Impairment of Goodwill and Other Long Lived Assets

12 Months Ended

Jul. 01, 2011

Impairment Of Goodwill And Other Long Lived Assets [Abstract]

IMPAIRMENT OF GOODWILL AND OTHER LONG-LIVED ASSETS

NOTE 22:  IMPAIRMENT OF GOODWILL AND OTHER LONG-LIVED ASSETS

Based on our policy as described at Note 1: Significant Accounting Policies in these Notes, we test our goodwill and other indefinite-lived intangible assets for impairment annually, as well as when events or circumstances indicate there may be an impairment. In the fourth quarter of fiscal 2009, we performed our annual review for impairment of our reporting units’ goodwill and other indefinite-lived intangible assets. To test for potential impairment, we determined the fair value of our reporting units based on projected discounted cash flows and market-based multiples applied to sales and earnings. Because of the global recession and postponement of capital projects which significantly weakened demand, and the general decline of peer company valuations impacting our valuation, it appeared that goodwill in our Broadcast and New Media Solutions reporting unit (formerly a separate reportable segment and which, effective for the third quarter of fiscal 2011, is reported under our Integrated Network Solutions segment) was impaired. This was based on the results of step one testing that indicated the adjusted net book value of this reporting unit exceeded its fair value. We then allocated this fair value to Broadcast and New Media Solutions’ underlying assets and liabilities to determine the implied fair value of goodwill.

In conjunction with the above-described impairment review, we conducted a review for impairment of Broadcast and New Media Solutions’ other long-lived assets, including amortizable intangible assets and capitalized software, as any impairment of these assets must be considered prior to the conclusion of the impairment review. The fair value of Broadcast and New Media Solutions’ other long-lived assets was determined based on projected discounted cash flows based on future sales and operating costs, except for product trade names, for which we projected discounted cash flows based on the relief-from-royalty method.

As a result of these impairment reviews, we determined that the goodwill, amortizable intangible assets and capitalized software for Broadcast and New Media Solutions were impaired. Accordingly, during the fourth quarter of fiscal 2009, our Broadcast and New Media Solutions reporting unit recorded a $255.5 million impairment charge, consisting of charges of $160.9 million, $70.2 million and $24.4 million for impairment of goodwill, amortizable intangible assets and capitalized software, respectively.