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Note 4 - Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Text Block]

4. GOODWILL AND INTANGIBLE ASSETS

Goodwill

Our recorded goodwill by reporting segment was as follows at June 30, 2012 and December 31, 2011 (in millions):

	2012		2011
Energy and Mining	$	77.8	$	77.4
North American Water and Wastewater		101.8		101.8
European Water and Wastewater		21.4		21.8
Asia-Pacific Water and Wastewater		5.7		5.7
Commercial and Structural		64.8		43.2
Total goodwill	$	271.5	$	249.9

The following table presents a reconciliation of the beginning and ending balances of the Company’s goodwill at June 30, 2012 and December 31, 2011 (in millions):

	2012			2011
Beginning balance (January 1, 2012 and 2011, respectively)	$	249.9		$	190.1
Additions to goodwill through acquisitions(1)(2)		22.5			63.7
Foreign currency translation		(0.9	)		(3.9	)
Goodwill at end of period(3)	$	271.5		$	249.9

(1)

During the first six months of 2012, the Company recorded goodwill of $2.5 million and $19.3 million related to the acquisition of Fyfe LA and Fyfe Asia, respectively. Additionally, the Company recorded decreases of $1.5 million and $0.2 million in goodwill related to the 2011 acquisitions of Hockway and Fyfe NA, respectively, and increases of $1.6 and $0.8 million in goodwill related to the CRTS and Fyfe LA acquisitions, respectively.

(2)

During the year ended December 31, 2011, the Company recorded goodwill of $18.5 million related to the acquisition of CRTS, $2.0 million related to the acquisition of Hockway and $43.2 million related to the acquisition of Fyfe NA as discussed in Note 1 of this report.

(3)

The Company does not have any accumulated impairment charges.

Intangible Assets

Intangible assets at June 30, 2012 and December 31, 2011 were as follows (in thousands):

	As of June 30, 2012 (1)										As of December 31, 2011
	Weighted Average Useful Lives (Years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
License agreements			8	$	3,922	$	(2,736	)	$	1,186	$	3,922	$	(2,654	)	$	1,268
Backlog		<	1		4,652		(4,507	)		145		4,651		(3,705	)		946
Leases			14		2,067		(260	)		1,807		2,067		(183	)		1,884
Trademarks			18		21,424		(2,653	)		18,771		21,396		(2,141	)		19,255
Non-competes			0		740		(740	)		—		740		(729	)		11
Customer relationships			15		116,375		(14,242	)		102,133		102,963		(10,970	)		91,993
Patents and acquired technology			18		57,474		(20,004	)		37,470		53,906		(19,608	)		34,298
				$	206,654	$	(45,142	)	$	161,512	$	189,645	$	(39,990	)	$	149,655

(1)

During the six months ended June 30, 2012, the Company recorded $3.9 million in patents and acquired technology to be amortized over a weighted average life of twenty years and $13.4 million in customer relationships to be amortized over a weighted average life of fifteen years related to the acquisitions discussed in Note 1 of this report.

Amortization expense was $3.0 million and $1.2 million for the quarters ended June 30, 2012 and 2011, respectively. Amortization expense was $5.7 million and $2.4 million for the six-month periods ended June 30, 2012 and 2011, respectively. Estimated amortization expense by year is as follows (in thousands):

2012	$	10,839
2013		10,163
2014		10,163
2015		10,157
2016		10,144

- 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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