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Intangible Assets Including Goodwill:
3 Months Ended
Mar. 31, 2012
Intangible Assets Including Goodwill:  
Intangible Assets Including Goodwill:

10. Intangible Assets Including Goodwill:  The following table details the company’s intangible asset balances by major asset class:

 

 

 

At March 31, 2012

 

(Dollars in millions)

 

Gross Carrying

 

Accumulated

 

Net Carrying

 

Intangible asset class

 

Amount

 

Amortization

 

Amount

 

Capitalized software

 

$

1,487

 

$

(669

)

$

817

 

Client relationships

 

1,852

 

(754

)

1,098

 

Completed technology

 

2,389

 

(833

)

1,556

 

In-process R&D

 

31

 

(1

)

30

 

Patents/trademarks

 

234

 

(99

)

135

 

Other(a)

 

29

 

(23

)

6

 

Total

 

$

6,021

 

$

(2,380

)

$

3,641

 

 

 

 

At December 31, 2011

 

(Dollars in millions)

 

Gross Carrying

 

Accumulated

 

Net Carrying

 

Intangible asset class

 

Amount

 

Amortization

 

Amount

 

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(a)

 

29

 

(22

)

7

 

Total

 

$

5,642

 

$

(2,250

)

$

3,392

 

 

 

(a)    Other intangibles are primarily acquired proprietary and non-proprietary business processes, methodologies and systems.

 

The net carrying amount of intangible assets increased $249 million during the first quarter of 2012, primarily due to intangible asset additions, partially offset by amortization.  The aggregate intangible amortization expense was $310 million and $310 million for the quarters ended March 31, 2012 and 2011, respectively.  In addition, in the first quarter, the company retired $180 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by 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 March 31, 2012:

 

 

 

Capitalized

 

Acquired

 

 

 

(Dollars in millions)

 

Software

 

Intangibles

 

Total

 

2012 (for Q2-Q4)

 

$

385

 

$

518

 

$

903

 

2013

 

313

 

628

 

941

 

2014

 

111

 

524

 

635

 

2015

 

8

 

397

 

405

 

2016

 

 

358

 

358

 

 

The change in the goodwill balances by reportable segment, for the three months ended March 31, 2012 and for the year ended December 31, 2011 are as follows:

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency

 

 

 

 

 

 

 

 

 

Purchase

 

 

 

Translation

 

 

 

(Dollars in millions)

 

Balance

 

Goodwill

 

Price

 

 

 

And Other

 

Balance

 

Segment

 

01/01/12

 

Additions

 

Adjustments

 

Divestitures

 

Adjustments

 

3/31/12

 

Global Business Services

 

$

4,313

 

$

 

$

(0

)

$

 

$

55

 

$

4,368

 

Global Technology Services

 

2,646

 

 

 

 

15

 

2,661

 

Software

 

18,121

 

846

 

2

 

 

110

 

19,079

 

Systems and Technology

 

1,133

 

221

 

(0

)

 

6

 

1,360

 

Total

 

$

26,213

 

$

1,067

 

$

2

 

$

 

$

186

 

$

27,468

 

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency

 

 

 

 

 

 

 

 

 

Purchase

 

 

 

Translation

 

 

 

(Dollars in millions)

 

Balance

 

Goodwill

 

Price

 

 

 

And Other

 

Balance

 

Segment

 

01/01/11

 

Additions

 

Adjustments

 

Divestitures

 

Adjustments

 

12/31/11

 

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

 

 

Purchase price adjustments recorded in the first three months of 2012 and full year 2011 were related to acquisitions that were completed on or prior to December 31, 2011 or December 31, 2010, 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 during the first three months of 2012 or the full year of 2011 and the company has no accumulated impairment losses.