Emerson 2014 Annual Report Download - page 45

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2014 Emerson > 41
The gross carrying amount and accumulated amortization of identifiable intangible assets by major class follow:
customer intellectual capitalized
relationships property software total
2013 2014 2013 2014 2013 2014 2013 2014
Gross carrying amount $1,482 1,594 1,023 1,052 1,110 1,190 3,615 3,836
Less: Accumulated amortization 533 643 565 613 845 891 1,943 2,147
Net carrying amount $ 949 951 458 439 265 299 1,672 1,689
Total intangible asset amortization expense for 2014, 2013 and 2012 was $313, $298 and $318, respectively. Based
on intangible asset balances as of September 30, 2014, amortization expense is expected to approximate $330 in
2015, $278 in 2016, $239 in 2017, $195 in 2018 and $163 in 2019.
(7) Financial Instruments
HEDGING ACTIVITIES
As of September 30, 2014, the notional amount of foreign currency hedge positions was approximately $1.7 billion,
while commodity hedge contracts totaled approximately 66 million pounds ($190) 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, 2014 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
gain (loss) to earnings other comprehensiVe income
2012 2013 2014 2012 2013 2014
Location
Commodity Cost of sales $(42) (15) (12) 43 (22) (16)
Foreign currency Sales, cost of sales 8 24 10 58 4 15
Foreign currency Other deductions, net 45 (5) (3)
Total $ 11 4 (5) 101 (18) (1)
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 2014, 2013 and 2012.
FAIR VALUE MEASUREMENTS
The estimated fair value of long-term debt was $4,492 and $4,727, respectively, as of September 30, 2014 and
2013, which exceeded the carrying value by $411 and $405, respectively. As of September 30, 2014, the fair value
of commodity contracts and foreign currency contracts was reported in other current assets and accrued expenses.
Valuations of derivative contract positions as of September 30 follow:
assets liaBilities assets liaBilities
2013 2013 2014 2014
Foreign currency $18 17 32 20
Commodity $ 2 8 1 10