Note 3. GOODWILL AND OTHER INTANGIBLE ASSETS

We had intangible assets with a net book value of $82.3 million and $84.6 million as of March 25, 2012 and December 25, 2011, respectively.

The following table reflects the components of intangible assets as of March 25, 2012 and December 25, 2011:

(amounts in thousands)


		March 25, 2012		December 25, 2011
	Amortizable Life (years)	Gross Amount	Gross Accumulated Amortization	Gross Amount	Gross Accumulated Amortization
Finite-lived intangible assets:
Customer lists	6 to 20	$ 82,023	$ 45,936	$ 81,348	$ 43,945
Trade name	1 to 30	30,518	18,701	30,007	18,237
Patents, license agreements	3 to 14	60,821	48,928	60,249	47,704
Other	2 to 6	7,173	6,185	7,160	5,830
Total amortized finite-lived intangible assets		180,535	119,750	178,764	115,716

Indefinite-lived intangible assets:
Trade name		21,510	—	21,509	—
Total identifiable intangible assets		$ 202,045	$ 119,750	$ 200,273	$ 115,716

Amortization expense for the three months ended March 25, 2012 and March 27, 2011 was $2.7 million and $2.4 million, respectively.

Estimated amortization expense for each of the five succeeding years is anticipated to be:

(amounts in thousands)

2012	$ 10,516
2013	$ 8,796
2014	$ 8,301
2015	$ 8,145
2016	$ 7,881

The changes in the carrying amount of goodwill are as follows:

(amounts in thousands)

	Shrink Management Solutions	Apparel Labeling Solutions	Retail Merchandising Solutions	Total
Balance as of December 26, 2010	$ 165,324	$ 3,915	$ 62,086	$ 231,325
Acquired during the year	—	58,008	—	58,008
Discontinued operations	(3,782)	—	—	(3,782)
Translation adjustments	269	661	(378)	552
Balance as of December 25, 2011	$ 161,811	$ 62,584	$ 61,708	$ 286,103
Purchase accounting adjustment	—	1,668	—	1,668
Translation adjustments	1,026	93	1,089	2,208
Balance as of March 25, 2012	$ 162,837	$ 64,345	$ 62,797	$ 289,979

The following table reflects the components of goodwill as of March 25, 2012 and December 25, 2011:

(amounts in thousands)


	March 25, 2012			December 25, 2011
	Gross Amount	Accumulated Impairment Losses	Goodwill, Net	Gross Amount	Accumulated Impairment Losses	Goodwill, Net
Shrink Management Solutions	$ 213,000	$ 50,163	$ 162,837	$ 213,836	$ 52,025	$ 161,811
Apparel Labeling Solutions	83,553	19,208	64,345	81,662	19,078	62,584
Retail Merchandising Solutions	134,126	71,329	62,797	130,640	68,932	61,708
Total goodwill	$ 430,679	$ 140,700	$ 289,979	$ 426,138	$ 140,035	$ 286,103

On January 28, 2011, Checkpoint Systems, Inc. and certain of its direct subsidiaries (collectively, the "Company") entered into a Master Purchase Agreement. The Master Purchase Agreement outlines the general terms and conditions pursuant to which the Company agreed to acquire, through the acquisition of equity and/or assets, a retail apparel and footwear product identification business which designs, manufactures and sells tags and labels, brand protection, and EAS solutions/labels (collectively, the "Shore to Shore businesses"). The acquisition was settled on May 16, 2011 for approximately $78.7 million, net of cash acquired of $1.9 million and the assumption of debt of $4.2 million. The purchase price was funded by $66.7 million of cash from operations and $9.2 million of borrowings under our Senior Secured Credit Facility, and includes the acquisition of the following:

·	100% of the voting equity interests of J&F International, Inc. (U.S.), Shore to Shore Far East (Hong Kong), Shore to Shore MIS (India), Shore to Shore Lacar SA (Guatemala), Adapt Identification (HK) Ltd., and W Print Europe Ltd. (UK);

·	Assets of Shore to Shore, Inc. (U.S.), Shanghai WH Printing Co. Ltd., Wing Hung (Dongguan) Printing Co., Ltd., and Wing Hung Printing Co., Ltd. (U.S.);

·	51% of the voting equity interests of Shore to Shore PVT Ltd. (Sri Lanka);

·	50% of the voting equity interests of the Cybsa Adapt SA de CV (El Salvador) joint venture. In accordance with ASC 323 "Investments—Equity Method and Joint Ventures", we have applied the Equity Method in recording this joint venture.

The purchase price includes a payment to escrow of $17.5 million related to the 2010 performance of the acquired business. This amount is subject to adjustment pending final determination of the 2010 performance and could result in an additional purchase price payment of up to $6.3 million. We are currently entering an arbitration process in order to require the seller to provide audited financial information related to the 2010 performance and given that such results are clearly and directly linked to the acquisition consideration and objectively determinable, we will adjust the purchase price when we receive this information. Acquisition costs incurred in connection with the transaction are recognized within acquisition costs in the Consolidated Statement of Operations and approximate $14 thousand and $0.2 million for the three months ended March 25, 2012 and March 27, 2011, respectively.

As the Company acquired 51% of the outstanding voting shares of Shore to Shore PVT Ltd. (Sri Lanka) in exchange for $1.7 million in cash, we have classified the non-controlling interests as equity on our Consolidated Balance Sheet as of March 25, 2012 and December 25, 2011, and presented net income attributable to non-controlling interests separately on our Consolidated Statement of Operations for the three months ended March 25, 2012. The fair value of the non-controlling interest was estimated by applying a market approach. Key assumptions include control premiums associated with guideline transactions of entities deemed to be similar to Shore to Shore PVT Ltd. (Sri Lanka), and adjustments because of the lack of control that market participants would consider when measuring the fair value of the non-controlling interest.

At March 25, 2012, the financial statements reflected the preliminary allocation of the purchase price based on estimated fair values at the date of acquisition, including $17.1 million in Property, Plant, and Equipment, $7.1 million in Accounts Receivable, and $2.2 million in Inventories. This preliminary allocation resulted in acquired goodwill of $59.7 million and intangible assets of $10.5 million. The intangible assets were composed of a non-compete agreement ($0.3 million), customer lists ($9.8 million), and trade names ($0.4 million). The useful lives were 5 years for the non-compete agreement, 10 years for the customer lists, and 7.5 months for the trade names. The Company continues to evaluate certain assets and liabilities related to this business combination. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as assets or liabilities may result in a corresponding adjustment to goodwill. Also, the allocation of the purchase price remains open for quantification of acquired income and non-income based tax exposures, certain information related to deferred income taxes, and finalization of the 2010 performance payment amount due. The measurement period is expected to be completed by May of 2012. The tax deductible portion of the acquired goodwill will also be determined during the measurement period. The results from the acquisition for the three months ended March 25, 2012 are included in the Apparel Labeling Solutions segment and were not material to the Consolidated Financial Statements (revenues of $9.7 million and a net loss of $0.2 million).

We perform an assessment of goodwill by comparing each individual reporting unit's carrying amount of net assets, including goodwill, to their fair value at least annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Our 2011 annual impairment test indicated no impairment of our goodwill or intangible assets. Although our analysis regarding the fair values of the goodwill and indefinite lived intangible assets indicates that they exceed their respective carrying values, materially different assumptions regarding the future performance of our businesses or significant declines in our stock price could result in additional goodwill impairment losses. Specifically, an unanticipated deterioration in revenues and gross margins generated by our Apparel Labeling Solutions and Retail Merchandising Solutions segments could trigger future impairment in those segments.

Our Apparel Labeling Solutions segment is composed of one reporting unit. The fair value of this reporting unit exceeded its respective carrying value as of the date of the most recent impairment test by approximately 18%. In determining the fair value of this reporting unit, our projected cash flows did not contain significant growth assumptions. In addition, the discount rate used in determining the discounted cash flows for this reporting unit was lower than that used for reporting units in other segments due to the lower risk associated with these low growth rates. However, a 16% decline in operating results, or a 300 basis point increase in our discount rate could result in a future decrease in the fair value of this reporting unit which could result in a future impairment. Our first quarter of 2012 experienced a decline in operating results as compared to the forecasted amounts in the most recent impairment test. While we believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment in this segment.

Our Retail Merchandising Solutions segment is composed of three reporting units. The fair value of one of the three reporting units exceeded its respective carrying value as of the date of the most recent impairment test by approximately 13%. In determining the fair value of this reporting unit, our projected cash flows did not contain significant growth assumptions. In addition, the discount rate used in determining the discounted cash flows for this reporting unit was lower than that used for reporting units in other segments due to the lower risk associated with these low growth rates. However, a 15% decline in operating results, or a 300 basis point increase in our discount rate could result in a future decrease in the fair value of this reporting unit which could result in a future impairment. All other reporting units within the Retail Merchandising segment exceed their respective carrying value by more than 35%. Our first quarter of 2012 experienced a decline in operating results as compared to the forecasted amounts in the most recent impairment test. While we believe that our projected results will not result in future impairment, a continued deterioration in results could trigger a future impairment in this segment.

For the year ended December 25, 2011, we classified our Banking Security Systems Integration business unit as held for sale. The Banking Security Systems Integration business unit had recorded goodwill of $3.8 million related to a series of three acquisitions completed during 2007 and 2008. As a result of the conclusion to report the business as held for sale, we tested the goodwill of the disposal group and determined that there was a $3.4 million impairment charge. We also recorded an impairment of definite-lived customer relationships of $2.8 million as a result of our decision to sell the Banking Security Systems Integration business unit. The impairment charges were recorded in discontinued operations on the Consolidated Statement of Operations during the fourth quarter ended December 25, 2011.