v2.4.1.9

GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Our intangible assets consist of goodwill, customer relationships, supply contracts, technology and trade names. Goodwill is the excess of the cost of an acquired entity over the fair value of tangible and intangible assets (including, but not limited to, customer lists, supply contracts, technology and trade names) acquired and liabilities assumed under acquisition accounting for business combinations.

Goodwill.    As of March 31, 2015, we have two segments that contain reporting units with goodwill and intangible assets: our chlorovinyls segment includes goodwill in its chlor-alkali and derivatives and compound reporting units and our building products segment includes goodwill primarily in its siding reporting unit. The following table provides the detail of the changes made to goodwill during the three months ended March 31, 2015.

(In millions)		Chlorovinyls			Building Products			Total
Gross goodwill at December 31, 2014		$	1,790.8		$	160.2		$	1,951.0
Accumulated impairment losses			(59.6	)		(150.4	)		(210.0	)
​	​	​	​	​	​	​	​	​	​	​
Net goodwill at December 31, 2014		$	1,731.2		$	9.8		$	1,741.0
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
Gross goodwill at December 31, 2014		$	1,790.8		$	160.2		$	1,951.0
Foreign currency translation adjustment			(9.7	)		-			(9.7	)
​	​	​	​	​	​	​	​	​	​	​
Gross goodwill at March 31, 2015		​	1,781.1		​	160.2		​	1,941.3
Accumulated impairment losses			(59.6	)		(150.4	)		(210.0	)
​	​	​	​	​	​	​	​	​	​	​
Net goodwill at March 31, 2015		$	1,721.5		$	9.8		$	1,731.3
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​

Indefinite-lived intangible assets.    As of March 31, 2015 and December 31, 2014, our indefinite-lived intangible assets consisted of certain trade names with a carrying value of $5.9 million and $6.0 million, respectively, net of cumulative translation adjustment.

Definite-lived intangible assets.    As of March 31, 2015 and December 31, 2014, we had definite-lived intangible assets related to: (i) customer relationships, supply contracts, technology and trade names in our chlorovinyls segment; and (ii) customer relationships and technology in our building products segment. The following table provides the definite-lived intangible assets, by reportable segment, as of March 31, 2015 and December 31, 2014.

		Chlorovinyls						Building Products						Total
(In millions)		March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014
Gross carrying amounts		​			​			​			​			​			​
Customer relationships		$	1,142.3		$	1,142.3		$	32.2		$	32.2		$	1,174.5		$	1,174.5
Supply contracts		​	42.6		​	42.6		​	-		​	-		​	42.6		​	42.6
Technology			14.9			14.9			17.4			17.4			32.3			32.3
Trade names		​	6.0		​	6.0		​	-		​	-		​	6.0		​	6.0
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total			1,205.8			1,205.8			49.6			49.6			1,255.4			1,255.4
Accumulated impairment charges:		​			​			​			​			​			​
Customer relationships			(2.9	)		(2.6	)		-			-			(2.9	)		(2.6	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total		​	(2.9	)	​	(2.6	)	​	-		​	-		​	(2.9	)	​	(2.6	)
Accumulated amortization:
Customer relationships		​	(136.3	)	​	(121.1	)	​	(12.5	)	​	(12.1	)	​	(148.8	)	​	(133.2	)
Supply contracts			(4.5	)		(4.1	)		-			-			(4.5	)		(4.1	)
Technology		​	(1.5	)	​	(1.3	)	​	(13.0	)	​	(12.7	)	​	(14.5	)	​	(14.0	)
Trade names			(0.8	)		(0.7	)		-			-			(0.8	)		(0.7	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total		​	(143.1	)	​	(127.2	)	​	(25.5	)	​	(24.8	)	​	(168.6	)	​	(152.0	)
Foreign currency translation adjustment:
Customer relationships		​	(16.4	)	​	(14.2	)	​	-		​	-		​	(16.4	)	​	(14.2	)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total			(16.4	)		(14.2	)		-			-			(16.4	)		(14.2	)
Net carrying amounts		​			​			​			​			​			​
Customer relationships			986.7			1,004.4			19.7			20.1			1,006.4			1,024.5
Supply contracts		​	38.1		​	38.5		​	-		​	-		​	38.1		​	38.5
Technology			13.4			13.6			4.4			4.7			17.8			18.3
Trade names		​	5.2		​	5.3		​	-		​	-		​	5.2		​	5.3
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total		$	1,043.4		$	1,061.8		$	24.1		$	24.8		$	1,067.5		$	1,086.6
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​

The weighted average estimated useful life remaining for customer relationships, supply contracts, technology and definite-lived trade names is approximately 16 years, 18 years, 16 years and 15 years, respectively, as of March 31, 2015. Amortization expense for the definite-lived intangible assets was $16.6 million and $16.8 million for the three months ended March 31, 2015 and 2014, respectively. The estimated annual amortization expense for definite-lived intangible assets for the next five fiscal years is approximately $66.4 million per year.

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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

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-URI http://asc.fasb.org/extlink&oid=35741047&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 1

-URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275



Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 350

-SubTopic 30

-Section 50

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-URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275



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-Publisher FASB

-Name Accounting Standards Codification

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-URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267

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