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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2011

GOODWILL AND OTHER INTANGIBLE ASSETS

7. GOODWILL AND OTHER INTANGIBLE ASSETS

In February 2011, we acquired Exterior Portfolio which is now part of our building products segment. We have estimated the fair market value of the acquired assets and liabilities and a preliminary allocation of the net purchase price to goodwill and other intangible assets as follows: $25.5 million to customer relationships, $5.5 million to technology, $4.5 million to trade names, and the remaining $5.7 million was attributed to goodwill.

Goodwill. The following table provides the detail of goodwill at December 31, 2010 and the changes made to goodwill by reportable segment during the nine months ended September 30, 2011.

(In thousands)	Chlorovinyls			Building Products			Total

Gross goodwill at December 31, 2010	$	245,266		$	152,058		$	397,324
Accumulated impairment losses at December 31, 2010		(55,487	)		(132,206	)		(187,693	)

Net goodwill at December 31, 2010	$	189,779		$	19,852		$	209,631

Gross goodwill at December 31, 2010	$	245,266		$	152,058		$	397,324
Preliminary addition from acquisition		—			5,702			5,702
Foreign currency translation adjustment		(4,821	)		—			(4,821	)

Gross goodwill at September 30, 2011		240,445			157,760			398,205
Accumulated impairment losses at September 30, 2011		(55,487	)		(132,206	)		(187,693	)

Net goodwill at September 30, 2011	$	184,958		$	25,554		$	210,512

Indefinite-lived intangible assets. At September 30, 2011 and December 31, 2010, our indefinite-lived assets consisted only of trade names. The following table provides the indefinite-lived intangible assets by reporting segment as of September 30, 2011 and December 31, 2010 and the changes to indefinite-lived intangible assets during the nine months ending September 30, 2011.

(In thousands)	Chlorovinyls			Building Products			Total

Balance at December 31, 2010	$	372		$	4,247		$	4,619
Preliminary addition from acquisition		—			4,500			4,500
Foreign currency translation adjustment		(16	)		(91	)		(107	)

Balance at September 30, 2011	$	356		$	8,656		$	9,012

Finite-lived intangible assets. At September 30, 2011 and December 31, 2010, we also had customer relationship and technology intangible assets that relate to our building products segment, which are our only finite-lived intangible assets. As noted above, an additional $25.5 million attributable to customer relationships and $5.5 million attributable to technology relating to the Exterior Portfolio acquisition are included in the September 30, 2011 building products segment balances. The following tables provide the detail of finite-lived intangible assets at September 30, 2011 and December 31, 2010.

(In thousands)		Building Products

Gross carrying amounts at September 30, 2011:
	Customer relationships	$	36,922
	Technology		17,367

	Total		54,289
Accumulated amortization at September 30, 2011:
	Customer relationships		(6,402	)
	Technology		(7,716	)

	Total		(14,118	)
Foreign currency translation adjustment and other at September 30, 2011:
	Customer relationships		(1,684	)
	Technology		—

	Total		(1,684	)
Net carrying amounts at September 30, 2011:
	Customer relationships		28,836
	Technology		9,651

	Total	$	38,487

In thousands		Building Products

Gross carrying amounts at December 31, 2010:
	Customer relationships	$	11,422
	Technology		11,867

	Total		23,289
Accumulated amortization at December 31, 2010:
	Customer relationships		(5,199	)
	Technology		(6,674	)

	Total		(11,873	)
Foreign currency translation adjustment and other at December 31, 2010:
	Customer relationships		(1,684	)
	Technology		—

	Total		(1,684	)
Net carrying amounts at December 31, 2010:
	Customer relationships		4,539
	Technology		5,193

	Total	$	9,732

The weighted average estimated useful life for the customer relationships is approximately 16 years. Technology has a weighted average estimated useful life of approximately 7 years. Amortization expense for the finite-lived intangible assets was $0.8 million and $0.3 million for the three months ended September 30, 2011 and September 30, 2010, respectively. For the nine months ended September 30, 2011 and September 30, 2010, amortization expense was $2.2 million and $0.8 million, respectively. Total finite-lived intangible assets estimated annual amortization expense for the next five fiscal years is approximately $3.3 million per year.

During the three months ended September 30, 2011 the Company's stock price and market capitalization fluctuated and at September 30, 2011 our market capitalization was less than the book value of our stockholders' equity. As a result we were required to evaluate our reporting units with goodwill and other indefinite lived intangible assets for impairments. Our reporting units within our building products segment have goodwill and other intangible asset balances of $72.7 million at September 30, 2011. In 2011, the North American housing and construction markets have remained anemic and current industry expectations vary significantly regarding the timing and pace of recovery. In the three months ended September 30, 2011, we do not believe there was any impairment but continued weakness in the North American housing and construction markets continues to challenge these reporting units. Further deterioration in the North American housing and construction markets or the use of different assumptions in our evaluations could yield materially different results.

- 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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