Goodwill and other intangible assets
Goodwill
The changes in the carrying amounts of goodwill for the years ended December 31, 2013 and 2012, were as follows (in millions):
|
| | | | | | | |
| 2013 | | 2012 |
Beginning balance | $ | 12,662 |
| | $ | 11,750 |
|
Goodwill resulting from acquisitions of businesses | 2,526 |
| | 928 |
|
Currency translation and other adjustments | (220 | ) | | (16 | ) |
Ending balance | $ | 14,968 |
| | $ | 12,662 |
|
Identifiable intangible assets
Identifiable intangible assets consisted of the following as of December 31, 2013 and 2012 (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 |
| Gross carrying amount | | Accumulated amortization | | Intangible assets, net | | Gross carrying amount | | Accumulated amortization | | Intangible assets, net |
Finite-lived intangible assets: | | | | | | | | | | | |
Developed product technology rights | $ | 10,130 |
| | $ | (3,347 | ) | | $ | 6,783 |
| | $ | 4,220 |
| | $ | (2,942 | ) | | $ | 1,278 |
|
Licensing rights | 3,241 |
| | (366 | ) | | 2,875 |
| | 445 |
| | (268 | ) | | 177 |
|
R&D technology rights | 1,207 |
| | (496 | ) | | 711 |
| | 1,130 |
| | (411 | ) | | 719 |
|
Marketing-related rights | 619 |
| | (366 | ) | | 253 |
| | 648 |
| | (313 | ) | | 335 |
|
Total finite-lived intangible assets | 15,197 |
| | (4,575 | ) | | 10,622 |
| | 6,443 |
| | (3,934 | ) | | 2,509 |
|
Indefinite-lived intangible assets: | | | | | | | | | | | |
IPR&D | 2,640 |
| | — |
| | 2,640 |
| | 1,459 |
| | — |
| | 1,459 |
|
Total identifiable intangible assets | $ | 17,837 |
| | $ | (4,575 | ) | | $ | 13,262 |
| | $ | 7,902 |
| | $ | (3,934 | ) | | $ | 3,968 |
|
Developed product technology rights consist of rights related to marketed products acquired in business combinations. Licensing rights are composed primarily of intangible assets acquired as part of the acquisition of Onyx and capitalized payments to third parties for milestones related to regulatory approvals to commercialize products and up-front payments associated with royalty obligations for marketed products. R&D technology rights consist of technology used in R&D with alternative future uses. Marketing-related intangible assets are composed primarily of rights related to the sale and distribution of marketed products. For information related to the acquisition of certain of these intangible assets, see Note 2, Business combinations.
IPR&D consists of R&D projects acquired in a business combination which are not complete due to remaining technological risks and/or the lack of receipt of the required regulatory approvals. These projects include Kyprolis®, a treatment for multiple myeloma being developed for use outside the U.S. (excluding Japan) acquired in the Onyx transaction; velcalcetide, a treatment for secondary hyperparathyroidism in patients with CKD who are on dialysis acquired in the KAI transaction; blinatumomab, a treatment for ALL acquired in the Micromet transaction, and talimogene laherparepvec, a treatment for melanoma acquired in the BioVex transaction (see Note 2, Business combinations).
During the years ended December 31, 2013, 2012 and 2011, we recognized amortization charges associated with our finite-lived intangible assets of $642 million, $397 million and $380 million, respectively. The total estimated amortization for each of the next five years for our intangible assets is $1.2 billion, $1.2 billion, $1.2 billion, $1.1 billion and $902 million in 2014, 2015, 2016, 2017 and 2018, respectively.
