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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2018
Goodwill and Intangible Assets |
Goodwill and Intangible Assets | NOTE 4. Goodwill and Intangible Assets There were no acquisitions that closed during the first nine months of 2018. 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 increased goodwill by $7 million during the nine months ended September 30, 2018. Divestiture activity within the Electronics and Energy business segment relates to the sale of substantially all of the Communication Markets Division. The amounts in the “Translation and other” column in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balances by business segment as of December 31, 2017 and September 30, 2018, follow: Goodwill
|  | December 31, 2017 |  | Acquisition |  | Divestiture |  | Translation |  | September 30, 2018 |
(Millions) |  | Balance |  | activity |  | activity |  | and other |  | Balance |
Industrial |  | $ | 2,678 |  | $ | — |  | $ | (4) |  | $ | (50) |  | $ | 2,624 |
Safety and Graphics |  |  | 4,419 |  |  | 7 |  |  | (8) |  |  | (53) |  |  | 4,365 |
Health Care |  |  | 1,682 |  |  | — |  |  | — |  |  | (20) |  |  | 1,662 |
Electronics and Energy |  |  | 1,524 |  |  | — |  |  | (247) |  |  | (11) |  |  | 1,266 |
Consumer |  |  | 210 |  |  | — |  |  | — |  |  | (4) |  |  | 206 |
Total Company |  | $ | 10,513 |  | $ | 7 |  | $ | (259) |  | $ | (138) |  | $ | 10,123 |
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 generally correspond to a division. As described in Note 16, effective in the first quarter of 2018, the Company changed its business segment reporting in its continuing effort to improve the alignment of its businesses around markets and customers. In addition, certain shared film manufacturing and supply technology platform resources formerly reflected within the Electronics and Energy business segment were combined with other shared and centrally managed material resource centers of expertise within Corporate and Unallocated. 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. During the first quarter of 2018, the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed. 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 September 30, 2018, and December 31, 2017, follow:
|  | September 30, |  | December 31, |
(Millions) |  | 2018 |  | 2017 |
Customer related intangible assets |  | $ | 2,301 |  | $ | 2,332 |
Patents |  |  | 544 |  |  | 561 |
Other technology-based intangible assets |  |  | 578 |  |  | 583 |
Definite-lived tradenames |  |  | 664 |  |  | 678 |
Other amortizable intangible assets |  |  | 125 |  |  | 207 |
Total gross carrying amount |  | $ | 4,212 |  | $ | 4,361 |
Accumulated amortization — customer related |  |  | (966) |  |  | (874) |
Accumulated amortization — patents |  |  | (486) |  |  | (489) |
Accumulated amortization — other technology based |  |  | (323) |  |  | (292) |
Accumulated amortization — definite-lived tradenames |  |  | (268) |  |  | (256) |
Accumulated amortization — other |  |  | (86) |  |  | (162) |
Total accumulated amortization |  | $ | (2,129) |  | $ | (2,073) |
Total finite-lived intangible assets — net |  | $ | 2,083 |  | $ | 2,288 |
Non-amortizable intangible assets (primarily tradenames) |  |  | 643 |  |  | 648 |
Total intangible assets — net |  | $ | 2,726 |  | $ | 2,936 |
3M does not amortize certain acquired tradenames because they have been in existence for over 55 years, have a history of leading-market share positions, are intended to be continuously renewed, and the associated products are expected to generate cash flows for 3M for an indefinite period of time. Amortization expense for acquired intangible assets for the three and nine months ended September 30, 2018 and 2017 follows:
|  | Three months ended |  | Nine months ended |
|  | September 30, |  | September 30, |
(Millions) |  | 2018 |  | 2017 |  | 2018 |  | 2017 |
Amortization expense |  | $ | 61 |  | $ | 51 |  | $ | 188 |  | $ | 162 |
Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2018:
|  | Remainder of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | After |
(Millions) |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2023 |
Amortization expense |  | $ | 62 |  | $ | 241 |  | $ | 229 |  | $ | 220 |  | $ | 206 |  | $ | 175 |  | $ | 950 |
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.

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