GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Aug. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table details the changes in the carrying amount of goodwill by reportable segment:



		Americas								International
(in thousands)		Recycling			Mills		Fabrication			Mill			Marketing and Distribution			Consolidated
Balance at September 1, 2013
	Goodwill	$	9,751		$	295	$	57,637		$	2,942		$	8,449		$	79,074
	Accumulated impairment losses	(2,484		)	—		(493		)	(187		)	(6,331		)	(9,495		)
		7,267			295		57,144			2,755			2,118			69,579
Acquisition		—			4,675		—			—			—			4,675
Translation		—			—		—			21			44			65
Balance at August 31, 2014
	Goodwill	9,751			4,970		57,637			2,964			8,805			84,127
	Accumulated impairment losses	(2,484		)	—		(493		)	(188		)	(6,643		)	(9,808		)
		7,267			4,970		57,144			2,776			2,162			74,319
Impairment		(7,267		)	—		—			—			—			(7,267		)
Goodwill reclassified to assets held for sale ⁽¹⁾		—			—		—						(6,643		)	(6,643		)
Accumulated impairment losses reclassified to assets held for sale ⁽¹⁾		—			—		—						6,643			6,643
Translation		—			—		—			(419		)	(250		)	(669		)
Balance at August 31, 2015
	Goodwill	9,751			4,970		57,637			2,517			1,912			76,787
	Accumulated impairment losses	(9,751		)	—		(493		)	(160		)	—			(10,404		)
		$	—		$	4,970	$	57,144		$	2,357		$	1,912		$	66,383

(1) Includes $1.6 million of goodwill and $1.6 million of accumulated goodwill impairment losses related to assets that were sold during the fourth quarter of fiscal 2015.

As a result of the Company's annual goodwill impairment analysis in the fourth quarter of fiscal 2015, the Company determined that the carrying amount of its Americas Recycling reporting unit exceeded its estimated fair value. The resulting impairment charge of $7.3 million was recorded within the Americas Recycling reporting segment in the fiscal year ended August 31, 2015. The weakened demand for ferrous scrap exports coupled with a lower near term forecast of future operating results were the contributing factors that led to the impairment charges recorded in fiscal 2015.

As of August 31, 2015 and 2014, one of the Company's reporting units within the Americas Fabrication reporting segment comprised $51.3 million of the Company's total goodwill and the fair value exceeded the carrying value by 18% at August 31, 2015. For all other reporting units with significant goodwill amounts as of August 31, 2015, the excess of the fair value over carrying value of each reporting unit was substantial.

The Company estimates the fair value of its reporting units using a weighting of fair values derived from the income and market approaches. Under the income approach, the Company determines the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into account industry and market conditions. The discount rate is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the Company. The market approach, on the other hand, estimates fair value based on market multiples of revenue and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit.

As noted above, at August 31, 2015, the excess of one of the Company's reporting segments within the Americas Fabrication segment exceeded the carrying value by 18%. The future occurrence of a potential indicator of impairment could include matters such as: a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or the general business climate, an adverse action or assessment by a regulator, a significant downturn in non-residential construction markets in the United States, and continued levels of imported steel into the United States. In the event of significant adverse changes of the nature described above, it may be necessary for the Company to recognize a non-cash impairment of goodwill, which could have a material adverse effect on the Company's consolidated financial condition and results of operations.

The annual goodwill impairment analysis did not result in any impairment charges in fiscal 2014. As a result of the Company's annual goodwill impairment analysis in the fourth quarter of fiscal 2013, the Company determined that the carrying amount of its Australian reporting unit exceeded its estimated fair value. The resulting impairment charge of $6.4 million, including a foreign currency translation gain of $0.6 million, was recorded within the International Marketing and Distribution reporting segment in the fiscal year ended August 31, 2013. The weakened Australian economy and in particular the demand for construction steel, coupled with continued operating performance below planned levels during fiscal 2013 and a weak forecast of future operating results were the contributing factors that lead to the impairment charges recorded in fiscal 2013.

The following intangible assets subject to amortization are included in other noncurrent assets on the Company's consolidated balance sheets:



	August 31, 2015						August 31, 2014
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer base	$	35,369	$	28,814	$	6,555	$	38,078	$	25,989	$	12,089
Favorable land leases	10,091		2,101		7,990		11,661		2,075		9,586
Non-competition agreements	1,629		217		1,412		779		40		739
Brand name	648		306		342		3,216		1,452		1,764
Other	101		52		49		101		45		56
Total	$	47,838	$	31,490	$	16,348	$	53,835	$	29,601	$	24,234

Excluding goodwill, there are no other significant intangible assets with indefinite lives. Amortization expense for intangible assets for the years ended August 31, 2015, 2014 and 2013 was $6.9 million, $5.1 million, and $4.9 million, respectively. At August 31, 2015, the weighted average remaining useful life of these intangible assets, excluding the favorable land leases was eight years. The weighted average life of the favorable land leases was 50 years. Estimated amounts of amortization expense for the next five years are as follows:




Year Ended August 31,	(in thousands)
2016	$	4,136
2017	550
2018	1,043
2019	1,072
2020	862

- Definition

The entire disclosure for 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 (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.

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