XML 86 R15.htm IDEA: XBRL DOCUMENT

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

GOODWILL AND OTHER INTANGIBLE ASSETS

8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill Impairment Charges. We performed our annual impairment testing for goodwill and other intangible assets as of October 1. We evaluate goodwill and other intangible assets for impairment using a two-step process. The first step is to identify potential impairment by comparing the fair value of the reporting unit to the book value, including goodwill. If the fair value of the reporting unit exceeds the book value, goodwill is not considered impaired. If the book value exceeds the fair value, the second step of the process is performed to measure the amount of impairment. Our goodwill evaluations utilized discounted cash flow analyses and market multiple analyses in estimating fair value. Our weighting of the discounted cash flow and market approaches varies by each reporting unit based on factors specific to each reporting unit. Inherent in our fair value determinations are certain judgments and estimates relating to future cash flows, including interpretation of current economic indicators and market conditions, overall economic conditions and our strategic operational plans with regard to our operations. In addition, to the extent significant changes occur in market conditions, overall economic conditions or our strategic operational plan; it is possible that goodwill not currently impaired may become impaired in the future.

We have two segments that contain reporting units with goodwill and intangible assets. The Chlorovinyls segment includes goodwill in our Compound reporting unit and the Building Products segment includes goodwill primarily in our Window and Door profiles reporting unit and our Siding reporting unit. The estimated fair value of the Compound, Window and Door Profiles and Siding reporting units exceeds the carrying value by more than ten percent.

Based on the information above, the company determined that there were no goodwill impairments in 2011, 2010 or 2009.

In February 2011 we acquired Exterior Portfolio which is now part of our building products segment. We have estimated the fair market value of the acquired assets and liabilities and a preliminary allocation of the net purchase price to goodwill and other intangible assets as follows: $25.5 million to customer relationships, $5.5 million to technology, $4.5 million to trade names, and the remaining $6.4 million was attributed to goodwill.

Goodwill. The following table provides the detail of the changes made to goodwill by reportable segment during the years ended December 31, 2011 and 2010.

(In thousands)	Chlorovinyls			Building Products			Total

Gross goodwill at December 31, 2009	$	239,444		$	152,058		$	391,502
Foreign currency translation adjustment		5,822			—			5,822

Gross goodwill at December 31, 2010		245,266			152,058			397,324
Accumulated impairment losses at December 31, 2010		(55,487	)		(132,206	)		(187,693	)

Net goodwill at December 31, 2010	$	189,779		$	19,852		$	209,631

Gross goodwill at December 31, 2010	$	245,266		$	152,058		$	397,324
Addition from acquisition		—			6,388			6,388
Foreign currency translation adjustment		(2,411	)		—			(2,411	)

Gross goodwill at December 31, 2011		242,855			158,446			401,301
Accumulated impairment losses at December 31, 2011		(55,487	)		(132,206	)		(187,693	)

Net goodwill at December 31, 2011	$	187,368		$	26,240		$	213,608

Indefinite lived intangible assets. At December 31, 2011 and December 31, 2010 our indefinite-lived assets consisted only of trade names.

The following table provides the detail of the changes made to indefinite lived intangible assets by reporting segment as of December 31, 2011 and December 31, 2010 and the changes to the indefinite-lived intangible assets during the year ended December 31, 2011 and 2010.

(In thousands)	Chlorovinyls			Building Products			Total

Balance at December 31, 2009	$	353		$	4,137		$	4,490

Foreign currency translation adjustment		19			110			129

Balance at December 31, 2010	$	372		$	4,247		$	4,619

Preliminary addition from acquisition		—			4,500			4,500
Foreign currency translation adjustment		(8	)		(46	)		(54	)

Balance at December 31, 2011	$	364		$	8,701		$	9,065

Finite-lived intangible assets. At December 31, 2011 and 2010, we also had customer relationship and technology intangible assets that relate to our building products segment, which are our only finite-lived assets As noted above, an additional $25.5 million attributable to customer relationships and $5.5 million attributable to technology relating to the Exterior Portfolio acquisition are included in the December 31, 2011 building products segment balances. The following table provides the detail of finite-lived assets at December 31, 2011 and December 31, 2010.

(In thousands)	Building Products

Gross carrying amounts at December 31, 2011:
Customer relationships	$	36,922
Technology		17,367

Total		54,289
Accumulated amortization at December 31, 2011:
Customer relationships		(6,860	)
Technology		(8,095	)

Total		(14,955	)
Foreign currency translation adjustment and other at December 31, 2011:
Customer relationships		(1,684	)
Technology		—

Total		(1,684	)
Net carrying amounts at December 31, 2011:
Customer relationships		28,378
Technology		9,272

Total	$	37,650

(In thousands)	Building Products

Gross carrying amounts at December 31, 2010:
Customer relationships	$	11,422
Technology		11,867

Total		23,289
Accumulated amortization at December 31, 2010:
Customer relationships		(5,199	)
Technology		(6,674	)

Total		(11,873	)
Foreign currency translation adjustment and other at December 31, 2010:
Customer relationships		(1,684	)
Technology		—

Total		(1,684	)
Net carrying amounts at December 31, 2010:
Customer relationships		4,539
Technology		5,193

Total	$	9,732

The weighted average estimated useful life for the customer relationships is approximately 16 years. Technology has a weighted average estimated useful life of approximately 7 years. Amortization expense for the finite-lived intangible assets was $3.1 million, $1.0 million, and $1.0 million for the years ended December 31, 2011, 2010 and 2009, respectively. Total finite-lived intangible assets estimated annual amortization expense for the next five fiscal years is approximately $3.3 million 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.

+ References+ Details