Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

8. Goodwill and Other Intangible Assets

Accounting Standards Codification ("ASC") 350, “Intangibles - Goodwill and Other Intangibles” provides guidance on an entity's subsequent measurement and subsequent recognition of goodwill and other intangibles, including subsequent changes to carrying amounts, including impairment and fair value adjustments. In accordance with the guidance set forth in ASC 350, and in connection with the separation of Apergy, the Company was required to calculate the portion of goodwill included in the Apergy distribution. Using a relative fair value approach, the Company reallocated $3,546 of goodwill from a reporting unit that included Apergy to a reporting unit now included within the Engineered Systems segment. Refer to See Note 17 —Segment Information for further information.

Further, the Company realigned its remaining businesses and reallocated goodwill among its reporting units based on their relative fair value and tested goodwill for impairment in the second quarter of 2018. The Company concluded that no impairment indicators exist.

The changes in the carrying value of goodwill by reportable operating segments were as follows:



	Engineered Systems			Fluids			Refrigeration & Food Equipment			Total
Balance at December 31, 2017	$	1,645,389		$	1,504,284		$	536,699		$	3,686,372
Reallocation due to Apergy separation	3,546			—			—			3,546
Acquisitions	—			36,070			10,402			46,472
Purchase price adjustments	44			—			—			44
Foreign currency translation	(9,596		)	(10,950		)	(523		)	(21,069		)
Balance at June 30, 2018	$	1,639,383		$	1,529,404		$	546,578		$	3,715,365

During the six months ended June 30, 2018, the Company recorded additions of $46,472 to goodwill as a result of the acquisitions discussed in Note 4 — Acquisitions. The net goodwill transferred to Apergy on May 9, 2018 amounted to $899,888.

The Company’s definite-lived and indefinite-lived intangible assets by major asset class were as follows:



	June 30, 2018						December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:
Customer intangibles	$	1,413,880	$	604,476	$	809,404	$	1,405,361	$	559,447	$	845,914
Trademarks	217,126		65,392		151,734		217,621		58,523		159,098
Patents	145,059		125,950		19,109		145,577		123,135		22,442
Unpatented technologies	157,161		78,745		78,416		152,913		71,284		81,629
Distributor relationships	85,145		35,235		49,910		85,794		32,092		53,702
Drawings & manuals	32,522		22,182		10,340		32,739		20,767		11,972
Other	28,105		15,152		12,953		23,095		12,028		11,067
Total	2,078,998		947,132		1,131,866		2,063,100		877,276		1,185,824
Unamortized intangible assets:
Trademarks	96,739		—		96,739		96,800		—		96,800
Total intangible assets, net	$	2,175,737	$	947,132	$	1,228,605	$	2,159,900	$	877,276	$	1,282,624

Amortization expense was $36,356 and $37,844, respectively, including acquisition-related intangible amortization of $35,945 and $37,295 for the three months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018 and 2017, amortization expense was $72,817 and $75,479, respectively, including acquisition-related intangible amortization of $71,834 and $74,398, respectively.

- 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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