6. Long-Lived Assets

Property, Plant and Equipment—Property, plant and equipment consisted of the following at September 30:

(in thousands of dollars)	Estimated useful lives	2012			2013

Land and improvements	15 - 40 years	$	11,761		$	11,359
Buildings and improvements	5 - 40 years		59,433			61,760
Equipment and vehicles	3 - 20 years		190,649			204,438
Dies and molds	3 - 20 years		75,265			79,248
Construction in progress	—		9,605			11,608

			346,713			368,413
Less accumulated depreciation			(187,007	)		(208,794	)

Net property, plant and equipment		$	159,706		$	159,619

Depreciation expense was approximately $41.9 million, $30.8 million and $32.1 million in 2011, 2012 and 2013, respectively.

Intangible Assets—All but one of Headwaters' identified intangible assets are being amortized. The following table summarizes the gross carrying amounts and related accumulated amortization of all intangible assets as of September 30:

		2012				2013

(in thousands of dollars)	Estimated useful lives	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Trade name	Indefinite	$	0		—	$	4,800		—
CCP contracts	20 years		106,400	$	53,379		106,400	$	58,699
Customer relationships	5 - 15 years		72,464		38,382		83,564		44,129
Trade names	5 - 20 years		67,890		27,105		67,790		30,502
Patents and patented technologies	4 - 19 years		55,102		41,661		55,099		46,954
Other	3 - 17 years		3,760		1,178		3,960		1,532

		$	305,616	$	161,705	$	321,613	$	181,816

The increase in gross carrying amount of intangible assets during 2013 is primarily attributable to assets acquired in the Kleer Lumber acquisition described in Note 12. Total amortization expense related to intangible assets was approximately $22.4 million, $20.7 million and $20.2 million in 2011, 2012 and 2013, respectively. Total estimated annual amortization expense for 2014 through 2018 is shown in the following table.

Year ending September 30:	(in thousands)

2014	$	19,946
2015		15,820
2016		15,563
2017		14,685
2018		14,637

Goodwill—Changes in the carrying amount of goodwill, by segment, are as follows for the two-year period ended September 30, 2013.

(in thousands)	Light building products		Heavy construction materials		Total

Balances as of September 30, 2011 and 2012	$	672	$	115,999	$	116,671
Goodwill related to 2013 acquisition		20,527		0		20,527

Balances as of September 30, 2013	$	21,199	$	115,999	$	137,198

Impairment Testing—In accordance with the requirements of ASC Topic 350 Intangibles—Goodwill and Other, Headwaters does not amortize goodwill or indefinite-lived intangible assets, all of which relate to acquisitions. However, Headwaters is required to periodically test these assets for impairment, at least annually, or sooner if indicators of possible impairment arise. Headwaters performs its annual impairment testing during the fourth quarter using a June 30 test date and a one- to three-step process for goodwill. Headwaters' reporting units for purposes of testing for goodwill impairment are the same as its operating segments.

Step 1 of goodwill impairment testing consists of determining and comparing the fair value of a reporting unit, calculated primarily using discounted expected future cash flows, to the carrying value of the reporting unit. If step 1 is failed for a reporting unit, indicating a potential impairment, Headwaters is required to complete step 2, which is a more detailed test to calculate the implied fair value of goodwill, and compare that value to the carrying value of the goodwill. If the carrying value of goodwill exceeds its implied fair value, an impairment loss is required to be recorded. For the 2011 test date, step 1 of the goodwill impairment test was performed for the heavy construction materials reporting unit with no resulting indications of potential impairment. Accordingly, step 2 was not performed and no impairment charges were necessary.

Under new accounting rules adopted in 2012, Headwaters evaluates qualitative factors, including macroeconomic conditions, industry and market considerations, overall financial performance and cost factors, to determine whether it is necessary to perform step 1 of the two-step goodwill impairment test. This qualitative evaluation is commonly referred to as "step 0." After assessing the appropriate qualitative factors, only if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, is it necessary to perform step 1 as described above. For the 2012 and 2013 test dates, Headwaters performed a step 0 qualitative evaluation for both the heavy construction materials and light building products reporting units and concluded that it was more likely than not that the fair values exceeded the carrying amounts of goodwill. Accordingly, further step 1 and step 2 testing for impairment was not required to be performed.

As of September 30, 2013, Headwaters has only one indefinite-lived intangible asset and it was acquired in 2013 (see Note 12). In future years, Headwaters will perform an annual qualitative assessment of this indefinite-lived intangible asset for potential impairment, similar to the test for goodwill impairment. If, based on the qualitative assessment, it is more likely than not that the fair value of the intangible asset is less than its carrying amount, a calculation of the fair value will be made, which will be compared to the carrying amount. If the carrying amount exceeds its fair value, an impairment loss would be recognized in an amount equal to that excess.