8. Goodwill

Goodwill represents the excess of the cost of companies acquired over the fair value of their net assets at the dates of acquisition. GAAP requires that goodwill not be amortized and that goodwill is to be tested for impairment at least annually at the reporting unit level. The Company tests for goodwill impairment during the last quarter of each calendar year. The first step compares the book value of the Company's stock (stockholders' equity) to the adjusted fair market value of those shares. To determine the fair value of the Company's net assets, the Company used the weighted average of the following valuation techniques: market capitalization plus control premium approach, guideline company (market) approach, and a discounted cash flow (income) approach. If the adjusted fair value of the stock is greater than the calculated book value of the stock, goodwill is deemed not to be impaired and no further testing is required. If the adjusted fair value is less than the calculated book value, additional steps of determining the fair value of net assets must be taken to determine impairment. Testing under step one in 2011 indicated the adjusted fair value of the Company's stock was less than its book value.

As a result, the Company then performed the second-step test to determine the fair value of the Company's net assets and the amount of implied goodwill. The majority of the Company's assets and liabilities are current in nature and, therefore, approximate fair value. The Company engaged a third party to conduct an independent appraisal of its property, plant and equipment. In addition, the Company performed a fair market assessment of interest bearing debt, deferred tax assets and liabilities and other intangible assets. The results of the second-step test indicated a goodwill impairment of approximately $67.0 million which was recorded in the three months ended December 31, 2011. The amount of goodwill remaining at December 31, 2011 is $54.1 million.

There was no change in goodwill for the year ended December 31, 2010. The following table details changes in recorded goodwill during the year ended December 31, 2011 (in thousands):

Balance at January 1, 2011	$	114,745
Additional goodwill related to 2011 acquisitions		6,305
Goodwill impairment		(67,000	)
Balance at December 31, 2011	$	54,050