Intangible Assets and Goodwill

12 Months Ended

Jan. 03, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

At the end of fiscal years 2020 and 2019, the gross and net amounts of intangible assets were:

(Dollars in Millions)	2020		2019
Intangible assets with definite lives:
Patents and trademarks — gross	$	39,990	36,634
Less accumulated amortization	17,618		13,154
Patents and trademarks — net	$	22,372	23,480
Customer relationships and other intangibles — gross	$	22,898	22,056
Less accumulated amortization	10,912		9,462
Customer relationships and other intangibles — net*	$	11,986	12,594
Intangible assets with indefinite lives:
Trademarks	$	7,195	6,922
Purchased in-process research and development(1)	11,849		4,647
Total intangible assets with indefinite lives	$	19,044	11,569
Total intangible assets — net	$	53,402	47,643

*The majority is comprised of customer relationships

(1) In fiscal year 2020, the Company completed multiple acquisitions and recorded in-process research and development intangible assets of $6.0 billion from Momenta Pharmaceuticals, Inc., $0.8 billion for bermekimab and certain related assets from XBiotech, Inc., and $0.4 billion from the acquisition of all outstanding shares in Verb Surgical, Inc.

Goodwill as of January 3, 2021 and December 29, 2019, as allocated by segment of business, was as follows:

(Dollars in Millions)	Consumer Health		Pharmaceutical	Medical Devices	Total
Goodwill at December 30, 2018	$	8,670	9,063	12,720	30,453
Goodwill, related to acquisitions	1,188		75	2,018	3,281
Currency translation/other	(122)		31	(4)	(95)
Goodwill at December 29, 2019	$	9,736	9,169	14,734	33,639
Goodwill, related to acquisitions	—		1,222	238	1,460
Currency translation/other	600		618	76	1,294
Goodwill at January 3, 2021	$	10,336	11,009	15,048	36,393

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 assets included in cost of products sold was $4.7 billion, $4.5 billion and $4.4 billion before tax, for the fiscal years ended January 3, 2021, December 29, 2019 and December 30, 2018, 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)
2021	2022	2023	2024	2025
$4,600	4,200	4,100	3,900	3,200

See Note 18 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.