XML 30 R9.htm IDEA: XBRL DOCUMENT

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

NOTE 3. Goodwill and Intangible Assets

Purchased goodwill related to acquisitions that closed during the first nine months of 2012 totaled $127 million, $39 million of which is deductible for tax purposes. The acquisition activity in the following table includes the net impacts of adjustments to the preliminary allocation of purchase price for prior year acquisitions, which increased goodwill by $12 million. The amounts in the “Translation and other” column in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balances by business segment as of December 31, 2011 and September 30, 2012, follow:

Goodwill

	December 31, 2011		Acquisition		Translation		September 30, 2012
(Millions)	Balance		activity		and other		Balance
Industrial and Transportation	$	1,961	$	6	$	23	$	1,990
Health Care		1,514		88		(5)		1,597
Consumer and Office		228		6		6		240
Safety, Security and Protection Services		1,675		―		19		1,694
Display and Graphics		993		39		(7)		1,025
Electro and Communications		676		―		(6)		670
Total Company	$	7,047	$	139	$	30	$	7,216

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as a change in reporting units or the testing of recoverability of a significant asset group within a reporting unit. At 3M, reporting units generally correspond to a division.

Effective in the first quarter of 2012, 3M made certain product moves across divisions within its business segments, but none were across 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. In addition, during the first quarter of 2012, the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed.

Acquired Intangible Assets

For the nine months ended September 30, 2012, gross intangible assets (excluding goodwill) acquired through business combinations increased balances, with this impact largely offset by changes in foreign currency exchange rates. The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets, as of September 30, 2012, and December 31, 2011, follow:

		September 30,		December 31,
(Millions)		2012		2011
Patents		$	562	$	561
Other amortizable intangible assets (primarily tradenames and customer related
	intangibles)		2,338		2,323
Total gross carrying amount		$	2,900	$	2,884

Accumulated amortization — patents			(393)		(374)
Accumulated amortization — other			(783)		(717)
Total accumulated amortization		$	(1,176)	$	(1,091)

	Total finite-lived intangible assets — net	$	1,724	$	1,793

Non-amortizable intangible assets (tradenames)			123		123
	Total intangible assets — net	$	1,847	$	1,916

Amortization expense for acquired intangible assets for the three-month and nine-month periods ended September 30, 2012 and 2011 follows:

	Three months ended				Nine months ended
	September 30,				September 30,
(Millions)	2012		2011		2012		2011
Amortization expense	$	60	$	59	$	176	$	176

The table below shows expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2012:
(Millions)	Remainder
	of													After
	2012		2013		2014		2015		2016		2017		2017
Amortization expense	$	58	$	225	$	201	$	188	$	175	$	160	$	717

The expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. 3M expenses the costs incurred to renew or extend the term of intangible assets.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details