Goodwill and Other Intangible Assets, Net

12 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, Net

Goodwill

The Company conducts annual goodwill impairment testing at least annually as of June 30, or more often if events, changes or circumstances indicate that the carrying amount may not be recoverable. Two of the Company’s reporting units, Amega West Services (“Amega”) and Specialty Steel Supply (“SSS”), have been significantly impacted by the prolonged weakness in oil and gas drilling and exploration activity driven by depressed oil prices. Given market conditions, depressed customer orders, reporting units results lower than expectation, the Company performed an interim impairment test during the third quarter of fiscal year 2016. In connection with the interim impairment test for Amega and SSS, the Company also performed an interim goodwill impairment test for the Latrobe Distribution reporting unit, for which results have been below expectations for the last several quarters. As a result of the goodwill impairment testing completed in the third quarter of fiscal year 2016, the Company determined that the goodwill associated with Amega and SSS was impaired and recorded an impairment charge of $12.5 million which represents the entire balance of the goodwill recorded for these reporting units. No other impairment was identified at the interim impairment testing date. The Company also performed an annual impairment test as of June 30, 2016 and no additional impairment was identified.

The changes in the carrying amount of goodwill by reportable segment for fiscal years 2016 and 2015 were as follows:



($ in millions)	June 30, 2014			Other			June 30, 2015			Impairment			Other			June 30, 2016
Goodwill	$	292.4		$	(0.3	)	$	292.1		$	—		$	(0.1	)	$	292.0
Accumulated impairment losses	(34.7		)	—			(34.7		)	(12.5		)	—			(47.2		)
Total goodwill	$	257.7		$	(0.3	)	$	257.4		$	(12.5	)	$	(0.1	)	$	244.8

Specialty Alloys Operations	$	195.5		$	—		$	195.5		$	—		$	—		$	195.5
Performance Engineered Products	62.2			(0.3		)	61.9			(12.5		)	(0.1		)	49.3
Total goodwill	$	257.7		$	(0.3	)	$	257.4		$	(12.5	)	$	(0.1	)	$	244.8

The amounts included in “other” in the above table represent foreign exchange impacts on the amounts recorded in goodwill.

Other Intangible Assets, Net



		June 30, 2016							June 30, 2015
($ in millions)	Useful Life (in Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trademarks and trade names	2.5 - 30	$	32.4	$	(20.7	)	$	11.7	$	42.0	$	(29.0	)	$	13.0
Customer relationships	5 - 15	73.0		(22.2		)	50.8		78.2		(21.3		)	56.9
Non-compete agreements	6.5	5.4		(4.7		)	0.7		5.4		(3.7		)	1.7
Contracts	2.9	—		—			—		1.5		(1.5		)	—
Total		$	110.8	$	(47.6	)	$	63.2	$	127.1	$	(55.5	)	$	71.6

As a result of the prolonged weakness in oil and gas drilling and exploration activities and the impact this weakness had on certain reporting units in the PEP segment, the Company recorded an impairment charge of $1.1 million related to definite lived intangible assets during the third quarter or fiscal year 2016.

The Company recorded $7.3 million of amortization expense related to intangible assets during fiscal year 2016, $9.0 million during fiscal year 2015 and $12.2 million during fiscal year 2014. The estimated annual amortization expense related to intangible assets for each of the succeeding five fiscal years is $6.4 million in fiscal year 2017, $6.1 million in fiscal year 2018, $5.9 million in fiscal year 2019, $5.9 million in fiscal year 2020 and $5.9 million in fiscal year 2021.

- 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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