Dow Chemical 2011 Annual Report Download - page 191

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At December 31, 2011, the Company had accumulated goodwill impairments of $209 million ($246 million at
December 31, 2010 and $250 million at January 1, 2010). During the past two years, the accumulated goodwill impairments
balance was reduced by the following transactions: the June 17, 2010 divestiture of Styron, which included $4 million of
impaired goodwill associated with the Rubber business (reflected in Performance Materials); the September 30, 2011 sale of
the global Polypropylene business, which included $30 million of impaired goodwill (reflected in Performance Plastics); and
the divestiture of the Dow Haltermann business during 2011, which included $7 million of impaired goodwill (reflected in
Performance Materials).
Goodwill Impairments
In 2011, the Company early adopted ASU 2011-08, “Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for
Impairment.” ASU 2011-08 simplifies how entities test goodwill for impairment and permits an entity to first assess qualitative
factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a
basis for determining whether it is necessary to perform the two-step goodwill impairment test. This ASU is effective for
annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early
adoption permitted.
During the fourth quarter of 2011, the Company performed its annual impairment test for goodwill. The Company assessed
qualitative factors to determine whether it was more likely than not that the fair value of each reporting unit was less than its
carrying value amount. The qualitative factors assessed for the Company included, but were not limited to, GDP growth rates,
long-term hydrocarbon and energy prices, equity and credit market activity, discount rates, foreign exchange rates and overall
financial performance. Qualitative factors assessed for each of the reporting units included, but were not limited to, changes in
industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw
material prices, and financial performance of each reporting unit. The qualitative assessment indicated that it was more likely
than not that the fair value of each reporting unit exceeded its carrying value. Additional quantitative testing was not required
for any of the Company's reporting units.
During the fourth quarter of 2010, the Company performed its annual impairment tests for goodwill. As a result of the
review, it was determined that no additional goodwill impairments existed.
During the fourth quarter of 2009, the Company performed its annual impairment tests for goodwill. As a result of the
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 Materials segment.
Other Intangible Assets
The following table provides information regarding the Company’s other intangible assets:
Other Intangible Assets at December 31
In millions
Intangible assets with finite lives:
Licenses and intellectual property
Patents
Software
Trademarks
Customer related
Other
Total other intangible assets, finite lives
IPR&D (1), indefinite lives
Total other intangible assets
2011
Gross
Carrying
Amount
$ 1,693
119
1,049
695
3,652
150
$ 7,358
52
$ 7,410
Accumulated
Amortization
$ (594)
(97)
(596)
(224)
(730)
(108)
$ (2,349)
—
$ (2,349)
Net
$ 1,099
22
453
471
2,922
42
$ 5,009
52
$ 5,061
2010
Gross
Carrying
Amount
$ 1,733
121
965
693
3,647
122
$ 7,281
54
$ 7,335
Accumulated
Amortization
$ (466)
(95)
(506)
(168)
(492)
(78)
$ (1,805)
—
$ (1,805)
Net
$ 1,267
26
459
525
3,155
44
$ 5,476
54
$ 5,530
(1) In-process research and development ("IPR&D") purchased in a business combination.