Memorex 2009 Annual Report Download - page 29

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ended December 31, 2009. The interest accretion is recorded in the interest expense line item of the Consolidated Results
of Operations.
On November 3, 2009, the United States Court of Appeals for the Federal Circuit issued a ruling despite the request
for a stay. The ruling was in our favor and reversed the district court judgment of November 26, 2008. This ruling has no
impact on the settlement agreement entered into on July 13, 2009. See Note 17 to the Consolidated Financial Statements
for a further description of the Philips litigation.
Goodwill Impairment
2009 2008 2007 2009 vs. 2008 2008 vs. 2007
Years Ended December 31, Percent Change
(In millions)
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $32.4 $94.1 ⫺100.0% ⫺65.6%
In the fourth quarter of 2008, in connection with our annual goodwill impairment test, impairments were identified and
recorded in an aggregate amount of $32.4 million related to the Americas-Commercial, Asia Pacific and Electronic
Products reporting units. We also recorded $2.3 million of goodwill impairments during the fourth quarter of 2008 related to
the Americas-Commercial reporting unit under discontinued operations in our Consolidated Statement of Operations.
During the fourth quarter of 2008, the continuing and accelerating deterioration of general economic conditions contributed
to shortfalls in our anticipated fourth quarter 2008 operating profitability and resulted in lower expectations for growth and
profitability in future periods. In addition, we experienced a decline in our stock price reflecting a further reduction in a
market participant’s view of fair value of our underlying reporting units.
During the fourth quarter of 2007, in conjunction with our annual goodwill impairment test, we recorded a goodwill
impairment charge of $94.1 million consisting of a full impairment of the goodwill associated with our Americas-Consumer
and Europe reporting units. The goodwill impairments in 2007 resulted from a general decline in the outlook for profitability
for the products sold by our Americas-Consumer and Europe reporting units combined with the fact that a market
participant’s view of our fair value was substantially reduced as reflected by the decline in our stock price.
See Notes 2 and 6 to the Consolidated Financial Statements as well as Critical Accounting Policies and Estimates
for further background and information on goodwill impairment.
Restructuring and Other
The components of our restructuring and other expense included in the Consolidated Statements of Operations were
as follows:
2009 2008 2007
Years Ended December 31,
(In millions)
Restructuring
Severance and severance related expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.2 $15.7 $23.6
Lease termination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 4.8 0.6
Total restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 20.5 24.2
Other
Pension settlement/curtailment (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7 5.7 1.4
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 5.0 8.4
TDK post-closing purchase price adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (2.3) —
Terminated employment agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.7)
Other ............................................................. 0.3 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.6 $28.9 $33.3
During 2009, we recorded $11.2 million of severance and severance related expenses and $0.1 million of lease
termination costs related to our 2008 corporate redesign restructuring program initiated during the fourth quarter of 2008.
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