MOLX » Topics » Goodwill

These excerpts taken from the MOLX 10-K filed Aug 6, 2008.
Goodwill
 
Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. We perform an annual review in the fourth quarter of each year, or more frequently if indicators of potential impairment exist, to determine if the carrying value of the recorded goodwill is impaired. The impairment review process compares the fair value of the reporting unit in which goodwill resides to its carrying value. Reporting units may be operating segments as a whole or an operation one level below an operating segment, referred to as a component.
 
Goodwill


 



Goodwill is recorded when the purchase price paid for an
acquisition exceeds the estimated fair value of the net
identified tangible and intangible assets acquired. We perform
an annual review in the fourth quarter of each year, or more
frequently if indicators of potential impairment exist, to
determine if the carrying value of the recorded goodwill is
impaired. The impairment review process compares the fair value
of the reporting unit in which goodwill resides to its carrying
value. Reporting units may be operating segments as a whole or
an operation one level below an operating segment, referred to
as a component.


 




This excerpt taken from the MOLX 10-K filed Aug 3, 2006.

9.  Goodwill


At June 30, changes to goodwill were as follows (in thousands):

 

  

2006

 

2005

 

2004

Beginning balance

$

143,872 

 

$

164,915 

 

$

160,732

Impairments

 

– 

  

(22,876)

  

Additions

 

5,591 

  

1,800 

  

4,166

Other adjustments

 

(5)

  

33 

  

17

Ending balance

$

149,458 

 

$

143,872 

 

$

164,915


During the fiscal 2005 annual impairment review for goodwill, indicators of impairment were found in the MPN reporting unit.  The MPN business, consisting of products primarily sold into the structured cabling market for data communications, had not performed as management had expected.


Slower growth in MPN’s markets served and slower-than-expected customer acceptance of its products in the structured cabling business, as well as a delay in the transition to next-generation data communication networks, had a negative impact on MPN’s operating results.  These factors resulted in lower growth expectations for the reporting unit, which resulted in the goodwill impairment charge.


49




Based on our assessment of MPN’s implied fair value, including a valuation by an independent valuation firm, we recorded a non-cash impairment charge of $22.9 million in fiscal 2005.  The charge is included as a component of net income in the Corporate and Other segment in Note 20.


This excerpt taken from the MOLX 10-K filed Sep 12, 2005.

12. Goodwill

Goodwill for the years ended June 30, 2005, 2004 and 2003 was as follows:
2005
   
2004
   
2003
Beginning balance
$
164,915
   
$
160,732
   
$
160,180
Impairments
(22,876
)
   
-
   
-
Additions
1,800
   
4,166
   
539
Other adjustments
33
   
17
   
13
Ending Balance
$
143,872
   
$
164,915
   
$
160,732

During 2005, the Company completed its annual impairment review for goodwill. Indicators of impairment were found in the MPN reporting unit. The MPN business, consisting of products primarily sold into the structured cabling market for data communications, had not performed as management had expected.

Slower growth in MPN’s markets served and slower-than-expected customer acceptance of its products in the structured cabling business, as well as a delay in the transition to next-generation data communication networks, had a negative impact on MPN’s operating results. These factors resulted in lower growth expectations for the reporting unit, which resulted in the goodwill impairment charge.

A goodwill impairment review requires a two-step process. The first step of the review compares the estimated fair value of reporting unit against its aggregate carrying value, including goodwill. The Company estimated the fair value of the MPN reporting unit using the income method of valuation, which included the use of estimated discounted cash flows. Based on the comparison, the carrying value of the MPN reporting unit exceeded its fair value.

Accordingly, the Company performed the second step of the test, comparing the implied fair value of the MPN reporting unit’s goodwill with the carrying value of that goodwill. Based on this assessment, the Company recorded a non-cash impairment charge of $22,876 in 2005. The charge is included as a component of net income in the Corporate and Other segment in Note 23.

The estimated fair market value of the business was based on a valuation by an independent valuation firm.

Other changes to goodwill are attributable to the Company’s acquisition during fiscal 2004 (see Note 6), contingent purchase payments on a fiscal 2001 acquisition and foreign currency translation adjustments.

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