Johnson and Johnson 2012 Annual Report Download - page 39

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3. Inventories
At the end of 2012 and 2011, inventories were comprised of:
(Dollars in Millions) 2012 2011
Raw materials and supplies $1,416 1,206
Goods in process 2,262 1,637
Finished goods 3,817 3,442
Total inventories $7,495 6,285
As of December 30, 2012, the remaining inventory step-up related to the Synthes, Inc., acquisition is approximately
$150 million.
4. Property, Plant and Equipment
At the end of 2012 and 2011, property, plant and equipment at cost and accumulated depreciation were:
(Dollars in Millions) 2012 2011
Land and land improvements $793 754
Buildings and building equipment 10,046 9,389
Machinery and equipment 21,075 19,182
Construction in progress 2,740 2,504
Total property, plant and equipment, gross $34,654 31,829
Less accumulated depreciation 18,557 17,090
Total property, plant and equipment, net $16,097 14,739
The Company capitalizes interest expense as part of the cost of construction of facilities and equipment. Interest expense
capitalized in 2012, 2011 and 2010 was $115 million, $84 million and $73 million, respectively.
Depreciation expense, including the amortization of capitalized interest in 2012, 2011 and 2010, was $2.5 billion, $2.3
billion and $2.2 billion, respectively.
Upon retirement or other disposal of property, plant and equipment, the costs and related amounts of accumulated
depreciation or amortization are eliminated from the asset and accumulated depreciation accounts, respectively. The
difference, if any, between the net asset value and the proceeds are recorded in earnings.
5. Intangible Assets and Goodwill
At the end of 2012 and 2011, the gross and net amounts of intangible assets were:
(Dollars in Millions) 2012 2011
Intangible assets with definite lives:
Patents and trademarks – gross $8,890 7,947
Less accumulated amortization 3,416 2,976
Patents and trademarks – net $5,474 4,971
Customer relationships and other intangibles – gross $18,755 8,716
Less accumulated amortization 4,030 3,432
Customer relationships and other intangibles – net $14,725 5,284
Intangible assets with indefinite lives:
Trademarks $7,648 6,034
Purchased in-process research and development 905 1,849
Total intangible assets with indefinite lives $8,553 7,883
Total intangible assets – net $28,752 18,138
Johnson & Johnson 2012 Annual Report •31