Goodwill and Other Intangibles, Net

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

A reconciliation of the change in the carrying value of goodwill by reportable segment is as follows:



	June 30, 2015
	Diversified			Energy			Corporate		Total
Balance at beginning of year
Gross Goodwill	$	26,299		$	64,790		$	81	$	91,170
Accumulated impairments	—			(45,219		)	—		(45,219		)
Net Goodwill	26,299			19,571			81		45,951
Acquisitions (a)	50,392			—			—		50,392
Impairment	—			—			—		—
Currency translation adjustment	(22		)	—			—		(22		)
Other adjustments	—			—			—		—
Balance at end of period
Gross Goodwill	76,669			64,790			81		141,540
Accumulated impairments	—			(45,219		)	—		(45,219		)
Net Goodwill	$	76,669		$	19,571		$	81	$	96,321

(a) Goodwill from acquisitions relates to HNH's acquisition of ITW and the acquisitions of CoSine and API. These balances are subject to adjustment during the finalization of the purchase price allocation for these acquisitions. For additional information, see Note 2 - "Acquisitions".

The Company performs its annual goodwill impairment test during the fourth quarter of each year, and more frequently if an event occurs or circumstances change to indicate that an impairment may have occurred. The Energy segment's recent projections reflected a decline in the projected operating income for 2015 as a result of the continuing weakness in the oil services industry and the specific adverse effects experienced in 2015. This decline in projected operating income resulted in the need to perform a goodwill impairment test for the Energy segment during the second quarter of 2015. The fair value of the Energy segment was determined based on a valuation using a combination of the income approach (discounted cash flows) and the market approach (guideline public companies and guideline transaction method). The fair value of the Energy segment exceeded its carrying value, resulting in no impairment of goodwill in the period.



	December 31, 2014
	Diversified			Energy			Corporate		Total
Balance at beginning of year
Gross Goodwill	$	26,260		$	64,790		$	81	$	91,131
Accumulated impairments	—			(3,769		)	—		(3,769		)
Net Goodwill	26,260			61,021			81		87,362
Acquisitions	—			—			—		—
Impairment	—			(41,450		)	—		(41,450		)
Currency translation adjustment	(37		)	—			—		(37		)
Other adjustments (a)	76			—			—		76
Balance at end of period
Gross Goodwill	26,299			64,790			81		91,170
Accumulated impairments	—			(45,219		)	—		(45,219		)
Net Goodwill	$	26,299		$	19,571		$	81	$	45,951

(a) Represents final purchase price allocation adjustments, including a final working capital adjustment, associated with the HNH acquisition of W.P. Hickman Company.

A summary of Other intangible assets, net is as follows:



	June 30, 2015						December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	133,152	$	34,947	$	98,205	$	113,952	$	29,726	$	84,226
Trademarks	34,154		6,960		27,194		28,803		5,856		22,947
Patents and technology	16,907		6,715		10,192		16,773		6,023		10,750
Other	6,804		2,103		4,701		2,426		1,799		627
	$	191,017	$	50,725	$	140,292	$	161,954	$	43,404	$	118,550

Trademarks with indefinite lives as of June 30, 2015 and December 31, 2014 were $8,020. Amortization expense related to intangible assets was $4,005 and $3,383 for the three months ended June 30, 2015 and 2014, respectively, and 7,352 and $6,877 for the six months ended June 30, 2015 and 2014, respectively.

Other intangible assets as of June 30, 2015 also include $4,400 in intangible assets, primarily unpatented technology, associated with HNH's ITW acquisition. This balance is subject to adjustment during the finalization of the purchase price allocation for the ITW acquisition.

- 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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