ADT 2010 Annual Report Download - page 199

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TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Goodwill and Intangible Assets (Continued)
Acquisitions/
Purchase Transfers Reclass to
September 25, Accounting due to Assets Held Currency September 24,
2009 Adjustments Divestitures Realignment for Sale Impairments Translation 2010
ADT Worldwide
Gross Goodwill ........... $4,961 $ 929 $ (3) $ 112 — — $ (48) $ 5,951
Impairments ............. (659) — — — — — — (659)
Carrying Amount of Goodwill . . 4,302 929 (3) 112 — — (48) 5,292
Flow Control
Gross Goodwill ........... 1,993 76 (5) — (101) — (57) 1,906
Impairments ............. — — — — — — — —
Carrying Amount of Goodwill . . 1,993 76 (5) — (101) — (57) 1,906
Fire Protection Services
Gross Goodwill ........... 1,523 — (1) 23 — — 11 1,556
Impairments ............. (189) — — — — — — (189)
Carrying Amount of Goodwill . . 1,334 — (1) 23 — — 11 1,367
Electrical and Metal Products
Gross Goodwill ........... 935 — — — — — — 935
Impairments ............. (935) — — — — — — (935)
Carrying Amount of Goodwill . . — — — — — — — —
Safety Products
Gross Goodwill ........... 2,075 — (9) (135) — — (6) 1,925
Impairments ............. (913) — — — — — — (913)
Carrying Amount of Goodwill . . 1,162 — (9) (135) — — (6) 1,012
TOTAL
Gross Goodwill ........... 11,487 1,005 (18) — (101) — (100) 12,273
Impairments ............. (2,696) — — — — — — (2,696)
Carrying Amount of Goodwill . . $ 8,791 $1,005 $(18) $ — $(101) $— $(100) $ 9,577
Fiscal 2009 Goodwill Impairment
The Company began to experience a decline in revenue during the first quarter of 2009 in its ADT
Worldwide, Fire Protection Services and Safety Products segments as a result of a slowdown in the
commercial markets including the retailer end market as well as a decline in sales volume at its
Electrical and Metal Products segment due to the slow down in the non-residential construction
market. Although the Company considered and concluded that these factors did not constitute
triggering events during the first quarter of 2009, the continued existence of these conditions during the
second quarter of 2009, along with downward revisions to forecast results, restructuring actions and
weaker industry outlooks, caused the Company to conclude that sufficient indicators of impairment
existed for certain reporting units in the above mentioned businesses. The Company determined that
these events and changes in circumstances constituted triggering events for the following six reporting
units: Europe, Middle East and Africa (‘‘EMEA’’) Security and EMEA Fire reporting units within the
ADT Worldwide and Fire Protection Services segments, respectively, Electrical and Metal Products
reporting unit within the Electrical and Metal Products segment and Access Control and Video Systems
(‘‘ACVS’’), Life Safety, and Sensormatic Retail Solutions (‘‘SRS’’) reporting units within the Safety
Products segment. As a result of the triggering events, the Company assessed the recoverability of each
of the reporting unit’s long-lived assets and concluded that the carrying amounts were recoverable at
2010 Financials 111