Note 11
Goodwill and other intangible assets

Effective January 1, 2016, the Company reorganized its operating segments with the aim of delivering more customer value in a better, more focused way from its combined power and automation offering. The new Electrification Products segment includes the business of the former Low Voltage Products segment and the Medium Voltage Products business from the former Power Products segment. The Process Automation segment has been expanded to include the Distributed Control Systems business from the former Power Systems segment, while the remaining businesses of the former Power Products and Power Systems segments were combined to form the new Power Grids segment. There were no significant changes to the Discrete Automation and Motion segment. The table below has been reclassified to reflect this reorganization.

Changes in “Goodwill” were as follows:

($ in millions)

Electrification
Products

Discrete Automation
and Motion

Power
Automation

Power Grids

Corporate
and Other

Total

Cost at January 1, 2015

2,970

3,766

1,546

1,748

41

10,071

Accumulated impairment charges

(18)

(18)

Balance at January 1, 2015

2,970

3,766

1,546

1,748

23

10,053

Goodwill acquired during the year

4

24

6

34

Goodwill allocated to disposals

(23)

(1)

(24)

Exchange rate differences and other

(203)

(92)

(34)

(62)

(1)

(392)

Balance at December 31, 2015

2,771

3,698

1,518

1,663

21

9,671

Goodwill acquired during the year

12

12

Goodwill allocated to assets held for sale

(105)

(105)

Exchange rate differences and other

(4)

(49)

(13)

(11)

(77)

Balance at December 31, 2016

2,767

3,661

1,505

1,547

21

9,501

In 2016, goodwill allocated to the Cables business, within the Power Grids operating segment, was transferred to “Assets held for sale”, see Note 3 for details.

In 2015, there were no significant acquisitions or divestments.

Intangible assets other than goodwill consisted of the following:

 

2016

2015

December 31, ($ in millions)

Gross carrying
amount

Accumulated
amortization

Net carrying
amount

Gross carrying
amount

Accumulated
amortization

Net carrying
amount

Capitalized software for internal use

712

(596)

116

692

(567)

125

Capitalized software for sale

409

(365)

44

401

(357)

44

Intangibles other than software:

 

 

 

 

 

 

Customer-related

2,500

(904)

1,596

2,517

(767)

1,750

Technology-related

755

(660)

95

790

(585)

205

Marketing-related

291

(159)

132

308

(140)

168

Other

34

(21)

13

67

(22)

45

Total

4,701

(2,705)

1,996

4,775

(2,438)

2,337

Additions to intangible assets other than goodwill consisted of the following:

($ in millions)

2016

2015

Capitalized software for internal use

39

63

Capitalized software for sale

18

15

Intangibles other than software:

 

 

Technology-related

1

33

Total

58

111

There were no significant intangible assets acquired in business combinations during 2016 and 2015.

Amortization expense of intangible assets other than goodwill consisted of the following:

($ in millions)

2016

2015

2014

Capitalized software for internal use

57

60

72

Capitalized software for sale

25

21

20

Intangibles other than software

287

315

362

Total

369

396

454

In 2016, 2015 and 2014, impairment charges on intangible assets other than goodwill were not significant.

At December 31, 2016, future amortization expense of intangible assets other than goodwill is estimated to be:

($ in millions)

 

2017

284

2018

233

2019

189

2020

170

2021

145

Thereafter

975

Total

1,996