3M 2014 Annual Report Download - page 69

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63
NOTE 3. Goodwill and Intangible Assets
Purchased goodwill from acquisitions totaled $65 million in 2014, none of which is deductible for tax purposes. There were
no acquisitions that closed during 2013. 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. 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, 2013 2013 Dec. 31, 2014 2014 Dec. 31,
2012 acquisition translation 2013 acquisition translation 2014
(Millions) Balance activity and other Balance activity and other Balance
Industrial $
2,174
$
10 $
(18)
$
2,166 $
―
$
(129) $
2,037
Safety and Graphics 1,751
―
(11)
1,740 ―
(90) 1,650
Electronics and Energy 1,622
―
(10)
1,612 ―
(53) 1,559
Health Care 1,598
―
(2)
1,596 65
(72) 1,589
Consumer 240
―
(9)
231 ―
(16) 215
Total Company $
7,385
$
10 $
(50)
$
7,345 $
65
$
(360) $
7,050
As discussed in Note 15, effective in the first quarter of 2014, 3M transferred a product line between divisions within
different business segments, and in the first, second and fourth quarters of 2014 made other changes within 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. During the first, second and fourth quarters
of 2014, 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 2014 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 2014, the gross carrying amount of intangible assets (excluding goodwill) decreased due to changes in foreign
currency exchange rates, partially offset by business combinations, which increased the gross carrying amount by $34
million. The gross carrying amount and accumulated amortization of acquired intangible assets as of December 31, follow:
(Millions) 2014 2013
Customer related intangible assets
$
1,348
$
1,411
Patents
581
602
Other technology-based intangible assets
407
406
Definite-lived tradenames
401
411
Other amortizable intangible assets
221
217
Total gross carrying amount
$
2,958
$
3,047
Accumulated amortization — customer related
(597)
(514)
Accumulated amortization — patents
(472)
(458)
Accumulated amortization — other technology based
(
215)
(179)
Accumulated amortization — definite-lived tradenames
(195)
(178)
Accumulated amortization — other
(167)
(159)
Total accumulated amortization
$
(1,646)
$
(1,488)
Total finite-lived intangible assets — net
$
1,312
$
1,559
Non-amortizable intangible assets (primarily tradenames)
123
129
Total intangible assets — net
$
1,435
$
1,688
3M has certain tradenames that are not amortized because of the long-time established name recognition in their
respective industries.