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Goodwill
 6 Months Ended
Jun. 30, 2011
Goodwill  
Goodwill

NOTE 5—GOODWILL

 

     Six Months Ended
June 30		  

(in millions)

    2011     2010  

At January 1

     

Gross cost

    $ 674.1      $ 674.3   

Accumulated Octane Additives segment goodwill impairment losses

      (232.0 )      (229.8 ) 
  

 

 

    

 

 

  
     442.1        444.5   

Impairment of Octane Additives segment goodwill

      (1.1 )      (1.1 ) 

Exchange effect

      0.3        (0.4 ) 
  

 

 

    

 

 

  

At June 30

    $ 441.3      $ 443.0   
  

 

 

    

 

 

  

Gross cost

    $ 674.4      $ 673.9   

Accumulated Octane Additives segment goodwill impairment losses

      (233.1 )      (230.9 ) 
  

 

 

    

 

 

  
     441.3        443.0   
  

 

 

    

 

 

  

Accumulated amortization at January 1

      (298.5 )      (298.5 ) 

Exchange effect

      (0.2 )      0.0   
  

 

 

    

 

 

  

Accumulated amortization at June 30

      (298.7 )      (298.5 ) 
  

 

 

    

 

 

  

Net book amount at June 30

    $ 142.6      $ 144.5   
  

 

 

    

 

 

  

Fuel Specialties and Active Chemicals segments goodwill

    $ 139.1      $ 138.8   

Octane Additives segment goodwill

      3.5        5.7   
  

 

 

    

 

 

  
   $ 142.6      $ 144.5   
  

 

 

    

 

 

  

Impairment of Octane Additives segment goodwill

Our Octane Additives segment is the world's only producer of tetra ethyl lead ("TEL"). The Octane Additives segment comprises sales of TEL for use in automotive gasoline and trading in respect of our environmental remediation business. Worldwide use of TEL has declined since 1973 following the enactment of the U.S. Clean Air Act of 1970 and similar legislation in other countries. The trend of countries exiting the leaded gasoline market has resulted in an average rate of decline in volume terms in demand for TEL in the last five years of approximately 10% per annum.

In light of the continuing decline in the Octane Additives market globally, as the Company makes sales of Octane Additives in each quarter, the remaining sales and corresponding cash flows that can be derived from the Octane Additives segment are reduced, and accordingly the fair value of the Octane Additives segment is reduced. As a result, the Company determined that quarterly impairment tests be performed from January 1, 2004 and any impairment charge arising be recognized in the relevant quarter. Given the quantum and predictability of the remaining future cash flows from the Octane Additives segment, the Company expects goodwill impairment charges to be recognized in the income statement on an approximate straight-line basis to December 31, 2012.