Goodwill and Other Intangible Assets

9 Months Ended

Jul. 31, 2011

Goodwill and Other Intangible Assets [Abstract]

NOTE 6 — GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the changes in the carrying amount of goodwill by segment for the nine month period ended July 31, 2011 (Dollars in thousands):


	Rigid Industrial
	Packaging &		Flexible Products &
	Services		Services			Paper Packaging		Land Management		Total
Balance at October 31, 2010	$	570,661	$	78,261		$	60,653	$	150	$	709,725
Goodwill acquired		66,329		—			—		—		66,329
Goodwill adjustments		3,325		(1,632	)		—		—		1,693
Currency translation		13,365		3,682			—		—		17,047

Balance at July 31, 2011	$	653,680	$	80,311		$	60,653	$	150	$	794,794

The goodwill acquired during 2011 of $66.3 million consisted of preliminary goodwill related to acquisitions in the Rigid Industrial Packaging & Services segment. The goodwill adjustments increased goodwill by a net amount of $1.7 million related to the finalization of purchase price allocation of prior year acquisitions. Certain business combinations that occurred at or near year end were recorded with provisional estimates for fair value based on management’s best estimate.

The following table summarizes the carrying amount of net intangible assets by class as of July 31, 2011 and October 31, 2010 (Dollars in thousands):


			Accumulated		Net Intangible
	Gross Intangible Assets		Amortization		Assets
October 31, 2010:
Trademark and patents	$	42,878	$	17,184	$	25,694
Non-compete agreements		20,456		7,774		12,682
Customer relationships		153,131		27,091		126,040
Other		15,235		6,412		8,823

Total	$	231,700	$	58,461	$	173,239

July 31, 2011:
Trademark and patents	$	54,422	$	20,912	$	33,510
Non-compete agreements		27,055		8,822		18,233
Customer relationships		212,393		35,365		177,028
Other		21,874		9,202		12,672

Total	$	315,744	$	74,301	$	241,443

Gross intangible assets increased by $84.0 million for the nine month period ended July 31, 2011. The increase in gross intangible assets was attributable to $81.0 million in preliminary purchase price allocations related to three of the 2011 acquisitions in the Rigid Industrial Packaging & Services segment, $7.2 million was attributable to currency fluctuations, a $3.0 million non-cash impairment charge related to the discontinued usage of certain trade names in the Flexible Products & Services segment and $1.2 million in other adjustments. Amortization expense for the nine months ended July 31, 2011 and 2010 was $12.4 million and $10.0 million, respectively. Amortization expense for the next five years is expected to be $5.7 million in 2011, $17.1 million in 2012, $20.3 million in 2013, $19.5 million in 2014 and $18.4 million in 2015.

All intangible assets for the periods presented are subject to amortization and are being amortized using the straight-line method over periods that range from three to 23 years, except for $20.8 million related to the Tri-Sure trademark and the trade names related to Blagden Express, Closed-loop, Box Board and Fustiplast, all of which have indefinite lives.

The Company reviews goodwill and indefinite-lived intangible assets for impairment by reporting unit as required by ASC 350, “Intangibles — Goodwill and Other”, on an annual basis and when events and circumstances indicate impairment may have occurred. A reporting unit is the operating segment, or a business one level below that operating segment if discrete financial information is prepared and regularly reviewed by segment management.

During the fiscal third quarter, the Flexible Products & Services segment made the strategic decision to announce the intention to rebrand the acquired companies of Storsack, Sunjut, Unsa and Ligtermoet under the Greif Flexibles brand globally. As a result, the Company recorded a non-cash impairment charge of $3.0 million included in selling, general and administrative expenses against the intangible asset value of the legacy companies trade names.

The Company’s business segments have been identified as reporting units and the Company concluded that no other impairment or impairment indicators exist at this time.

- Definition

Discloses 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 or 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. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

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