Note 11 Goodwill and other intangible assets

Changes in “Goodwill” were as follows:

($ in millions)

Power
Products

Power
Systems

Discrete
Automation
and Motion

Low
Voltage
Products

Process
Automation

Corporate
and
Other

Total

Cost at January 1, 2010

619

429

564

379

1,011

42

3,044

Accumulated impairment charges

(18)

(18)

Balance at January 1, 2010

619

429

564

379

1,011

24

3,026

Goodwill acquired during the year

6

973

37

75

1,091

Exchange rate differences

(3)

8

(17)

(17)

5

(24)

Other

(8)

1

(1)

(8)

Balance at December 31, 2010

614

1,411

547

399

1,090

24

4,085

Goodwill acquired during the year

109

321

2,765

16

50

3,261

Exchange rate differences

(11)

(24)

(19)

(8)

(10)

(2)

(74)

Other

(3)

(3)

Balance at December 31, 2011

712

1,705

3,293

407

1,130

22

7,269

In 2011, goodwill acquired primarily included $2,728 million in respect of Baldor (allocated to the Discrete Automation and Motion segment) with the remainder representing goodwill in respect of Mincom (allocated to the Power Systems segment), Trasfor (allocated to the Power Products segment) and Lorentzen & Wettre (allocated to the Process Automation segment) as well as a number of smaller acquisitions and purchase accounting adjustments.

In 2010, the goodwill acquired primarily related to Ventyx (allocated to the Power Systems segment), K-TEK Corp. (allocated to the Process Automation segment) and a number of smaller acquisitions and purchase accounting adjustments.

Intangible assets other than goodwill consisted of the following:

 

2011

2010

December 31, ($ in millions)

Gross
carrying
amount

Accumu-
lated
amorti-
zation

Net
carrying
amount

Gross
carrying
amount

Accumu-
lated
amorti-
zation

Net
carrying
amount

Capitalized software for internal use

640

(483)

157

613

(441)

172

Capitalized software for sale

393

(295)

98

419

(285)

134

Intangibles other than software:

 

 

 

 

 

 

Customer-related

1,499

(163)

1,336

315

(73)

242

Technology-related

564

(123)

441

140

(52)

88

Marketing-related

213

(32)

181

68

(15)

53

Other

70

(30)

40

52

(40)

12

Total

3,379

(1,126)

2,253

1,607

(906)

701

Additions to intangible assets other than goodwill consisted of the following:

($ in millions)

2011

2010

Capitalized software for internal use

74

41

Capitalized software for sale

128

Intangibles other than software

1,843

249

Total

1,917

418

Included in the additions of $1,917 million and $418 million were the following intangible assets other than goodwill related to business combinations:

 

2011

2010

($ in millions)

Amount
acquired

Weighted-average
useful life

Amount
acquired

Weighted-average
useful life

Capitalized software for internal use

15

5 years

 

Capitalized software for sale

 

128

5 years

Intangibles other than software

1,838

14 years

228

9 years

Total

1,853

14 years

356

8 years

Amortization expense of intangible assets other than goodwill consisted of the following:

($ in millions)

2011

2010

2009

Capitalized software for internal use

87

75

76

Capitalized software for sale

48

32

25

Intangibles other than software

200

50

53

Total

335

157

154

In 2011, 2010 and 2009, impairment charges on intangible assets other than goodwill were not significant.

At December 31, 2011, future amortization expense of intangible assets other than goodwill is estimated to be:

($ in millions)

 

2012

322

2013

286

2014

242

2015

195

2016

174

Thereafter

1,034

Total

2,253

Financial review

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