3M 2013 Annual Report Download - page 68

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62
NOTE 3. Goodwill and Intangible Assets
There were no acquisitions that closed during 2013. Purchased goodwill from acquisitions totaled $327 million in 2012, $41
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 $10 million
in 2013 and increased goodwill by $12 million in 2012. 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, 2012 2012 Dec. 31, 2013 2013 Dec. 31,
2011 acquisition translation 2012 acquisition translation 2013
(Millions) Balance activity and other Balance activity and other Balance
Industrial $
1,972
$
204 $
(2)
$
2,174 $
10
$
(18) $
2,166
Safety and Graphics 1,713
41
(3)
1,751 ―
(11) 1,740
Electronics and Energy 1,608
― 14
1,622 ―
(10) 1,612
Health Care 1,508
88 2
1,598 ―
(2) 1,596
Consumer 246
6
(12)
240 ―
(9) 231
Total Company $
7,047
$
339 $
(1)
$
7,385 $
10
$
(50) $
7,345
As discussed in Note 15, effective in the first quarter of 2013, 3M completed a realignment of its business segments.
Concurrent with this business segment realignment, certain products were also moved between business segments, with
the resulting impact reflected in the goodwill balances by business segment above for all periods presented. 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. During the first quarter of 2013, 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 2013 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
3M did not complete any business combinations during 2013. As a result, gross balances of acquired intangible assets
were primarily 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) 2013 2012
Patents
$
602
$
596
Other amortizable intangible assets (primarily tradenames and customer related
intangibles)
2,445
2,456
Total gross carrying amount
$
3,047
$
3,052
Accumulated amortization — patents
(458)
(421)
Accumulated amortization — other
(1,030)
(833)
Total accumulated amortization
$
(1,488)
$
(1,254)
Total finite-lived intangible assets — net
$
1,559
$
1,798
Non-amortizable intangible assets (primarily tradenames)
129
127
Total intangible assets — net
$
1,688
$
1,925
3M has certain tradenames that are not amortized because of the long-time established name recognition in their
respective industries.