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58
NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill was $294 million and $907 million as of December 31, 2010 and 2009, respectively. The changes in the carrying amount of
goodwill by reportable segment for 2010 and 2009 were as follows:
Consumer
Film,
Digital
Graphic
Photofinishing
Imaging
Communications
and Entertainment
Consolidated
(in millions)
Group
Group
Group
Total
Balance as of December 31, 2008:
Goodwill
$ 195
$ 873
$ 613
$ 1,681
Accumulated impairment losses
-
(785)
-
(785)
$ 195
$ 88
$ 613
$ 896
Additions
-
4
-
4
Purchase accounting adjustments
-
(1)
-
(1)
Currency translation adjustments
-
3
5
8
Balance as of December 31, 2009:
Goodwill
195
879
618
1,692
Accumulated impairment losses
-
(785)
-
(785)
$ 195
$ 94
$ 618
$ 907
Impairment
-
-
(626)
(626)
Currency translation adjustments
6
(1)
8
13
Balance as of December 31, 2010:
Goodwill
201
878
626
1,705
Accumulated impairment losses
-
(785)
(626)
(1,411)
$ 201
$ 93
$ -
$ 294
As of December 31, 2008, due to the continuing challenging business conditions and the significant decline in its market
capitalization during the fourth quarter of 2008, the Company concluded there was an indication of possible impairment. Based on its
updated analysis, the Company concluded that there was an impairment of goodwill related to the Graphic Communications Group
(GCG) segment and, thus, recorded a pre-tax impairment charge of $785 million in the fourth quarter of 2008 that was included in
Other operating expenses (income), net in the Consolidated Statement of Operations. The fair values of reporting units within the
Company’s Consumer Digital Imaging Group (CDG) and Film, Photofinishing and Entertainment Group (FPEG) segments, and one
of the two GCG reporting units were greater than their respective carrying values as of December 31, 2008, so no goodwill
impairment was recorded for these reporting units. Reasonable changes in the assumptions used to determine these fair values
would not have resulted in goodwill impairments in any of these reporting units.
On September 1, 2009, the Company completed the acquisition of the scanner division of BÖWE BELL + HOWELL, a global
supplier of documents scanners to value-added resellers, system integrators, and end-users. The acquired scanner division is now a
part of the Company’s GCG segment. As a result of the acquisition, the Company recorded $4 million and $8 million of goodwill and
intangible assets, respectively.
As of December 31, 2010, due to continuing challenging business conditions driven, in part, by rising commodity prices and a
continuation of significant declines in the FPEG business caused by digital substitution, the Company concluded there was an
indication of a possible goodwill impairment related to the FPEG segment. Based on its updated goodwill analysis, including an
updated forecast reflecting certain operational changes to manage the impact of these conditions, the Company concluded that there
was an impairment of goodwill related to the FPEG segment as of December 31, 2010. The Company recorded a pre-tax impairment
charge of $626 million in the fourth quarter of 2010 that was included in Other operating expenses (income), net in the Consolidated
Statement of Operations.