Goodwill And Other Intangible Assets

9 Months Ended

Sep. 27, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

As discussed in Note 14 to the Condensed Consolidated Financial Statements, effective in the third quarter of 2014, the Company completed a realignment of resources and management toward a new organizational structure comprised of a single operating segment, which combined its existing Implantable Electronic Systems Division and Cardiovascular and Ablation Technologies Division. This change resulted in the combination of the Company’s reporting units. During the third quarter of 2014, the Company completed its goodwill impairment assessment and determined that no impairment existed. Prior annual impairment tests were performed in the context of the reporting unit structure that existed at those times.

The changes in the carrying amount of goodwill for the nine months ended September 27, 2014 were as follows (in millions):




Balance at December 28, 2013	$	3,524
NeuroTherm	132
Spinal Modulation	(36		)
Foreign currency translation and other	(43		)
Balance at September 27, 2014	$	3,577

During the second quarter of 2014, the Company finalized the allocation of Spinal Modulation's assets and liabilities included in the Company's consolidated balance sheet as of June 7, 2013, recognizing a fair value adjustment of $36 million to decrease goodwill and noncontrolling interest.

The following table provides the gross carrying amount of other intangible assets and related accumulated amortization (in millions):



	September 27, 2014				December 28, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangible assets:
Purchased technology and patents	$	1,125	$	452	$	986	$	393
Customer lists and relationships	20		14		20		13
Trademarks and tradenames	22		13		22		11
Licenses, distribution agreements and other	6		2		4		1
	$	1,173	$	481	$	1,032	$	418
Indefinite-lived intangible assets:
Acquired IPR&D	$	187			$	262
Trademarks and tradenames	27				35
	$	214			$	297

During the third quarter of 2014, the Company recognized a $17 million impairment charge related to an IPR&D asset and an $8 million impairment charge associated with an indefinite-lived tradename asset as the fair values decreased below their carrying values. See Note 7 and Note 12 for further information.

During the second quarter of 2014, CardioMEMS received FDA approval of its CardioMEMS™ (Heart Failure) HF System. As a result of the approval, the Company reclassified $58 million of acquired IPR&D from an indefinite-lived intangible asset to a purchased technology definite-lived intangible asset.

During the second quarter of 2013, the Company recognized a $13 million impairment charge primarily associated with customer relationship intangible assets (see Note 7). The gross carrying amounts and related accumulated amortization amounts for these impairment charges were written off accordingly.

The following table presents expected future amortization expense for acquired intangible assets recognized as of September 27, 2014 and expected amortization expense of indefinite-lived IPR&D assets based on anticipated regulatory product approvals (in millions):



	Remainder of										After
	2014		2015		2016		2017		2018		2018
Amortization expense	$	23	$	95	$	98	$	84	$	84	$	495

The expected amortization expense is an estimate. Actual amounts of amortization expense may differ due to actual timing of regulatory approvals, additional intangible assets acquired, foreign currency translation impacts, impairment of intangible assets and other events. The Company expenses the costs incurred to renew or extend the term of intangible assets.

- 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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