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Intangible Assets Including Goodwill
6 Months Ended
Jun. 30, 2019
Intangible Assets Including Goodwill  
Intangible Assets Including Goodwill

12. Intangible Assets Including Goodwill: 

Intangible Assets

The following table details the company's intangible asset balances by major asset class.

At June 30, 2019

(Dollars in millions)

    

Gross Carrying

    

Accumulated

    

Net Carrying

Intangible asset class

Amount

Amortization

Amount

Capitalized software

$

1,621

$

(668)

$

953

Client relationships

 

1,876

 

(1,094)

 

782

Completed technology

 

1,903

 

(1,201)

 

701

Patents/trademarks

 

622

 

(358)

 

263

Other*

 

56

 

(27)

 

28

Total

$

6,077

$

(3,349)

$

2,728

*  Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems.

At December 31, 2018

(Dollars in millions)

    

Gross Carrying

    

Accumulated

    

Net Carrying

Intangible asset class

Amount

Amortization

Amount

Capitalized software

$

1,568

$

(629)

$

939

Client relationships

 

2,068

 

(1,123)

 

945

Completed technology

 

2,156

 

(1,296)

 

860

Patents/trademarks

 

641

 

(330)

 

311

Other*

 

56

 

(23)

 

32

Total

$

6,489

$

(3,402)

$

3,087

*  Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems.

The net carrying amount of intangible assets decreased $360 million during the first six months of 2019, primarily due to intangible asset amortization, partially offset by additions resulting from capitalized software. The aggregate intangible amortization expense was $307 million and $610 million for the second quarter and first six months of 2019, respectively, versus $342 million and $683 million for the second quarter and first six months of 2018, respectively. In

addition, in the first six months of 2019, the company retired $433 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.

The amortization expense for each of the five succeeding years relating to intangible assets currently recorded in the Consolidated Statement of Financial Position is estimated to be the following at June 30, 2019:

    

Capitalized

    

Acquired

    

    

(Dollars in millions)

Software

Intangibles

Total

2019 (for Q3-Q4)

$

261

$

323

$

584

2020

 

410

 

550

 

961

2021

 

248

 

445

 

693

2022

 

33

 

382

 

415

2023

 

 

64

 

64

Goodwill

The change in the goodwill balances by segment, for the six months ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

    

    

    

    

    

    

    

    

    

Foreign

    

    

Currency

Purchase

Translation

(Dollars in millions)

Balance

Goodwill

Price

And Other

Balance

Segment

1/1/2019

Additions

Adjustments

Divestitures

Adjustments*

6/30/2019

Cloud & Cognitive Software

$

24,594

$

$

0

$

$

89

$

24,683

Global Business Services

 

4,711

 

 

1

 

 

7

 

4,718

Global Technology Services

 

3,988

 

 

 

 

40

 

4,027

Systems

 

1,847

 

 

 

 

7

 

1,855

Other — divested businesses

 

1,126

 

 

 

(1,126)

 

 

Total

$

36,265

$

$

1

$

(1,126)

$

143

$

35,284

* Primarily driven by foreign currency translation.

    

    

    

    

    

    

    

    

    

Foreign

    

    

Currency

Purchase

Translation

(Dollars in millions)

Balance

Goodwill

Price

And Other

Balance

Segment

1/1/2018

Additions

Adjustments

Divestitures

Adjustments**

12/31/2018

Cloud & Cognitive Software*

$

24,973

$

9

$

0

$

(1)

$

(388)

$

24,594

Global Business Services*

 

4,782

 

24

 

(3)

 

 

(92)

 

4,711

Global Technology Services*

 

4,044

 

 

0

 

 

(56)

 

3,988

Systems

 

1,862

 

 

0

 

 

(15)

 

1,847

Other — divested businesses*

 

1,127

 

1

 

0

 

0

 

(2)

 

1,126

Total

$

36,788

$

34

$

(3)

$

(1)

$

(553)

$

36,265

*   Recast to conform to 2019 presentation.

** Primarily driven by foreign currency translation.

There were no goodwill impairment losses recorded during the first six months of 2019 or the full year of 2018 and the company has no accumulated impairment losses.

Purchase price adjustments recorded in the first six months of 2019 and full year 2018 were related to acquisitions that were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when

information becomes available. Net purchase price adjustments recorded during the first six months of 2019 and full year 2018 were not material.