ADT 2008 Annual Report Download - page 232

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Goodwill and Intangible Assets (Continued)
Australia and New Zealand Security Services business, part of the ADT Worldwide segment. As a
result, the Company recognized a goodwill impairment of $46 million in the third quarter of 2007.
In determining fair value, management relies on a number of factors including operating results,
business plans, economic projections, anticipated future cash flows, and marketplace data. There are
inherent uncertainties related to these factors and judgments in applying them to the analysis of
goodwill impairment. However, fair value determinations require considerable judgment and are
sensitive to changes in the factors described above. In light of current economic conditions, additional
impairments to one or more of our reporting units could occur in future periods whether or not
connected to the annual impairment analysis. The Company has certain reporting units which have
limited excess of fair value over carrying value. The goodwill balance for reporting units with less than
a ten percent excess of fair value over carrying value in the aggregate was approximately $2.4 billion at
September 26, 2008. See Note 1.
There were no goodwill impairments related to continuing operations during 2006.
The changes in the carrying amount of goodwill for 2008 and 2007 are as follows ($ in millions):
Total
Balance at September 29, 2006 ................................ $11,194
Purchase accounting adjustments ............................... 6
Acquisitions .............................................. 16
Divestitures(1) ............................................. (89)
Impairments .............................................. (46)
Currency translation ........................................ 418
Balance at September 28, 2007 ................................ 11,499
Purchase accounting adjustments ............................... (24)
Acquisitions .............................................. 140
Divestitures .............................................. (19)
Impairments .............................................. (9)
Currency translation ........................................ (89)
Balance at September 26, 2008 ................................ $11,498
(1) Includes $69 million of goodwill for businesses that have met the held for sale criteria which are included in assets held for
sale on the consolidated balance sheets. Therefore, the amount has been presented as a reduction to goodwill in the
rollforward above. In the third quarter of 2008 the Company approved a plan to sell a business in the Safety Products
segment. See Note 2. The goodwill related to this Safety Products business has been presented as a reduction to goodwill in
the period that goodwill was reallocated in connection with the Separation in the third quarter of 2007.
2008 Financials 129