Note 14. GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in the carrying amount of goodwill were as follows:
|
| | | | | | | | |
| | December 31, |
Dollars in Millions | | 2013 | | 2012 |
Carrying amount of goodwill at January 1 | | $ | 7,635 |
| | $ | 5,586 |
|
Acquisitions: | | | | |
Inhibitex | | — |
| | 1,213 |
|
Amylin | | 11 |
| | 836 |
|
Assets held-for-sale | | (550 | ) | | — |
|
Carrying amount of goodwill at December 31 | | $ | 7,096 |
| | $ | 7,635 |
|
In the first quarter of 2013, the purchase price allocation was finalized for the Amylin acquisition resulting in an $11 million adjustment to goodwill and deferred income taxes. Goodwill of $550 million was allocated to the sale of the diabetes business and included in assets held-for-sale. See“—Note 5. Assets Held-For-Sale” for further discussion.
Other intangible assets include:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | December 31, 2013 | | December 31, 2012 |
Dollars in Millions | | Estimated Useful Lives | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount |
Licenses | | 5 – 15 years | | $ | 1,162 |
| | $ | 637 |
| | $ | 525 |
| | $ | 1,160 |
| | $ | 534 |
| | $ | 626 |
|
Developed technology rights | | 9 – 15 years | | 2,486 |
| | 1,482 |
| | 1,004 |
| | 8,827 |
| | 1,604 |
| | 7,223 |
|
Capitalized software | | 3 – 10 years | | 1,240 |
| | 999 |
| | 241 |
| | 1,200 |
| | 939 |
| | 261 |
|
Total finite-lived intangible assets | | | | 4,888 |
| | 3,118 |
| | 1,770 |
| | 11,187 |
| | 3,077 |
| | 8,110 |
|
IPRD | | | | 548 |
| | — |
| | 548 |
| | 668 |
| | — |
| | 668 |
|
Total other intangible assets | | | | $ | 5,436 |
| | $ | 3,118 |
| | $ | 2,318 |
| | $ | 11,855 |
| | $ | 3,077 |
| | $ | 8,778 |
|
Changes in other intangible assets were as follows:
|
| | | | | | | | | | | | |
Dollars in Millions | | 2013 | | 2012 | | 2011 |
Other intangible assets carrying amount at January 1 | | $ | 8,778 |
| | $ | 3,124 |
| | $ | 3,370 |
|
Capitalized software and other additions | | 80 |
| | 60 |
| | 75 |
|
Acquisitions | | — |
| | 8,335 |
| | 160 |
|
Amortization expense | | (858 | ) | | (607 | ) | | (353 | ) |
Impairment charges | | — |
| | (2,134 | ) | | (30 | ) |
Assets held-for-sale | | (5,682 | ) | | — |
| | — |
|
Other | | — |
| | — |
| | (98 | ) |
Other intangible assets, net carrying amount at December 31 | | $ | 2,318 |
| | $ | 8,778 |
| | $ | 3,124 |
|
Developed technology rights of $5,562 million and IPRD of $120 million related to the sale of the diabetes business were reclassified to assets held-for-sale as of December 31, 2013. See “—Note 5. Assets Held-For-Sale” for further discussion.
Annual amortization expense of other intangible assets is expected to be approximately $300 million in 2014, $200 million in 2015, $200 million in 2016, $200 million in 2017, $150 million in 2018 and $720 million thereafter.
BMS announced the discontinued development of BMS-986094 (formerly known as INX-189), a nucleotide polymerase (NS5B) inhibitor that was in Phase II development for the treatment of the hepatitis C virus infection in August 2012. The decision was made in the interest of patient safety, based on a rapid, thorough and ongoing assessment of patients in a Phase II study that was voluntarily suspended on August 2012. BMS acquired BMS-986094 with its acquisition of Inhibitex in February 2012. As a result of the termination of this development program, a $1,830 million pre-tax impairment charge was recognized for the IPRD intangible asset.
An impairment charge of $120 million was recognized in 2012 related to continued competitive pricing pressures and a partial write-down to fair value of developed technology rights related to a previously acquired non-key product.
