Goodwill and Other Intangible Assets

9 Months Ended

Sep. 29, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

The Company reviews goodwill and other intangible assets with indefinite lives for impairment on an annual basis, or more frequently if events or circumstances change that would impact the value of these assets. The Company did not recognize any impairment losses of its goodwill during the quarters or nine months ended September 29, 2012 and October 1, 2011.

During the third quarter of 2011, due to the weaker economic conditions and lower projections for results of operations, management lowered its forecast used for its discounted cash flow analysis. In addition, Parent granted stock options in September 2011 to its newly appointed President and Chief Executive Officer at an exercise price of $5 per share based on a determination of fair market value by the board of directors of Parent, and also modified certain other outstanding options to an exercise price of $5 per share. As a result of the lower management projections for operating results and the calculated lower per share equity value, the Company believed that it had an indicator of impairment and performed interim goodwill impairment testing as of September 3, 2011. The Company completed the first step of its goodwill impairment testing with the assistance of an independent valuation firm during the third quarter of 2011. However, the second step of the valuation analysis was not completed and management could not reasonably estimate the amount of an impairment charge prior to the filing date of the Company's Quarterly Report on Form 10-Q for the quarter ended October 1, 2011. The Company completed the valuation work and the estimates of fair value necessary to complete the second step of the impairment analysis and recorded the resulting impairment charge during the fourth quarter of 2011. None of the Company’s goodwill is deductible for income tax purposes.

The changes in the carrying amount of goodwill are as follows (in thousands):



	Goodwill
Balance at December 31, 2011	$	478,912
Foreign currency translation	5,850
Balance at September 29, 2012	$	484,762

The Company’s other intangible assets consist of the following (in thousands):



	September 29, 2012							December 31, 2011
	Average Amortization Period (In Years)	Cost		Accumulated Amortization		Net Carrying Value		Average Amortization Period (In Years)	Cost		Accumulated Amortization		Net Carrying Value
Amortized customer bases	13	$	327,372	$	51,493	$	275,879	13	$	330,080	$	31,498	$	298,582
Amortized non-compete agreements	3	10		4		6		3	10		2		8
Total amortized intangible assets		327,382		51,497		275,885			330,090		31,500		298,590
Non-amortized trade names (1)		332,454		—		332,454			323,510		—		323,510
Total intangible assets		$	659,836	$	51,497	$	608,339		$	653,600	$	31,500	$	622,100

(1) Balances reflect impairment charges recorded during 2011.

The Company’s non-amortized intangible assets consist of the Alside^®, Revere^®, Gentek^®, Preservation^® and Alpine trade names and are tested for impairment at least annually at the beginning of the fourth quarter and on a more frequent basis if there are indications of potential impairment. The Company did not recognize any impairment losses of its other intangible assets during the quarter or nine months ended September 29, 2012.

As a result of the lower management projections for operating results and the calculated lower per share equity value discussed above, the Company believed potential indicators of impairment existed for the non-amortized trade names and completed an interim test of the fair value with the assistance of an independent valuation firm. The Company determined that the fair value determined by the income approach of certain non-amortized trade names was lower than the carrying value. Accordingly, the Company recorded an impairment charge of $72.2 million during the third quarter of 2011 associated with its non-amortized trade names.

Finite lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense related to other intangible assets was $6.6 million and $19.7 million for the quarter and nine months ended September 29, 2012, respectively, and $6.5 million and $19.7 million for the quarter and nine months ended October 1, 2011, respectively.

- 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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