Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets [Abstract]

GOODWILL AND INTANGIBLE ASSETS

NOTE 18: GOODWILL AND

INTANGIBLE ASSETS

We classify purchased intangible assets into three categories: (1) goodwill, (2) intangible assets with finite lives subject to amortization and (3) intangible assets with indefinite lives. Goodwill and intangible assets with indefinite lives are not amortized; rather, they are reviewed for impairment at least annually. For additional information regarding our policies on impairment reviews, see Note 1 under the captions Goodwill and Goodwill Impairment, and Impairment of Long-lived Assets excluding Goodwill.

GOODWILL

Goodwill is recognized when the consideration paid for a business combination (acquisition) exceeds the fair value of the tangible and other intangible assets acquired. Goodwill is allocated to reporting units for purposes of testing goodwill for impairment. There were no charges for goodwill impairment in the years ended December 31, 2011, 2010 and 2009.

We have four reportable segments organized around our principal product lines: aggregates, concrete, asphalt mix and cement. Changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2011, 2010 and 2009 are summarized below:

GOODWILL

in thousands	Aggregates			Concrete		Asphalt Mix		Cement			Total
Gross Carrying Amount
Total as of December 31, 2009		$3,004,667			$0		$91,633		$252,664			$3,348,964
Goodwill of acquired businesses		716			0		0		0			716
Total as of December 31, 2010		$3,005,383			$0		$91,633		$252,664			$3,349,680
Goodwill of divested businesses		(10,300	)		0		0		0			(10,300	)
Total as of December 31, 2011		$2,995,083			$0		$91,633		$252,664			$3,339,380
Accumulated Impairment Losses
Total as of December 31, 2009		$0			$0		$0		($252,664	)		($252,664	)
Goodwill impairment loss		0			0		0		0			0
Total as of December 31, 2010		$0			$0		$0		($252,664	)		($252,664	)
Goodwill impairment loss		0			0		0		0			0
Total as of December 31, 2011		$0			$0		$0		($252,664	)		($252,664	)
Goodwill, net of Accumulated Impairment Losses
Total as of December 31, 2009		$3,004,667			$0		$91,633		$0			$3,096,300
Total as of December 31, 2010		$3,005,383			$0		$91,633		$0			$3,097,016
Total as of December 31, 2011		$2,995,083			$0		$91,633		$0			$3,086,716

We test goodwill for impairment on an annual basis or more frequently if events or circumstances change in a manner that would more likely than not reduce the fair value of a reporting unit below its carrying value. A decrease in the estimated fair value of one or more of our reporting units could result in the recognition of a material, noncash write-down of goodwill that would reduce equity and result in an increase in our total debt as a percentage of total capital (42.6% as of December 31, 2011). The indenture governing our notes contains a covenant limiting our total debt as a percentage of total capital to 65%. We believe that it is highly unlikely that any potential write-down in goodwill would result in a violation of this covenant.

INTANGIBLE ASSETS

Intangible assets acquired in business combinations are stated at their fair value determined as of the date of acquisition. Costs incurred to renew or extend the life of existing intangible assets are capitalized. These capitalized renewal/extension costs were immaterial for the years presented. Intangible assets consist of contractual rights in place (primarily permitting and zoning rights), noncompetition agreements, favorable lease agreements, customer relationships and trade names and trademarks. Intangible assets acquired individually or otherwise obtained outside a business combination consist primarily of permitting, permitting compliance and zoning rights and are stated at their historical cost, less accumulated amortization, if applicable.

Historically, we have acquired intangible assets with only finite lives. Amortization of intangible assets with finite lives is recognized over their estimated useful lives using a method of amortization that closely reflects the pattern in which the economic benefits are consumed or otherwise realized. Intangible assets with finite lives are reviewed for impairment when events or circumstances indicate that the carrying amount may not be recoverable. There were no charges for impairment of intangible assets in the years ended December 31, 2011, 2010 and 2009.

The gross carrying amount and accumulated amortization by major intangible asset class for the years ended December 31 are summarized below:

INTANGIBLE ASSETS

in thousands	2011			2010
Gross Carrying Amount
Contractual rights in place		$640,450			$628,707
Noncompetition agreements		1,430			2,200
Favorable lease agreements		16,677			16,677
Permitting, permitting compliance and zoning rights		76,956			69,631
Customer relationships		14,493			14,393
Trade names and trademarks		5,006			5,006
Other		3,200			3,200
Total gross carrying amount		$758,212			$739,814
Accumulated Amortization
Contractual rights in place		($35,748	)		($29,100	)
Noncompetition agreements		(841	)		(1,308	)
Favorable lease agreements		(2,031	)		(1,531	)
Permitting, permitting compliance and zoning rights		(12,880	)		(11,083	)
Customer relationships		(4,466	)		(2,940	)
Trade names and trademarks		(1,544	)		(1,043	)
Other		(3,200	)		(1,116	)
Total accumulated amortization		($60,710	)		($48,121	)
Total Intangible Assets Subject to Amortization, net		$697,502			$691,693
Intangible Assets with Indefinite Lives		0			0
Total Intangible Assets, net		$697,502			$691,693
Aggregate Amortization Expense for the Year		$14,032			$13,617

Estimated amortization expense for the five years subsequent to December 31, 2011 is as follows:

in thousands
Estimated Amortization Expense for Five Subsequent Years
2012	$11,104
2013	10,311
2014	10,505
2015	11,652
2016	12,783