Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

13. Goodwill and Other Intangible Assets

A. Goodwill

The components of, and changes in, the carrying amount of goodwill follow:

(MILLIONS OF DOLLARS)	U.S.		International		Total
Balance, December 31, 2022	$	1,485	$	1,261	$	2,746
Additions(a)	24		14		38
Transfers/Adjustments(b)	25		(34)		(9)
Other(c)	(2)		(14)		(16)
Balance, December 31, 2023	$	1,532	$	1,227	$	2,759
Other(c)	(17)		(18)		(35)
Balance, December 31, 2024	$	1,515	$	1,209	$	2,724

(a)     Primarily relates to the acquisitions of PetMedix and adivo. See Note 5. Acquisitions and Divestitures.

(b)     Primarily relates to asset transfers from international markets to the U.S.

(c)     Includes adjustments for foreign currency translation.

For 2024, also includes adjustments for the derecognition of goodwill of $24 million related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. See Note 5. Acquisitions and Divestitures.

For 2023, also includes the sale of a majority interest in our pet insurance business within our U.S. segment.

The gross goodwill balance was $3,260 million as of December 31, 2024 and $3,295 million as of December 31, 2023. Accumulated goodwill impairment losses were $536 million as of December 31, 2024 and 2023.

B. Other Intangible Assets

The components of identifiable intangible assets follow:

	As of December 31, 2024						As of December 31, 2023
					Identifiable						Identifiable
	Gross				Intangible Assets,		Gross				Intangible Assets,
	Carrying		Accumulated		Less Accumulated		Carrying		Accumulated		Less Accumulated
(MILLIONS OF DOLLARS)	Amount		Amortization		Amortization		Amount		Amortization		Amortization
Finite-lived intangible assets:
Developed technology rights(a)	$	1,891	$	(1,175)	$	716	$	1,986	$	(1,101)	$	885
Brands and tradenames(a)	367		(246)		121		383		(246)		137
Other	278		(197)		81		270		(190)		80
Total finite-lived intangible assets	2,536		(1,618)		918		2,639		(1,537)		1,102
Indefinite-lived intangible assets:
Brands and tradenames(a)	66		—		66		88		—		88
In-process research and development	136		—		136		141		—		141
Product rights	7		—		7		7		—		7
Total indefinite-lived intangible assets	209		—		209		236		—		236
Identifiable intangible assets	$	2,745	$	(1,618)	$	1,127	$	2,875	$	(1,537)	$	1,338

Developed Technology Rights

Developed technology rights represent the amortized cost associated with developed technology, which has been acquired from third parties and which can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed. These assets include technologies related to the care and treatment of dogs, cats, horses, cattle, swine, poultry, fish and sheep.

Brands and Tradenames

Brands and tradenames represent the amortized or unamortized cost associated with product name recognition, as the products themselves do not receive patent protection. The most significant finite-lived brands and tradenames are related to Abaxis, Platinum Performance, and Lutalyse. The most significant indefinite-lived brands and tradenames were acquired from SmithKlineBeecham and the Linco family of products.

In-Process Research and Development

IPR&D assets represent R&D assets that have not yet received regulatory approval in a major market. The majority of these IPR&D assets were acquired in connection with our acquisition of two research and development stage animal health biopharmaceutical companies, PetMedix and adivo.

IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated R&D effort. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in a major market, typically either the U.S., U.K. or the EU, or in a series of other countries, subject to certain specified conditions and management judgment. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned, the related IPR&D assets will be written-off and we will record an impairment charge.

There can be no certainty that IPR&D assets ultimately will yield a successful product.

Product Rights

Product rights represent product registration and application rights that were acquired from Pfizer in 2014.

C. Amortization

The weighted average life of our total finite-lived intangible assets is approximately 8.2 years. Total amortization expense for finite-lived intangible assets was $170 million in 2024, $185 million in 2023 and $193 million in 2022.

The annual amortization expense expected for the years 2025 through 2029 is as follows:

(MILLIONS OF DOLLARS)	2025		2026		2027		2028		2029
Amortization expense	$	154	$	147	$	143	$	114	$	77