Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

The Company tests goodwill and indefinite-lived intangible assets for impairment at least annually. The Company performs its annual impairment test as of October 1 after the annual forecasting process is completed. Furthermore, goodwill and indefinite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company reviews goodwill for impairment at the reporting unit level. The Mobile Industries segment has three reporting units and the Process Industries segment has two reporting units.

Changes in the carrying value of goodwill were as follows:

Year ended December 31, 2015:



	Mobile Industries			Process Industries			Total
Beginning Balance	$	89.6		$	169.9		$	259.5
Acquisitions	8.2			62.6			70.8
Other	(0.8		)	(2.2		)	(3.0		)
Ending Balance	$	97.0		$	230.3		$	327.3

Acquisitions in 2015 related to the preliminary purchase price allocation for the Belts business completed on September 1, 2015. $59.7 million of the goodwill acquired for the Belts business is tax-deductible and will be recognized over 15 years for tax purposes. The remaining $11.1 million is non-deductible for tax purposes. “Other” primarily includes foreign currency translation adjustments.

Year ended December 31, 2014:



	Mobile Industries			Process Industries			Total
Beginning Balance	$	176.7		$	169.4		$	346.1
Acquisitions	—			3.3			3.3
Impairment	(86.3		)	—			(86.3		)
Other	(0.8		)	(2.8		)	(3.6		)
Ending Balance	$	89.6		$	169.9		$	259.5

The change related to acquisitions reflects the results of preliminary purchase price allocations for the acquisitions of Schulz on April 28, 2014 and Revolvo on November 30, 2014. The goodwill acquired from Schulz of $2.9 million is tax-deductible and will be amortized over 15 years. The goodwill acquired from Revolvo of $0.4 million is tax-deductible and is estimated to be amortized over approximately 15 years. These amounts were updated in 2015. “Other” primarily included foreign currency translation adjustments for 2014. Refer to Note 3 - Acquisitions and Divestitures for additional information on the acquisitions listed above.

During the third quarter of 2014, the Company reviewed goodwill for impairment for two of its reporting units within the Company's former Aerospace segment (now included in the Mobile Industries segment) as a result of declining sales forecasts and financial performance within the segment. The Company utilizes both an income approach and a market approach in testing goodwill for impairment. The Company utilized updated forecasts for the income approach as part of the goodwill impairment review. As a result of the lower earnings and cash flow forecasts, the Company determined that the Aerospace Transmissions and the Aerospace Aftermarket reporting units could not support the carrying value of their goodwill. As a result, the Company recorded a pretax impairment loss of $86.3 million during the third quarter of 2014, which was reported in impairment and restructuring charges in the Consolidated Statement of Income.

In 2015 and 2013, no goodwill impairment losses were recorded.

Intangibles Assets:

The following table displays intangible assets as of December 31:



	2015						2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets subject to amortization:
Customer relationships	$	198.9	$	70.0	$	128.9	$	160.1	$	59.0	$	101.1
Know-how	31.9		6.7		25.2		33.4		5.1		28.3
Industrial license agreements	0.1		0.1		—		0.1		0.1		—
Land-use rights	8.3		4.7		3.6		8.7		4.7		4.0
Patents	2.1		2.1		—		2.3		2.0		0.3
Technology use	53.6		14.0		39.6		37.0		11.9		25.1
Trademarks	6.5		3.3		3.2		5.4		3.0		2.4
PMA licenses	—		—		—		5.3		4.5		0.8
Non-compete agreements	2.7		2.5		0.2		3.5		3.2		0.3
Software	243.8		197.6		46.2		235.0		182.0		53.0
	$	547.9	$	301.0	$	246.9	$	490.8	$	275.5	$	215.3
Intangible assets not subject to amortization:
Tradename	$	15.7	$	—	$	15.7	$	15.8	$	—	$	15.8
FAA air agency certificates	8.7		—		8.7		8.7		—		8.7
	$	24.4	$	—	$	24.4	$	24.5	$	—	$	24.5
Total intangible assets	$	572.3	$	301.0	$	271.3	$	515.3	$	275.5	$	239.8

In addition to recording an impairment loss related to goodwill, the Company recorded an impairment loss of $9.9 million related to intangible assets within the former Aerospace segment during the third quarter of 2014.

Intangible assets acquired in 2015 were $63.9 million for the acquisition of the Belts business. Intangible assets subject to amortization acquired in 2015 were assigned useful lives of three to 20 years and had a weighted-average amortization period of 19.4 years. Intangible assets acquired in 2014 were $4.7 million for the Schulz acquisition and $2.8 million for the Revolvo acquisition. Intangible assets subject to amortization acquired in 2014 were assigned useful lives of five to 20 years and had a weighted-average amortization period of 14.5 years.

Amortization expense for intangible assets was $36.2 million, $21.5 million and $17.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. Amortization expense for intangible assets is estimated to be approximately: $34.4 million in 2016; $30.0 million in 2017; $25.3 million in 2018; $21.0 million in 2019; and $17.1 million in 2020.

- 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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