CDW 2012 Annual Report Download - page 67
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Table of Contents CDW CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
estimated future cash flows for the Corporate, Public and CDW Advanced Services reporting units were discounted at 11.5% ; cash
flows for the Canada reporting unit were discounted at 12.0% based on the future growth rates assumed in the discounted cash flows.
December 1, 2010 Evaluation
The Company performed its annual evaluation of goodwill as of December 1, 2010. All reporting units passed the first step of the
goodwill evaluation (with the fair value exceeding the carrying value by 16% , 17% , 55% and 64% , for the Corporate, Public, Canada
and CDW Advanced Services reporting units, respectively) and, accordingly, the Company was not required to perform the second step
of the goodwill evaluation.
To determine the fair value of the reporting units, the Company used a 75% / 25% weighting of the income approach and market
approach, respectively. Under the income approach, the Company estimated future cash flows of each reporting unit based on internally
generated forecasts for the remainder of 2010 and the next six years. The Company used a 5% long-term assumed consolidated annual
revenue growth rate for periods after the six-year forecast. The estimated future cash flows for the Corporate, Public and Canada
reporting units were discounted at 12.0% ; cash flows for the CDW Advanced Services reporting unit were discounted at 13.0% given
inherent differences in the business model and risk profile.
The following table presents the change in goodwill by segment for the years ended December 31, 2012 and 2011 :
(1) Other is comprised of CDW Advanced Services and Canada reporting units.
61
(in millions) Corporate
Public
Other
(1)
Consolidated
Balances as of December 31, 2010:
Goodwill
$
2,794.4
$
1,261.4
$
107.1
$
4,162.9
Accumulated impairment charges
(1,571.4
)
(354.1
)
(28.3
)
(1,953.8
)
$
1,223.0
$
907.3
$
78.8
$
2,209.1
2011 Activity:
Translation adjustment
$
—
$
—
$
(
0.7
)
$
(0.7
)
$
—
$
—
$
(
0.7
)
$
(0.7
)
Balances as of December 31, 2011:
Goodwill
$
2,794.4
$
1,261.4
$
106.4
$
4,162.2
Accumulated impairment charges
(1,571.4
)
(354.1
)
(28.3
)
(1,953.8
)
$
1,223.0
$
907.3
$
78.1
$
2,208.4
2012 Activity:
Translation adjustment
$
—
$
—
$
0.9
$
0.9
$
—
$
—
$
0.9
$
0.9
Balances as of December 31, 2012:
Goodwill
$
2,794.4
$
1,261.4
$
107.3
$
4,163.1
Accumulated impairment charges
(1,571.4
)
(354.1
)
(28.3
)
(1,953.8
)
$
1,223.0
$
907.3
$
79.0
$
2,209.3