Note C – Goodwill and Other Long-Lived Assets

Impairment of Definite-Lived Long-Lived Assets: We review the carrying value of our long-lived assets, including intangible assets with finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to its respective carrying amount. If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to determine the amount of impairment, if any, to be recognized in our consolidated statements of earnings. An impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds fair value.

Fiscal 2011: During the fourth quarter of fiscal 2011, due largely to changes in the intended use of certain long-lived assets within our former Automotive Body Panels operating segment that were not contributed to ArtiFlex, we determined indicators of impairment were present. Recoverability of the identified asset group was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. The subsequent comparison of book value to fair value also indicated excess book value, resulting in an impairment charge of $6,414,000. Consistent with the classification of the gain on deconsolidation, as more fully described in "Note A – Summary of Significant Accounting Policies," this impairment charge was recognized within the joint venture transactions line item in our consolidated statements of earnings. Refer to "Note P – Fair Value" for information regarding the determination of fair value for these assets.

During the fourth quarter of fiscal 2011, due largely to changes in the intended use of certain long-lived within our Metal Framing operating segment that were not contributed to ClarkDietrich, we determined indicators of impairment were present. Recoverability of the identified assets was tested using future cash flow projections based on management's estimate of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. The subsequent comparison of book value to fair value also indicated excess book value, resulting in an impairment charge of $18,293,000. Consistent with the classification of the gain on deconsolidation and related restructuring charges, as more fully described in "Note A – Summary of Significant Accounting Policies," this impairment charge was recognized within the joint venture transactions line item in our consolidated statements of earnings. Refer to "Note P – Fair Value" for information regarding the determination of fair value for these assets.

During the fourth quarter of fiscal 2011, due largely to changes in the intended use of certain long-lived assets within our Commercial Stairs business unit, we determined indicators of impairment were present. Recoverability of the identified asset group was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. The subsequent comparison of book value to fair value also indicated excess book value, resulting in an impairment charge of $2,473,000, which was recognized within impairment of long-lived assets in our consolidated statement of earnings. Refer to "Note P – Fair Value" for information regarding the determination of fair value for these assets.

During the fourth quarter of fiscal 2011, due largely to changes in the intended use of certain long-lived assets within our Steel Packaging operating segment, we determined indicators of impairment were present. Recoverability of the identified asset group was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. The subsequent comparison of book value to fair value also indicated excess book value, resulting in an impairment charge of $1,913,000, which was recognized within impairment of long-lived assets in our consolidated statement of earnings. Refer to "Note P – Fair Value" for information regarding the determination of fair value for these assets.

During the third quarter of fiscal 2011, due largely to changes in the intended use of certain long-lived assets within our Metal Framing and Steel Packaging operating segments, we determined indicators of impairment were present. Recoverability of the identified asset groups was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of the undiscounted future cash flows related to each asset group was more than the net book value for each of the asset groups; therefore, no impairment charges were recognized.

During the second and third quarters of fiscal 2011, due largely to changes in the intended use of certain long-lived assets of our consolidated joint venture, Spartan, we determined indicators of impairment were present. Recoverability of the identified asset group was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of the undiscounted future cash flows related to the asset group was more than the net book value; therefore, no impairment charges were recognized.

Fiscal 2010: During the fourth quarter of fiscal 2010, due largely to changes in the intended use of certain long-lived assets within our Steel Processing operating segment, we determined that indicators of impairment were present. Therefore, long-lived assets were tested for impairment during the fourth quarter of fiscal 2010. Recoverability of the identified asset groups was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of the undiscounted future cash flows related to each asset group was more than the net book value for each of the asset groups; therefore, no impairment charges were recognized.

Due to continued deterioration in business and market conditions impacting our Metal Framing and then Construction Services operating segments during the third quarter of fiscal 2010, we determined that indicators of potential impairment were present for certain long-lived assets. Therefore, long-lived assets, including intangible assets with finite useful lives, were tested for impairment during the fiscal quarter ended February 28, 2010. Recoverability of the identified asset groups was tested using future cash flow projections based on management's long range estimates of market conditions.

The sum of the undiscounted future cash flows related to the identified metal framing assets was more than the related net book value of the asset group. Therefore, there was no impairment charges were recognized with regard to these long-lived assets.

The sum of the undiscounted future cash flows related to an identified asset group within the then Construction Services operating segment was less than the net book value for the asset group. Therefore, an impairment charge of $8,055,000 was recognized during the fiscal quarter ended February 28, 2010. This impairment charge was recorded within impairment of long-lived assets in our consolidated statements of earnings, and was based on the excess of the assets' carrying amounts over their respective fair values at February 28, 2010. The impaired assets consisted largely of customer lists and also included trade name and technology assets. Refer to "Note P – Fair Value" for information regarding the determination of fair value for these assets.

Due to continued deterioration in business and market conditions impacting our Metal Framing and then Construction Services operating segments during the first and second quarters of fiscal 2010, we determined that indicators of potential impairment were present for certain long-lived assets. Therefore, the identified assets, including intangible assets with finite useful lives, were tested for impairment during the fiscal quarters ended August 31, 2009 and November 30, 2009. Recoverability of the identified asset groups was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of the undiscounted future cash flows related to each asset group was more than the corresponding net book value; therefore, no impairment charges were recognized.

Due to continued deterioration in business and market conditions impacting the Steel Packaging operating segment during the second quarter of fiscal 2010, we determined that indicators of potential impairment were present for certain long-lived assets. Therefore, those long-lived assets were tested for impairment during the fiscal quarter ended November 30, 2009. Recoverability of the identified asset groups was tested using future cash flow projections based on management's long range estimates of market conditions. The sum of the undiscounted future cash flows related to the Steel Packaging asset group was less than the net book value for the asset group. Therefore, an impairment charge of $2,703,000 was recognized. This impairment charge was recorded within impairment of long-lived assets in our consolidated statement of earnings, and was based on the excess of the assets' carrying amounts over their respective fair values at November 30, 2009. Refer to "Note P – Fair Value" for information regarding the determination of fair value for these assets.

Impairment of Indefinite-Lived Long-Lived Assets: Purchased goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may be present. Application of goodwill impairment testing involves judgment, including but not limited to, the identification of reporting units and estimating the fair value of each reporting unit. A reporting unit is defined as an operating segment or one level below an operating segment. We test goodwill at the operating segment level as we have determined that the characteristics of the reporting units within each operating segment are similar and allow for their aggregation in accordance with the applicable accounting guidance.

The goodwill impairment test consists of comparing the fair value of each operating segment, determined using discounted cash flows, to each operating segment's respective carrying value. If the estimated fair value of an operating segment exceeds its carrying value, there is no impairment. If the carrying amount of the operating segment exceeds its estimated fair value, a goodwill impairment is indicated. The amount of the impairment is determined by comparing the fair value of the net assets of the operating segment, excluding goodwill, to its estimated fair value, with the difference representing the implied fair value of the goodwill. If the implied fair value of the goodwill is lower than its carrying value, the difference is recorded as an impairment charge in our consolidated statements of earnings.

Fiscal 2011: During the fourth quarter of fiscal 2011, we completed our annual impairment evaluation of goodwill. The estimated fair value of our Pressure Cylinders operating segment, the only reporting unit with goodwill throughout fiscal 2011, exceeded its carrying value by a substantial amount and, therefore, no impairment charges were recognized. However, future declines in the market and deterioration in earnings could lead to impairment of goodwill and other long-lived assets in subsequent periods.

Fiscal 2010: Due to industry changes, weakness in the construction market and the depressed results in the then Construction Services operating segment, we determined that indicators of impairment were present and, therefore, tested the goodwill of this operating segment for impairment on a quarterly basis throughout fiscal 2010. Given the significant decline in, and continued uncertainty of, the construction market throughout the first half of fiscal 2010, during the third quarter, we revised downward the forecasted cash flows used in our impairment evaluation. After reviewing the revised valuation and the fair value estimates of the remaining net assets, it was determined that the value of the business no longer supported its goodwill balance of $24,651,000. As a result, the full amount was written-off during the third quarter of fiscal 2010. The impairment loss was recorded within impairment of long-lived assets in our consolidated statements of earnings.

During the fourth quarter of fiscal 2010, we completed our annual impairment evaluation of the remaining goodwill balance, consisting solely of goodwill within our Pressure Cylinders operating segment. The estimated fair value of our Pressure Cylinders operating segment exceeded its carrying value by a substantial amount and, therefore, no impairment charges were recognized.

Changes in the carrying amount of goodwill for the fiscal years ended May 31, 2011 and 2010, by reportable business segment, were as follows:


	Pressure Cylinders			Metal Framing			Other			Total
(in thousands)
Balance at June 1, 2009
Goodwill	$	76,692		$	96,943		$	24,651		$	198,286
Accumulated impairment losses		-			(96,943	)		-			(96,943	)

		76,692			-			24,651			101,343
Acquisitions and purchase accounting adjustments		5,495			-			-			5,495
Translation adjustments		(2,644	)		-			-			(2,644	)
Impairment losses		-			-			(24,651	)		(24,651	)

Balance at May 31, 2010
Goodwill		79,543			96,943			24,651			201,137
Accumulated impairment losses		-			(96,943	)		(24,651	)		(121,594	)

		79,543			-			-			79,543

Acquisitions and purchase accounting adjustments		11,536			-			-			11,536
Translation adjustments		2,554			-			-			2,554

Balance at May 31, 2011
Goodwill		93,633			96,943			24,651			215,227
Accumulated impairment losses		-			(96,943	)		(24,651	)		(121,594	)

	$	93,633		$	-		$	-		$	93,633

The fiscal 2010 decrease in goodwill within Other was due to the write-off of the entire goodwill balance of our then Construction Services operating segment during the quarter ended February 28, 2010.

The increase in goodwill within Pressure Cylinders during fiscal 2011 and fiscal 2010 resulted primarily from acquisitions completed during those respective fiscal years. For additional information regarding these acquisitions, refer to "Note N – Acquisitions."

Amortizable intangible assets by class were as follows at May 31:


	2011				2010
(in thousands)	Cost		Accumulated Amortization		Cost		Accumulated Amortization
Patents and trademarks	$	5,034	$	2,706	$	13,119	$	8,246
Customer relationships		23,587		7,935		23,443		6,775
Non-compete agreements		1,893		1,525		2,100		1,844
Other		2,132		521		3,070		903

Total	$	32,646	$	12,688	$	41,732	$	17,768

The net decrease in amortizable intangible assets was driven largely by the contribution of certain intangible assets to ClarkDietrich, partially offset by the previously noted acquisitions completed by our Pressure Cylinders operating segment in fiscal 2011. Currency translation adjustments comprised the remainder of the change in cost basis.

Amortization expense was $3,293,000, $4,124,000 and $3,896,000 during fiscal 2011, fiscal 2010 and fiscal 2009, respectively. These intangible assets are amortized on the straight-line method over their estimated useful lives, which range from one to 20 years.

Estimated amortization expense for these intangible assets for the next five fiscal years is as follows:


(in thousands)
2012	$	2,395
2013		2,146
2014		2,096
2015		2,083
2016		2,009