Goodwill and Intangibles of Consumer Products Segment

9 Months Ended

Jul. 03, 2011

Goodwill and Intangibles of Consumer Products Segment

(6) Goodwill and Intangibles of Consumer Products Segment

A summary of the changes in the carrying amounts of goodwill and intangible assets of the Consumer Products Segment is as follows:


			Intangible Assets
	Goodwill		Indefinite Lived		Amortizable			Total
Balance at September 30, 2010	$	600,055	$	857,478	$	911,882		$	1,769,360
Business acquisitions (Note 17)		10,284		1,250		—			1,250
Trade name acquisition		—		1,530		—			1,530
Amortization during period		—		—		(43,073	)		(43,073	)
Effect of translation		11,568		11,459		11,286			22,745

Balance at July 3, 2011	$	621,907	$	871,717	$	880,095		$	1,751,812

Intangible assets are recorded at cost or at fair value if acquired in a purchase business combination. Customer relationships, proprietary technology intangibles and certain trade names are amortized, using the straight-line method, over their estimated useful lives of approximately four to 20 years. Excess of cost over fair value of net assets acquired (goodwill) and indefinite lived trade name intangibles are not amortized.

Goodwill and indefinite lived intangible assets are tested for impairment at least annually at Spectrum Brands’ August financial period end, and more frequently if an event or circumstance indicates that an impairment loss may have been incurred between annual impairment tests. As a result of a realignment of reporting units, goodwill and indefinite lived trade name intangibles were tested for impairment as of October 1, 2010. Spectrum Brands concluded that the fair values of its reporting units and indefinite lived trade name intangible assets were in excess of the carrying amounts of those assets and, accordingly, no impairment of goodwill or indefinite lived trade name intangibles was recorded.

Intangible assets subject to amortization include proprietary technology, customer relationships and certain trade names, which are summarized as follows:


	July 3, 2011						September 30, 2010
			Accumulated						Accumulated				Amortizable
	Cost		Amortization		Net		Cost		Amortization		Net		Life
Technology assets	$	67,613	$	11,765	$	55,848	$	67,097	$	6,305	$	60,792	8-17 years
Customer relationships		756,804		69,077		687,727		741,016		35,865		705,151	15-20 years
Trade names		149,700		13,180		136,520		149,689		3,750		145,939	4-12 years

	$	974,117	$	94,022	$	880,095	$	957,802	$	45,920	$	911,882

Amortization expense for the three and nine month periods ended July 3, 2011 and July 4, 2010 is as follows:


	Three Months				Nine Months
	2011		2010		2011		2010
Technology assets	$	1,649	$	1,563	$	4,946	$	4,655
Customer relationships		9,650		8,767		28,708		26,476
Trade names		3,140		549		9,419		613

	$	14,439	$	10,879	$	43,073	$	31,744

The Company estimates annual amortization expense for the next five fiscal years will approximate $57,800 per year.

- 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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