Goodwill and Other Intangible Assets

Goodwill

The carrying amounts of goodwill, by operating segment, for the years ended December 31, 2018 and 2017 were as follows:



	(In thousands)
	Electronic Systems			Structural Systems		Consolidated Ducommun
Gross goodwill	$	199,157		$	—	$	199,157
Accumulated goodwill impairment	(81,722		)	—		(81,722		)
Balance at December 31, 2017	117,435			—		117,435
Goodwill from acquisition during the period	—			18,622		18,622
Balance at December 31, 2018	$	117,435		$	18,622	$	136,057

We perform our annual goodwill impairment test as of the first day of the fourth quarter. If certain factors occur, including significant under performance of our business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may perform an impairment test prior to the fourth quarter.

In the fourth quarter of 2018, the carrying amount of goodwill at the date of the most recent annual impairment evaluation for Electronic Systems and Structural Systems was $117.5 million and $18.6 million, respectively. As of the date of our 2018 annual evaluation for goodwill impairment, we used a qualitative assessment including 1) margin of passing most recent step 1 analysis, 2) earnings before interest, taxes, depreciation, and amortization, 3) long-term growth rate, 4) analyzing material adverse factors/changes between valuation dates, 5) general macroeconomic factors, and 6) industry and market conditions, noting it was not more likely than not that the fair value of a reporting unit is less than its carrying amount and thus, goodwill was not deemed impaired.

On April 23, 2018, we acquired 100.0% of the outstanding equity interests of CTP for a purchase price of $30.7 million, net of cash acquired. We allocated the gross purchase price of $30.8 million to the assets acquired and liabilities assumed at estimated fair values. The excess of the purchase over the aggregate fair values was recorded as goodwill. See Note 3.

In September 2017, we acquired 100.0% of the outstanding equity interests of LDS for a purchase price of $60.0 million, net of cash acquired. We allocated the gross purchase price of $62.0 million to the assets acquired and liabilities assumed at estimated fair values. The excess of the purchase over the aggregate fair values was recorded as goodwill. See Note 3.

Other intangible assets are related to acquisitions, including CTP, and recorded at fair value at the time of the acquisition. Other intangible assets with finite lives are generally amortized on the straight-line method over periods ranging from 10 to 18 years. Intangible assets are as follows:



		(In thousands)
		December 31, 2018						December 31, 2017
	Wtd. Avg Life (Yrs)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Finite-lived assets
Customer relationships	17	$	187,200	$	77,824	$	109,376	$	180,300	$	67,449	$	112,851
Trade names	13	2,500		193		2,307		1,300		26		1,274
Contract renewal	14	1,845		1,625		220		1,845		1,493		352
Technology	15	400		211		189		400		184		216
Total		$	191,945	$	79,853	$	112,092	$	183,845	$	69,152	$	114,693

The carrying amount of other intangible assets by operating segment as of December 31, 2018 and 2017 was as follows:



	(In thousands)
	December 31, 2018						December 31, 2017
	Gross		Accumulated Amortization		Net Carrying Value		Gross		Accumulated Amortization		Net Carrying Value
Other intangible assets
Electronic Systems	$	164,545	$	62,108	$	102,437	$	164,545	$	52,688	$	111,857
Structural Systems	27,400		17,745		9,655		19,300		16,464		2,836
Total	$	191,945	$	79,853	$	112,092	$	183,845	$	69,152	$	114,693

Amortization expense of other intangible assets was $10.7 million, $9.3 million and $9.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Future amortization expense by operating segment is expected to be as follows:



	(In thousands)
	Electronic Systems		Structural Systems		Consolidated Ducommun
2019	$	9,419	$	1,401	$	10,820
2020	9,348		1,300		10,648
2021	9,287		1,191		10,478
2022	9,288		1,130		10,418
2023	9,287		1,072		10,359
Thereafter	55,808		3,561		59,369
	$	102,437	$	9,655	$	112,092