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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangible Assets [Abstract]

Note 3 - Goodwill and Other Intangible Assets

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

Balance at December 31, 2009	$	176,923
Acquired goodwill		1,164
Purchase price adjustments, net		429
Balance at December 31, 2010		178,516
Acquired goodwill		137
Goodwill impairment		(1,550	)
Balance at December 31, 2011	$	177,103

The goodwill balance as of December 31, 2009 and December 31, 2010 reflects accumulated impairment losses of $0.7 million. As of October 1, 2011, we had 209 reporting units with allocated goodwill balances. The highest goodwill balance was $7.1 million for our UK reporting unit. For the other reporting units, the highest goodwill balance was $5.7 million and the average goodwill balance was $0.8 million.

In October 2011, we performed our annual goodwill impairment test and identified three Horizon locations in Texas that had estimated fair values below their carrying values. The combined carrying value of goodwill for these three reporting units was $4.6 million. Since the estimated fair values for each reporting unit’s goodwill was below the respective carrying values, we recognized the total difference of $1.6 million as an impairment loss. We recorded this impairment in selling and administrative expenses on the Consolidated Statements of Income. We determined that the goodwill attributed to each of our other reporting units was not impaired.

Other intangible assets consisted of the following (in thousands):

	December 31,
	2011			2010
Horizon tradename (indefinite life)	$	8,400		$	8,400
National Pool Tile (NPT) tradename (20 year life)		1,500			1,500
Non-compete agreements (5 year weighted average useful life)		10,223			10,223
Employment contracts (1)		650			650
Distribution agreement (1)		6,115			6,115
Other intangible assets		26,888			26,888
Less accumulated amortization		(15,150	)		(13,923	)
Other intangible assets, net	$	11,738		$	12,965

(1) The employment contracts and distribution agreement intangibles were fully amortized as of December 31, 2008.

The Horizon tradename has an indefinite useful life and is not subject to amortization. However, we evaluate the useful life of this intangible asset and test for impairment annually. The NPT tradename and the non-compete agreements have finite useful lives and we amortize the estimated fair value of these agreements using the straight-line method over their respective useful lives. The useful lives for our non-compete agreements are based on their contractual terms.

Other intangible amortization expense was $1.2 million in 2011, $1.9 million in 2010 and $1.8 million in 2009.

The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands):

2012	$	854
2013		790
2014		647
2015		135
2016		75

- 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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