XML 117 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
Other Assets
 12 Months Ended
Dec. 31, 2014
Other Assets [Abstract]  
Other Assets
Other Assets
Other assets consist of the following at December 31:
 
 
2014
 
2013
 
Weighted
Average
Life
 
 
Cost
 
Accumulated
Amortization
 
Net
 
Cost
 
Accumulated
Amortization
 
Net
 
Intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Licenses and intellectual
   property
 
$
82,611

 
$
(35,732
)
 
$
46,879

 
$
63,765

 
$
(43,190
)
 
$
20,575

 
16
Trademarks
 
42,790

 
(759
)
 
42,031

 
6,361

 
—

 
6,361

 
19
Customer relationships
 
75,249

 
(17,374
)
 
57,875

 
75,249

 
(12,176
)
 
63,073

 
14
Goodwill
 
62,016

 
—

 
62,016

 
62,016

 
—

 
62,016

 
 
Other
 
16,501

 
(6,871
)
 
9,630

 
11,858

 
(4,837
)
 
7,021

 
7
Total intangible assets
 
279,167

 
(60,736
)
 
218,431

 
219,249

 
(60,203
)
 
159,046

 
 
Available-for-sale investments
 
15,414

 
—

 
15,414

 
—

 
—

 
—

 
 
Cost-method investments
 
57,147

 
—

 
57,147

 
—

 
—

 
—

 
 
Notes receivable from affiliate
 
1,025

 
—

 
1,025

 
1,025

 
—

 
1,025

 
 
Turnaround costs
 
107,892

 
(56,493
)
 
51,399

 
107,732

 
(37,276
)
 
70,456

 
5
Debt issuance costs
 
20,406

 
(11,282
)
 
9,124

 
19,220

 
(9,608
)
 
9,612

 
13
Other
 
49,546

 
(18,245
)
 
31,301

 
31,288

 
(14,489
)
 
16,799

 
3
Total deferred charges and
   other assets
 
251,430

 
(86,020
)
 
165,410

 
159,265

 
(61,373
)
 
97,892

 
 
Other assets, net
 
$
530,597

 
$
(146,756
)
 
$
383,841

 
$
378,514

 
$
(121,576
)
 
$
256,938

 
 

Amortization expense on other assets of $35,986, $30,045 and $25,131 is included in the consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012, respectively.
Scheduled amortization of intangible assets for the next five years is as follows: $12,315, $12,087, $11,491, $11,191 and $10,036 in 2015, 2016, 2017, 2018 and 2019, respectively.
Goodwill
Goodwill is tested for impairment at least annually, or when events or changes in circumstances indicate the fair value of a reporting unit with goodwill has been reduced below its carrying value. The Company performed its annual impairment tests for the Olefins and Vinyls segments' goodwill in October 2014 and April 2014, respectively, and the impairment tests indicated that the recorded goodwill was not impaired. There has been no impairment of the Olefins or Vinyls segments' goodwill since the goodwill was initially recorded. The gross carrying amounts of goodwill for the years ended December 31, 2014 and 2013 are as follows:
 
 
Olefins Segment
 
Vinyls Segment
 
Total
Balance at December 31, 2012
 
$
29,990

 
$
—

 
$
29,990

Goodwill acquired during the year
 
—

 
32,026

 
32,026

Balance at December 31, 2013
 
29,990

 
32,026

 
62,016

Changes in goodwill during the year
 
—

 
—

 
—

Balance at December 31, 2014
 
$
29,990

 
$
32,026

 
$
62,016


Olefins Segment Goodwill
The fair value of the Olefins segment, the reporting unit assessed, was calculated using both a discounted cash flow methodology and a market value methodology. The discounted cash flow projections were based on a nine-year forecast, from 2015 to 2023, to reflect the cyclicality of the Company's olefins business. The forecast was based on (1) prices and spreads projected by IHS Chemical, a chemical industry organization offering market and business advisory services for the chemical market, for the same period, and (2) estimates by management, including its strategic and operational plans. Other significant assumptions used in the discounted cash flow projection included sales volumes based on current capacities. The future cash flows were discounted to present value using a discount rate of 8.8%.
The significant assumptions used in determining the fair value of the reporting unit using the market value methodology include the determination of appropriate market comparables and the estimated multiples of EBITDA a willing buyer is likely to pay.
Even if the fair value of the Olefins segment decreased by 10%, the carrying value of the Olefins segment would not exceed its fair value.
Vinyls Segment Goodwill
The fair value of the pipe and foundation building products business, the reporting unit assessed, was calculated using both a discounted cash flow methodology and a market value methodology. The discounted cash flow projections were based on a 10-year forecast, from 2014 to 2023, to reflect the cyclicality of the North American housing and construction markets as the Company's pipe and foundation building products business is significantly influenced by said markets. The forecast was based on historical results and estimates by management, including its strategic and operational plans, and assumed a gradual increase in financial performance based on a housing market recovery in the United States. The future cash flows were discounted to present value using a discount rate of 11.5%.
The significant assumptions used in determining the fair value of the reporting unit using the market value methodology include the determination of appropriate market comparables and the estimated multiples of EBITDA a willing buyer is likely to pay.
Even if the fair value of the reporting unit decreased by 10%, the carrying value of the reporting unit would not exceed its fair value.