Goodwill and Other Intangible Assets, Net

12 Months Ended

Jun. 30, 2014

Goodwill and Other Intangible Assets, Net

Goodwill and Other Intangible Assets, Net

7. Goodwill and Other Intangible Assets, Net

Goodwill

Historically, the Company has conducted its annual goodwill impairment test as of June 30 for its reporting units, other than the reporting units acquired in connection with the Latrobe Acquisition (Latrobe Manufacturing, Latrobe Distribution and Specialty Steel Supply (“SSS”), which were tested for impairment annually as of February 28. In the fourth quarter of fiscal year 2014, the Company changed the annual impairment testing date for the Latrobe Distribution and SSS reporting units to June 30, which was considered a change in accounting principle. The change to the goodwill impairment testing date is preferable. The change in accounting principle did not accelerate, delay or cause a goodwill impairment charge. In addition, to reflect the continued integration of the Latrobe Manufacturing operations into the Company’s SAO segment the discrete financial information at the Latrobe Manufacturing level ceased to be available during the fourth quarter of fiscal year 2014; therefore, effective April 1, 2014, the SAO segment is the reporting unit for goodwill impairment testing purposes. The Company performed a goodwill impairment test for the SAO segment at June 30, 2014. As a result of the change in the annual impairment testing date, goodwill was also tested for impairment at the Latrobe Distribution and SSS reporting units at June 30, 2014. As a result of the impairment testing completed as of June 30, 2014 and February 28, 2014, the Company has determined that there was no goodwill impairment.

The changes in the carrying amount of goodwill by reportable segment for fiscal years 2014 and 2013 were as follows:

($ in millions)	June 30, 2012			Other			June 30, 2013			Other		June 30, 2014

Goodwill	$	295.2		$	(2.8	)	$	292.4		$	—	$	292.4
Accumulated impairment losses	(34.7		)	—			(34.7		)	—		(34.7		)
Total goodwill	$	260.5		$	(2.8	)	$	257.7		$	—	$	257.7

Specialty Alloys Operations	$	202.9		$	(7.4	)	$	195.5		$	—	$	195.5
Performance Engineered Products	57.6			4.6			62.2			—		62.2
Total goodwill	$	260.5		$	(2.8	)	$	257.7		$	—	$	257.7

The amounts included in “other” in the above table represent adjustments to amounts recorded in goodwill associated with the fiscal year 2012 Latrobe acquisition to reflect the final purchase price allocation that was completed during fiscal year 2013.

Other Intangible Assets, Net

		June 30, 2014							June 30, 2013
($ 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	$	42.0	$	(27.2	)	$	14.8	$	42.0	$	(22.1	)	$	19.9
Customer relationships	5 - 15	78.2		(15.2		)	63.0		78.2		(9.4		)	68.8
Non-compete agreements	6.5	5.4		(2.9		)	2.5		5.4		(2.1		)	3.3
Contracts	2.9	1.5		(1.2		)	0.3		3.7		(0.7		)	3.0
Total		$	127.1	$	(46.5	)	$	80.6	$	129.3	$	(34.3	)	$	95.0

Carpenter recorded $12.2 million of amortization expense related to intangible assets during fiscal year 2014, $12.2 million during fiscal year 2013 and $6.2 million during fiscal year 2012. The estimated annual amortization expense related to intangible assets for each of the succeeding five fiscal years is $8.8 million in fiscal year 2015, $7.4 million in fiscal year 2016, $6.8 million in fiscal year 2017, $6.0 million in fiscal year 2018 and $6.0 million in fiscal year 2019.

- 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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