GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill are detailed below by segment.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| North America | | Latin America | | Europe/ Africa/ Russia Caspian | | Middle East/ Asia Pacific | | Industrial Services | | Total Goodwill |
Balance at December 31, 2012 | $ | 3,069 |
| | $ | 586 |
| | $ | 1,018 |
| | $ | 852 |
| | $ | 433 |
| | $ | 5,958 |
|
Acquisitions and other | (4 | ) | | 1 |
| | 12 |
| | — |
| | (1 | ) | | 8 |
|
Balance at December 31, 2013 | $ | 3,065 |
| | $ | 587 |
| | $ | 1,030 |
| | $ | 852 |
| | $ | 432 |
| | $ | 5,966 |
|
We perform an annual impairment test of goodwill as of October 1 of every year. There were no impairments of goodwill in any of the three years ended December 31, 2013 related to the annual impairment test.
Intangible assets are comprised of the following at December 31:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 |
| Gross Carrying Amount | | Less: Accumulated Amortization | | Net | | Gross Carrying Amount | | Less: Accumulated Amortization | | Net |
Technology | $ | 814 |
| | $ | 337 |
| | $ | 477 |
| | $ | 787 |
| | $ | 282 |
| | $ | 505 |
|
Customer relationships | 494 |
| | 157 |
| | 337 |
| | 494 |
| | 117 |
| | 377 |
|
Trade names | 120 |
| | 82 |
| | 38 |
| | 121 |
| | 60 |
| | 61 |
|
Other (1) | 43 |
| | 12 |
| | 31 |
| | 60 |
| | 10 |
| | 50 |
|
Total intangibles | $ | 1,471 |
| | $ | 588 |
| | $ | 883 |
| | $ | 1,462 |
| | $ | 469 |
| | $ | 993 |
|
| |
(1) | Includes indefinite-lived intangibles of $27 million and $44 million at December 31, 2013 and 2012, respectively, related to in-process research and development projects. |
During 2011, we recognized impairments of certain trade names, the majority of which related to the impairment of the BJ Services trade name. As a result, we recorded a charge of $315 million before-tax ($220 million net of tax) in net income. The BJ Services trade name was classified as an indefinite lived intangible asset and, therefore, was not being amortized. The impairment of the BJ Services trade name was due to the decision to minimize the use of the BJ Services trade name as part of our overall branding strategy. The BJ Services trade name was revalued resulting in a revised fair value of $61 million, with a remaining useful life of 3 years, which we began amortizing in 2012 on an accelerated basis.
The following table details the impairment charge by segment:
|
| | | |
| 2011 |
North America | $ | 105 |
|
Latin America | 64 |
|
Europe/Africa/Russia Caspian | 48 |
|
Middle East/Asia Pacific | 47 |
|
Industrial Services | 51 |
|
Total | $ | 315 |
|
Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 3 to 30 years. Amortization expense included in net income for the years ended December 31, 2013, 2012 and 2011 was $119 million, $140 million and $96 million, respectively. Estimated amortization expense for each of the subsequent five fiscal years is expected to be as follows:
|
| | |
Year | Estimated Amortization Expense |
2014 | 104 |
|
2015 | 97 |
|
2016 | 95 |
|
2017 | 92 |
|
2018 | 86 |
|
