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54Textron Inc. Annual Report • 2013
Industrial
• Sherman & Reilly, Inc., a manufacturer of underground and aerial transmission and distribution products was acquired by
our Greenlee business on May 1, 2013.
• HD Electric Company, a designer and manufacturer of power utility products that test, measure and control electric power
was also acquired by our Greenlee business on December 18, 2013.
Cessna
• Two service centers located in Zurich, Switzerland and Düsseldorf, Germany were acquired on December 31, 2012.
The consideration paid for each of these businesses was allocated to the tangible and intangible assets acquired and liabilities
assumed based on their estimated fair values at the acquisition date. We assigned $75 million to identifiable intangible assets,
which primarily include platform technology and trade names. For the three acquisitions that were closed in December 2013, we
made preliminary estimates of the fair value of certain assets and we expect to complete the valuation of the assets in the first
quarter of 2014. The acquired intangible assets will be amortized over their estimate lives, which range from 7 to 11 years,
primarily using accelerated amortization methods based on the cash flow streams used to value those assets. The excess of the
purchase price over the estimated fair value of the net assets acquired totaled $82 million, which was recorded as goodwill, and
reflects the expected revenue, assembled workforce and going concern nature of the businesses. Approximately $52 million of the
goodwill is deductible for tax purposes.
The operating results for these acquisitions have been included in the Consolidated Statement of Operations since their respective
closing dates. Pro forma information has not been included for these business acquisitions as the results would not be materially
different from our consolidated results.
The changes in the carrying amount of goodwill by segment are as follows:
(In millions) Cessna Bell
Textron
Systems Industrial Total
Balance at January 1, 2011 $ 322 $ 31 $ 974 $ 305 $ 1,632
Acquisitions — — — 5 5
Foreign currency translation — — — (2) (2)
Balance at December 31, 2011 322 31 974 308 1,635
Acquisitions 4 — — 6 10
Foreign currency translation — — — 4 4
Balance at December 29, 2012 326 31 974 318 1,649
Acquisitions — — 52 30 82
Foreign currency translation — — — 4 4
Balance at December 28, 2013 $ 326 $ 31 $ 1,026 $ 352 $ 1,735
Our intangible assets are summarized below:
December 28, 2013 December 29, 2012
(Dollars in millions)
Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization Net
Gross
Carrying
Amount
Accumulated
Amortization Net
Customer agreements and
contractual relationships 15 $ 331 $ (165) $ 166 $ 330 $ (139) $ 191
Patents and technology 10 142 (63) 79 84 (55) 29
Trademarks 15
49 (24) 25 36 (22) 14
Other 9
23 (17) 620 (16) 4
Total
$ 545 $ (269) $ 276 $ 470 $ (232) $ 238
Amortization expense totaled $37 million, $40 million and $51 million in 2013, 2012 and 2011, respectively. Amortization
expense is estimated to be approximately $43 million, $42 million, $36 million, $32 million and $25 million in 2014, 2015, 2016,
2017 and 2018, respectively.