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acquiredinprocesstechnology.Suchestimatesareinherentlydifficultandsubjectiveandcanhavea
materialimpactonourfinancialstatements.
AssessmentofImpairmentofAssets.Managementevaluatestherecoverabilityofouridentifiable
intangibleassetsandotherlonglivedassetsinaccordancewithFASBliteraturerelatedtoaccountingfor
theimpairmentordisposaloflonglivedassetswithinASCSubtopic36010,whichgenerallyrequiresthe
assessmentoftheseassetsforrecoverabilitywheneventsorcircumstancesindicateapotentialimpairment
exists.Weconsideredcertaineventsandcircumstancesindeterminingwhetherthecarryingvalueof
identifiableintangibleassetsandotherlonglivedassetsmaynotberecoverableincluding,butnotlimited
to:significantchangesinperformancerelativetoexpectedoperatingresults;significantchangesintheuse
oftheassets;significantnegativeindustryoreconomictrends;asignificantdeclineinourstockpricefora
sustainedperiodoftime;andchangesinourbusinessstrategy.Indeterminingwhetheranimpairment
exists,weestimatetheundiscountedcashflowstobegeneratedfromtheuseandultimatedispositionof
theseassets.Ifanimpairmentisindicatedbasedonacomparisonoftheassets’carryingvaluesandthe
undiscountedcashflows,theimpairmentlossismeasuredastheamountbywhichthecarryingamountof
theassetsexceedsthefairvalueoftheassets.
During2009,werecordedanimpairmentchargeof$409milliontoourfinitelivedintangible
assets.SeeNote12oftheNotestoConsolidatedFinancialStatementsincludedinthisAnnualReportfor
additionalinformationregardingthedeterminationoftheimpairmentchargesrecordedfortheyearended
December31,2009.
FASBliteraturerelatedtotheaccountingforgoodwillandotherintangibleswithinASCTopic
350requiresatwostepapproachtotestinggoodwillforimpairmentforeachreportingunit.Ourreporting
unitsaredeterminedbythecomponentsofouroperatingsegmentsthatconstituteabusinessforwhichboth
(1)discretefinancialinformationisavailableand(2)segmentmanagementregularlyreviewstheoperating
resultsofthatcomponent.ASCTopic350requiresthattheimpairmenttestbeperformedatleastannually
byapplyingafairvaluebasedtest.Thefirststepmeasuresforimpairmentbyapplyingfairvaluebased
testsatthereportingunitlevel.Thesecondstep(ifnecessary)measurestheamountofimpairmentby
applyingfairvaluebasedteststotheindividualassetsandliabilitieswithineachreportingunit.
Todeterminethefairvaluesofthereportingunitsusedinthefirststep,weuseadiscountedcash
flowapproach.Eachsteprequiresustomakejudgmentsandinvolvestheuseofsignificantestimatesand
assumptions.Theseestimatesandassumptionsincludelongtermgrowthratesandoperatingmarginsused
tocalculateprojectedfuturecashflows,riskadjusteddiscountratesbasedonourweightedaveragecostof
capital,andfutureeconomicandmarketconditions.Theseestimatesandassumptionshavetobemadefor
eachreportingunitevaluatedforimpairment.Ourestimatesformarketgrowth,ourmarketshareandcosts
arebasedonhistoricaldata,variousinternalestimatesandcertainexternalsources,andarebasedon
assumptionsthatareconsistentwiththeplansandestimatesweareusingtomanagetheunderlying
business.Iffutureforecastsarerevised,theymayindicateorrequirefutureimpairmentcharges.Webase
ourfairvalueestimatesonassumptionswebelievetobereasonablebutthatareunpredictableand
inherentlyuncertain.Actualfutureresultsmaydifferfromthoseestimates.
StockBasedCompensation.Weestimatethevalueofsharebasedpaymentawardsonthe
measurementdateusingabinomiallatticemodel.Ourdeterminationoffairvalueofsharebasedpayment
awardsonthedateofgrantusinganoptionpricingmodelisaffectedbyourstockpriceaswellas
assumptionsregardinganumberofhighlycomplexandsubjectivevariables.Thesevariablesinclude,but
arenotlimitedto,ourexpectedstockpricevolatilityoverthetermoftheawards,andactualandprojected
employeestockoptionexercisebehaviors.
ForadetaileddiscussionoftheapplicationoftheseandotheraccountingpoliciesseeNote2ofthe
NotestoConsolidatedFinancialStatementsincludedinthisAnnualReport.
RecentlyIssuedAccountingStandards
InJune2009,theFASBissuedanamendmenttotheaccountinganddisclosurerequirementsfor
theconsolidationofvariableinterestentities(VIEs),whichamendstheevaluationcriteriausedtoidentify