Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

At December 31, 2015, the Company had $651.4 million of goodwill on its consolidated balance sheet, all of which relates to the High Performance Materials & Components segment. Goodwill decreased $129.0 million in 2015, resulting from a $126.6 million impairment charge in the Flat Rolled Products segment and $2.6 million from the impact of foreign currency translation on goodwill denominated in functional currencies other than the U.S. dollar, partially offset by $0.2 million for final purchase accounting adjustments for the Hanard acquisition.

The Company performs its annual goodwill impairment evaluations in the fourth quarter of each year. Quantitative goodwill assessments were performed for all reporting units in 2015. As a result of these assessments, the Company determined that the fair value of the Flat Rolled Products business was below carrying value, including goodwill. During the fourth quarter of 2015, the Company recorded a $126.6 million pre-tax impairment charge to write-off all the goodwill in the Flat Rolled Products segment. This was due to challenging market conditions in 2015 in this business, primarily impacting commodity stainless flat-rolled products. Fourth quarter 2015 market conditions continued to deteriorate in this business due in large part to a surge of imports into the U.S. market, and excess North American and global capacities for commodity stainless steel sheet. Base-selling prices for commodity stainless steel sheet products fell throughout 2015 and reached historic lows in December. In addition, weakness continued in the oil & gas/chemical & hydrocarbon processing industry market, which has been the largest end market for the Flat Rolled Products business. Restructuring actions were initiated in December 2015 in the Flat Rolled Products business in response to these market conditions and outlook, including announced idling of various operations (see Note 17). This goodwill impairment charge was excluded from the Flat Rolled Products business segment results.

No goodwill impairments were determined to exist for the year ended December 31, 2015 for all other reporting units with goodwill. In order to validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization was performed using a reasonable control premium. No goodwill impairments were determined to exist for the years ended December 31, 2014 and 2013. Accumulated impairment losses as of December 31, 2015 were $126.6 million.

Other intangible assets, which are included in Other assets on the accompanying consolidated balance sheets as of December 31, 2015 and 2014 were as follows:



		December 31, 2015					December 31, 2014
(in millions)	Weighted Average Useful life (years)	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
Technology	21	$	91.4	$	(18.6	)	$	91.4	$	(14.2	)
Customer relationships	24	35.7		(6.2		)	35.7		(4.7		)
Trademarks	15	64.6		(8.6		)	64.6		(4.3		)
Total amortizable intangible assets		191.7		(33.4		)	191.7		(23.2		)

Amortization expense from continuing operations related to intangible assets was approximately $10.0 million for the years ended December 31, 2015 and 2014. For each of the years ending December 31, 2016 through 2020, annual amortization expense is expected to be approximately $10.0 million.

- 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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