Note 4. Intangible Assets

Goodwill


(In thousands)	CooperVision			CooperSurgical			Total
Balance as of October 31, 2009	$	1,049,270		$	207,759		$	1,257,029
Net additions during the year ended October 31, 2010		0			10,102			10,102
Translation		(4,998	)		(157	)		(5,155	)

Balance as of October 31, 2010		1,044,272			217,704			1,261,976
Net additions during the nine-month period ended July 31, 2011		870			2,830			3,700
Translation		4,593			31			4,624


Balance as of July 31, 2011	$	1,049,735		$	220,565		$	1,270,300

We performed our annual impairment test in our fiscal third quarter of 2011, and our analysis indicated that we had no impairment of goodwill. We test goodwill for impairment annually during the fiscal third quarter and when an event occurs or circumstances change such that it is reasonably possible that impairment may exist. We account for goodwill and evaluate our goodwill balances and test them for impairment in accordance with related accounting standards.

The goodwill impairment test is a two-step process. Initially, we compare the book value of net assets to the fair value of each reporting unit that has goodwill assigned to it. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of the impairment. A reporting unit is the level of reporting at which goodwill is tested for impairment. Our reporting units are the same as our business segments CooperVision and CooperSurgical reflecting the way that we manage our business.

The fair value of our reporting units was determined using the income valuation approach. Under the income approach, specifically the discounted cash flow method, the fair value of the reporting unit is based on the present value of estimated future cash flows that the reporting unit is expected to generate over its remaining life.

In the application of the income approach, the Company is required to make estimates of future operating trends and judgments on discount rates and other variables. Actual future results related to assumed variables could differ from these estimates. Discount rates are based on a weighted average cost of capital, which represents the average rate a business must pay its providers of debt and equity capital. We used discount rates that are the representative weighted average cost of capital for each of our reporting units, with consideration given to the current condition of the global economy. The discount rates used in the current year are about 100 basis points lower than those used in our analysis for fiscal year 2010 reflecting the current condition of the United States and the global economy. The Company determines net sales forecasts based on our best estimate of near-term net sales expectations and long-term projections which include review of published independent industry analyst reports. As a sensitivity analysis, a 100 basis point reduction in the assumed net sales growth beginning in fiscal 2011 and extending through the valuation period would decrease the excess amount of the estimated fair value of each reporting unit over the carrying value but would not cause a change in the results of our impairment testing that indicated that we had no impairment of goodwill.

Goodwill impairment analysis and measurement is a process that requires significant judgment. If our common stock price trades below book value per share, there are changes in market conditions or a future downturn in our business, or a future annual goodwill impairment test indicates an impairment of our goodwill, the Company may have to recognize a non-cash impairment of its goodwill that could be material, and could adversely affect our results of operations in the period recognized and also adversely affect our total assets, stockholders' equity and financial condition.

Other Intangible Assets


	As of July 31, 2011				As of October 31, 2010
(In thousands)	Gross Carrying Amount		Accumulated Amortization & Translation		Gross Carrying Amount		Accumulated Amortization & Translation
Trademarks	$	3,115	$	1,362	$	3,022	$	1,195
Technology		109,645		60,174		105,527		52,954
Shelf space and market share		102,083		44,804		88,803		37,953
License and distribution rights and other		24,169		6,832		15,701		6,774

		239,012	$	113,172		213,053	$	98,876


Less accumulated amortization and translation		113,172				98,876

Other intangible assets, net	$	125,840			$	114,177

We estimate that amortization expense will average $20.7 million per year in the three-year period ending October 31, 2013, and average $14.7 million in the two succeeding years ending October 31, 2015.