Intangible Assets and Goodwill

3 Months Ended

Apr. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

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)	April 2, 2023		January 1, 2023
Intangible assets with definite lives:
Patents and trademarks — gross	$	44,636	44,012
Less accumulated amortization	(23,512)		(22,266)
Patents and trademarks — net	21,124		21,746
Customer relationships and other intangibles — gross	23,008		22,987
Less accumulated amortization	(13,211)		(12,901)
Customer relationships and other intangibles — net(1)	9,797		10,086
Intangible assets with indefinite lives:
Trademarks	6,843		6,807
Purchased in-process research and development	9,684		9,686
Total intangible assets with indefinite lives	16,527		16,493
Total intangible assets — net	$	47,448	48,325

(1)The majority is comprised of customer relationships

Goodwill as of April 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	—		—	—		—
Currency translation/Other	49		124	171	*	344
Goodwill at April 2, 2023	$	9,233	10,308	26,034		45,575

*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 first quarters ended April 2, 2023 and April 3, 2022, 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)
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.