Goodwill and Intangibles

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Intangible Assets

The Company’s gross carrying amount and accumulated impairments of goodwill consist of the following as of December 31, 2017 and 2016:



	2017										2016
	Gross Carrying Amount		Accumulated Impairments			Accumulated Foreign Currency Translation			Net Book Value		Gross Carrying Amount		Accumulated Impairments			Accumulated Foreign Currency Translation			Net Book Value
Epoxy, Phenolic and Coating Resins	$	111	$	(70	)	$	1		$	42	$	111	$	(57	)	$	—		$	54
Forest Products Resins	81		—			(10		)	71		81		—			(14		)	67
Total	$	192	$	(70	)	$	(9	)	$	113	$	192	$	(57	)	$	(14	)	$	121

The changes in the net carrying amount of goodwill by segment for the years ended December 31, 2017 and 2016 are as follows:



	Epoxy, Phenolic and Coating Resins			Forest Products Resins			Total
Goodwill balance at December 31, 2015	$	54		$	68		$	122
Foreign currency translation	—			(1		)	(1		)
Goodwill balance at December 31, 2016	54			67			121
Goodwill impairment	(13		)	—			(13		)
Foreign currency translation	1			4			5
Goodwill balance at December 31, 2017 ⁽¹⁾	$	42		$	71		$	113


(1)	Includes $1 of goodwill related to the ATG Business, within the Forest Products Resins segment, included in “Long-term assets held for sale” in the Consolidated Balance Sheets.

In 2017, the Company lowered its forecast of estimated earnings and cash flows for its oilfield business from those previously projected, and indefinitely idled a manufacturing facility within its oilfield business. This was due to the slower than previously assumed recovery in the oil and gas market. As of September 30, 2017, the estimated fair value of the Company’s oilfield reporting unit was less than the carrying value of the net assets of the reporting unit. In estimating the fair value of the oilfield reporting unit, the Company relied solely on a discounted cash flow model income approach. This was due to the Company’s belief that the reporting unit’s EBITDA, a key input under the market approach, was not representative and consistent with the reporting unit’s historical performance and long-term outlook and, therefore, was not consistent with assumptions that a market participant would use in determining the fair value of the reporting unit. When the fair value of the reporting unit was determined, an impairment charge was recognized for the amount by which the carrying amount of oilfield’s net assets exceeded its fair value. As such, the entire oilfield reporting unit’s goodwill balance of $13 was impaired during the third quarter of 2017, and the Company recognized a goodwill impairment charge of $13 in its Epoxy, Phenolic and Coating Resins segment, which is included in “Asset impairments” in the Consolidated Statements of Operations. Significant unobservable inputs in the discounted cash flow analysis included projected long-term future cash flows, projected growth rates and discount rates associated with this reporting unit. Future projected long-term cash flows and growth rates were derived from models based upon forecasts prepared by the Company’s management. These projected cash flows were discounted using a rate of 13.5%.

The Company’s intangible assets with identifiable useful lives consist of the following as of December 31, 2017 and 2016:



	2017										2016
	Gross Carrying Amount		Accumulated Impairments			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairments			Accumulated Amortization			Net Book Value
Patents and technology	$	112	$	—		$	(97	)	$	15	$	112	$	—		$	(91	)	$	21
Customer lists and contracts	109		(17		)	(79		)	13		109		(17		)	(75		)	17
Other	25		—			(11		)	14		25		—			(11		)	14
Total	$	246	$	(17	)	$	(187	)	$	42	$	246	$	(17	)	$	(177	)	$	52

The impact of foreign currency translation on intangible assets is included in accumulated amortization.

Total intangible amortization expense for the years ended December 31, 2017, 2016 and 2015 was $12, $12 and $13, respectively.

Estimated annual intangible amortization expense for 2018 through 2022 is as follows:



2018	$	15
2019	6
2020	6
2021	2
2022	2

- 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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