Motorola 2010 Annual Report Download - page 127

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119
Goodwill
The following table displays a rollforward of the carrying amount of goodwill by reportable segment from
January 1, 2008 to December 31, 2010:
Enterprise
Mobility
Solutions
Mobile
Devices Home
Total
Company
Balances as of January 1, 2008:
Aggregate goodwill acquired $ 2,916 $ 19 $1,528 $ 4,463
Accumulated impairment losses — — (73) (73)
Goodwill, net of impairment losses 2,916 19 1,455 4,390
Goodwill acquired 60 15 12 87
Impairment losses (1,564) (55) — (1,619)
Adjustments 28 21 (179) (130)
Balance as of December 31, 2008:
Aggregate goodwill acquired 3,004 55 1,361 4,420
Accumulated impairment losses (1,564) (55) (73) (1,692)
Goodwill, net of impairment losses 1,440 — 1,288 2,728
Goodwill acquired — — — —
Impairment losses — — — —
Adjustments (11) — (3) (14)
Balance as of December 31, 2009:
Aggregate goodwill acquired 2,993 55 1,358 4,406
Accumulated impairment losses (1,564) (55) (73) (1,692)
Goodwill, net of impairment losses 1,429 — 1,285 2,714
Goodwill acquired — 78 33 111
Impairment losses — — — —
Adjustments — — — —
Balance as of December 31, 2010:
Aggregate goodwill acquired 2,993 133 1,391 4,517
Accumulated impairment losses (1,564) (55) (73) (1,692)
Goodwill, net of impairment losses $ 1,429 $ 78 $1,318 $ 2,825
During the year ended December 31, 2008, the Company finalized its assessment of the Internal Revenue Code
Section 382 Limitations (“IRC Section 382”) relating to the pre-acquisition tax loss carryforwards of its 2007
acquisitions. As a result of the IRC Section 382 studies, the Company recorded additional deferred tax assets and a
corresponding reduction in goodwill, which is reflected in the adjustment line above.
The Company conducts its annual assessment of goodwill for impairment in the fourth quarter of each year.
The goodwill impairment test is performed at the reporting unit level. A reporting unit is an operating segment or
one level below an operating segment. The Company has determined that the Mobile Devices segment meets the
requirement of a reporting unit. For the Enterprise Mobility Solutions segment, the Company has identified two
reporting units, the Government and Public Safety reporting unit and the Enterprise Mobility reporting unit. For the
Home segment, the Company has identified two reporting units, the Broadband Home Solutions reporting unit and
the Access Networks reporting unit. The Company performs extensive valuation analyses, utilizing both income and
market-based approaches, in its goodwill assessment process. The determination of the fair value of the reporting
units and other assets and liabilities within the reporting units requires the Company to make significant estimates
and assumptions. These estimates and assumptions primarily include, but are not limited to, the discount rate,
terminal growth rate, earnings before depreciation and amortization, and capital expenditures forecasts specific to
each reporting unit. Due to the inherent uncertainty involved in making these estimates, actual results could differ
from those estimates.
The Company has weighted the valuation of its reporting units at 75% based on the income approach and 25%
based on the market-based approach, consistent with prior periods. The Company believes that this weighting is