ADT 2008 Annual Report Download - page 233

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Goodwill and Intangible Assets (Continued)
The changes in the carrying amount of goodwill from September 28, 2007 to September 26, 2008
was as follows ($ in millions):
Fire Electrical
ADT Protection Flow Safety and Metal
Worldwide Services Control Products Products Total
Balance, as reallocated on September 28, 2007 ....... $5,025 $1,495 $1,975 $1,950 $1,054 $11,499
Purchase accounting adjustments ................ 1 — — (22) (3) (24)
Acquisitions ............................... 115 — 11 14 — 140
Divestitures ............................... — (17) — (2) — (19)
Impairment ............................... — (9) — — — (9)
Currency translation ......................... (60) (2) 7 (7) (27) (89)
Balance at September 26, 2008 .................. $5,081 $1,467 $1,993 $1,933 $1,024 $11,498
Intangible assets, net were $2,655 million and $2,653 million at September 26, 2008 and
September 28, 2007, respectively. The following table sets forth the gross carrying amount and
accumulated amortization of the Company’s intangible assets at September 26, 2008 and September 28,
2007 ($ in millions):
September 26, 2008 September 28, 2007
Gross Weighted Average Gross Weighted Average
Carrying Accumulated Amortization Carrying Accumulated Amortization
Amount Amortization Period Amount Amortization Period
Amortizable:
Contracts and related
customer relationships $6,136 $3,958 14 years $5,808 $3,565 14 years
Intellectual property . . . 499 371 17 years 486 321 16 years
Other ............. 17 12 15 years 20 14 11 years
Total ............... $6,652 $4,341 15 years $6,314 $3,900 14 years
Non-Amortizable:
Intellectual property . . . $ 234 $ 234
Other ............. 110 5
Total ............... $ 344 $ 239
Intangible asset amortization expense for 2008, 2007 and 2006 was $528 million, $513 million and
$517 million, respectively. The estimated aggregate amortization expense on intangible assets currently
owned by the Company is expected to be approximately $500 million for 2009, $350 million for 2010,
$300 million for 2011, $250 million for 2012 and $200 million for 2013.
Indefinite lived intangible assets consisting primarily of trade names are tested for impairment
using the relief from royalty method. The Company believes that its intangible assets balance at
September 26, 2008 is recoverable. However, fair value determinations require considerable judgment
and are sensitive to change. In light of current economic conditions, impairments to intangible assets
could occur in future periods.
See Note 1 for discussion regarding changes in the estimated lives of dealer intangibles.
130 2008 Financials