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Goodwill and Intangible Assets
3 Months Ended
Mar. 31, 2021
Goodwill and Intangible Assets  
Goodwill and Intangible Assets

NOTE 4. Goodwill and Intangible Assets

There was no goodwill recorded from acquisitions during the first three months of 2021. The amounts in the “Translation and other” row in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balance by business segment as of December 31, 2020 and March 31, 2021, follow:

Goodwill

(Millions)

Safety and Industrial

Transportation and Electronics

Health Care

Consumer

Total Company

Balance as of December 31, 2020

$

4,687

$

1,858

$

6,992

$

265

$

13,802

Translation and other

(29)

(14)

(98)

(7)

(148)

Balance as of March 31, 2021

$

4,658

$

1,844

$

6,894

$

258

$

13,654

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 correspond to a division.

As described in Note 16, effective in the first quarter of 2021, the Company changed its business segment reporting. For any product changes 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, the results of which were immaterial.

Acquired Intangible Assets

The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets, as of March 31, 2021 and December 31, 2020, follow:

    

March 31,

    

December 31,

 

(Millions)

    

2021

    

2020

 

Customer related intangible assets

$

4,266

$

4,280

Patents

 

517

 

537

Other technology-based intangible assets

 

2,113

 

2,114

Definite-lived tradenames

 

1,172

 

1,178

Other amortizable intangible assets

 

104

 

104

Total gross carrying amount

$

8,172

$

8,213

Accumulated amortization — customer related

 

(1,473)

 

(1,422)

Accumulated amortization — patents

 

(495)

 

(512)

Accumulated amortization — other technology-based

 

(687)

 

(638)

Accumulated amortization — definite-lived tradenames

 

(397)

 

(385)

Accumulated amortization — other

 

(78)

 

(79)

Total accumulated amortization

$

(3,130)

$

(3,036)

Total finite-lived intangible assets — net

$

5,042

$

5,177

Non-amortizable intangible assets (primarily tradenames)

 

655

 

658

Total intangible assets — net

$

5,697

$

5,835

Certain tradenames acquired by 3M are not amortized because they have been in existence for over 60 years, have a history of leading-market share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time. As discussed in Note 13, 3M reflected an immaterial charge related to impairment of certain indefinite-lived assets in the first quarter of 2020.

Amortization expense for the three months ended March 31, 2021 and 2020 follows:

    

Three months ended 

March 31,

(Millions)

    

2021

    

2020

Amortization expense

$

133

$

134

Expected amortization expense for acquired amortizable intangible assets recorded as of March 31, 2021:

Remainder of

After

 

(Millions)

2021

2022

2023

2024

2025

2026

2026

 

Amortization expense

$

395

$

514

$

488

$

458

$

428

$

421

$

2,338

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. 3M expenses the costs incurred to renew or extend the term of intangible assets.