Dow Chemical 2013 Annual Report Download - page 111

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89
2012 Goodwill Impairment Testing
In 2012, the Company assessed qualitative factors for 11 of its 20 reporting units carrying goodwill. The qualitative assessment
indicated that it was more likely than not that the fair value exceeded carrying value for those reporting units included in the
qualitative test. The Company performed the first step of the quantitative testing for the remaining 9 reporting units. The
Company utilized a discounted cash flow methodology to calculate the fair value of the reporting units. Based on the fair value
analysis, management concluded that fair value exceeded carrying value for all reporting units except Dow Formulated
Systems. Management completed the second step of the quantitative test for Dow Formulated Systems which compared the
implied fair value of the reporting unit's goodwill to the carrying value. As a result, the Company recorded an impairment loss
of $220 million in the fourth quarter of 2012, which is included in "Goodwill impairment loss" in the consolidated statements
of income and reflected in the Performance Materials segment. The goodwill impairment loss represents the total amount of
goodwill carried by the Dow Formulated Systems reporting unit.
2011 Goodwill Impairment Testing
In 2011, the Company assessed qualitative factors for each reporting unit carrying goodwill. The qualitative assessment
indicated that it was more likely than not that the fair value of each reporting unit exceeded its carrying value. Additional
quantitative testing was not required for any of the Company's reporting units.
Other Intangible Assets
The following table provides information regarding the Company’s other intangible assets:
Other Intangible Assets at December 31 2013 2012
In millions
Gross
Carrying
Amount
Accumulated
Amortization Net
Gross
Carrying
Amount
Accumulated
Amortization Net
Intangible assets with finite lives:
Licenses and intellectual property $ 1,774 $ (908) $ 866 $ 1,729 $ (747) $ 982
Patents 125 (109) 16 120 (100) 20
Software 1,186 (591) 595 1,047 (548) 499
Trademarks 686 (345) 341 691 (285) 406
Customer related 3,622 (1,181) 2,441 3,688 (974) 2,714
Other 154 (136) 18 158 (131) 27
Total other intangible assets, finite lives $ 7,547 $ (3,270) $ 4,277 $ 7,433 $ (2,785) $ 4,648
IPR&D (1), indefinite lives 37 — 37 63 — 63
Total other intangible assets $ 7,584 $ (3,270) $ 4,314 $ 7,496 $ (2,785) $ 4,711
(1) In-process research and development ("IPR&D") purchased in a business combination.
The following table provides information regarding amortization expense related to intangible assets:
Amortization Expense
In millions 2013 2012 2011
Other intangible assets, excluding software (1) $ 461 $ 478 $ 496
Software, included in “Cost of sales” $ 67 $ 63 $ 94
(1) Includes a $3 million asset impairment charge related to intangible assets in 2013.
During 2013, the Company recognized a $3 million asset impairment charge related to software, which is recorded in "Cost of
sales" and reflected in Corporate.
Total estimated amortization expense for the next five fiscal years is as follows:
Estimated Amortization Expense
for Next Five Years
In millions
2014 $ 509
2015 $ 491
2016 $ 481
2017 $ 447
2018 $ 429