Intangible Assets and Goodwill

6 Months Ended

Jul. 02, 2023

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 2022. 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)	July 2, 2023		January 1, 2023
Intangible assets with definite lives:
Patents and trademarks — gross	$	44,637	44,012
Less accumulated amortization	(24,460)		(22,266)
Patents and trademarks — net	20,177		21,746
Customer relationships and other intangibles — gross	23,055		22,987
Less accumulated amortization	(13,516)		(12,901)
Customer relationships and other intangibles — net(1)	9,539		10,086
Intangible assets with indefinite lives:
Trademarks	6,834		6,807
Purchased in-process research and development	9,696		9,686
Total intangible assets with indefinite lives	16,530		16,493
Total intangible assets — net	$	46,246	48,325

(1)The majority is comprised of customer relationships

Goodwill as of July 2, 2023 was allocated by segment of business as follows:


(Dollars in Millions)	Consumer Health		Pharmaceutical	MedTech		Total
Goodwill at January 1, 2023	$	9,184	10,184	25,863		45,231
Goodwill, related to acquisitions	—		—	—		—
Goodwill, related to divestitures	—		—	—		—
Currency translation/Other	(103)		137	175	*	209
Goodwill at July 2, 2023	$	9,081	10,321	26,038		45,440

*Includes purchase price allocation adjustment for Abiomed

The weighted average amortization period for patents and trademarks is 12 years. The weighted average amortization period for customer relationships and other intangible assets is 21 years. The amortization expense of amortizable intangible assets included in cost of products sold was $1.2 billion and $1.1 billion for the fiscal second quarters ended July 2, 2023 and July 3, 2022, respectively. The amortization expense of amortizable intangible assets included in cost of products sold was $2.4 billion and $2.2 billion for the fiscal six months ended July 2, 2023 and July 3, 2022, respectively. Intangible asset write-downs are included in Other (income) expense, net, with the exception of In-Process research and development which are included in the In-Process research and development impairments line.

The estimated amortization expense for approved products, before tax, for the five succeeding years is approximately:


(Dollars in Millions)
2023	2024	2025	2026	2027
$4,800	4,600	3,800	3,200	2,600

See Note 10 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.