Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Goodwill is related to our acquisitions of the Chandler, Arizona (Extrusion) facility and the Florence, Alabama facility and is included in the Fabricated Products segment. The carrying value of our goodwill was $18.8 million as of December 31, 2017 and $37.2 million at both the beginning and the end of the year ended December 31, 2016. The carrying value as of December 31, 2017 included accumulated impairment of $18.4 million. There was no accumulated impairment reflected in the carrying values at both the beginning and the end of the year ended December 31, 2016.

Several factors identified in a qualitative review in the quarter ended June 30, 2017 indicated that long-term demand for hard alloy extruded shapes produced at the Chandler, Arizona (Extrusion) facility was less than previously assumed. Such factors included: (i) reduced build rates of wide body commercial aircraft; (ii) continued low build rates for business jets; and (iii) additional substitution away from hard alloy extruded shapes in favor of composites, titanium and/or aerospace aluminum plate in the manufacture of commercial aircraft. After testing for goodwill impairment applying Level 3 inputs and a combination of an income approach using the estimated discounted cash flow and a market-based valuation methodology, we impaired the carrying value of the goodwill related to our Chandler, Arizona (Extrusion) facility by $18.4 million as of June 30, 2017. As this goodwill is deductible for income tax purposes, the deferred tax effects were included in the impairment charge and income tax provision.

During our annual goodwill impairment test in the quarter ending December 31, 2017, we performed a quantitative impairment test and determined that no additional impairment of our goodwill was required.

Intangible Assets. In 2017 and 2016, our identifiable intangible assets related to acquired finite-lived customer relationships. Information regarding the gross carrying amount and accumulated amortization of these intangible assets was as follows as of each period presented:



	December 31, 2017			December 31, 2016
	(In millions of dollars)
Gross carrying amount	$	34.7		$	34.7
Accumulated amortization	(9.7		)	(8.3		)
Net carrying amount	$	25.0		$	26.4

We recorded a $2.6 million non-cash impairment charge within Other operating charges, net during the quarter ended September 30, 2016 due to the loss of a customer. We identified no other indicators of impairment associated with the remainder of our intangible assets during the years ended December 31, 2017, December 31, 2016 or December 31, 2015.

Amortization expense relating to definite-lived intangible assets is recorded in the Fabricated Products segment over a weighted-average useful life of 25 years. Such expense was $1.4 million for 2017, $1.5 million for 2016, and $1.6 million for 2015. The expected amortization of intangible assets for each of the next five calendar years is $1.4 million and $18.0 million for years thereafter.

- 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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