4.	Composition of Certain Financial Statement Captions

Inventories are valued at the lower of cost (first in, first out) or market. Inventory costs include the cost of material, labor and manufacturing overhead. The following is a summary of the inventory components as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30, 2011		December 31, 2010
Raw materials	$	5,518	$	9,459
Work-in-process		66,199		49,825
Finished goods		39,524		34,974
	$	111,241	$	94,258

Property, plant and equipment are recorded at cost and consist of the following (in thousands):

	June 30, 2011			December 31, 2010
Land	$	19,444		$	18,902
Buildings and improvements		122,484			97,076
Machinery and equipment		235,495			209,334
Leasehold improvements		8,663			8,401
Office equipment		36,501			32,269
Construction in progress		13,043			37,286
		435,630			403,268
Less accumulated depreciation and amortization		(179,571	)		(159,587	)
	$	256,059		$	243,681

Depreciation expense for the three and six months ended June 30, 2011 were x.x million and x.x million, respectively.

The components of intangible assets are as follows (in thousands):

	June 30, 2011						December 31, 2010
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Amortizing Intangible Assets
Backlog	$	1,871	$	1,871	$	-	$	1,826	$	1,826	$	-
Developed technology		70,969		6,908		64,061		50,530		5,387		45,143
Tradename		4,110		630		3,480		1,110		571		539
Customer relationships		47,604		14,191		33,413		47,604		12,087		35,517
Non-compete agreement		1,100		650		450		500		500		-
Non-amortizing tradename		2,466		-		2,466		2,276		-		2,276
Total	$	128,120	$	24,250 -	$	103,870	$	103,846	$	20,371	$	83,475

Amortization expense for the three and six months ended June 30, 2011 were x.x million and x.x million, respectively.

The estimated useful lives for intangible assets are:

Identified Intangible Asset	Estimated Useful Life in Years or Months
Developed technology	10 years – 20 years
Tradename	10 years
Customer relationships	10 years – 12.5 years
Backlog	1 month – 3 months
Non-compete agreement	15 months

Amortization of definite-lived intangible assets will be approximately (in thousands): $6,692 for the balance of fiscal year 2011, $7,905 in fiscal year 2012, $10,246 in fiscal year 2013, $12,684 in fiscal year 2014 and $15,440 in fiscal year 2015.

The roll forward of the goodwill balance by segment during the six months ended June 30, 2011 is as follows (in thousands):

	ACO		Thermo		ESK		Boron			Total
Balance at December 31, 2010
Goodwill	$	5,311	$	10,331	$	9,326	$	22,083		$	47,051
Accumulated impairment losses		-		-		-		(3,832	)		(3,382	)
		5,311		10,331		9,326		18,251			43,219
Acquisition of VIOX Corporation		7,022		-		-		-			7,022
Translation and other		-		-		780		-			780

Balance at June 30, 2011
Goodwill		12,333		10,331		10,106		22,083			54,853
Accumulated impairment losses		-		-		-		(3,832	)		(3,382	)
	$	12,333	$	10,331	$	10,106	$	18,251		$	51,021

The Company is required to test annually whether the estimated fair value of its reporting units is sufficient to support the goodwill assigned to those reporting units; the Company performs the annual test in the fourth quarter. The Company is also required to test goodwill for impairment before the annual test if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount, such as a significant adverse change in the business climate. The Company determined that a test of goodwill for impairment was not required as of June 30, 2011.