Goodwill

During the year ended December 31, 2011, the Company recorded goodwill in connection with its acquisition of Aerius Photonics, LLC. and two other small companies (see Note 18). The Company reviews its goodwill for impairment annually, or more frequently, if there is a triggering event. A two-step test is performed to assess goodwill for impairment. First, the fair value of the reporting unit is compared to its carrying value. If the fair value exceeds the carrying value, goodwill is not impaired and no further testing is required. The second step is performed if the carrying value exceeds the fair value. The implied fair value of the reporting unit’s goodwill must be determined and compared to the carrying value of the goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference will be recorded. In determining the fair value of the reporting units, the Company relied upon the Income Approach and the Market Approach. Under the Income Approach, the fair value of a business is based on the cash flows it can be expected to generate over its remaining life. The estimated cash flows are converted to their present value equivalent using an appropriate rate of return and are analyzed within the boundary of the overall market capitalization of the Company. Under the Market Approach, the fair value of the business is based on forecasted earnings multiplied by an average earnings multiplier of a group of the Company’s peers and compared to the carrying value of the goodwill.

As of June 30, 2011, the Company has determined that there is no impairment of its recorded goodwill and as of December 31, 2011, there have been no triggering events that would require an updated impairment review.

The carrying value of goodwill by reporting segment and the activity for the two year period ending December 31, 2011 is as follows (in thousands):



	Thermal Vision and Measurement			Raymarine			Surveillance			Detection			Integrated Systems		Total
Balance, December 31, 2009	$	224,747		$	—		$	37,584		$	—		$	—	$	262,331
Goodwill from acquisitions	14,065			91,643			50,126			41,026			19,494		216,354
Currency translation adjustments	(2,627		)	5,623			292			—			—		3,288
Other activity	(4		)	—			50			—			—		46
Balance, December 31, 2010	236,181			97,266			88,052			41,026			19,494		482,019
Goodwill from acquisitions	16,452			1,440			—			—			—		17,892
Currency translation adjustments	(1,344		)	(610		)	(90		)	—			—		(2,044		)
Other activity	(102		)	268			2,539			(2,864		)	635		476
Balance, December 31, 2011	$	251,187		$	98,364		$	90,501		$	38,162		$	20,129	$	498,343