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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2011
Goodwill and Intangible Assets [Abstract]  
Goodwill and Intangible Assets
6. Goodwill and Intangible Assets:

The changes in the carrying amount of goodwill, by reportable segment, are as follows:

 

                         
    Flat Products     Tubular and
Pipe Products		     Total  
(in thousands)                  

Balance as of December 31, 2010

   $ 7,083     $ —       $ 7,083  

CTI acquisition

     —         40,171       40,171  
   

 

 

    

 

 

    

 

 

  

Balance as of December 31, 2011

   $ 7,083     $ 40,171     $ 47,254  
   

 

 

    

 

 

    

 

 

  

The goodwill of $47,254, is not deductible for income tax purposes. The goodwill represents the excess of cost over the fair value of net tangible and intangible assets acquired.

We perform an annual impairment test of goodwill for our Integrity Stainless and CTI operations on October 31, and our Southern region on December 31, or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. Events or changes in circumstances that could trigger an impairment review include significant nonperformance relative to the expected historical or projected future operating results, significant changes in the manner of the use of the acquired assets or the strategy for the overall business or significant negative industry or economic trends.

Intangible Assets, net

Intangible assets, net, consisted of the following as of December 31, 2011:

 

                         
    Gross Carrying
Amount		     Accumulated
Amortization		     Intangible Assets,
Net		  
(in thousands)                  

Customer relationships - subject to amortization

   $ 13,332     $ (444 )    $ 12,888  

Trade name - not subject to amortization

     23,425       —         23,425  
   

 

 

    

 

 

    

 

 

  
    $ 36,757     $ (444 )    $ 36,313  
   

 

 

    

 

 

    

 

 

  

The Company had no intangible assets during the year ended December 31, 2010. All of the Company’s intangible assets were recorded in connection with its July 1, 2011 acquisition of CTI (See Note 2). The intangible assets noted above were evaluated on the premise of highest and best use to a market participant, primarily utilizing the income approach valuation methodology. The useful life of the CTI trade name was determined to be indefinite primarily due to its history and reputation in the marketplace, the Company’s expectation that the CTI trade name will continue to be used throughout the life of CTI, and the conclusion that there are currently no other factors identified that would limit its useful life. The useful life of the CTI customer relationships was determined to be fifteen years, based primarily on the consistent and predictable revenue source associated with the existing CTI customer base, the present value of which extends through the fifteen year amortization period. The Company will continue to evaluate the useful life assigned to our amortizable customer relationships in future periods.

The Company estimates that amortization expense for its intangible assets subject to amortization will be $889 per year in each of the next five years.