Intangible Assets

12 Months Ended

Dec. 31, 2011

Intangible Assets [Abstract]

Intangible assets

5. Intangible Assets

We have both indefinite and definite lived intangible assets. We perform impairment tests on intangible assets with indefinite useful lives including goodwill (when applicable) as of October 31 of each fiscal year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit or an intangible asset with an indefinite useful life to below its carrying value. The impairment test consists of a comparison of the fair value of an intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Intangible assets determined to have indefinite useful lives, primarily comprised of trade names, are not amortized. An income approach is used for valuing trade names. Assumptions used in the income approach include projected revenues and assumed royalty, long-term growth and discount rates. We perform impairment tests on definite lived intangible assets, such as customer relationships, upon identification of events or circumstances that may indicate the carrying amount of the asset might be unrecoverable.

In 2011 and 2010, there was no impairment for any of our customer relationship or trade name intangible assets. We had no recorded goodwill on our consolidated balance sheets as of December 31, 2011 and 2010 or during the years then ended.

In 2009, we recorded goodwill and other intangible asset impairment charges of $43 million. Because of continuing weak economic conditions, macroeconomic factors impacting industry business conditions, recent segment operating performance and our decision in September 2009 to close additional distribution branches, we performed interim impairment tests on L&W Supply Corporation and its subsidiaries, or L&W Supply, the reporting unit that comprises our Building Products Distribution segment, as of September 30, 2009. This testing indicated that the fair value of the L&W Supply reporting unit was less than its carrying value and, as a result, impairment existed. Consequently, in the third quarter of 2009, we recorded impairment charges totaling $41 million, of which $29 million related to L&W Supply’s intangible assets associated with trade names and $12 million was its remaining goodwill balance. No impairment existed for L&W Supply’s intangible assets associated with customer relationships. During our annual impairment review in the fourth quarter of 2009, we determined that a full impairment existed for the trade names of the Latin America reporting unit within our Worldwide Ceilings segment. This impairment resulted in an additional impairment charge of $2 million. We determined that no additional impairment existed for L&W Supply’s intangible assets based on the annual review. We had no recorded goodwill on our consolidated balance sheet as of December 31, 2009.

Intangible assets are included in other assets on the consolidated balance sheets. Intangible assets with definite lives are amortized. These assets are summarized as follows:

	As of December 31, 2011							As of December 31, 2010
(millions)	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Intangible Assets with Definite Lives:
Customer relationships	$	70	$	(34	)	$	36	$	70	$	(26	)	$	44
Other		9		(5	)		4		9		(5	)		4
Total	$	79	$	(39	)	$	40	$	79	$	(31	)	$	48

The weighted average amortization periods are 10 years for customer relationships and 11 years for other intangible assets with definite lives. Total amortization expense was $7 million in each of 2011 and 2010 and $8 million in 2009. Estimated annual amortization expense is as follows:

(millions)	2012		2013		2014		2015		2016
Estimated annual amortization expense	$	8	$	7	$	7	$	7	$	7

Intangible assets with indefinite lives are not amortized. These assets are summarized as follows:

	As of December 31, 2011						As of December 31, 2010
(millions)	Gross Carrying Amount		Impairment Charges		Net		Gross Carrying Amount		Impairment Charges			Net
Intangible Assets with Indefinite Lives:
Trade names	$	22	$	—	$	22	$	22	$	—		$	22
Other		8		—		8		9		(1	)		8
Total	$	30	$	—	$	30	$	31	$	(1	)	$	30