Intangible Assets and Goodwill

9 Months Ended

Sep. 27, 2020

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 2019. 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, 2020		December 29, 2019
Intangible assets with definite lives:
Patents and trademarks — gross	$	38,381	36,634
Less accumulated amortization	16,098		13,154
Patents and trademarks — net	22,283		23,480
Customer relationships and other intangibles — gross	22,455		22,056
Less accumulated amortization	10,427		9,462
Customer relationships and other intangibles — net*	12,028		12,594
Intangible assets with indefinite lives:
Trademarks	6,995		6,922
Purchased in-process research and development ⁽¹⁾	5,700		4,647
Total intangible assets with indefinite lives	12,695		11,569
Total intangible assets — net	$	47,006	47,643

*The majority is comprised of customer relationships

⁽¹⁾In the fiscal first quarter of 2020, the Company completed the acquisition of bermekimab and certain related assets from XBiotech Inc., as well as the acquisition of all outstanding shares in Verb Surgical Inc. and recorded in-process research and development intangible assets of $0.8 billion and $0.4 billion, respectively.

Goodwill as of September 27, 2020 was allocated by segment of business as follows:


(Dollars in Millions)	Consumer Health		Pharmaceutical	Medical Devices	Total
Goodwill at December 29, 2019	$	9,736	9,169	14,734	33,639
Goodwill, related to acquisitions	—		1	183	184

Currency translation/Other	171		280	33	484
Goodwill at September 27, 2020	$	9,907	9,450	14,950	34,307

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 third quarters ended September 27, 2020 and September 29, 2019, respectively. The amortization expense of amortizable intangible assets included in cost of products sold was $3.4 billion and $3.3 billion for the fiscal nine months ended September 27, 2020 and September 29, 2019, respectively. Intangible asset write-downs are included in Other (income) expense, net.

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


(Dollars in Millions)
2020	2021	2022	2023	2024
$4,500	4,300	4,100	4,100	3,900

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