NOTE 3: Goodwill

The following table summarizes the changes in goodwill by segment for fiscal 2013 and 2012:


In Thousands	Avionics & Controls			Sensors & Systems			Advanced Materials			Total

Balance, October 28, 2011	$	513,508		$	435,645		$	214,572		$	1,163,725
Sale of product line		(523	)		0			0			(523	)
Goodwill adjustments		(234	)		24,280			0			24,046
Goodwill impairment		(52,169	)		0			0			(52,169	)
Foreign currency translation adjustment		(4,490	)		(31,505	)		(122	)		(36,117	)


Balance, October 26, 2012		456,092			428,420			214,450			1,098,962
Goodwill from acquisitions		21,640			0			0			21,640
Goodwill adjustments		0			2,904			0			2,904
Goodwill impairment		(3,454	)		0			0			(3,454	)
Foreign currency translation adjustment		(9,575	)		18,159			341			8,925

Balance, October 25, 2013	$	464,703		$	449,483		$	214,791		$	1,128,977

During the third fiscal quarter of 2013 and 2012, management performed Step One impairment tests for Racal Acoustics upon identification of an indicator of impairment. The Company’s third quarter forecast in 2013 projected a higher operating loss in fiscal 2013 and lower earnings over the five years compared to the prior-year forecast due to further delays and reductions in global defense programs. As required under U.S. GAAP, a Step Two impairment test was required in fiscal 2013, because the current fair value of the business using a discounted cash flow and market approach was less than its carrying amount of the business. Under Step Two, the fair value of all Racal Acoustics’ assets and liabilities was estimated, including tangible assets, existing technology, and trade names, for the purpose of deriving an estimate of the implied fair value of goodwill. The implied fair value of the goodwill was then compared to the recorded goodwill to determine the amount of the impairment. Assumptions used in measuring the value of these assets and liabilities included the discount rates, royalty rates, and obsolescence rates used in valuing the intangible assets, and pricing of comparable transactions in the market in valuing the tangible assets. The excess of the carrying amount of goodwill over the implied fair value of goodwill resulted in an impairment charge of $3.5 million in fiscal 2013. An impairment charge of $52.2 million was recorded at Racal Acoustics in fiscal 2012.