Business Acquisitions, Goodwill, and Intangible Assets

9 Months Ended

Sep. 30, 2020

Business Combinations, Goodwill, and Intangible Assets [Abstract]

Business Acquisitions, Goodwill, and Intangible Assets

Business Acquisitions, Goodwill and Intangible Assets

Business Acquisitions. Our investments in businesses, net of cash acquired, totaled $53 million (including debt assumed) in the nine months ended September 30, 2020, consisting primarily of an acquisition of a service business. Transaction costs incurred were not considered significant.

Investments in businesses, net of cash acquired, totaled $39 million in the nine months ended September 30, 2019, consisting of a number of immaterial acquisitions in our Service segment. Transaction costs incurred were not considered significant.

In the nine months ended September 30, 2019, Otis recorded a pre-tax loss on the sale of a business of $19 million within Other income (expense), net on the Condensed Consolidated Statement of Operations. There were no significant disposals of businesses for the quarter and nine months ended September 30, 2020.

Goodwill. Changes in our Goodwill balances during the nine months ended September 30, 2020 were as follows:

(dollars in millions)	Balance as of January 1, 2020		Goodwill Resulting From Business Combinations		Foreign Currency Translation  and Other		Balance as of September 30, 2020
New Equipment	$	337	$	—	$	5	$	342
Service	1,310		29		19		1,358
Total	$	1,647	$	29	$	24	$	1,700

Intangible Assets. Identifiable intangible assets are comprised of the following:

	September 30, 2020				December 31, 2019
(dollars in millions)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Amortized:
Purchased service portfolios	$	2,042	$	(1,575)	$	2,069	$	(1,598)
Patents, trademarks/trade names	21		(16)		21		(15)
Customer relationships and other	52		(42)		46		(40)
	2,115		(1,633)		2,136		(1,653)
Unamortized:
Trademarks and other	7		—		7		—
Total	$	2,122	$	(1,633)	$	2,143	$	(1,653)

Amortization of intangible assets for the quarter and nine months ended September 30, 2020 was $22 million and $67 million, respectively, compared with $22 million and $71 million for the same periods of 2019. Fully amortized purchased service portfolios of $117 million were written off during the quarter and nine months ended September 30, 2020.