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GOODWILL AND OTHER INTANGIBLE ASSETS AND RESTRUCTURING | 12 Months Ended
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Dec. 31, 2013
GOODWILL AND OTHER INTANGIBLE ASSETS AND RESTRUCTURING |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL, OTHER INTANGIBLE ASSETS AND RESTRUCTURING Our intangible assets consist of goodwill and other intangible assets. Goodwill is the excess of the cost of an acquired entity over the fair value of tangible and intangible assets (including customer lists, trade names and technology) acquired and liabilities assumed under purchase accounting for business combinations. We acquired substantial intangible assets related to the Merged Business, including $1,572.7 million in goodwill, $1,142.3 million in customer relationships, $42.6 million in supply contracts, $14.9 million in technology and $6.0 million in definite-lived product trade names. These amounts are based on the 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. Valuation: As of December 31, 2013, we have two segments that contain reporting units with goodwill and intangible assets. Our chlorovinyls segment includes goodwill in our chlor- alkali and derivatives and compound reporting units and our building products segment includes goodwill primarily in the siding reporting unit. In the year ended December 31, 2013 we concluded a test for the impairment of goodwill and other intangible assets in our window and door profiles reporting unit. The window and door profiles reporting unit fair value was estimated using the discounted cash flow approach and market approach. We estimated our future discounted cash flows based on our actual results during the year ended December 31, 2013, as compared to our projections for such period. The cash flow approach assumed a gradual increase in financial performance, based on a housing market recovery in the United States, and a discount rate of approximately 15 percent. The window and door profiles reporting unit's future earnings are significantly influenced by the North American housing and construction markets. Our market approaches considered market multiples of peer companies as adjusted and applicable to our window and door profiles reporting unit within our building products segment. Based on the results of our evaluation, we recorded a non-cash impairment charge to write-down goodwill and other intangible assets in the window and door profiles reporting unit by $24.9 million in the year ended December 31, 2013. The write-down was due primarily to the prolonged downturn in the North American housing and construction markets, continued pricing declines, and the expected impact of those declines on projected cash flows on the window and door profiles reporting unit. The write-down included $18.2 million for goodwill, $3.1 million for indefinite-lived trade names and $3.6 million for customer relationship assets. We tested our other reporting units with goodwill and other indefinite-lived intangible assets in the fourth quarter in accordance with our annual October 1 impairment testing. None of our other reporting units showed indications of impairment for their goodwill or other indefinite-lived intangible assets. Goodwill. During year ended December 31, 2013, we allocated the fair values of assets acquired and liabilities assumed of the Merged Business. The following table provides the detail of the changes made to goodwill during the years ended December 31, 2013 and 2012, including $18.2 million of goodwill impairment charges in 2013 for our window and door profiles reporting unit within our building products segment.
(In millions) |  | Chlorovinyls |  | Building Products |  | Total |
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Gross goodwill at January 1, 2012 |  | $ | 242.9 |  | $ | 158.4 |  | $ | 401.3 |
Addition from mergers and acquisitions |  |  | - |  |  | 1.1 |  |  | 1.1 |
Foreign currency translation adjustment |  |  | 2.5 |  |  | - |  |  | 2.5 |
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Gross goodwill at December 31, 2012 |  |  | 245.4 |  |  | 159.5 |  |  | 404.9 |
Accumulated impairment losses |  |  | (55.5 | ) |  | (132.2 | ) |  | (187.7 | )
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Net goodwill at December 31, 2012 |  | $ | 189.9 |  | $ | 27.3 |  | $ | 217.2 |
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Gross goodwill at December 31, 2012 |  | $ | 245.4 |  | $ | 159.5 |  | $ | 404.9 |
Addition from mergers and acquisitions |  |  | 1,572.7 |  |  | 0.8 |  |  | 1,573.5 |
Foreign currency translation adjustment |  |  | (9.3 | ) |  | - |  |  | (9.3 | )
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Gross goodwill at December 31, 2013 |  |  | 1,808.8 |  |  | 160.3 |  |  | 1,969.1 |
Accumulated impairment losses |  |  | (55.5 | ) |  | (150.4 | ) |  | (205.9 | )
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Net goodwill at December 31, 2013 |  | $ | 1,753.3 |  | $ | 9.9 |  | $ | 1,763.2 |
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Indefinite-lived intangible assets. Our indefinite-lived intangible assets consisted only of certain trade names with a carrying value of $6.0 million and $9.1 million at December 31, 2013 and 2012, respectively. The variance between period-end dates is due to $3.1 million of impairment charges recorded in the third quarter of 2013 for our window and door profiles reporting. Definite-lived intangible assets. At December 31, 2013 and 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 values of these assets acquired are $1.1 billion for customer relationships, $42.6 million for supply contracts, $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 December 31, 2013 and 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 December 31, 2013 and 2012, including impairment charges recorded for our window and door profiles reporting unit within our building products segment.
|  | Chlorovinyls |  | Building Products |  | Total |
--- | --- | --- | --- | --- | --- | --- | ---
(In millions) |  | December 31, 2013 |  | December 31, 2013 |  | December 31, 2012 |  | December 31, 2013 |  | December 31, 2012 |
Gross carrying amounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 1,142.3 |  | $ | 32.2 |  | $ | 35.2 |  | $ | 1,174.5 |  | $ | 35.2 |
Supply contracts |  |  | 42.6 |  |  | - |  |  | - |  |  | 42.6 |  |  | - |
Trade names |  |  | 6.0 |  |  | - |  |  | - |  |  | 6.0 |  |  | - |
Technology |  |  | 14.9 |  |  | 17.4 |  |  | 17.4 |  |  | 32.3 |  |  | 17.4 |
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Total |  |  | 1,205.8 |  |  | 49.6 |  |  | 52.6 |  |  | 1,255.4 |  |  | 52.6 |
Accumulated amortization: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | (58.2 | ) |  | (10.5 | ) |  | (8.7 | ) |  | (68.7 | ) |  | (8.7 | )
Supply contracts |  |  | (2.0 | ) |  | - |  |  | - |  |  | (2.0 | ) |  | - |
Trade names |  |  | (0.3 | ) |  | - |  |  | - |  |  | (0.3 | ) |  | - |
Technology |  |  | (0.6 | ) |  | (11.1 | ) |  | (9.6 | ) |  | (11.7 | ) |  | (9.6 | )
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Total |  |  | (61.1 | ) |  | (21.6 | ) |  | (18.3 | ) |  | (82.7 | ) |  | (18.3 | )
Foreign currency translation adjustment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | (4.0 | ) |  | - |  |  | - |  |  | (4.0 | ) |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total |  |  | (4.0 | ) |  | - |  |  | - |  |  | (4.0 | ) |  | - |
Net carrying amounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 1,080.1 |  |  | 21.7 |  |  | 26.5 |  |  | 1,101.8 |  |  | 26.5 |
Supply contracts |  |  | 40.6 |  |  | - |  |  | - |  |  | 40.6 |  |  | - |
Trade names |  |  | 5.7 |  |  | - |  |  | - |  |  | 5.7 |  |  | - |
Technology |  |  | 14.3 |  |  | 6.3 |  |  | 7.8 |  |  | 20.6 |  |  | 7.8 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total |  | $ | 1,140.7 |  | $ | 28.0 |  | $ | 34.3 |  | $ | 1,168.7 |  | $ | 34.3 |
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The weighted average estimated useful life remaining for customer relationships, supply contracts, definite-lived trade names and technology is approximately 17 years, 19 years, 16 years, and 16 years, respectively. Amortization expense for the definite-lived intangible assets was $64.3 million, $3.3 million and $3.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Total definite-lived intangible assets estimated annual amortization expense for the next five fiscal years is approximately $69.7 million per year. Restructuring: In September 2013, we initiated a restructuring plan in our building products segment consisting of various cost saving initiatives, including the reduction of overhead and plant labor, and the consolidation of various plants, primarily in the window and door profiles reporting unit, to improve utilization and efficiencies. During the year ended December 31, 2013, we recorded $3.2 million in restructuring charges in our building products segment that is included in Transaction related costs and other, net in the consolidated statements of income. We expect to complete these restructuring plans in the early part of the 2015 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=26713463&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 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 Reference 3: 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=26713463&loc=d3e16373-109275 Reference 4: 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=26713463&loc=d3e16265-109275 Reference 5: 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 + Details
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