	$	—	$	34,395
Acquisition of Pemco	—		2,738		2,738
Carrying value as of December 31, 2016	$	34,395	$	2,738	$	37,133

The Company's acquired intangible assets are as follows (in thousands):



	Airline		Amortizing
	Certificates		Intangibles			Total
Carrying value as of December 31, 2014	$	3,000	$	1,615		$	4,615
Amortization	—		(281		)	(281		)
Carrying value as of December 31, 2015	$	3,000	$	1,334		$	4,334
Acquisition of Pemco	—		4,400			4,400
Amortization	—		(281		)	(281		)
Carrying value as of December 31, 2016	$	3,000	$	5,453		$	8,453

The airline certificates have an indefinite life and therefore are not amortized. The Company recorded intangible amortization expense of $0.3 million, $0.3 million and $0.3 million for the years ending December 31, 2016, 2015 and 2014, respectively. The Company amortizes finite-lived intangibles assets, including customer relationship and STC intangibles, over 4 to 7 years. Estimated amortization expense for the next five years is $1.2 million, $1.2 million, $1.2 million, $1.1 million and $0.3 million.

In January 2014, the Company acquired a 25 percent equity interest in West Atlantic AB of Gothenburg, Sweden ("West"). West, through its two airlines, Atlantic Airlines Ltd. and West Air Sweden AB, operates a fleet of aircraft on behalf of European regional mail carriers and express logistics providers. The airlines operate a combined fleet of British Aerospace ATPs, Bombardier CRJ-200-PFs, and Boeing 767 and 737 aircraft. West leases three Boeing 767 aircraft from the Company. The Company’s carrying value of West was $9.9 million and $13.1 million at December 31, 2016 and 2015, respectively, including $5.5 million of excess purchase price over the Company's fair value of West's nets assets in January of 2014. The carrying value is reflected in “Other Assets” in the Company’s consolidated balance sheets as of December 31, 2016 and 2015.

Stock warrants issued to a lessee (see Note B) as an incentive are recorded as a lease incentive asset using their fair value at the time that the lessee has met its performance obligation and amortized against revenues over the duration of related aircraft leases. The Company's lease incentive granted to the lessee was as follows (in thousands):



	Lease
	Incentive
Carrying value as of December 31, 2015	$	—
Warrants granted	59,236
Amortization	(4,506		)
Carrying value as of December 31, 2016	$	54,730

The lease incentive began to amortize in April 2016, with the commencement of certain aircraft leases. Based on vested warrants as of December 31, 2016, the Company expects to record amortization, as a reduction to the lease revenue, of $9.1 million, $9.9 million, $9.9 million, $9.9 million and $6.9 million for each of the next five years ending December 31, 2021.