Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Assets Acquired

The Company acquired a license in 2014 with a cost of $0.3 million with a weighted-average amortization period of 8.5 years. The Company incurred $1.6 million for deferred financing costs associated with new debt agreements in 2013 with a weighted-average amortization period of 4.8 years.

Assets Subject to Amortization

The cost, accumulated amortization, and net book value of intangible assets subject to amortization as of December 31, 2014 and 2013, and the aggregate amortization expense for each year then ended is as follows:



(Thousands)	2014			2013
Deferred financing costs
Cost	$	7,794		$	7,794
Accumulated amortization	(5,302		)	(4,507		)
Net book value	2,492			3,287
Customer relationships
Cost	38,427			38,427
Accumulated amortization	(26,544		)	(22,624		)
Net book value	11,883			15,803
Technology
Cost	12,092			12,092
Accumulated amortization	(8,594		)	(7,626		)
Net book value	3,498			4,466
License
Cost	2,755			2,480
Accumulated amortization	(2,096		)	(1,828		)
Net book value	659			652
Trade Name
Cost	62			62
Accumulated amortization	(35		)	(22		)
Net book value	27			40
Total
Cost	$	61,130		$	60,855
Accumulated amortization	(42,571		)	(36,607		)
Net book value	$	18,559		$	24,248
Aggregate amortization expense	$	5,964		$	6,208

The aggregate amortization expense is estimated to be $5.8 million in 2015, $5.1 million in 2016, $4.6 million in 2017, $1.8 million in 2018, and $0.6 million in 2019.

Assets Not Subject to Amortization

The Company’s only intangible asset not subject to amortization is goodwill. A reconciliation of the goodwill activity for 2014 and 2013 is as follows:



(Thousands)	2014		2013
Balance at the beginning of the year	$	86,725	$	88,753
Adjustment	—		(2,028		)
Balance at the end of the year	$	86,725	$	86,725

In connection with a change in the Company's operating segments as described in Note M , the Company reassigned goodwill based on relative fair value. Goodwill totaling $46.6 million has been assigned to the Advanced Materials segment. Within the Precision Coatings group, goodwill of $17.6 million and $20.6 million has been assigned to the Precision Optics and Large Area Coatings operating segments, respectively. The remaining $1.9 million has been assigned to the Beryllium reporting unit within the Performance Alloys and Composites segment.

In the third quarter of 2014, the Company recorded an adjustment of $2.0 million to increase deferred tax assets and reduce goodwill to correct the amount of deferred tax assets recognized in connection with the acquisition of EIS Optics Limited in 2011, which is included in the Other segment. This adjustment was not material to previously issued financial statements as it had no net impact on total assets, equity, or cash flows and had an immaterial impact in the Consolidated Statements of Income. The Company has reflected this adjustment in the accompanying 2013 Consolidated Balance Sheet.

- 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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