Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets [Abstract]

12. Goodwill and Intangible Assets

The Company has goodwill of $12.5 million included in other assets on the Consolidated Balance Sheets. Goodwill includes $5.0 million in the Grain business, $6.8 million in the Plant Nutrient business and $0.7 million in the Turf & Specialty business. The total amount of goodwill in the Plant Nutrient business includes $1.7 million goodwill from the 2011 acquisition discussed in Note 16, Business Acquisitions.

Goodwill is tested annually for impairment as of December 31 or whenever events or circumstances change that would indicate that an impairment of goodwill may be present. There have been no goodwill impairment charges historically. In 2010, the reporting units' fair value significantly exceeded its carrying value. In the fourth quarter of 2011, the Company performed a qualitative goodwill impairment analysis. In performing this qualitative assessment of goodwill, management has considered the following relevant events and circumstances:

•

Macroeconomic conditions including, but not limited to deterioration in general economic conditions, limitation on accessing capital, or other developments in equity and credit markets;

•

Industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment, a change in the market for an entity's products or services, or a regulatory or political development;

•

Cost factors such as increases in commodity prices, raw materials, labor, or other costs that have a negative effect on earnings and cash flows;

•

Overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods;

•

Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers and;

•

Events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more-likely-than-not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit.

There is a certain degree of uncertainty associated with the key assumptions used. Potential events or changes in circumstances that could reasonably be expected to negatively affect the key assumptions include significant volatility in commodity prices or raw material prices and unanticipated changes in the economy or industries within which the businesses operate. When considering all factors in totality, management believes it is more likely than not that the fair value of goodwill exceeds its carrying amount, and as such, no further analysis was required for purposes of testing goodwill for impairment.

The Company's intangible assets are included in other assets and are as follows:

(in thousands)

Group

Original
Cost

Accumulated
Amortization

Net Book
Value

December 31, 2011

Amortized intangible assets

Acquired customer list

Rail

3,462

3,331

131

Acquired customer list

Plant Nutrient

4,096

1,098

2,998

Acquired customer list

Grain

1,250

433

817

Acquired non-compete agreement

Plant Nutrient

1,319

847

472

Acquired non-compete agreement

Grain

175

129

Acquired marketing agreement

Plant Nutrient

1,607

825

782

Acquired supply agreement

Plant Nutrient

4,846

1,443

3,403

Acquired grower agreement

Grain

300

175

125

Patents and other

Various

943

474

469

Lease intangible

Rail

2,222

1,433

789

20,220

10,105

10,115

December 31, 2010

Amortized intangible assets

Acquired customer list

Rail

3,462

3,299

163

Acquired customer list

Plant Nutrient

3,846

670

3,176

Acquired customer list

Grain

1,250

150

1,100

Acquired non-compete agreement

Plant Nutrient

1,250

594

656

Acquired non-compete agreement

Grain

175

164

Acquired marketing agreement

Plant Nutrient

1,604

619

985

Acquired supply agreement

Plant Nutrient

4,846

926

3,920

Acquired grower agreement

Grain

300

225

Acquired patents and other

Various

943

401

542

Lease intangible

Rail

1,673

633

1,040

19,349

7,378

11,971

Amortization expense for intangible assets was $2.8 million, $2.4 million and $1.2 million for 2011, 2010 and 2009, respectively. Expected future annual amortization expense is as follows: 2012 — $2.8 million; 2013 — $1.6 million; 2014 — $1.2 million; 2015 — $1.0 million; and 2016 — $0.9 million.

- Definition

Discloses 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 or 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. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

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