Emerson 2013 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2013 Emerson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

42 Emerson > 2013 Annual Report
The change in the carrying value of goodwill by business segment follows. Cumulative pretax impairment charges in
Network Power total $1.1 billion.
commercial &
process industrial network climate residential
management automation power technologies solutions total
Balance, September 30, 2011 $2,368 1,393 3,990 483 537 8,771
Acquisitions 5 62 27 94
Divestitures (102) (102)
Impairment (592) (592)
Foreign currency translation and other
6 (55) (93) (9) 6 (145)
Balance, September 30, 2012 $2,379 1,338 3,367 501 441 8,026
Acquisitions 11 11
Divestitures (40) (2) (42)
Impairment (528) (528)
Foreign currency translation and other
(7) 14 33 2 42
Balance, September 30, 2013 $2,383 1,352 2,832 503 439 7,509
The gross carrying amount and accumulated amortization of identifiable intangible assets by major class follow:
customer
relationships intellectual property capitalized software total
2012 2013 2012 2013 2012 2013 2012 2013
Gross carrying amount $1,537 1,482 1,125 1,023 1,046 1,110 3,708 3,615
Less: Accumulated amortization 459 533 606 565 805 845 1,870 1,943
Net carrying amount $1,078 949 519 458 241 265 1,838 1,672
Total intangible asset amortization expense for 2013, 2012 and 2011 was $298, $318 and $345, respectively. Based on
intangible asset balances as of September 30, 2013, amortization expense is expected to approximate $292 in 2014, $264
in 2015, $224 in 2016, $199 in 2017 and $163 in 2018.
(7) Financial Instruments
HEDGING ACTIVITIES
As of September 30, 2013, the notional amount of foreign currency hedge positions was approximately $1.5 billion, while
commodity hedge contracts totaled approximately 62 million pounds ($175) of copper and aluminum. All derivatives
receiving deferral accounting are cash flow hedges. The majority of hedging gains and losses deferred as of September 30,
2013 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. Gains and
losses on foreign currency derivatives reported in other deductions, net reflect hedges of balance sheet exposures that do
not receive deferral accounting. Amounts included in earnings and other comprehensive income follow:
gain (loss) to earnings gain (loss) to other comprehensive income
2011 2012 2013 2011 2012 2013
Location
Commodity Cost of sales $52 (42) (15) (58) 43 (22)
Foreign currency Sales, cost of sales 33 8 24 (14) 58 4
Foreign currency Other deductions, net 9 45 (5)
Total $94 11 4 (72) 101 (18)
Regardless of whether derivatives receive deferral accounting, the Company expects hedging gains or losses to be
essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from
those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement.
Derivatives receiving deferral accounting are highly effective and no amounts were excluded from the assessment of
hedge effectiveness. Hedge ineffectiveness was immaterial in 2013, 2012 and 2011.