Emerson 2011 Annual Report Download - page 38

36 | 2011 Emerson
Costs incurred during 2010 included actions to exit approximately 25 production, distribution or office facilities and
eliminate approximately 3,500 positions, as well as costs related to facilities exited in previous periods. All the Compa-
ny’s business segments incurred shutdown costs due to workforce reductions and/or the consolidation of facilities.
Start-up and moving costs, vacant facilities and other costs were not material for any segment. In addition to force-
count reductions, actions in 2010 included Process Management consolidating some North American and European
production; Industrial Automation consolidating production and sales within Europe and North America; Network
Power consolidating North American production and shifting some capabilities from North America and Europe to Asia;
and Climate Technologies consolidating or downsizing production in North America and Europe.
Costs incurred during 2009 included exiting approximately 25 production, distribution or office facilities and elimi-
nating approximately 20,000 positions, of which approximately one-half were from restructuring actions and the
remainder through layoffs and attrition, as well as costs related to facilities exited in previous periods. All the Compa-
ny’s business segments incurred shutdown costs due to workforce reductions and/or the consolidation of facilities.
Start-up and moving costs were primarily attributable to Network Power and Industrial Automation, while Network
Power incurred most of the asset write-downs. Vacant facilities and other costs were immaterial for any segment.
In addition to worldwide forcecount reductions, actions during 2009 included Industrial Automation consolidating
production facilities; Network Power primarily incurring integration costs for the Embedded Computing acquisition,
but also consolidating production in North America and Europe and shifting certain capabilities from Europe to Asia;
Climate Technologies consolidating or downsizing production in North America, Europe and Asia; and Tools and
Storage consolidating and downsizing production in North America.
(6) Goodwill and Other Intangibles
Purchases of businesses are accounted for under the acquisition method, with substantially all goodwill assigned to
the reporting unit that acquires the business. Under an impairment test performed annually, if the carrying amount of
a reporting unit’s goodwill exceeds its estimated fair value, impairment is recognized to the extent that the carrying
amount exceeds the implied fair value of the goodwill. Fair values of reporting units are estimated using discounted
cash flows and are subject to change due to changes in underlying economic conditions. The change in the carry
amount of goodwill by business segment follows. See Notes 3 and 4 for further discussion of changes in goodwill
related to acquisitions, divestitures and impairment.
process industrial network climate tools and
management automation power technologies storage total
Balance, September 30, 2009 $2,279 1,304 2,417 473 605 7,078
Acquisitions 27 97 1,509 1,633
Divestitures (2) (44) (46)
Foreign currency translation and other (32) (22) 73 (9) (19) (9)
Balance, September 30, 2010 $2,274 1,379 3,997 464 542 8,656
Acquisitions 110 15 125
Divestitures (1) (8) (6) (15)
Impairment (19) (19)
Foreign currency translation and other (16) 34 1 4 1 24
Balance, September 30, 2011 $2,368 1,393 3,990 483 537 8,771
The gross carrying amount and accumulated amortization of identifiable intangible assets by major class follow:
customer
relationships intellectual property capitalized software total
2010 2011 2010 2011 2010 2011 2010 2011
Gross carrying amount $1,414 1,499 1,127 1,110 918 971 3,459 3,580
Less: Accumulated amortization 181 330 420 518 708 763 1,309 1,611
Net carrying amount $1,233 1,169 707 592 210 208 2,150 1,969
Total intangible asset amortization expense for 2011, 2010 and 2009 was $345, $254 and $184, respectively. Based on
intangible asset balances as of September 30, 2011, amortization expense is expected to approximate $312 in 2012,
$267 in 2013, $231 in 2014, $198 in 2015 and $173 in 2016.