XML 35 R10.htm IDEA: XBRL DOCUMENT

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2020

NOTE 4. Goodwill and Intangible Assets

There was no goodwill recorded from acquisitions during the first three months of 2020. The acquisition activity in the following table relates to the net impact of adjustments to the preliminary allocation of purchase price within the one year measurement period following prior acquisitions, which decreased goodwill by $18 million during the three months ended March 31, 2020. The amounts in the “Translation and other” row in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balance by business segment as of December 31, 2019 and March 31, 2020, follow:

Goodwill


(Millions)	Safety and Industrial		Transportation and Electronics		Health Care		Consumer		Total Company
Balance as of December 31, 2019	$	4,621	$	1,830	$	6,739	$	254	$	13,444
Acquisition activity		—		—		(18)		—		(18)
Divestiture activity		—		(10)		—		—		(10)
Translation and other		(64)		(10)		(29)		(1)		(104)
Balance as of March 31, 2020	$	4,557	$	1,810	$	6,692	$	253	$	13,312

Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as a change in reporting units or the testing of recoverability of a significant asset group within a reporting unit. At 3M, reporting units correspond to a division.

As described in Note 16, effective in the first quarter of 2020, the Company changed its business segment reporting. For any product changes that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill of the associated reporting units, the results of which were immaterial. In conjunction with the change in segment reporting, 3M completed an assessment indicating no goodwill impairment existed as a result of this new segment structure.

Acquired Intangible Assets

The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets, as of March 31, 2020 and December 31, 2019, follow:


	March 31,		December 31,
(Millions)	2020		2019
Customer related intangible assets	$	4,222	$	4,316
Patents		535		538
Other technology-based intangible assets		2,093		2,124
Definite-lived tradenames		1,175		1,158
Other amortizable intangible assets		123		125
Total gross carrying amount	$	8,148	$	8,261

Accumulated amortization — customer related		(1,197)		(1,180)
Accumulated amortization — patents		(500)		(499)
Accumulated amortization — other technology-based		(470)		(435)
Accumulated amortization — definite-lived tradenames		(332)		(316)
Accumulated amortization — other		(90)		(90)
Total accumulated amortization	$	(2,589)	$	(2,520)

Total finite-lived intangible assets — net	$	5,559	$	5,741

Non-amortizable intangible assets (primarily tradenames)		632		638
Total intangible assets — net	$	6,191	$	6,379

Certain tradenames acquired by 3M are not amortized because they have been in existence for over 55 years, have a history of leading-market share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time. As discussed in Note 13, 3M reflected an immaterial charge related to impairment of certain indefinite-lived assets in the three months ended March 31, 2020.

Amortization expense for the three months ended March 31, 2020 and 2019 follows:

Expected amortization expense for acquired amortizable intangible assets recorded as of March 31, 2020:


	Remainder of												After
(Millions)	2020		2021		2022		2023		2024		2025		2025
Amortization expense	$	398	$	521	$	509	$	479	$	454	$	424	$	2,774

The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. 3M expenses the costs incurred to renew or extend the term of intangible assets.

Three months ended

March 31,

(Millions)

Amortization expense