MASCO CORP /DE/ | 2013 | FY | 3


H. GOODWILL AND OTHER INTANGIBLE ASSETS

        The changes in the carrying amount of goodwill for 2013 and 2012, by segment, were as follows, in millions:

 
  Gross Goodwill
At December 31,
2013
  Accumulated
Impairment
Losses
  Net Goodwill
At December 31,
2013
 

Cabinets and Related Products

  $ 240   $ (59 ) $ 181  

Plumbing Products

    550     (340 )   210  

Installation and Other Services

    1,806     (762 )   1,044  

Decorative Architectural Products

    294     (75 )   219  

Other Specialty Products

    983     (734 )   249  
               

Total

  $ 3,873   $ (1,970 ) $ 1,903  
               
               


 

 
  Gross Goodwill
At December 31,
2012
  Accumulated
Impairment
Losses
  Net Goodwill
At December 31,
2012
  Pre-tax
Impairment
Charge
  Additions (A)   Other (B)   Net Goodwill
At December 31,
2013
 

Cabinets and Related Products

  $ 240   $ (59 ) $ 181   $   $   $   $ 181  

Plumbing Products

    544     (340 )   204             6     210  

Installation and Other Services

    1,806     (762 )   1,044                 1,044  

Decorative Architectural Products

    294     (75 )   219                 219  

Other Specialty Products

    980     (734 )   246         3         249  
                               

Total

  $ 3,864   $ (1,970 ) $ 1,894   $   $ 3   $ 6   $ 1,903  
                               
                               


 

 
  Gross Goodwill
At December 31,
2011
  Accumulated
Impairment
Losses
  Net Goodwill
At December 31,
2011
  Pre-tax
Impairment
Charge
  Additions (A)   Other (B)   Net Goodwill
At December 31,
2012
 

Cabinets and Related Products

  $ 240   $ (59 ) $ 181   $   $   $   $ 181  

Plumbing Products

    541     (340 )   201             3     204  

Installation and Other Services

    1,806     (762 )   1,044                 1,044  

Decorative Architectural Products

    294     (75 )   219                 219  

Other Specialty Products

    980     (734 )   246                 246  
                               

Total

  $ 3,861   $ (1,970 ) $ 1,891   $   $   $ 3   $ 1,894  
                               
                               

(A)
Additions include acquisitions.
(B)
Other principally includes the effect of foreign currency translation.

        In the fourth quarters of 2013 and 2012, the Company completed its annual impairment testing of goodwill and other indefinite-lived intangible assets. The impairment test in 2013 and 2012 indicated there was no impairment of goodwill for any of the Company's reporting units.

        The impairment test in 2011 indicated that goodwill recorded for certain of the Company's reporting units was impaired. The Company recognized the non-cash, pre-tax impairment charges, in continuing operations, for goodwill of $442 million ($286 million, after tax) for 2011. In 2011, the pre-tax impairment charge in the Decorative Architectural Products segment relates to the builders' hardware business and reflects increasing competitive conditions for that business. The pre-tax impairment charge in the Other Specialty Products segment relates to the North American window and door business and reflects the continuing weak level of new home construction activity in the western U.S., the reduced levels of repair and remodel activity and the expectation that recovery in these segments will be modestly slower than anticipated. The Company then assessed the long-lived assets associated with these business units and determined no impairment was necessary at December 31, 2011.

        Other indefinite-lived intangible assets were $133 million and $132 million at December 31, 2013 and 2012, respectively, and principally included registered trademarks. In 2013, the impairment test indicated there was no impairment of other intangible assets for any of the Company's reporting units. In 2012 and 2011, the impairment test indicated that the registered trademark for a North American business unit in the Other Specialty Products segment and the registered trademark for a North American business unit in the Plumbing Products segment (2011 only) were impaired due to changes in the long-term outlook for the business units. The Company recognized non-cash, pre-tax impairment charges for other indefinite-lived intangible assets of $42 million ($27 million, after tax) and $8 million ($5 million, after tax) in 2012 and 2011, respectively.

        The carrying value of the Company's definite-lived intangible assets was $16 million (net of accumulated amortization of $62 million) at December 31, 2013 and $19 million at December 31, 2012 (net of accumulated amortization of $57 million) and principally included customer relationships and non-compete agreements, with a weighted average amortization period of 6 years in both 2013 and 2012. Amortization expense related to the definite-lived intangible assets of continuing operations was $5 million in 2013 and $6 million in each of 2012 and 2011.

        At December 31, 2013, amortization expense related to the definite-lived intangible assets during each of the next five years was as follows: 2014 – $5 million; 2015 – $4 million; 2016 – $3 million; 2017 – $1 million; and 2018 – $1 million.


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