Goodwill and Other Intangible Assets

6 Months Ended

Jul. 02, 2011

Goodwill and Other Intangible Assets [Abstract]

Note 4 — Goodwill and Other Intangible Assets

The Merger was accounted for using the acquisition method of accounting. The total purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values. The excess of the cost of the Merger over the fair value of the assets acquired and liabilities assumed resulted in goodwill. Total goodwill was approximately $573.9 million and $566.4 million as of July 2, 2011 and January 1, 2011, respectively. The Company did not recognize any impairment losses of its goodwill during any of the periods presented. The impact of foreign currency translation increased the carrying value of goodwill by $7.5 million for the six months ended July 2, 2011. None of the Company’s goodwill is deductible for income tax purposes.

In May 2011, the Company completed its acquisition of a supply center located in Evansville, Indiana. As a result, the Company recorded an additional customer base intangible asset of approximately $0.6 million and a non-compete agreement of less than $0.1 million, both of which will be amortized.

The Company’s other intangible assets consist of the following (in thousands):


	July 2, 2011							January 1, 2011
	Average							Average
	Amortization					Net		Amortization					Net
	Period			Accumulated		Carrying		Period			Accumulated		Carrying
	(In Years)	Cost		Amortization		Value		(In Years)	Cost		Amortization		Value
Amortized customer bases	13	$	334,141	$	18,711	$	315,430	13	$	330,915	$	5,453	$	325,462
Amortized non-compete agreements	3		10		—		10			—		—		—

Total amortized intangible assets			334,151		18,711		315,440			330,915		5,453		325,462
Non-amortized trade names			410,500		—		410,500			405,552		—		405,552

Total intangible assets		$	744,651	$	18,711	$	725,940		$	736,467	$	5,453	$	731,014

The Company’s non-amortized intangible assets consist of the Alside^®, Revere^® and Gentek^® trade names and are tested for impairment at least annually at the beginning of the fourth quarter.

Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense related to intangible assets was approximately $6.6 million and $0.7 million for the quarters ended July 2, 2011 and July 3, 2010, respectively. Amortization expense related to intangible assets was approximately $13.2 million and $1.4 million for the six months ended July 2, 2011 and July 3, 2010, respectively. The foreign currency translation impact on accumulated amortization of intangibles was less than $0.1 million for the quarter ended July 2, 2011. Amortization expense is expected to be approximately $13.2 million for the remainder of fiscal 2011. Amortization expense is estimated to be $26.5 million per year for fiscal years 2012, 2013, 2014 and 2015.

- 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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