NOTE 8 - GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES
Goodwill
The following table summarizes changes in the carrying amount of goodwill allocated by operating segment for the nine months ended SeptemberÌý30, 2012 and the year ended DecemberÌý31, 2011:
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Ìý |
(In Millions) |
Ìý |
September 30, 2012 |
Ìý |
December 31, 2011 (1)
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Ìý |
Ìý |
U.S. Iron Ore |
Ìý |
Eastern Canadian Iron Ore |
Ìý |
Asia Pacific
Iron Ore |
Ìý |
Other |
Ìý |
Total |
Ìý |
U.S. Iron Ore |
Ìý |
Eastern
Canadian Iron Ore
|
Ìý |
Asia Pacific Iron Ore |
Ìý |
North American Coal |
Ìý |
Other |
Ìý |
Total |
Beginning Balance |
$ |
2.0 |
|
Ìý |
$ |
986.2 |
|
Ìý |
$ |
83.0 |
|
Ìý |
$ |
80.9 |
|
Ìý |
$ |
1,152.1 |
|
Ìý |
$ |
2.0 |
|
Ìý |
$ |
3.1 |
|
Ìý |
$ |
82.6 |
|
Ìý |
$ |
27.9 |
|
Ìý |
$ |
80.9 |
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Ìý |
$ |
196.5 |
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Arising in business combinations |
— |
|
Ìý |
13.8 |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
13.8 |
|
Ìý |
— |
|
Ìý |
983.5 |
|
Ìý |
— |
|
Ìý |
(0.1 |
) |
Ìý |
— |
|
Ìý |
983.4 |
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Impairment |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
(27.8 |
) |
Ìý |
— |
|
Ìý |
(27.8 |
) |
Impact of foreign currency translation |
— |
|
Ìý |
— |
|
Ìý |
1.3 |
|
Ìý |
— |
|
Ìý |
1.3 |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
0.4 |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
0.4 |
|
Other |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
(0.4 |
) |
Ìý |
— |
|
Ìý |
— |
|
Ìý |
— |
|
Ìý |
(0.4 |
) |
Ending Balance |
$ |
2.0 |
|
Ìý |
$ |
1,000.0 |
|
Ìý |
$ |
84.3 |
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Ìý |
$ |
80.9 |
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Ìý |
$ |
1,167.2 |
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Ìý |
$ |
2.0 |
|
Ìý |
$ |
986.2 |
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Ìý |
$ |
83.0 |
|
Ìý |
$ |
— |
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Ìý |
$ |
80.9 |
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Ìý |
$ |
1,152.1 |
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(1) |
Represents a 12-Month rollforward of our goodwill by reportable segment at DecemberÌý31, 2011.
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Goodwill is not subject to amortization and is tested for impairment annually as of October 1st or when events or circumstances indicate that impairment may have occurred.
Other Intangible Assets and Liabilities
Following is a summary of intangible assets and liabilities as of SeptemberÌý30, 2012 and DecemberÌý31, 2011:
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Ìý |
Ìý |
Ìý |
(In Millions) |
Ìý |
Ìý |
Ìý |
September 30, 2012 |
Ìý |
December 31, 2011 |
Ìý |
Classification |
Ìý |
Gross
Carrying
Amount
|
Ìý |
Accumulated
Amortization
|
Ìý |
Net
Carrying
Amount
|
Ìý |
Gross
Carrying
Amount
|
Ìý |
Accumulated
Amortization
|
Ìý |
Net
Carrying
Amount
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Definite-lived intangible assets: |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Ìý |
Permits |
Intangible assets, net |
Ìý |
$ |
135.3 |
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Ìý |
$ |
(28.9 |
) |
Ìý |
$ |
106.4 |
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Ìý |
$ |
134.3 |
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Ìý |
$ |
(23.2 |
) |
Ìý |
$ |
111.1 |
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Utility contracts |
Intangible assets, net |
Ìý |
54.7 |
|
Ìý |
(29.7 |
) |
Ìý |
25.0 |
|
Ìý |
54.7 |
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Ìý |
(21.3 |
) |
Ìý |
33.4 |
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Leases |
Intangible assets, net |
Ìý |
5.5 |
|
Ìý |
(3.1 |
) |
Ìý |
2.4 |
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Ìý |
5.5 |
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Ìý |
(3.0 |
) |
Ìý |
2.5 |
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Total intangible assets |
Ìý |
Ìý |
$ |
195.5 |
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Ìý |
$ |
(61.7 |
) |
Ìý |
$ |
133.8 |
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Ìý |
$ |
194.5 |
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Ìý |
$ |
(47.5 |
) |
Ìý |
$ |
147.0 |
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Below-market sales contracts |
Other current liabilities |
Ìý |
$ |
(46.0 |
) |
Ìý |
$ |
— |
|
Ìý |
$ |
(46.0 |
) |
Ìý |
$ |
(77.0 |
) |
Ìý |
$ |
24.3 |
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Ìý |
$ |
(52.7 |
) |
Below-market sales contracts |
Below-market sales contracts, net |
Ìý |
(250.7 |
) |
Ìý |
166.9 |
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Ìý |
(83.8 |
) |
Ìý |
(252.3 |
) |
Ìý |
140.5 |
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Ìý |
(111.8 |
) |
Total below-market sales contracts |
Ìý |
Ìý |
$ |
(296.7 |
) |
Ìý |
$ |
166.9 |
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Ìý |
$ |
(129.8 |
) |
Ìý |
$ |
(329.3 |
) |
Ìý |
$ |
164.8 |
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Ìý |
$ |
(164.5 |
) |
The intangible assets are subject to periodic amortization on a straight-line basis over their estimated useful lives as follows:
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Intangible Asset |
Ìý |
Useful Life (years) |
Permits |
Ìý |
15 - 28 |
Utility contracts |
Ìý |
5 |
Leases |
Ìý |
1.5 - 4.5 |
Amortization expense relating to intangible assets was $4.8 million and $14.1 million, respectively, for the three and nine months ended SeptemberÌý30, 2012, and is recognized in Cost of goods sold and operating expenses in the Statements of Unaudited Condensed Consolidated Operations. Amortization expense relating to intangible assets was $3.3 million and $12.5 million, respectively, for the comparable periods in 2011. The estimated amortization expense relating to intangible assets for the remainder of 2012 and each of the five succeeding years is as follows:
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(In Millions) |
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Amount |
Year Ending December 31 |
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2012 (remaining three months) |
$ |
4.5 |
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2013 |
17.9 |
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2014 |
17.9 |
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2015 |
6.0 |
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2016 |
6.0 |
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2017 |
6.0 |
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Total |
$ |
58.3 |
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The below-market sales contracts are classified as a liability and recognized over the terms of the underlying contracts, which have remaining lives ranging from two to five years. For the three and nine months ended SeptemberÌý30, 2012, we recognized $14.7 million and $31.3 million, respectively, in Product revenues related to the below-market sales contracts, compared with $16.7 million and $40.4 million, respectively, for the three and nine months ended SeptemberÌý30, 2011. The following amounts are estimated to be recognized in Product revenues for each of the five succeeding fiscal years:
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Ìý |
(In Millions) |
Ìý |
Amount |
Year Ending December 31 |
Ìý |
2012 (remaining three months) |
$ |
14.7 |
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2013 |
46.0 |
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2014 |
23.1 |
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2015 |
23.0 |
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2016 |
23.0 |
|
2017 |
— |
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Total |
$ |
129.8 |
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