Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangible Assets [Abstract]

10. Goodwill and Other Intangible Assets

Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually. 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. Our reporting units 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 a market-based approach and an income approach. Under the market-based approach, 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.

We completed our 2011 annual evaluation of goodwill for our Paper Machine Clothing reporting unit in the second quarter of 2011. Our assessment of goodwill impairment indicated that the fair value of the reporting unit exceeded its carrying value and therefore no impairment provision was required. In addition, the reporting unit was not at risk due to the large spreads between the fair and carrying values.

We are continuing to amortize certain patents, trade names, customer contracts and technology assets that have finite lives. The changes in intangible assets and goodwill from January 1, 2010 to December 31, 2011, were as follows:

	Balance at					Currency			Balance at
(in thousands)	December 31, 2010		Amortization			Translation			December 31, 2011
Amortized intangible assets:
Paper Machine Clothing technology rights		$222		($231	)		$9		$	-
AEC trade names		48		(5	)		-			43
AEC customer contracts		1,055		(247	)		-			808
AEC technology		253		(25	)		-			228
Total amortized intangible assets		$1,578		($508	)		$9			$1,079
Unamortized intangible assets:
Goodwill		$77,196	$	-			($1,727	)		$75,469

	Balance at					Currency			Balance at
(in thousands)	December 31, 2009		Amortization			Translation			December 31, 2010
Amortized intangible assets:
Paper Machine Clothing technology rights		$605		($339	)		($44	)		$222
AEC trade name		53		(5	)		-			48
AEC customer contracts		1,481		(426	)		-			1,055
AEC technology		278		(25	)		-			253
Total amortized intangible assets		$2,417		($795	)		($44	)		$1,578
Unamortized intangible assets:
Goodwill		$81,375	$	-			($4,179	)		$77,196

As of December 31, 2011, the balance of goodwill was $75.5 million and was completely attributable to our Paper Machine Clothing reportable segment.

Estimated amortization expense of intangibles for the years ending December 31, 2012 through 2016, is as follows:

		Annual amortization
Year		(in thousands)
2012		$231
2013		231
2014		231
2015		231
2016		29

- 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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