Note 11 Goodwill and other intangible assets

Changes in “Goodwill” were as follows:

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($ in millions)

Discrete
Automation and Motion

Low
Voltage
Products

Process
Automation

Power
Products

Power
Systems

Corporate and Other

Total

(1)

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

Cost at January 1, 2012

3,293

407

1,130

712

1,705

40

7,287

Accumulated impairment charges

(18)

(18)

Balance at January 1, 2012

3,293

407

1,130

712

1,705

22

7,269

Goodwill acquired during the year(1)

112

2,723

(1)

17

44

2,895

Exchange rate differences

15

17

11

5

13

1

62

Balance at December 31, 2012

3,420

3,147

1,140

734

1,762

23

10,226

Goodwill acquired during the year(1)

485

(45)

85

525

Goodwill allocated to disposals

(9)

(2)

(11)

Exchange rate differences

18

(43)

6

2

(53)

(70)

Balance at December 31, 2013

3,914

3,059

1,229

736

1,709

23

10,670

In 2013, goodwill acquired primarily relates to Power-One, acquired in July 2013, which has been allocated to the Discrete Automation and Motion operating segment.

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.

Intangible assets other than goodwill consisted of the following:

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2013

2012

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

767

(618)

149

688

(533)

155

Capitalized software for sale

432

(384)

48

401

(346)

55

Intangibles other than software:

 

 

 

 

 

 

Customer-related

2,773

(481)

2,292

2,733

(319)

2,414

Technology-related

867

(374)

493

768

(240)

528

Marketing-related

400

(99)

301

378

(59)

319

Other

63

(49)

14

73

(43)

30

Total

5,302

(2,005)

3,297

5,041

(1,540)

3,501

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

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($ in millions)

2013

2012

Capitalized software for internal use

66

71

Capitalized software for sale

26

Intangibles other than software:

 

 

Customer-related

82

1,204

Technology-related

110

222

Marketing-related

16

161

Total

300

1,658

Included in the additions of $300 million and $1,658 million in 2013 and 2012, respectively, were the following intangible assets other than goodwill related to business combinations:

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2013

2012

($ in millions)

Amount
acquired

Weighted-average
useful life

Amount
acquired

Weighted-average
useful life

(1)

Includes the fair value of order backlog acquired in business combinations.

Customer-related(1)

82

11 years

1,200

18 years

Technology-related

108

4 years

222

5 years

Marketing-related

16

10 years

161

10 years

Total

206

7 years

1,583

15 years

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

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($ in millions)

2013

2012

2011

Capitalized software for internal use

81

79

87

Capitalized software for sale

34

38

48

Intangibles other than software

361

332

200

Total

476

449

335

In 2013, 2012 and 2011, impairment charges on intangible assets other than goodwill were not significant.

At December 31, 2013, future amortization expense of intangible assets other than goodwill is estimated to be:

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($ in millions)

 

2014

466

2015

403

2016

356

2017

266

2018

219

Thereafter

1,587

Total

3,297