3M 2007 Annual Report Download - page 59

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53
The sale of 3M’s global branded pharmaceuticals business (Health Care) resulted in the write-off of $54 million in
goodwill, which is reflected in the 2006 translation and other column below. Changes in foreign currency exchange
rates impacted both 2007 and 2006 goodwill balances. The goodwill balance by business segment follows:
Goodwill 2006 2007
2006 trans- 2007 trans-
Dec. 31, acqui- lation Dec. 31, acqui- lation Dec. 31,
2005 sition and 2006 sition and 2007
(Millions) Balance activity other Balance activity other Balance
Industrial and Transportation $1,283 $ 26 $ (7) $1,302 $155 $ 67 $1,524
Health Care 559 191 (37) 713 73 53 839
Display and Graphics 871 12 3 886 – 8 894
Consumer and Office 71 11 7 89 – 5 94
Safety, Security and
Protection Services
234
264 27
525
70
16
611
Electro and Communications 512 32 23 567 28 32 627
Total Company $3,530 $536 $16 $4,082 $326 $181 $4,589
Acquired Intangible Assets
The carrying amount and accumulated amortization of acquired intangible assets as of December 31 follow:
(Millions) 2007 2006
Patents $ 446 $ 419
Other amortizable intangible assets (primarily
tradenames and customer-related intangibles) 801 641
Non-amortizable intangible assets (tradenames) 75 68
Total gross carrying amount $1,322 $1,128
Accumulated amortization – patents (305) (266)
Accumulated amortization – other (216) (154)
Total accumulated amortization (521) (420)
Total intangible assets – net $ 801
$ 708
Amortization expense for acquired intangible assets for the years ended December 31 follows:
(Millions) 2007 2006 2005
Amortization expense $87 $89 $48
Expected amortization expense for acquired intangible assets recorded as of December 31, 2007 follows:
After
(Millions) 2008 2009 2010 2011 2012 2012
Amortization expense $100 $98 $89 $81 $72 $286
The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from
estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates,
impairment of intangible assets, accelerated amortization of intangible assets and other events.
NOTE 4. Restructuring Actions and Other Exit Activities
Restructuring Actions:
During the fourth quarter of 2006 and the first six months of 2007, management approved and committed to undertake
the following restructuring actions:
• Pharmaceuticals business actions – employee-related, asset impairment and other costs pertaining to the
Company’s exit of its branded pharmaceuticals operations. These costs included severance and benefits for
pharmaceuticals business employees who are not obtaining employment with the buyers as well as
impairment charges associated with certain assets not transferred to the buyers.
• Overhead reduction actions – employee-related costs for severance and benefits, costs associated with
actions to reduce the Company's cost structure.