Goodwill And Other Intangible Assets

12 Months Ended

Oct. 28, 2011

Goodwill And Other Intangible Assets [Abstract]

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the fiscal years ended October 28, 2011 and October 29, 2010 are as follows:


	Coatings			Paints			Other			Total
Balance, October 30, 2009	$	1,079,462		$	234,804		$	23,731		$	1,337,997
Goodwill acquired (disposed/adjusted)		4,123			5,191			—			9,314
Currency translation gain (loss)		7,942			322			243			8,507
Balance, October 29, 2010	$	1,091,527		$	240,317		$	23,974		$	1,355,818
Goodwill acquired (disposed/adjusted)		15,348			(317	)		—			15,031
Allocation of goodwill due to change in reporting units		(21,633	)		—			21,633			—
Impairment of goodwill		(292,942	)		—			(21,633	)		(314,575	)
Currency translation gain (loss)		(2,994	)		4,438			288			1,732
Balance, October 28, 2011	$	789,306		$	244,438		$	24,262		$	1,058,006

The decrease in goodwill during fiscal year 2011 is primarily due to an impairment of goodwill as a result of our annual impairment testing, partially offset by the acquisition of Isocoat and foreign currency translation.

The increase in goodwill during fiscal year 2010 is due to foreign currency translation, the acquisition of Wattyl Limited and the purchase of certain assets and the shares of DIC Coatings India Limited from DIC Corporation of Japan.

Information regarding our other intangible assets is as follows:


	Estimated Useful Life		Carrying Amount		Accumulated Amortization			Net
Balance, October 29, 2010
Customer lists		40 years	$	285,650	$	(49,411	)	$	236,239
Technology		Indefinite		204,469		—			204,469
Trademarks		Indefinite		196,295		—			196,295
Other		10 years		11,571		(11,184	)		387
Total			$	697,985	$	(60,595	)	$	637,390
Balance, October 28, 2011
Customer lists		20to 40 years	$	256,551	$	(47,885	)	$	208,666
Technology		Indefinite		169,112		—			169,112
Trademarks		Indefinite		175,192		—			175,192
Other		10 years		11,587		(11,271	)		316
Total			$	612,442	$	(59,156	)	$	553,286

The balance as of October 28, 2011 reflects the net impairment charge on intangible assets of $95,139 as a result of our annual impairment analysis, partially offset by the allocation related to the acquisition of Isocoat ($10,957 was allocated to customer lists and $1,055 was allocated to trademarks). The balance as of October 29, 2010 reflects the allocation related to the acquisition of Wattyl Limited ($8,110 was allocated to trademarks) and the acquisition of certain assets from DIC Corporation ($3,420 was allocated to customer lists).

Table of Contents

Goodwill for our reporting units is reviewed for impairment at least annually using a two-step process. In the first step, we compare the fair value of each reporting unit to its carrying value, including goodwill. If the fair value exceeds the carrying value, no further work is required and no impairment loss is recognized. If the carrying value exceeds the fair value, the goodwill of the reporting unit is potentially impaired and we would then complete step 2 in order to measure the impairment loss. In step 2, we would calculate the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets (including unrecognized intangible assets) of the reporting unit from the fair value of the reporting unit. If the implied fair value of goodwill is less than the carrying value of goodwill, we would recognize an impairment loss, in the period identified, equal to the difference.

In the fourth quarter of 2011, we completed our annual goodwill and indefinite-lived intangible asset impairment reviews. During the goodwill review, the carrying value for the wood and gelcoat reporting units exceeded the fair value, requiring a step 2 valuation using an income approach (Level 3 measurement in the fair value hierarchy). As a result, we recorded a pre-tax impairment loss of $409,714 in the fourth quarter of 2011. This represents impairment of goodwill and indefinite-lived intangible assets in our wood coatings reporting unit, part of our Coatings segment, and in our gelcoat reporting unit, part of All Other. The impairment charge on goodwill and intangible assets was recorded as follows:


	Goodwill		Intangible Assets		Total
Wood reporting unit ¹	$	292,942	$	75,120	$	368,062
Gelcoat reporting unit ²		21,633		20,019		41,652
Total Impairment	$	314,575	$	95,139	$	409,714

¹	Wood intangible asset write-downs were as follows: (i) technology of $31,005; (ii) customer lists of $23,260 and (iii) trademarks of $20,855.
²	Gelcoat intangible asset write-downs were as follows: (i) customer lists of $10,496; (ii) technology of $5,579 and (iii) trademarks of $3,944.

No impairment to the carrying values of the other reporting units was identified.

During the fourth quarter of 2010, we completed our annual goodwill and intangible asset impairment reviews with no impairments to the carrying values identified.

Amortization lives are based on management's estimates. Amortization lives for intangible assets range from 10 to 40 years. The remaining life averages for assets included in the customer lists and other categories were 32 years and 3 years, respectively.

Total intangible asset amortization expense was $7,638, $7,273 and $7,575 in 2011, 2010 and 2009, respectively. Estimated amortization expense for each of the five succeeding fiscal years based on intangible assets as of October 28, 2011 is approximately $7,000 annually.

- 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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