3M 2012 Annual Report Download - page 70

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NOTE 3. Goodwill and Intangible Assets
Purchased goodwill from acquisitions totaled $327 million in 2012, $41 million of which is deductible for tax purposes.
Purchased goodwill from acquisitions totaled $255 million in 2011, $7 million of which is deductible for tax purposes. The
acquisition activity in the following table also includes the net impact of adjustments to the preliminary allocation of purchase
price for prior year acquisitions, which increased goodwill by $12 million in 2012 and increased goodwill by $4 million in
2011. The amounts in the “Translation and other” column in the following table primarily relate to changes in foreign currency
exchange rates. The goodwill balance by business segment follows:
Goodwill
Dec. 31,
2011
2011
Dec. 31,
2012
2012
Dec. 31,
2010
acquisition
translation
2011
acquisition
translation
2012
(Millions)
Balance
activity
and other
Balance
activity
and other
Balance
Industrial and
Transportation
$
1,783
$
205
$
(27)
$
1,961
$
204
$
19
$
2,184
Health Care
1,506
3
5
1,514
88
(4)
1,598
Consumer and Office
187
42
(1)
228
6
(1)
233
Safety, Security and
Protection Services
1,670
(1)
6
1,675
―
6
1,681
Display and Graphics
994
4
(5)
993
41
(18)
1,016
Electro and
Communications
680
6
(10)
676
―
(3)
673
Total Company
$
6,820
$
259
$
(32)
$
7,047
$
339
$
(1)
$
7,385
Effective in the first quarter of 2012, 3M made certain product moves across divisions within its business segments, but
none were across business segments. For any product moves that resulted in reporting unit changes, the Company
applied the relative fair value method to determine the impact on goodwill of the associated reporting units. In addition,
during the first quarter of 2012, the Company completed its assessment of any potential goodwill impairment for reporting
units impacted by this new structure and determined that no impairment existed. The Company also completed its annual
goodwill impairment test in the fourth quarter of 2012 for all reporting units and determined that no impairment existed. In
addition, the Company had no impairments of goodwill in prior years.
Acquired Intangible Assets
For 2012, intangible assets (excluding goodwill) acquired through business combinations increased the gross carrying
amount by $213 million. Balances are also impacted by changes in foreign currency exchange rates. The gross carrying
amount and accumulated amortization of acquired intangible assets as of December 31, follow:
(Millions)
2012
2011
Patents
$
596
$
561
Other amortizable intangible assets (primarily tradenames and customer related
intangibles)
2,456
2,323
Total gross carrying amount
$
3,052
$
2,884
Accumulated amortization — patents
(421)
(374)
Accumulated amortization — other
(833)
(717)
Total accumulated amortization
$
(1,254)
$
(1,091)
Total finite-lived intangible assets — net
$
1,798
$
1,793
Non-amortizable intangible assets (primarily tradenames)
127
123
Total intangible assets — net
$
1,925
$
1,916
3M has certain tradenames that are not amortized because of the long-time established name recognition in their
respective industries.