GE 2006 Annual Report Download - page 94

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Changes in goodwill balances follow.
2006 2005
Acquisitions/ Dispositions, Acquisitions/ Dispositions,
purchase currency purchase currency
Balance accounting exchange Balance Balance accounting exchange Balance
(In millions) January 1 adjustments and other December 31 January 1 adjustments and other December 31
Infrastructure
$10,166 $ 590 $ 175 $10,931 $ 9,759 $ 770 $ (363) $10,166
Commercial Finance 10,621 603 91 11,315 10,141 766 (286) 10,621
GE Money 9,184 309 352 9,845 9,860 (24) (652) 9,184
Healthcare
13,404 1,396 48 14,848 13,259 226 (81) 13,404
NBC Universal 17,534 838 (372) 18,000 16,672 946 (84) 17,534
Industrial 8,702 550 (852) 8,400 7,674 1,236 (208) 8,702
Total $69,611 $4,286 $(558) $73,339 $67,365 $3,920 $(1,674) $69,611
Goodwill balances increased $4,476 million in 2006 as a result of
new acquisitions. The largest goodwill balance increases arose
from acquisitions of IDX Systems Corporation ($1,133 million) and
Biacore International AB ($308 million) by Healthcare, iVillage Inc.
($521 million) by NBC Universal, ZENON Environmental Inc.
($506 million) by Infrastructure, and Banque Artesia Nederland N.V.,
a subsidiary of Dexia Group ($340 million) and the custom fl eet
business of National Australia Bank Ltd. ($306 million) by
Commercial Finance. Goodwill declined in 2006 as a result of
the sale of Advanced Materials ($930 million) by Industrial and
the sale of television stations ($304 million) by NBC Universal.
The goodwill balance also declined by $190 million related to
purchase accounting adjustments to prior-year acquisitions
during 2006.
Goodwill balances increased $3,705 million in 2005 as a result
of new acquisitions. The largest goodwill balance increases arose
from acquisitions of Edwards Systems Technology ($996 million)
by Industrial, Ionics, Inc. ($681 million) by Infrastructure, Antares
Capital Corp. ($407 million) by Commercial Finance, an additional
interest in MSNBC ($402 million) and the previously outstanding
minority interest in Vivendi Universal Entertainment LLLP (VUE)
($329 million) by NBC Universal. Goodwill also increased by
$215 million related to purchase accounting adjustments to prior-
year acquisitions during 2005, primarily associated with the 2004
acquisition of Amersham by Healthcare and the combination of
NBC and VUE.
Upon closing an acquisition, we estimate the fair values of
assets and liabilities acquired and consolidate the acquisition as
quickly as possible. Given the time it takes to obtain pertinent
information to finalize the acquired company’s balance sheet
(frequently with implications for the price of the acquisition), then
to adjust the acquired company’s accounting policies, procedures,
books and records to our standards, it is often several quarters
before we are able to finalize those initial fair value estimates.
Accordingly, it is not uncommon for our initial estimates to be
subsequently revised.
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION
Gross
carrying Accumulated
December 31 (In millions) amount amortization Net
GE
2006
Patents, licenses and trademarks $ 4,670 $(1,308) $3,362
Capitalized software 4,543 (2,741) 1,802
All other 2,859 (438) 2,421
Total $12,072 $(4,487) $7,585
2005
Patents, licenses and trademarks $ 4,814 $(1,134) $3,680
Capitalized software 4,109 (2,261) 1,848
All other 2,172 (222) 1,950
Total $11,095 $(3,617) $7,478
GECS
2006
Patents, licenses and trademarks $ 467 $ (302) $ 165
Capitalized software 1,684 (981) 703
All other 3,591 (1,245) 2,346
Total $ 5,742 $(2,528) $3,214
2005
Patents, licenses and trademarks $ 497 $ (272) $ 225
Capitalized software 1,477 (798) 679
All other 2,565 (1,015) 1,550
Total $ 4,539 $(2,085) $2,454
Consolidated amortization expense related to intangible assets
subject to amortization was $1,789 million and $1,413 million for
2006 and 2005, respectively.
92 ge 2006 annual report