Dow Chemical 2009 Annual Report Download - page 139

Table of Contents
Goodwill Impairments
During the fourth quarter of 2009, the Company performed its annual impairment tests for goodwill. As a result of this review, it was determined that the
goodwill associated with the Dow Haltermann reporting unit was impaired. The impairment was based on a review of the Dow Haltermann reporting unit
performed by management, in which discounted cash flows did not support the carrying value of the goodwill due to poor future projections for the business.
As a result, an impairment loss of $7 million was recognized in the fourth quarter of 2009 against the Performance Products segment.
During the fourth quarter of 2008, the Company performed its annual impairment tests for goodwill. As a result of this review, it was determined that the
goodwill associated with the Automotive Systems reporting unit was impaired. The impairment was based on a review of the Automotive Systems reporting
unit performed by management, in which discounted cash flows did not support the carrying value of the goodwill due to the severe downturn in the
automotive industry and the future projections for the business. As a result, an estimated impairment loss of $209 million was recognized in the fourth quarter
of 2008 against the Performance Systems segment. As required by the goodwill and other intangible assets topic of the ASC, the second step of goodwill
impairment testing to determine the implied fair value of goodwill for the Dow Automotive reporting unit was finalized in the first quarter of 2009. No
adjustment was required to be made to the estimated impairment loss based on completion of the allocation process.
Also as a result of the 2008 annual tests, it was determined that the goodwill associated with the Polypropylene reporting unit was impaired. The
impairment was based on a review of the Polypropylene reporting unit performed by management, in which discounted cash flows did not support the
carrying value of the goodwill due to demand decline in North America and Western Europe, as well as significant new industry capacity that came on stream
in 2008 and additional industry capacity that was expected in 2009. As a result, an impairment loss of $30 million was recognized in the fourth quarter of
2008 against the Basic Plastics segment.
Other Intangible Assets
The following table provides information regarding the Company’s other intangible assets:
Other Intangible Assets at
December 31 2009 2008
In millions
Gross
Carrying
Amount
Accumulated
Amortization Net
Gross
Carrying
Amount
Accumulated
Amortization Net
Intangible assets with finite lives:
Licenses and intellectual property $ 1,729 $ (320) $ 1,409 $ 316 $ (192) $ 124
Patents 140 (107) 33 139 (100) 39
Software 875 (439) 436 700 (363) 337
Trademarks 694 (110) 584 169 (61) 108
Customer related 3,613 (261) 3,352 210 (66) 144
Other 142 (65) 77 120 (43) 77
Total other intangible assets, finite lives $ 7,193 $ (1,302) $ 5,891 $ 1,654 $ (825) $ 829
IPR&D, indefinite lives 75 - 75 - - -
Total other intangible assets $ 7,268 $ (1,302) $ 5,966 $ 1,654 $ (825) $ 829
Intangible assets acquired with the April 1, 2009 acquisition of Rohm and Haas amounted to $5,305 million including net adjustments made since the
acquisition that increased the fair value of these assets $830 million. These adjustments are reflected in the values presented in the tables above and below:
Rohm and Haas Intangible
Assets
In millions
Gross Carrying
Amount
Weighted-average
Amortization Period
Intangible assets with finite lives:
Licenses and intellectual property $ 1,410 10 years
Software 73 3 years
Trademarks 513 10 years
Customer related 3,235 16 years
Total intangible assets, finite lives $ 5,231 14 years
IPR&D, indefinite lives 74 -
Total intangible assets $ 5,305
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