CNST » Topics » Goodwill

These excerpts taken from the CNST 10-K filed Mar 31, 2009.

Goodwill

Goodwill is tested for impairment at least annually, however, these tests are performed more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. The evaluation

 

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Constar International Inc.

(Debtor-In-Possession)

Notes to Consolidated Financial Statements—(Continued)

 

requires a comparison of the estimated fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, goodwill is considered impaired. The amount of impairment equals the difference between the carrying value of goodwill and the “implied fair value” of goodwill. Fair values are primarily estimated using discounted cash flow analysis.

There were no changes in the carrying amount of goodwill for the years ended December 31, 2008 and 2007.

Goodwill

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Goodwill is tested for impairment at least annually, however, these tests are performed more frequently when events or changes in circumstances indicate
the carrying value may not be recoverable. The evaluation

 


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Constar International Inc.

ALIGN="center">(Debtor-In-Possession)

Notes to Consolidated Financial
Statements—(Continued)

 



requires a comparison of the estimated fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, goodwill is
considered impaired. The amount of impairment equals the difference between the carrying value of goodwill and the “implied fair value” of goodwill. Fair values are primarily estimated using discounted cash flow analysis.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">There were no changes in the carrying amount of goodwill for the years ended December 31, 2008 and 2007.

STYLE="margin-top:18px;margin-bottom:0px">Derivative Financial Instruments

Derivative
instruments are reported as either assets or liabilities in the consolidated balance sheets at their fair values. Changes in the fair value of derivatives are recorded in earnings or other comprehensive income, based on whether the instrument is
designated as part of a hedge transaction, and if so, the type of hedge transaction. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of
other comprehensive income and subsequently reclassified into earnings in the period in which earnings are affected by the underlying hedged item. The ineffective portion of all hedges is recognized in earnings in the current period. Changes in the
fair values of derivative instruments that are not designated as hedges are recorded in current period earnings. See Note 22 for additional discussion regarding the Company’s objectives and strategies for derivative instruments.

STYLE="margin-top:18px;margin-bottom:0px">Restructuring

The Company records restructuring
charges for the costs associated with an exit or disposal activity in the period in which the liability is incurred. See Note 13 for additional information.

SIZE="2">Asset Retirement Obligations

The Company recognizes asset retirement obligations (“AROs”) and the related asset
retirement costs when a legal obligation to retire the asset exists, including obligations incurred as a result of the acquisition, construction, or normal operation of a long-lived asset. The fair values of these AROs are recorded on a discounted
basis at the time the obligation is incurred, and accreted over time using the interest method. Asset retirement costs are recorded by increasing the carrying amount of the related long-lived assets and depreciating those assets over their estimated
remaining useful life.

These excerpts taken from the CNST 10-K filed Mar 31, 2008.

Goodwill

Goodwill is tested for impairment at least annually, however, these tests are performed more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. The evaluation requires a comparison of the estimated fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, goodwill is considered impaired. The amount of impairment equals the difference between the carrying value of goodwill and the “implied fair value” of goodwill. Fair values are primarily estimated using discounted cash flow analysis.

There were no changes in the carrying amount of goodwill for the years ended December 31, 2007 and 2006.

 

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CONSTAR INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Goodwill

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Goodwill is tested for impairment at least annually, however, these tests are performed more frequently when events or changes in circumstances indicate
the carrying value may not be recoverable. The evaluation requires a comparison of the estimated fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, goodwill is considered impaired. The amount of
impairment equals the difference between the carrying value of goodwill and the “implied fair value” of goodwill. Fair values are primarily estimated using discounted cash flow analysis.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">There were no changes in the carrying amount of goodwill for the years ended December 31, 2007 and 2006.

STYLE="margin-top:0px;margin-bottom:0px"> 


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CONSTAR INTERNATIONAL INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 


This excerpt taken from the CNST 10-K filed Mar 29, 2007.

Goodwill

Goodwill is tested for impairment at least annually, however, these tests are performed more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. The evaluation requires a comparison of the estimated fair value of each reporting unit to the carrying value. If the carrying value exceeds fair value, goodwill is considered impaired. The amount of impairment equals the difference between the carrying value of goodwill and the “implied fair value” of goodwill. Fair values are primarily estimated using discounted cash flow analysis.

There were no changes in the carrying amount of goodwill for the years ended December 31, 2006 and 2005.

This excerpt taken from the CNST 10-K filed Mar 29, 2006.

6.    Goodwill

 

Changes in goodwill for the periods ended December 31, 2005 and 2004 were as follows:

 

Balance as of January 1, 2004

   $ 148,813

Goodwill adjustments

     —  
    

Balance as of December 31, 2004

   $ 148,813

Goodwill adjustments

     —  
    

Balance as of December 31, 2005

   $ 148,813
    

 

Due to the trading price of the Company’s common stock, operating results that reflect lower volumes of domestic conventional product sales, increased handling and shuttling costs and other factors, the Company determined that a goodwill impairment existed at June 30, 2003. Based on a preliminary assessment, the Company recognized an estimated impairment charge of $183 million in the second quarter of 2003. The fair value of the Company was determined by quoted market prices of the Company’s common stock plus a control premium. In accordance with SFAS No. 142, the Company performed a detailed analysis of the fair value of the Company’s assets and liabilities, including obtaining appraisals for fixed assets and intangibles, during the third quarter of 2003. Based on the results of that analysis, the Company was not required to make any adjustments to the estimated impairment charge of $183 million as recorded during the second quarter ended June 30, 2003. In 2005 and in 2004, the Company completed its annual test and based on that test, there was no impairment of goodwill in each respective year.

 

This excerpt taken from the CNST 10-K filed Mar 31, 2005.

7.    Goodwill

 

Effective January 1, 2002, Constar adopted the provisions of SFAS No. 142, which required companies to cease amortizing goodwill and certain intangible assets deemed to have an indefinite useful life. Instead, SFAS No. 142 requires that goodwill and intangible assets deemed to have an indefinite useful life be reviewed for impairment upon adoption of SFAS No. 142 and annually thereafter. Under SFAS No. 142, goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. On an annual basis, or more frequently if facts and circumstances indicate that goodwill may be impaired, the Company performs an impairment review by comparing the fair value of a reporting unit, including goodwill, to its carrying value. The impairment review involves a number of assumptions and judgments including the identification of the appropriate reporting units and the calculation of fair value. The Company uses the market value of its common stock plus a control premium to calculate fair value.

 

Historically, Constar’s operations were reported through Crown’s Americas and Europe reporting segments. However, the operations within Europe and the U.S. are similar in the nature of their products, production processes, the types of classes of customers for products and the methods used to distribute products. Accordingly, Constar has only one reporting segment but has identified the following reporting units as of January 1, 2002: United States and Europe. In connection with Constar’s transitional impairment review, recorded goodwill was determined to be impaired in the European reporting unit. During the second quarter of 2002, Constar completed its transitional impairment review of identified reporting units and recognized an impairment charge of approximately $50 million as a cumulative effect of a change in accounting principle as of January 1, 2002. Subsequent to the Company’s initial public offering in November 2002 and as of December 31, 2002, the Company identified that it had only one reporting unit.

 

Due to the trading price of the Company’s common stock, operating results that reflect lower volumes of domestic conventional product sales, increased handling and shuttling costs and other factors, the Company determined that a goodwill impairment existed at June 30, 2003. Based on a preliminary assessment, the Company recognized an estimated impairment charge of $183 million in the second quarter of 2003. The fair value of the Company was determined by quoted market prices of the Company’s common stock plus a control premium. In accordance with SFAS No. 142, the Company performed a detailed analysis of the fair value of the Company’s assets and liabilities, including obtaining appraisals for fixed assets and intangibles, during the third quarter of 2003. Based on the results of that analysis, the Company was not required to make any adjustments to the estimated impairment charge of $183 million as recorded during the second quarter ended June 30, 2003. In 2004, the Company completed its annual test and based on that test, there was no impairment of goodwill.

 

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CONSTAR INTERNATIONAL INC.

 

NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

A reconciliation of goodwill is presented below:

 

Balance as of December 31, 2001

   $ 381.872  

Fiscal 2002 impairment

     (50,059 )
    


Balance as of December 31, 2002

     331,813  

Fiscal 2003 impairment

     (183,000 )
    


Balance as of December 31, 2003 and 2004

   $ 148,813  
    


 

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