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59
9. GOODWILL AND OTHER INTANGIBLE ASSETS
The change in the net carrying amount of goodwill for the years ended December 31, 2015 and 2014 by segment is as follows:
(in thousands)
Steel Mills
Steel
Products
Raw
Materials Total
Balance, December 31, 2013 $495,897 $774,486 $703,225 $1,973,608
Acquisitions 98,505 — — 98,505
Translation — (30,112) — (30,112)
Other — 311 26,352 26,663
Balance, December 31, 2014 594,402 744,685 729,577 2,068,664
Translation — (53,618) — (53,618)
Other (3,768) — — (3,768)
Balance, December 31, 2015 $590,634 $691,067 $729,577 $2,011,278
The majority of goodwill is not tax deductible.
Goodwill increased by $26.4 million in the third quarter of 2014 due to a correction of deferred taxes related to purchase accounting for
the acquisition of The David J. Joseph Company in 2008. This correction did not have an impact on the consolidated statements of earnings,
consolidated statements of comprehensive income or the consolidated statements of cash flows in the year of correction or any prior
period. Also, this correction had no impact on the results of the goodwill impairment assessments performed in prior periods and is not
material to the year of correction or any prior period.
Intangible assets with estimated lives of 5 to 22 years are amortized on a straight-line or accelerated basis and are comprised of the following:
(in thousands)
December 31, 2015 2014
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
Customer relationships $1,185,299 $517,817 $1,199,942 $454,353
Trademarks and trade names 155,864 57,756 158,584 48,356
Other 23,025 17,943 22,823 16,547
$1,364,188 $593,516 $1,381,349 $519,256
Intangible asset amortization expense was $74.3 million in 2015 ($72.4 million in 2014 and $74.4 million in 2013). Annual
amortization expense is estimated to be $70.9 million in 2016, $68.7 million in 2017, $65.9 million in 2018, $63.4 million in
2019 and $61.0 million in 2020.
The Company completed its annual goodwill impairment testing as of the first day of the fourth quarters of 2015, 2014 and 2013 and
concluded that as of such dates there was no impairment of goodwill for any of its reporting units. We do not believe there are any
reporting units at significant risk of goodwill impairment in the next twelve months. However, assumptions in estimating reporting unit
fair values are subject to a high degree of judgment and complexity. Changes in assumptions and estimates may affect the estimated
reporting unit fair values and could result in impairment charges in future periods.
There are no significant historical accumulated impairment charges, by segment or in the aggregate, related to goodwill.