NOTE 3: Goodwill

The following table summarizes the changes in goodwill by segment for fiscal 2014 and 2013:

In Thousands	Avionics &			Sensors &			Advanced
	Controls			Systems			Materials			Total

Balance, October 26, 2012	$	456,092		$	428,420		$	214,450		$	1,098,962
Goodwill from acquisitions		21,640			-			-			21,640
Goodwill adjustments		-			2,904			-			2,904
Goodwill impairment		(3,454	)		-			-			(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

Goodwill from acquisitions		-			17,741			-			17,741
Goodwill adjustments		-			(1,427	)		-			(1,427	)
Goodwill write off on assets held for sale		(6,333	)		(8,702	)		(7,427	)		(22,462	)
Foreign currency translation adjustment		(18,355	)		(31,742	)		(946	)		(51,043	)
Balance, October 31, 2014	$	440,015		$	425,353		$	206,418		$	1,071,786

On September 3, 2014, the Board of Directors approved a plan to sell certain non-core business units. These business units are reported as discontinued operations. Based upon the estimated fair values, the Company recorded an estimated after-tax loss of $49.5 million in fiscal 2014 on the assets held for sale in discontinued operations, of which $22.5 million was recorded against goodwill.

During the third fiscal quarter of 2013, 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 of 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.