Intangible Assets and Goodwill

12 Months Ended

Dec. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

At the end of 2012 and 2011, the gross and net amounts of intangible assets were:



(Dollars in Millions)	2012		2011
Intangible assets with definite lives:
Patents and trademarks — gross	$	8,890	7,947
Less accumulated amortization	3,416		2,976
Patents and trademarks — net	$	5,474	4,971
Customer relationships and other intangibles — gross	$	18,755	8,716
Less accumulated amortization	4,030		3,432
Customer relationships and other intangibles — net	$	14,725	5,284
Intangible assets with indefinite lives:
Trademarks	$	7,648	6,034
Purchased in-process research and development	905		1,849
Total intangible assets with indefinite lives	$	8,553	7,883
Total intangible assets — net	$	28,752	18,138

Goodwill as of December 30, 2012 and January 1, 2012, as allocated by segment of business, was as follows:



(Dollars in Millions)	Consumer			Pharmaceuticals		Med Devices and Diagnostics		Total
Goodwill at January 2, 2011	$	8,144		1,225		5,925		15,294
Acquisitions	251			538		198		987
Currency translation/other	(97		)	(42	)	(4	)	(143	)
Goodwill at January 1, 2012	$	8,298		1,721		6,119		16,138
Acquisitions	10			46		6,045		6,101
Currency translation/other	211			25		(51	)	185
Goodwill at December 30, 2012	$	8,519		1,792		12,113		22,424

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 assets was $1,146 million, $852 million and $748 million before tax, for the fiscal years ended December 30, 2012, January 1, 2012 and January 2, 2011, respectively. The estimated amortization expense for the five succeeding years approximates $1,350 million before tax, per year. Amortization expense is included in cost of products sold.

Intangible assets and goodwill increased by $12.9 billion and $6.0 billion, respectively, based on the purchase price allocation for the Synthes, Inc. acquisition. See Note 20 to the Consolidated Financial Statements for additional details on the Synthes, Inc. acquisition. The increase in intangible assets was partially offset by $0.8 billion in intangible asset write-downs and a $1.2 billion impairment of purchased in-process research and development, primarily related to the discontinuation of the Phase III clinical development of bapineuzumab IV and the partial impairment related to the Crucell vaccine business.

- 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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