Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets and goodwill

A. Intangible assets

Intangible assets are comprised of the following:




		March 31, 2018
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net
Customer relationships	15	$	2,527	$	(1,159	)	$	1,368
Intellectual property	11	1,569		(878		)	691
Other	13	197		(93		)	104
Total finite-lived intangible assets	14	$	4,293	$	(2,130	)	$	2,163



		December 31, 2017
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net
Customer relationships	15	$	2,441	$	(1,122	)	$	1,319
Intellectual property	11	1,538		(851		)	687
Other	13	198		(93		)	105
Total finite-lived intangible assets	14	$	4,177	$	(2,066	)	$	2,111

During the first quarter of 2018, we acquired finite-lived intangible assets of $112 million and $5 million due to the purchase of ECM S.p.A. and Downer Freight Rail, respectively. See Note 20 for details on these acquisitions.

Amortization expense for the three months ended March 31, 2018 and 2017 was $83 million and $79 million, respectively. Amortization expense related to intangible assets is expected to be:



(Millions of dollars)

Remaining Nine Months of 2018	2019	2020	2021	2022	Thereafter
$251	$328	$317	$299	$279	$689

B. Goodwill

No goodwill was impaired during the three months ended March 31, 2018 or 2017.

During the first quarter of 2018, we acquired net assets with related goodwill of $124 million in the Energy & Transportation segment. We recorded goodwill of $112 million related to the acquisition of ECM S.p.A. and $12 million related to the acquisition of Downer Freight Rail. See Note 20 for details on these acquisitions.

The changes in carrying amount of goodwill by reportable segment for the three months ended March 31, 2018 were as follows:




(Millions of dollars)	December 31, 2017			Acquisitions ¹		Other Adjustments ²		March 31, 2018
Construction Industries
Goodwill	$	305		$	—	$	8	$	313
Impairments	(22		)	—		—		(22		)
Net goodwill	283			—		8		291
Resource Industries
Goodwill	4,232			—		24		4,256
Impairments	(1,175		)	—		—		(1,175		)
Net goodwill	3,057			—		24		3,081
Energy & Transportation
Goodwill	2,806			124		16		2,946
All Other ³
Goodwill	54			—		4		58
Consolidated total
Goodwill	7,397			124		52		7,573
Impairments	(1,197		)	—		—		(1,197		)
Net goodwill	$	6,200		$	124	$	52	$	6,376

¹See Note 20 for additional details.

² Other adjustments are comprised primarily of foreign currency translation.

³Includes All Other operating segments (See Note 15).

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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