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GOODWILL AND OTHER INTANGIBLE ASSETS
6 Months Ended
Jun. 30, 2012
GOODWILL AND OTHER INTANGIBLE ASSETS  
GOODWILL AND OTHER INTANGIBLE ASSETS

(7)                                 GOODWILL AND OTHER INTANGIBLE ASSETS

 

The changes in the carrying amount of goodwill, by reportable segment and other operating segments, were as follows:

 

 

 

December 31,
2011

 

Goodwill
resulting from
business
combinations

 

Impairments

 

Foreign
Currency
Translation
and other (1)

 

June 30, 2012

 

Flow Technology reportable segment

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

$

1,019.9

 

$

24.9

 

$

 

$

11.0

 

$

1,055.8

 

Accumulated Impairments

 

 

 

 

 

 

Goodwill

 

1,019.9

 

24.9

 

 

11.0

 

1,055.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Thermal Equipment and Services reportable segment

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

597.8

 

 

 

(33.2

)

564.6

 

Accumulated Impairments

 

(134.9

)

 

 

 

(134.9

)

Goodwill

 

462.9

 

 

 

(33.2

)

429.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Products and Services

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

450.6

 

 

 

0.3

 

450.9

 

Accumulated Impairments

 

(159.7

)

 

 

(0.3

)

(160.0

)

Goodwill

 

290.9

 

 

 

 

290.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

2,068.3

 

24.9

 

 

(21.9

)

2,071.3

 

Accumulated Impairments

 

(294.6

)

 

 

(0.3

)

(294.9

)

Goodwill

 

$

1,773.7

 

$

24.9

 

$

 

$

(22.2

)

$

1,776.4

 

 

 

(1)                                 Includes the allocation of goodwill of $24.3 related to the deconsolidation of our dry cooling products business in China (see Note 3) and reductions in goodwill associated with foreign currency translation adjustments of $50.7, partially offset by adjustments resulting from revisions to estimates of fair value of certain assets and liabilities associated with the Clyde Union and other acquisitions of $52.8.

 

Other Intangibles

 

Identifiable intangible assets comprise the following:

 

 

 

June 30, 2012

 

December 31, 2011

 

 

 

Gross
Carrying
Value

 

Accumulated
Amortization

 

Net
Carrying
Value

 

Gross
Carrying
Value

 

Accumulated
Amortization

 

Net
Carrying
Value

 

Intangible assets with determinable lives:

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents

 

$

8.5

 

$

(7.9

)

$

0.6

 

$

8.5

 

$

(7.6

)

$

0.9

 

Technology

 

183.5

 

(34.9

)

148.6

 

182.2

 

(30.5

)

151.7

 

Customer relationships

 

402.9

 

(52.3

)

350.6

 

400.4

 

(44.7

)

355.7

 

Other

 

32.2

 

(14.7

)

17.5

 

38.7

 

(11.0

)

27.7

 

 

 

627.1

 

(109.8

)

517.3

 

629.8

 

(93.8

)

536.0

 

Trademarks with indefinite lives

 

433.5

 

 

433.5

 

436.4

 

 

436.4

 

Total

 

$

1,060.6

 

$

(109.8

)

$

950.8

 

$

1,066.2

 

$

(93.8

)

$

972.4

 

 

Estimated annual amortization expense related to these intangible assets is $17.3 for the remainder of 2012, $35.0 in 2013, $30.6 in 2014, $30.1 in 2015, and $29.9 in 2016.

 

At June 30, 2012, the net carrying value of intangible assets with determinable lives consisted of $452.2 in the Flow Technology reportable segment, $54.8 in the Thermal Equipment and Services reportable segment, and $10.3 in Industrial Products and Services. Trademarks with indefinite lives consisted of $279.6 in the Flow Technology reportable segment, $130.0 in the Thermal Equipment and Services reportable segment, and $23.9 in Industrial Products and Services.

 

We annually test the recoverability of our goodwill and indefinite-lived intangible assets during the fourth quarter based on a measurement date as of the end of the third quarter and continually monitor impairment indicators across all our reporting units. Any significant change in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in fair value may give rise to impairment in the period that the change becomes known.

 

Based on our annual impairment testing during the fourth quarter of 2010, our SPX Heat Transfer Inc. reporting unit had an estimated fair value that was comparable to the carrying value of its net assets.  In the second quarter of 2011, SPX Heat Transfer Inc. experienced an additional decline in its revenues and profitability, furthering a trend which began late in the first quarter of 2011, in comparison to (i) recent historical results and (ii) expected results for the period, due to the challenging conditions within the U.S. power market.  As such, during the second quarter of 2011, we updated the projection of future discounted cash flows for SPX Heat Transfer Inc., which indicated the reporting unit’s fair value was less than the carrying value of its net assets.  Accordingly, we recorded an impairment charge of $24.7 during the second quarter of 2011 associated with SPX Heat Transfer Inc.’s goodwill ($17.2) and indefinite-lived intangible assets ($7.5).