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GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended
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Jun. 30, 2013
GOODWILL AND OTHER INTANGIBLE ASSETS |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS In the acquisition of the Merged Business we acquired substantial intangible assets including $1.5 billion in goodwill and other intangible assets consisting of $1.2 billion in customer relationships, $14.9 million in technology and $6.0 million in product trade names. These amounts are preliminary and are based on the preliminary purchase price allocation of the fair values of the acquired assets and liabilities assumed as of the closing date of the Merger, as further described below. Goodwill. During the six months ended June 30, 2013, we preliminarily allocated the fair values of assets acquired and liabilities of the Merged Business assumed in the Transactions, which are subject to change. The following table provides the detail of the changes made to goodwill during the six months ended June 30, 2013.
(In millions) |  | Chlorovinyls |  | Building Products |  | Total |
--- | --- | --- | --- | --- | --- | --- | ---
Gross goodwill at January 1, 2013 |  | $ | 245.4 |  | $ | 159.5 |  | $ | 404.9 |
Accumulated impairment losses |  |  | (55.5 | ) |  | (132.2 | ) |  | (187.7 | )
Net goodwill at January 1, 2013 |  | $ | 189.9 |  | $ | 27.3 |  | $ | 217.2 |
Gross goodwill at January 1, 2013 |  | $ | 245.4 |  | $ | 159.5 |  | $ | 404.9 |
Preliminary addition from the Transactions |  |  | 1,450.2 |  |  | - |  |  | 1,450.2 |
Foreign currency translation adjustment |  |  | (9.5 | ) |  | - |  |  | (9.5 | )
Gross goodwill at June 30, 2013 |  |  | 1,686.1 |  |  | 159.5 |  |  | 1,845.6 |
Accumulated impairment losses |  |  | (55.5 | ) |  | (132.2 | ) |  | (187.7 | )
Net goodwill at June 30, 2013 |  | $ | 1,630.6 |  | $ | 27.3 |  | $ | 1,657.9 |
Indefinite-lived intangible assets. Our indefinite-lived intangible assets consisted only of trade names with a carrying value of $9.0 million and $9.1 million at June 30, 2013 and December 31, 2012, respectively. The variance between period end dates is due to fluctuations in the Canadian dollar exchange rate. Definite-lived intangible assets. At June 30, 2013 and December 31, 2012, we had definite-lived intangible assets in our building products segment that related to customer relationships and technology. In the acquisition of the Merged Business, we acquired definite-lived intangible assets in our chlorovinyls segments. The preliminary values of these assets acquired are $1.2 billion for customer relationships, $14.9 million for technology and $6.0 million for trade names. There were no definite-lived intangible assets in our chlorovinyls segment as of December 31, 2012. At June 30, 2013 and December 31, 2012 there were no definite-lived intangible assets in our aromatics segment. The following table provides the definite-lived intangible assets, by reportable segment, as of June 30, 2013 and December 31, 2012.
|  | Chlorovinyls |  | Building Products |  | Total |
--- | --- | --- | --- | --- | --- | --- | ---
(In millions) |  | June 30, 2013 |  | June 30, 2013 |  | December 31, 2012 |  | June 30, 2013 |  | December 31, 2012 |
Gross carrying amounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 1,197.1 |  | $ | 35.2 |  | $ | 35.2 |  | $ | 1,232.3 |  | $ | 35.2 |
Trade names |  |  | 6.0 |  |  | - |  |  | - |  |  | 6.0 |  |  | - |
Technology |  |  | 14.9 |  |  | 17.4 |  |  | 17.4 |  |  | 32.3 |  |  | 17.4 |
Total |  |  | 1,218.0 |  |  | 52.6 |  |  | 52.6 |  |  | 1,270.6 |  |  | 52.6 |
Accumulated amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | (27.7 | ) |  | (9.6 | ) |  | (8.7 | ) |  | (37.3 | ) |  | (8.7 | )
Trade names |  |  | (0.1 | ) |  | - |  |  | - |  |  | (0.1 | ) |  | - |
Technology |  |  | (0.3 | ) |  | (10.4 | ) |  | (9.6 | ) |  | (10.7 | ) |  | (9.6 | )
Total |  |  | (28.1 | ) |  | (20.0 | ) |  | (18.3 | ) |  | (48.1 | ) |  | (18.3 | )
Foreign currency translation adjustment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | (4.3 | ) |  | - |  |  | - |  |  | (4.3 | ) |  | - |
Total |  |  | (4.3 | ) |  | - |  |  | - |  |  | (4.3 | ) |  | - |
Net carrying amounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 1,165.1 |  |  | 25.6 |  |  | 26.5 |  |  | 1,190.7 |  |  | 26.5 |
Trade names |  |  | 5.9 |  |  | - |  |  | - |  |  | 5.9 |  |  | - |
Technology |  |  | 14.6 |  |  | 7.0 |  |  | 7.8 |  |  | 21.6 |  |  | 7.8 |
Total |  | $ | 1,185.6 |  | $ | 32.6 |  | $ | 34.3 |  | $ | 1,218.2 |  | $ | 34.3 |
The weighted average estimated useful life remaining for customer relationships, definite-lived trade names and technology is approximately 18 years, 17 years, and 16 years, respectively. Amortization expense for the definite-lived intangible assets was $18.2 million and $0.8 million for the three months ended June 30, 2013 and 2012, respectively and $29.8 million and $1.7 million for the six month periods ended June 30, 2013 and 2012, respectively. Total definite-lived intangible assets estimated annual amortization expense for the next five fiscal years is approximately $70.9 million per year.

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7658586&loc=d3e16265-109275 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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