Goodwill and Long-Lived Assets

Gross and net carrying amounts of goodwill at December 31, 2018 and 2017 were as follows:



In thousands	Performance Materials		Technical Nonwovens		Thermal Acoustical Solutions			Totals
Goodwill	$	13,307	$	55,662	$	12,160		$	81,129
Accumulated amortization/impairment	—		—		(12,160		)	(12,160		)
Balance at December 31, 2017	13,307		55,662		—			68,969
Goodwill	144,626		52,337		12,160			209,123
Accumulated amortization/impairment	—		—		(12,160		)	(12,160		)
Balance at December 31, 2018	$	144,626	$	52,337	$	—		$	196,963

The changes in the carrying amounts of goodwill in 2018 and 2017 were as follows:



In thousands	Performance Materials			Technical Nonwovens			Totals
Balance at January 1, 2017	$	12,777		$	50,829		$	63,606
Goodwill addition	—			323			323
Currency translation adjustment	530			4,510			5,040
Balance at December 31, 2017	13,307			55,662			68,969
Goodwill addition	131,509			—			131,509
Currency translation adjustment	(190		)	(3,325		)	(3,515		)
Balance at December 31, 2018	$	144,626		$	52,337		$	196,963

Goodwill Associated with Acquisitions and Divestitures

The additional goodwill of $131.5 million in 2018 within the Performance Materials segment results from the two acquisitions completed in the third quarter of 2018. The Interface acquisition accounted for $131.0 million of the $131.5 million increase. The amount allocated to goodwill is reflective of the benefits the Company expects to realize from the expansion of the Company's engineered materials offering, new product development and Interface's assembled workforce. None of the goodwill associated with the Interface acquisition is expected to be deductible for income tax purposes.

The additional goodwill of $0.3 million in 2017 within the Technical Nonwovens segment is the result of the final post-closing adjustments related to the acquisition of Gutsche on December 31, 2016.

Goodwill Impairment Testing

During the fourth quarter of 2018, the Company performed its annual impairment analysis of the $144.6 million of goodwill in the Performance Materials reporting unit (PM reporting unit) and $52.3 million in the Technical Nonwovens reporting unit (TNW reporting unit). The Company used the qualitative method to analyze the goodwill for the PM reporting unit by considering capital markets environment, economic conditions, industry trends, results of operations, and other factors. The Company also considered changes in assumptions used in the Company's most recent quantitative annual testing, including results of operations, the magnitude of excess of fair value over carrying value and other factors. As a result of this qualitative analysis, the Company concluded that the PM reporting unit's fair value more likely than not exceeds its carrying value and as a result, the two-step impairment assessment is not required to be completed.

To periodically supplement historical qualitative assessments, the Company also performed the two-step impairment test for the TNW reporting unit. In performing step one of the impairment analysis, a quantitative valuation of the fair value of the reporting unit was completed utilizing both an income approach and a market approach. The income approach involved determining the present value of future cash flows from the TNW reporting unit's projected financial results for 2019-2021 and the projected cash flows beyond that three year period computed as the terminal value. The Company believes the income approach was appropriate because it provided a fair value estimate based upon the reporting unit's expected long-term operations and cash flow performance.

In applying the market approach, valuation multiples were derived from historic operating data of selected guideline companies, which were evaluated and adjusted, if necessary. The valuation multiples were then applied to the appropriate operating data of the TNW reporting unit to arrive at an indication of fair value. The Company believes the market approach was appropriate because it provided a fair value using multiples from companies with operations and economic characteristics similar to the TNW reporting unit.

As a result of the step-one quantitative assessment, the Company concluded that the TNW reporting unit had a fair value in excess of its carrying value and as a result, step two of the impairment test was not required.

Other Intangible Assets

The table below presents the gross carrying amount and, as applicable, the accumulated amortization of the Company’s acquired intangible assets other than goodwill included in “Other intangible assets, net” in the Consolidated Balance Sheets as of December 31, 2018 and 2017:



	December 31, 2018					December 31, 2017
In thousands	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets
Customer relationships	$	141,455	$	(11,453	)	$	39,474	$	(4,460	)
Patents	4,333		(3,816		)	4,504		(3,821		)
Technology	2,500		(810		)	2,500		(644		)
Trade names	7,235		(2,840		)	4,288		(1,461		)
License agreements	619		(619		)	640		(640		)
Other	561		(561		)	586		(423		)
Total amortized intangible assets	$	156,703	$	(20,099	)	$	51,992	$	(11,449	)

In connection with the acquisition of Interface on August 31, 2018, the Company recorded intangible assets of $106.9 million, which included $103.7 million of customer relationships and $3.2 million of trade names. As of December 31, 2018, the weighted average useful lives of Interface's intangible assets was 12 years.

Amortization of all intangible assets for the years ended December 31, 2018, 2017, and 2016 was $9.3 million, $4.5 million, and $1.5 million, respectively. Estimated amortization expense for intangible assets is expected to be $21.4 million, $20.8 million, $16.4 million, $14.4 million and $12.7 million for each of the years ending December 31, 2019 through 2023 and thereafter, respectively. As of December 31, 2018, the weighted average useful life of intangible assets was approximately 11 years.

Impairment of Long-Lived Assets

During the first quarter of 2017, the Company tested for impairment a discrete long-lived asset group in the Performance Materials segment with a carrying value of $1.3 million, as a result of indicators of possible impairment. To determine the recoverability of this asset group, the Company completed an undiscounted cash flow analysis and compared it to the asset group carrying value. This analysis was primarily dependent on the expectations for net sales over the estimated remaining useful life of the underlying asset group. The impairment test concluded that the asset group was not recoverable as the resulting undiscounted cash flows were less than their carrying amount. Accordingly, the Company determined the fair value of the asset group to assess if there was an impairment. Determining fair value is judgmental in nature and requires the use of significant estimates and assumptions considered to be Level 3 inputs. To determine the estimated fair value of the asset group the Company used the market approach. Under the market approach, the determination of fair value considered market conditions including an independent appraisal of the components of the asset group. The estimated fair value of the asset group was $0.5 million, below its carrying value of $1.3 million, which resulted in a long-lived asset impairment charge of $0.8 million included in selling, product development and administrative expenses during 2017.