3M 2004 Annual Report Download - page 78

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52
The business combination activity for the year ended December 31, 2002, is summarized in the following table.
Purchased identifiable intangible assets of $45 million are being amortized on a straight-line basis over lives
ranging from two to 17 years (weighted-average life of 10.6 years). There were no in-process research and
development charges associated with these acquisitions. Pro forma information related to these acquisitions is not
included because the impact of these acquisitions, either individually or in the aggregate, on the Company’s
consolidated results of operations is not considered to be material.
2002 ACTIVITY
Precision 3M Aggregation
Asset (Liability) Optics, Inter-Unitek of Remaining Total
(Millions) Inc. GmbH Acquisitions Activity
Accounts receivable $ 36 $ – $ 7 $ 43
Inventory 21 5 5 31
Other current assets 1 – – 1
Property, plant and equipment – net 107 – 11 118
Purchased indefinite-lived intangible assets – – 2 2
Purchased identifiable intangible assets 36 – 9 45
Purchased goodwill 672 12 101 785
Accounts payable and other current liabilities (23) – (6) (29)
Interest bearing debt – – (4) (4)
Minority interest liability – 289 14 303
Other long-term liabilities – (2) – (2)
Net assets acquired $850 $304 $139 $1,293
Cash, net of cash acquired $850 $304 $104 $1,258
Non-cash (3M shares at fair value) – – 35 35
Net assets acquired $850 $304 $139 $1,293
NOTE 3. Goodwill and Intangible Assets
3M has 18 reporting units under the criteria set forth by SFAS No. 142. SFAS No. 142 requires that goodwill be
tested for impairment at least annually and when reporting units are changed. The Company completed its annual
goodwill impairment test in the fourth quarter of 2004 and determined that no goodwill was impaired.
Purchased goodwill from acquisitions totaled $141 million in 2004, none of which is deductible for tax purposes.
Goodwill was reduced by $13 million as a result of the Corning Incorporated settlement. The increase in the goodwill
balance in 2004 primarily relates to the 2004 business combinations previously discussed and changes in foreign
currency exchange rates during the period. The goodwill balance by business segment follows:
Goodwill Dec. 31, 2004 2004 Dec. 31,
2003
acquisition translation 2004
(Millions) balance
activity and other balance
Health Care $ 513 $ 17 $ 45 $ 575
Industrial 323 52 37 412
Display and Graphics 903 (13) (5) 885
Consumer and Office 56 – 3 59
Safety, Security and Protection Services 100 72 21 193
Electro and Communications 494 – 5 499
Transportation 30 – 2 32
Total Company $2,419 $ 128 $ 108 $2,655