Intangible Assets and Goodwill

9 Months Ended

Sep. 27, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

Intangible assets that have finite useful lives are amortized over their estimated useful lives. The latest annual impairment assessment of goodwill and indefinite lived intangible assets was completed in the fiscal fourth quarter of 2014. Future impairment tests for goodwill and indefinite lived intangible assets will be performed annually in the fiscal fourth quarter, or sooner, if warranted.



(Dollars in Millions)	September 27, 2015		December 28, 2014
Intangible assets with definite lives:
Patents and trademarks — gross	$	8,298	9,074
Less accumulated amortization	4,687		4,700
Patents and trademarks — net	3,611		4,374
Customer relationships and other intangibles — gross	17,739		17,970
Less accumulated amortization	5,637		5,227
Customer relationships and other intangibles — net	12,102		12,743
Intangible assets with indefinite lives:
Trademarks	7,084		7,263
Purchased in-process research and development	3,191		2,842
Total intangible assets with indefinite lives	10,275		10,105
Total intangible assets — net	$	25,988	27,222

Goodwill as of September 27, 2015 was allocated by segment of business as follows:



(Dollars in Millions)	Consumer			Pharm		Med Devices			Total
Goodwill, net at December 28, 2014	$	7,675		2,626		11,531			21,832
Goodwill, related to acquisitions	—			64		22			86
Goodwill, related to divestitures	(117		)	(17	)	(1	)		(135	)
Currency translation/Other	(350		)	(56	)	(98	)	(1)	(504	)
Goodwill, net as of September 27, 2015	$	7,208		2,617		11,454			21,279

See Note 10 to the Consolidated Financial Statements for more details related to business combinations and divestitures.

⁽¹⁾Includes $98 million classified as held for sale, a component of other assets on the Consolidated Balance Sheet, related to the divestiture of Cordis which was pending as of September 27, 2015.

The weighted average amortization periods for patents and trademarks and customer relationships and other intangible assets are 17 years and 24 years, respectively. The amortization expense of amortizable intangible assets included in cost of products sold was $912 million and $1,033 million for the fiscal nine months ended September 27, 2015 and September 28, 2014, respectively. The estimated amortization expense for the five succeeding years approximates $1.2 billion, before tax, per year. Intangible asset write-downs are included in Other (income) expense, net.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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