Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill:

The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company as of and for the period ended September 30, 2022:


	Industrial		Aerospace		Total Company
December 31, 2021	$	924,584	$	30,786	$	955,370



Impairment charge	(68,194)		—		(68,194)
Foreign currency translation	(102,224)		—		(102,224)
September 30, 2022	$	754,166	$	30,786	$	784,952

As of April 1, 2022, management performed its annual impairment testing of goodwill. The Company utilizes the option to first assess qualitative factors to determine whether it is necessary to perform the Step 1 quantitative goodwill impairment test in accordance with applicable accounting standards. Under the qualitative assessment, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market considerations, overall reporting unit performance and events directly affecting a reporting unit. If the Company determines that the Step 1 quantitative impairment test is required, management estimates the fair value of the reporting unit primarily using an income approach, which reflects management’s cash flow projections, and also evaluates the fair value using a market approach. Inherent in management’s development of cash flow projections are assumptions and estimates, including those related to future earnings and growth rates and the weighted average cost of capital. The Company compares the fair value of the reporting unit with the carrying value of the reporting unit. If the fair values were to fall below the carrying values, the Company would recognize a

non-cash impairment charge to income from operations for the amount by which the carrying amount of any reporting unit exceeds the reporting unit’s fair value, assuming the loss recognized does not exceed the total amount of goodwill for the reporting unit.

Based on our assessment as of April 1, the estimated fair value of the Automation reporting unit, which represents the 2018 acquisition of Gimatic, exceeded its carrying value, while the estimated fair value of each of the remaining reporting units significantly exceeded their carrying values. The Company evaluated deteriorating macro-economic conditions subsequent to the date of the assessment, including inflationary pressures, rising interest rates, worsening global supply chain constraints and demand outlook, which materialized during the second quarter of 2022, which impacted performance and outlook at Automation and resulted in a triggering event. Management revised its cash flow projections and weighted average cost of capital, resulting in a non-cash goodwill impairment charge of $68,194 related to the Automation reporting unit as the estimated fair value of the reporting unit declined below its carrying value. The goodwill impairment charge was recorded during the three-month period ended June 30, 2022.

Based on our second quarter assessments and as noted above, the estimated fair value for each of the remaining reporting units significantly exceeded their carrying values, and there was no impairment at any other reporting units in 2022.

The Company has continued to evaluate the macro-economic conditions, as described above, during the third quarter of 2022. Based on our third quarter assessment, there was no impairment of goodwill as of September 30, 2022.

Other Intangible Assets:

Other intangible assets consisted of:


		September 30, 2022				December 31, 2021
	Range of Life -Years	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Amortized intangible assets:
Revenue Sharing Programs (RSPs)	Up to 30	$	299,500	$	(161,413)	$	299,500	$	(151,961)
Component Repair Programs (CRPs)	Up to 30	111,839		(40,113)		111,839		(35,632)
Customer relationships	10-16	337,189		(151,866)		337,189		(137,856)
Patents and technology	4-11	123,433		(91,211)		123,433		(86,002)
Trademarks/trade names	10-30	10,949		(10,727)		10,949		(10,587)
Other	Up to 10	8,851		(2,698)		7,450		(2,072)
		891,761		(458,028)		890,360		(424,110)
Unamortized intangible assets:
Trade names		55,670		—		55,670		—
Foreign currency translation		(52,720)		—		(21,674)		—
Other intangible assets		$	894,711	$	(458,028)	$	924,356	$	(424,110)

Amortization of intangible assets for the three and nine month periods ended September 30, 2022 was $11,747 and $33,918, respectively. Amortization of intangible assets for the three and nine month periods ended September 30, 2021 was $11,372 and $32,271, respectively. Estimated amortization of intangible assets for future periods is as follows: 2022 (remainder) - $13,000; 2023 - $48,000; 2024 - $46,000; 2025 - $45,000; 2026 - $45,000 and 2027 - $44,000.

In the second quarter of 2022, management performed its annual impairment testing of its trade names, which are indefinite-lived intangible assets. Based on this assessment, there were no impairments.