Goodwill and Other Intangible Assets

6 Months Ended

Jul. 03, 2011

Goodwill and Other Intangible Assets [Abstract]

Note 6: Goodwill and Other Intangible Assets

Goodwill

A summary of the changes in goodwill for the six months ended July 3, 2011 is as follows:


	Tubes and
	Cores/			Consumer			Packaging
	Paper			Packaging			Services		All Other
	Segment			Segment			Segment		Sonoco		Total

Goodwill at December 31, 2010	$	231,637		$	389,384		$	150,082	$	68,645	$	839,748
Goodwill on acquisitions		4,553			—			—		—		4,553
Other		(97	)		(2,846	)		—		—		(2,943	)
Foreign currency translation		10,259			5,349			—		149		15,757


Goodwill at July 3, 2011	$	246,352		$	391,887		$	150,082	$	68,794	$	857,115

The Company recorded $4,553 of goodwill in connection with 2011 acquisitions. “Other” consists primarily of amounts previously recorded as “Goodwill” that have been reclassified to “Long-Term Deferred Income Taxes.” This reclassification related to the July 2010 acquisition of Associated Packaging Technologies, Inc. and resulted from a final review of the facts and conditions that existed at the time of the acquisition. In addition, “Other” also reflects the disposal of $97 of goodwill associated with the sale of a small tubes and core business in the United States.

The Company completed its most recent annual goodwill impairment testing during the third quarter of 2010. Based on the results of this evaluation, the Company concluded that there was no impairment of goodwill for any of its reporting units. For 2010 testing purposes, the fair values of the Company’s reporting units were estimated based on projections of future years’ operating results and associated cash flows, together with comparable trading and transaction multiples. The Company’s projections incorporated management’s expectations for future growth and, where applicable, improved operating margins. Should such growth and/or margin improvement not materialize as projected, or if the Company’s assessments of the relevant facts and circumstances change, noncash impairment charges may be required. Reporting units with significant goodwill whose results need to show improvement included Tubes & Cores/Paper — Europe, Matrix Packaging, Flexible Packaging, Packaging Services, and Rigid Paper Containers — Australia/New Zealand. Total goodwill associated with these reporting units was approximately $110,000, $132,000, $97,000, $150,000, and $6,000, respectively at July 3, 2011. There were no triggering events during the three- or six-month periods ended July 3, 2011.

Other Intangible Assets

A summary of other intangible assets as of July 3, 2011 and December 31, 2010 is as follows:


	July 3,			December 31,
	2011			2010

Other Intangible Assets, gross
Patents	$	2,225		$	2,264
Customer lists		184,264			180,673
Land use rights		366			354
Supply agreements		—			1,000
Other		16,645			16,409

Other Intangible Assets, gross	$	203,500		$	200,700

Accumulated Amortization	$	(78,015	)	$	(70,300	)

Other Intangible Assets, net	$	125,485		$	130,400

The Company recorded $161 of identifiable intangibles in connection with 2011 acquisitions, all of which related to customer lists.

Other intangible assets are amortized on a straight-line basis over their respective useful lives, which generally range from three to twenty years. The Company has no intangibles with indefinite lives. Aggregate amortization expense was $3,650 and $2,983 for the three months ended July 3, 2011 and June 27, 2010, respectively, and $7,351 and $5,986 for the six months ended July 3, 2011 and June 27, 2010, respectively. Amortization expense on other intangible assets is expected to approximate $14,600 in 2011, $14,000 in 2012, $13,700 in 2013, $12,900 in 2014 and $11,500 in 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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