Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 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 six 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 June 30, 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		(7)		(8)		(59)		(6)		(80)
Balance as of June 30, 2021	$	4,680	$	1,850	$	6,933	$	259	$	13,722

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 June 30, 2021, and December 31, 2020, follow:

	June 30,		December 31,
(Millions)	2021		2020
Customer related intangible assets	$	4,276	$	4,280
Patents		518		537
Other technology-based intangible assets		2,115		2,114
Definite-lived tradenames		1,173		1,178
Other amortizable intangible assets		107		104
Total gross carrying amount	$	8,189	$	8,213
Accumulated amortization — customer related		(1,539)		(1,422)
Accumulated amortization — patents		(500)		(512)
Accumulated amortization — other technology-based		(739)		(638)
Accumulated amortization — definite-lived tradenames		(414)		(385)
Accumulated amortization — other		(81)		(79)
Total accumulated amortization	$	(3,273)	$	(3,036)
Total finite-lived intangible assets — net	$	4,916	$	5,177
Non-amortizable intangible assets (primarily tradenames)		656		658
Total intangible assets — net	$	5,572	$	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 and six months ended June 30, 2021 and 2020 follows:

	Three months ended				Six months ended
	June 30,				June 30,
(Millions)	2021		2020		2021		2020
Amortization expense	$	134	$	134	$	267	$	268

Expected amortization expense for acquired amortizable intangible assets recorded as of June 30, 2021:

	Remainder of												After
(Millions)	2021		2022		2023		2024		2025		2026		2026
Amortization expense	$	262	$	516	$	487	$	459	$	429	$	421	$	2,342

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.