Goodwill and Intangibles

12 Months Ended

Dec. 31, 2012

6. Goodwill and Intangibles

Goodwill activity for 2012 and 2011 is as follows:


											December 31, 2012
(in millions)	Net Book Value at December 31, 2011		Additions		Impairment Charge			Foreign Exchange and Other Adjustments			Gross Carrying Amount		Accumulated Impairment Charges			Net Book Value
Goodwill
Outdoor Solutions	$	687.7	$	35.9	$	—		$	(0.5	)	$	741.6	$	(18.5	)	$	723.1
Consumer Solutions		492.3		32.4		—			2.4			527.1		—			527.1
Branded Consumables		515.6		35.6		—			0.9			775.3		(223.2	)		552.1
Process Solutions		21.5		0.2		—			—			21.7		—			21.7

	$	1,717.1	$	104.1	$	—		$	2.8		$	2,065.7	$	(241.7	)	$	1,824.0


											December 31, 2011
(in millions)	Net Book Value at December 31, 2010		Additions		Impairment Charge			Foreign Exchange and Other Adjustments			Gross Carrying Amount		Accumulated Impairment Charges			Net Book Value
Goodwill
Outdoor Solutions	$	684.0	$	3.6	$	—		$	0.1		$	706.2	$	(18.5	)	$	687.7
Consumer Solutions		492.6		—		—			(0.3	)		492.3		—			492.3
Branded Consumables(a)		554.3		4.6		(41.9	)		(1.4	)		741.4		(225.8	)		515.6
Process Solutions		21.5		—		—			—			21.5		—			21.5

	$	1,752.4	$	8.2	$	(41.9	)	$	(1.6	)	$	1,961.4	$	(244.3	)	$	1,717.1

(a)

In the fourth quarter of 2011, the Company’s annual impairment test, in connection with fourth quarter triggering events, resulted in a non-cash charge to reflect impairment of goodwill in the Company’s Branded Consumables segment. The impairment charge was recorded primarily within the United States Playing Cards business and was primarily due to a decrease in the fair value of forecasted cash flows, reflecting lower levels of revenues and margins in the business than originally forecast.

In the second quarter of 2010, the Company recorded a non-cash charge of $17.3 to reflect impairment of goodwill in the Company’s Branded Consumables segment. The impairment was due to a decrease in the fair value of forecasted cash flows, reflecting the deterioration of revenues and margins in this segment’s Arts and Crafts business due to a decline in 2010 of forecasted sales to a major customer.

Intangibles activity for 2012 and 2011 is as follows:


(in millions)	Gross Carrying Amount at December 31, 2011		Additions		Impairment Charge			Accumulated Amortization and Foreign Exchange			Net Book Value at December 31, 2012		Amortization Periods (years)
Intangibles
Patents	$	7.5	$	1.8	$	—		$	(2.9	)	$	6.4		12-30
Manufacturing process and expertise		42.1		2.1		—			(38.5	)		5.7		3-7
Brand names		18.3		—		—			(5.9	)		12.4		4-20
Customer relationships and distributor channels		253.6		54.2		—			(54.3	)		253.5		10-35
Trademarks and tradenames		922.0		58.9		—			(2.2	)		978.7		indefinite

	$	1,243.5	$	117.0	$	—		$	(103.8	)	$	1,256.7


(in millions)	Gross Carrying Amount at December 31, 2010		Additions		Impairment Charge			Accumulated Amortization and Foreign Exchange			Net Book Value at December 31, 2011		Amortization Periods (years)
Intangibles
Patents	$	7.2	$	0.3	$	—		$	(2.2	)	$	5.3		12-30
Non-compete agreements		3.7		—		—			(3.7	)		—		1-5
Manufacturing process and expertise		42.1		—		—			(34.4	)		7.7		3-7
Brand names		18.3		—		—			(3.8	)		14.5		4-20
Customer relationships and distributor channels		253.6		—		—			(42.7	)		210.9		10-35
Trademarks and tradenames		925.4		—		(1.5	)		(5.8	)		918.1		indefinite

	$	1,250.3	$	0.3	$	(1.5	)	$	(92.6	)	$	1,156.5

Impairment charges for 2011 and 2010 were allocated to the Company’s reporting segments as follows:


(in millions)	2011		2010
Impairment of intangibles
Outdoor Solutions	$	—	$	0.7
Consumer Solutions		—		0.7
Branded Consumables		1.5		1.0

	$	1.5	$	2.4

Impairments—2011

The non-cash impairment charge recorded within the Branded Consumables segment during 2011, which resulted from the Company’s annual impairment test, reflects the impairment of certain tradenames within this segment’s Arts and Crafts business and was due to a decline in forecasted cash flows resulting from a continued deterioration of forecasted sales and profitability at its major customers.

Impairments—2010

The non-cash impairment charge recorded within the Branded Consumables segment during the second quarter of 2010 reflects the impairment of certain tradenames within this segment’s Arts and Crafts business. The impairment was due to a decrease in the fair value of forecasted cash flows, reflecting the deterioration of revenues and margins in the business due to a decline in 2010 of forecasted sales to a major customer. The remainder of the impairment charges in 2010 are primarily due to a decline in forecasted revenues of certain tradenames.

The estimated future amortization expense related to amortizable intangible assets at December 31, 2012 is as follows:


Years Ending December 31,	Amount
	(in millions)
2013	$	19.8
2014		17.1
2015		16.6
2016		16.2
2017		15.6
Thereafter		192.7

Amortization of intangibles for 2012, 2011 and 2010 was $17.8, $18.7 and $16.0, respectively. At December 31, 2012, approximately $2 billion of the goodwill and other intangible assets recorded by the Company is not deductible for income tax purposes.

During 2011, the Company recorded a $9.1 impairment charge related to the impairment of an equity basis investment. This impairment charge is classified in the consolidated financial statement of operations in impairment of goodwill, intangibles and other assets.

- 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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