Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE I—GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill (in thousands) by business segment consisted of the following:



	Oil & Gas Proppants Segment			Industrial & Specialty Products Segment		Total
Balance at December 31, 2017	247,467			24,612		272,079

MS Sand acquisition measurement period adjustment	2,800			—		2,800
EPMH acquisition and measurement period adjustment	—			150,628		150,628
Oil & Gas Sand impairment	(164,167		)	—		(164,167		)

Goodwill	250,267			175,240		425,507
Impairment losses	(164,167		)	—		(164,167		)
Balance at December 31, 2018	86,100			175,240		261,340

EPMH acquisition measurement period adjustment	—			12,184		12,184
Balance at December 31, 2019	$	86,100		$	187,424	$	273,524

Goodwill and trade names are evaluated for impairment annually as of October 31, or more frequently when indicators of impairment exist. We evaluated events and circumstances since the date of our last qualitative assessment, including macroeconomic conditions, industry and market conditions, and our overall financial performance. After assessing the totality of the events and circumstances, we determined that it was not more likely than not that the fair value of our reporting units was less than their carrying amount and no impairment existed related to goodwill or trade names as of December 31, 2019.

During 2018, subsequent to our annual impairment test, we experienced a declining shift in demand for Northern White sand caused by some of our customers shifting to local in-basin frac sands with lower logistics costs. Our largest customer at our Voca, Texas plant did not renew their contract, instead opting to sign a new contract with us for local in-basin frac sand. Additionally, Northern White Sand operations and reserves in Fairchild, Wisconsin and Peru, Illinois experienced a similar significant fourth quarter decline in demand due to customers' shift to local in-basin sand closer to their operations.

As a result of these triggering events, we performed a quantitative analysis and determined that the goodwill of our Oil & Gas Sand reporting unit was impaired. We recognized goodwill impairment charges of $164.2 million and intangible asset impairment charges related to trade names of $4.5 million during the fourth quarter of 2018. These impairment charges were recorded in the "Goodwill and other asset impairments" caption of our Consolidated Statements of Operations. The fair value of our reporting units was determined using a combination of the discounted cash flow method and the market multiples approach.

The changes in the carrying amount of intangible assets (in thousands) consisted of the following:



	December 31, 2019										December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Impairments			Net		Gross Carrying Amount		Accumulated Amortization			Impairments			Net

Technology and intellectual property	$	86,183	$	(17,080	)	—			$	69,103	$	83,616	$	(11,168	)	—			$	72,448
Customer relationships	68,599		(18,737		)	$	(1,240	)	48,622		68,664		(13,826		)	—			54,838
Total definite-lived intangible assets:	$	154,782	$	(35,817	)	$	(1,240	)	$	117,725	$	152,280	$	(24,994	)	$	—		$	127,286
Trade names	65,390		—			—			65,390		71,118		—			(4,478		)	66,640
Other	700		—			—			700		700		—			—			700
Total intangible assets:	$	220,872	$	(35,817	)	$	(1,240	)	$	183,815	$	224,098	$	(24,994	)	$	(4,478	)	$	194,626

We recorded a $1.2 million impairment of customer relationships and a $4.5 million impairment of trade names as of December 31, 2019 and 2018, respectively, in the Oil & Gas Segment. These impairment charges were recorded in the "Goodwill and other asset impairments" caption of our Consolidated Statements of Operations. See Note Z - Impairments for additional information.

Estimated useful life of technology and intellectual property is 15 years. Estimated useful life of customer relationships is a range of 13 - 15 years.

During the first quarter of 2019, measurement period adjustments related to the Company's EPMH acquisition decreased the gross carrying amounts of the technology and intellectual property by $1.5 million and the trade names by $1.3 million. See Note E - Business Combinations.

Amortization expense was $10.8 million, $9.7 million and $8.8 million for the years ended December 31, 2019, 2018, and 2017, respectively.

The estimated amortization expense related to definite-lived intangible assets (in thousands) for the five succeeding years is as follows:



2020	$	10,863
2021	10,861
2022	10,846
2023	10,841
2024	10,843