harris corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Credit Risk
We are exposed to credit losses in the event of non-performance by counterparties to these financial
instruments, but we do not expect any of the counterparties to fail to meet their obligations. To manage credit risks,
we select counterparties based on credit ratings, limit our exposure to any single counterparty under defined
guidelines and monitor the market position with each counterparty.
See Note 24: Fair Value Measurements in these Notes for the amount of the assets and liabilities related to
these foreign currency forward contracts in our Consolidated Balance Sheet as of July 1, 2011, and see our
Consolidated Statement of Comprehensive Income and Equity for additional information on changes in accumulated
other comprehensive income (loss) for the three fiscal years ended July 1, 2011.
NOTE 20: NON-OPERATING LOSS
The components of non-operating loss were as follows:
2011 2010
(In millions)
2009
Impairment of securities available-for-sale .............................. $ — $ — $(7.6)
Impairment of investments ......................................... (0.7) (0.3) —
Net royalty income (expense) ....................................... (2.0) (1.6) 3.4
Other ......................................................... 0.8 — 1.1
$(1.9) $(1.9) $(3.1)
NOTE 21: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The components of accumulated other comprehensive income (loss) were as follows:
2011 2010
(In millions)
Foreign currency translation ............................................. $50.8 $ 14.3
Net unrealized gain on securities available-for-sale, net of income taxes ............. 1.1 0.6
Net unrealized gain (loss) on hedging derivatives, net of income taxes .............. (0.1) 0.5
Unamortized loss on treasury lock, net of income taxes ......................... (3.5) (4.1)
Unrecognized pension obligations, net of income taxes ......................... (29.6) (31.7)
$ 18.7 $(20.4)
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.
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