Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2019

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 2018. 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)	June 30, 2019		December 30, 2018
Intangible assets with definite lives:
Patents and trademarks — gross	$	36,582	35,194
Less accumulated amortization	11,500		9,784
Patents and trademarks — net	25,082		25,410
Customer relationships and other intangibles — gross	21,862		21,334
Less accumulated amortization	8,874		8,323
Customer relationships and other intangibles — net	12,988		13,011
Intangible assets with indefinite lives:
Trademarks	6,939		6,937
Purchased in-process research and development ⁽¹⁾	4,323		2,253
Total intangible assets with indefinite lives	11,262		9,190
Total intangible assets — net	$	49,332	47,611

⁽¹⁾In the fiscal first quarter of 2019, the Company recorded an IPR&D impairment charge of $0.9 billion for the remaining intangible asset value related to the development program of AL-8176, an investigational drug for the treatment of Respiratory Syncytial Virus (RSV) and human metapneumovirus (hMPV) acquired with the 2014 acquisition of Alios Biopharma Inc. The impairment charge was based on

additional information, including clinical data, which became available and led to the Company's decision to abandon the development of AL-8176. A partial impairment charge of $0.8 billion was previously recorded in the fiscal third quarter of 2018 related to the development program of AL-8176. In the fiscal second quarter of 2019, the Company completed the acquisition of Auris Health, Inc. and recorded an in-process research and development intangible asset of $2.9 billion.

Goodwill as of June 30, 2019 was allocated by segment of business as follows:



(Dollars in Millions)	Consumer			Pharm	Med Devices	Total
Goodwill, net at December 30, 2018	$	8,670		9,063	12,720	30,453
Goodwill, related to acquisitions	1,196			—	2,019	3,215
Currency translation/Other	(49		)	41	1	(7	)
Goodwill, net at June 30, 2019	$	9,817		9,104	14,740	33,661

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 $1.1 billion for each of the fiscal second quarters ended June 30, 2019 and July 1, 2018. The amortization expense of amortizable intangible assets included in cost of products sold was $2.2 billion for each of the fiscal six months ended June 30, 2019 and July 1, 2018. The estimated amortization expense for the five succeeding years approximates $4.4 billion, before tax, per year. Intangible asset write-downs are included in Other (income) expense, net.

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