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GOODWILL AND OTHER INTANGIBLE ASSETS
9 Months Ended
Sep. 29, 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:

 

 

 

 

 

Goodwill

 

 

 

Foreign

 

 

 

 

 

 

 

resulting from

 

 

 

Currency

 

 

 

 

 

December 31,

 

business

 

 

 

Translation

 

September 29,

 

 

 

2011

 

combinations

 

Impairments

 

and other (1)

 

2012

 

Flow Technology reportable segment

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

$

1,019.9

 

$

24.9

 

$

 

$

39.1

 

$

1,083.9

 

Accumulated Impairments

 

 

 

 

 

 

Goodwill

 

1,019.9

 

24.9

 

 

39.1

 

1,083.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Thermal Equipment and Services reportable segment

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

597.8

 

 

 

(27.6

)

570.2

 

Accumulated Impairments

 

(134.9

)

 

 

 

(134.9

)

Goodwill

 

462.9

 

 

 

(27.6

)

435.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Products and Services

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

450.6

 

 

 

2.6

 

453.2

 

Accumulated Impairments

 

(159.7

)

 

 

(2.0

)

(161.7

)

Goodwill

 

290.9

 

 

 

0.6

 

291.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Gross Goodwill

 

2,068.3

 

24.9

 

 

14.1

 

2,107.3

 

Accumulated Impairments

 

(294.6

)

 

 

(2.0

)

(296.6

)

Goodwill

 

$

1,773.7

 

$

24.9

 

$

 

$

12.1

 

$

1,810.7

 

 

(1)                                Includes adjustments resulting from revisions to estimates of fair value of certain assets and liabilities associated with Clyde Union and other acquisitions of $56.7, partially offset by 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 $20.3.

 

Other Intangibles

 

Identifiable intangible assets comprise the following:

 

 

 

September 29, 2012

 

December 31, 2011

 

 

 

Gross

 

 

 

Net

 

Gross

 

 

 

Net

 

 

 

Carrying

 

Accumulated

 

Carrying

 

Carrying

 

Accumulated

 

Carrying

 

 

 

Value

 

Amortization

 

Value

 

Value

 

Amortization

 

Value

 

Intangible assets with determinable lives:

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents

 

$

8.5

 

$

(7.9

)

$

0.6

 

$

8.5

 

$

(7.6

)

$

0.9

 

Technology

 

188.4

 

(38.3

)

150.1

 

182.2

 

(30.5

)

151.7

 

Customer relationships

 

416.0

 

(58.5

)

357.5

 

400.4

 

(44.7

)

355.7

 

Other

 

33.4

 

(16.3

)

17.1

 

38.7

 

(11.0

)

27.7

 

 

 

646.3

 

(121.0

)

525.3

 

629.8

 

(93.8

)

536.0

 

Trademarks with indefinite lives

 

441.8

 

 

441.8

 

436.4

 

 

436.4

 

Total

 

$

1,088.1

 

$

(121.0

)

$

967.1

 

$

1,066.2

 

$

(93.8

)

$

972.4

 

 

Estimated annual amortization expense related to these intangible assets is $9.2 for the remainder of 2012, $35.0 in 2013, $30.6 in 2014, $30.1 in 2015, and $29.9 in 2016.

 

At September 29, 2012, the net carrying value of intangible assets with determinable lives consisted of $461.3 in the Flow Technology reportable segment, $53.6 in the Thermal Equipment and Services reportable segment, and $10.4 in Industrial Products and Services. Trademarks with indefinite lives consisted of $287.5 in the Flow Technology reportable segment, $130.2 in the Thermal Equipment and Services reportable segment, and $24.1 in Industrial Products and Services.

 

We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process.  In addition, we test goodwill for impairment on a more frequent basis if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying value.  A significant amount of judgment is involved in determining if an indication of impairment has occurred between annual testing dates.  Such indications may include:  a significant decline in expected future cash flows; a significant adverse change in legal factors or the business climate; unanticipated competition; and a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit.

 

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).