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Goodwill and Other Intangible Assets
 9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually at the reporting unit level. Impairment is the condition that exists when the carrying amount of a reporting unit, including goodwill, exceeds its fair value. Our reportable segments are consistent with our operating segments.
Determining the fair value of a reporting unit requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others. Goodwill and other long-lived assets are reviewed for impairment whenever events, such as significant changes in the business climate, plant closures, changes in product offerings, or other circumstances indicate that the carrying amount may not be recoverable.
To determine fair value, we utilize market-based approaches and an income approach. Under the market-based approaches, we utilize information regarding the Company, as well as publicly available industry information, to determine earnings multiples and sales multiples. Under the income approach, we determine fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn.
In the second quarter of 2020, management applied the quantitative assessment approach in performing its annual evaluation of goodwill and concluded that no impairment provision was required. As part of this evaluation, the Company considered projected cash flows and market multiples for the Company’s Machine Clothing reporting unit and three AEC reporting units. Management performed assessments as to whether the fair value of each reporting unit was less than its carrying value as of June 30, 2020 and concluded that it was more likely than not that each reporting unit’s fair value continued to exceed its carrying value. In addition, there were no amounts at risk due to the estimated spread between the fair and carrying values. Accordingly, no impairment charges were recorded.
We are continuing to amortize certain patents, trade names, customer relationships, customer contracts and technology assets that have finite lives. The gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of September 30, 2020 and December 31, 2019, were as follows:
As of September 30, 2020
Weighted average amortization life
in years
Gross carrying amount
Accumulated amortization
Net carrying amount
(in thousands)
Amortized intangible assets:
AEC Trademarks and trade names
6-15$208 $(148)$60 
AEC Technology
10-156,522 (871)5,651 
AEC Intellectual property
151,250 (68)1,182 
AEC Customer contracts
617,471 (13,110)4,361 
AEC Customer relationships
8-1551,763 (14,768)36,995 
AEC Other intangibles
5322 (290)32 
Total amortized intangible assets
$77,536 $(29,255)$48,281 
Unamortized intangible assets:
MC Goodwill
$69,884 $— $69,884 
AEC Goodwill
114,403 — 114,403 
Total unamortized intangible assets:
$184,287 $— $184,287 
As of December 31, 2019
Weighted average amortization life
in years
Gross carrying amount
Accumulated amortization
Net carrying amount
(in thousands)
Amortized intangible assets:
AEC Trademarks and trade names
6-15$208 $(135)$73 
AEC Technology
10-156,191 (387)5,804 
AEC Intellectual property
151,250 (7)1,243 
AEC Customer contracts
617,471 (10,927)6,544 
AEC Customer relationships
8-1551,255 (12,108)39,147 
AEC Other intangibles
5322 (241)81 
Total amortized intangible assets
$76,697 $(23,805)$52,892 
Unamortized intangible assets:
MC Goodwill
$67,672 $— $67,672 
AEC Goodwill
113,262 — 113,262 
Total unamortized intangible assets:
$180,934 $— $180,934 

The changes in intangible assets, net and goodwill from December 31, 2019 to September 30, 2020, were as follows:
(in thousands)
December 31,
2019
Other
Changes
Amortization
Currency
Translation
September 30,
2020
Amortized intangible assets:
AEC Trademarks and trade names
$73 $— $(13)$— $60 
AEC Technology
5,804 — (480)327 5,651 
AEC Intellectual property
1,243 — (61)— 1,182 
AEC Customer contracts
6,544 — (2,183)— 4,361 
AEC Customer relationships
39,147 329 (2,626)145 36,995 
AEC Other intangibles
81 — (49)— 32 
Total amortized intangible assets
$52,892 $329 $(5,412)$472 $48,281 
Unamortized intangible assets:
MC Goodwill
$67,672 $— $— $2,212 $69,884 
AEC Goodwill
113,262 335 — 806 114,403 
Total unamortized intangible assets:
$180,934 $335 $— $3,018 $184,287 

Estimated amortization expense of intangibles for the years ending December 31, 2020 through 2024, is as follows:
Year
Annual amortization
(in thousands)
2020$7,200 
20217,100 
20224,900 
20234,200 
20244,200