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Intangible Assets Including Goodwill
12 Months Ended
Dec. 31, 2011
Intangible Assets Including Goodwill  
Intangible Assets Including Goodwill

 

Note I.

Intangible Assets Including Goodwill

 

Intangible Assets

 

The following table details the company’s intangible asset balances by major asset class.

 

($ in millions)

 

 

 

Gross

 

 

 

Net

 

 

 

Carrying

 

Accumulated

 

Carrying

 

At December 31, 2011:

 

Amount

 

Amortization

 

Amount

 

Intangible asset class

 

 

 

 

 

 

 

Capitalized software

 

$

1,478

 

$

(678

)

$

799

 

Client relationships

 

1,751

 

(715

)

1,035

 

Completed technology

 

2,156

 

(745

)

1,411

 

In-process R&D

 

22

 

(1

)

21

 

Patents/trademarks

 

207

 

(88

)

119

 

Other*

 

29

 

(22

)

7

 

Total

 

$

5,642

 

$

(2,250

)

$

3,392

 

 

($ in millions)

 

 

 

Gross

 

 

 

Net

 

 

 

Carrying

 

Accumulated

 

Carrying

 

At December 31, 2010:

 

Amount

 

Amortization

 

Amount

 

Intangible asset class

 

 

 

 

 

 

 

Capitalized software

 

$

1,558

 

$

(726

)

$

831

 

Client relationships

 

1,709

 

(647

)

1,062

 

Completed technology

 

2,111

 

(688

)

1,422

 

In-process R&D

 

21

 

(0

)

21

 

Patents/trademarks

 

211

 

(71

)

140

 

Other*

 

39

 

(28

)

11

 

Total

 

$

5,649

 

$

(2,161

)

$

3,488

 

 

*                 Other intangibles are primarily acquired proprietary and nonproprietary business processes, methodologies and systems.

 

The net carrying amount of intangible assets decreased $96 million during the year ended December 31, 2011, primarily due to amortization, partially offset by intangible asset additions. No impairment of intangible assets was recorded in any of the periods presented.

 

Total amortization was $1,226 million and $1,174 million for the years ended December 31, 2011 and 2010, respectively. The aggregate intangible amortization expense for acquired intangibles (excluding capitalized software) was $634 million and $517 million for the years ended December 31, 2011 and 2010, respectively. In addition, in 2011 the company retired $1,133 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization for this amount.

 

The amortization expense for each of the five succeeding years relating to intangible assets currently recorded in the Consolidated Statement of Financial Position is estimated to be the following at December 31, 2011:

 

($ in millions)

 

 

 

Capitalized

 

Acquired

 

 

 

 

 

Software

 

Intangibles

 

Total

 

2012

 

$

480

 

$

634

 

$

1,113

 

2013

 

250

 

590

 

840

 

2014

 

70

 

446

 

516

 

2015

 

 

340

 

340

 

2016

 

 

303

 

303

 

 

Goodwill

 

The changes in the goodwill balances by reportable segment, for the years ended December 31, 2011 and 2010, are as follows:

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency

 

 

 

 

 

Balance

 

 

 

Purchase

 

 

 

Translation

 

Balance

 

 

 

January 1,

 

Goodwill

 

Price

 

 

 

and Other

 

December 31,

 

Segment

 

2011

 

Additions

 

Adjustments

 

Divestitures

 

Adjustments

 

2011

 

Global Business Services

 

$

4,329

 

$

14

 

$

(0

)

$

(10

)

$

(20

)

$

4,313

 

Global Technology Services

 

2,704

 

 

(1

)

(2

)

(55

)

2,646

 

Software

 

16,963

 

1,277

 

10

 

(2

)

(127

)

18,121

 

Systems and Technology

 

1,139

 

 

(6

)

 

(0

)

1,133

 

Total

 

$

25,136

 

$

1,291

 

$

2

 

$

(13

)

$

(203

)

$

26,213

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency

 

 

 

 

 

Balance

 

 

 

Purchase

 

 

 

Translation

 

Balance

 

 

 

January 1,

 

Goodwill

 

Price

 

 

 

and Other

 

December 31,

 

Segment

 

2010

 

Additions

 

Adjustments

 

Divestitures

 

Adjustments

 

2010

 

Global Business Services

 

$

4,042

 

$

252

 

$

0

 

$

 

$

35

 

$

4,329

 

Global Technology Services

 

2,777

 

32

 

(1

)

 

(104

)

2,704

 

Software

 

12,605

 

4,095

 

(52

)

 

315

 

16,963

 

Systems and Technology

 

766

 

375

 

(1

)

 

(1

)

1,139

 

Total

 

$

20,190

 

$

4,754

 

$

(54

)

$

 

$

245

 

$

25,136

 

 

Purchase price adjustments recorded in the 2011 and 2010 were related to acquisitions that were completed on or prior to December 31, 2010 or 2009, respectively, and were still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. There were no goodwill impairment losses recorded in 2011 or 2010, and the company has no accumulated impairment losses.