Note 11 Goodwill and other intangible assets

Changes in “Goodwill” were as follows:

Download XLS (18 kB)

($ in millions)

Power
Products

Power
Systems

Discrete
Automation
and Motion

Low
Voltage
Products

Process
Automation

Corporate
and  Other

Total

(1)

Amounts include adjustments arising during the 12-month measurement period subsequent to the acquisition date.

Cost at January 1, 2011

614

1,411

547

399

1,090

42

4,103

Accumulated impairment charges

(18)

(18)

Balance at January 1, 2011

614

1,411

547

399

1,090

24

4,085

Goodwill acquired during the year(1)

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

Goodwill acquired during the year(1)

17

44

112

2,723

(1)

2,895

Exchange rate differences

5

13

15

17

11

1

62

Balance at December 31, 2012

734

1,762

3,420

3,147

1,140

23

10,226

In 2012, goodwill acquired primarily included $2,723 million in respect of Thomas & Betts (allocated to the Low Voltage Products operating segment) with the remainder representing goodwill in respect of Newave Energy Holding SA (allocated to the Discrete Automation and Motion operating segment), as well as a number of smaller acquisitions and purchase accounting adjustments.

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

Intangible assets other than goodwill consisted of the following:

Download XLS (17 kB)

 

2012

2011

December 31, ($ in millions)

Gross carrying
amount

Accumulated
amortization

Net carrying
amount

Gross carrying
amount

Accumulated
amortization

Net carrying
amount

Capitalized software for internal use

688

(533)

155

640

(483)

157

Capitalized software for sale

401

(346)

55

393

(295)

98

Intangibles other than software:

 

 

 

 

 

 

Customer-related

2,733

(319)

2,414

1,499

(163)

1,336

Technology-related

768

(240)

528

564

(123)

441

Marketing-related

378

(59)

319

213

(32)

181

Other

73

(43)

30

70

(30)

40

Total

5,041

(1,540)

3,501

3,379

(1,126)

2,253

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

Download XLS (16 kB)

($ in millions)

2012

2011

Capitalized software for internal use

71

74

Intangibles other than software:

 

 

Customer-related

1,204

1,272

Technology-related

222

415

Marketing-related

161

153

Other

3

Total

1,658

1,917

Included in the additions of $1,658 million and $1,917 million in 2012 and 2011, respectively, were the following intangible assets other than goodwill related to business combinations:

Download XLS (17 kB)

 

2012

2011

($ in millions)

Amount
acquired

Weighted-average
useful life

Amount
acquired

Weighted-average
useful life

(1)

Includes order backlog related to business combinations.

Capitalized software for internal use

15

5 years

Intangibles other than software:

 

 

 

 

Customer-related(1)

1,200

18 years

1,267

18 years

Technology-related

222

5 years

415

6 years

Marketing-related

161

10 years

153

10 years

Other

3

4 years

Total

1,583

15 years

1,853

14 years

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

Download XLS (16 kB)

($ in millions)

2012

2011

2010

Capitalized software for internal use

79

87

75

Capitalized software for sale

38

48

32

Intangibles other than software

332

200

50

Total

449

335

157

In 2012, 2011 and 2010, impairment charges on intangible assets other than goodwill were not significant.

At December 31, 2012, future amortization expense of intangible assets other than goodwill is estimated to be:

Download XLS (16 kB)

($ in millions)

 

2013

446

2014

399

2015

348

2016

323

2017

248

Thereafter

1,737

Total

3,501