ALCOA INC | 2013 | FY | 3


E. Goodwill and Other Intangible Assets

The following table details the changes in the carrying amount of goodwill:

 

      Alumina    

Primary

Metals

   

Global
Rolled

Products

    

Engineered

Products
and
Solutions

    Corporate*     Total  

Balance at December 31, 2011:

             

Goodwill

   $ 11      $ 991      $ 208       $ 2,694      $ 1,281      $ 5,185   

Accumulated impairment losses

     -        -        -         (28     -        (28
     11        991        208         2,666        1,281        5,157   

Acquisition of businesses

     -        -        -         (1     -        (1

Translation

     (1     6        6         12        (9     14   

Balance at December 31, 2012:

             

Goodwill

     10        997        214         2,705        1,272        5,198   

Accumulated impairment losses

     -        -        -         (28     -        (28
     10        997        214         2,677        1,272        5,170   

Impairment

     -        (989     -         -        (742     (1,731

Translation

     (1     (8     4         (7     (12     (24

Balance at December 31, 2013:

             

Goodwill

     9        989        218         2,698        1,260        5,174   

Accumulated impairment losses

     -        (989     -         (28     (742     (1,759
     $ 9      $ -      $ 218       $ 2,670      $ 518      $ 3,415   
* As of December 31, 2013, $493 of the amount reflected in Corporate is allocated to three of Alcoa’s four reportable segments ($158 to Alumina, $61 to Global Rolled Products, and $274 to Engineered Products and Solutions) included in the table above for purposes of impairment testing (see Note A). This goodwill is reflected in Corporate for segment reporting purposes because it is not included in management’s assessment of performance by the three reportable segments.

In 2013, Alcoa recognized an impairment of goodwill in the amount of $1,731 ($1,719 after noncontrolling interest) related to the annual impairment review of the Primary Metals segment (see Goodwill and Other Intangible Assets policy in Note A).

Other intangible assets, which are included in Other noncurrent assets on the accompanying Consolidated Balance Sheet, were as follows:

 

December 31, 2013    Gross
carrying
amount
     Accumulated
amortization
 

Computer software

   $ 988       $ (743

Patents and licenses

     133         (93

Other intangibles

     100         (32

Total amortizable intangible assets

     1,221         (868

Indefinite-lived trade names and trademarks

     46         -   

Total other intangible assets

   $ 1,267       $ (868

 

December 31, 2012    Gross
carrying
amount
     Accumulated
amortization
 

Computer software

   $ 907       $ (664

Patents and licenses

     133         (88

Other intangibles

     101         (28

Total amortizable intangible assets

     1,141         (780

Indefinite-lived trade names and trademarks

     46         -   

Total other intangible assets

   $ 1,187       $ (780

Computer software consists primarily of software costs associated with an enterprise business solution (EBS) within Alcoa to drive common systems among all businesses.

Amortization expense related to the intangible assets in the tables above for the years ended December 31, 2013, 2012, and 2011 was $73, $82, and $86, respectively, and is expected to be in the range of approximately $60 to $70 annually from 2014 to 2018.

 


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