Intangible Assets and Goodwill

Intangible Assets and Goodwill

At the end of 2015 and 2014, the gross and net amounts of intangible assets were:



(Dollars in Millions)	2015		2014
Intangible assets with definite lives:
Patents and trademarks — gross	$	8,299	9,074
Less accumulated amortization	4,745		4,700
Patents and trademarks — net	$	3,554	4,374
Customer relationships and other intangibles — gross	$	17,583	17,970
Less accumulated amortization	5,816		5,227
Customer relationships and other intangibles — net	$	11,767	12,743
Intangible assets with indefinite lives:
Trademarks	$	7,023	7,263
Purchased in-process research and development	3,420		2,842
Total intangible assets with indefinite lives	$	10,443	10,105
Total intangible assets — net	$	25,764	27,222

Goodwill as of January 3, 2016 and December 28, 2014, as allocated by segment of business, was as follows:



(Dollars in Millions)	Consumer			Pharmaceutical		Med Devices		Total
Goodwill at December 29, 2013	$	8,531		2,068		12,199		22,798
Goodwill, related to acquisitions	13			665		—		678
Goodwill, related to divestitures	(138		)	—		(603	)	(741	)
Currency translation/other	(731		)	(107	)	(65	)	(903	)
Goodwill at December 28, 2014	$	7,675		2,626		11,531		21,832
Goodwill, related to acquisitions	110			366		34		510
Goodwill, related to divestitures	(119		)	(17	)	(57	)	(193	)
Currency translation/other	(426		)	(86	)	(8	)	(520	)
Goodwill at January 3, 2016	$	7,240		2,889		11,500		21,629

The weighted average amortization periods for patents and trademarks and customer relationships and other intangible assets are 18 years and 24 years, respectively. The amortization expense of amortizable assets included in cost of products sold was $1.2 billion, $1.4 billion and $1.4 billion before tax, for the fiscal years ended January 3, 2016, December 28, 2014 and December 29, 2013, respectively. The estimated amortization expense for the five succeeding years approximates $1.2 billion before tax, per year. Intangible asset write-downs are included in Other (income) expense, net.

See Note 20 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.

- 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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