Johnson and Johnson 2012 Annual Report Download - page 60

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The following table presents the amounts recognized for assets acquired and liabilities assumed as of the acquisition date,
as well as the adjustments made up to December 30, 2012:
(Dollars in Millions) June 14, 2012 December 30, 2012
Cash & Cash equivalents $2,749 2,749
Inventory 889 1,194
Accounts Receivable, net 738 738
Other current assets 249 238
Property, plant and equipment 1,253 1,253
Goodwill 5,371 6,011
Intangible assets 12,929 12,861
Other non-current assets 46 46
Total Assets Acquired 24,224 25,090
Current liabilities 825 1,053
Deferred Taxes 2,731 3,471
Other non-current liabilities 431 329
Total Liabilities Assumed 3,987 4,853
Net Assets Acquired $20,237 20,237
The adjustments made since the date of acquisition were to account for changes to inventory, based on the results of the
physical inventory counts and deferred taxes, to reflect the statutory tax rate that is being applied to the intangible assets.
The revisions to the purchase price allocation were not material to the Statements of Consolidated Earnings for the prior
fiscal quarters of 2012.
The assets acquired are recorded in the Medical Devices and Diagnostics segment. The acquisition of Synthes, Inc.
resulted in $6.0 billion of goodwill. The goodwill is primarily attributable to synergies expected to arise from the acquisition
of Synthes, Inc. The goodwill is not expected to be deductible for tax purposes.
The purchase price allocation to the identifiable intangible assets included in the June 14, 2012 and December 30, 2012
balance sheets were as follows:
(Dollars in Millions) June 14, 2012 December 30, 2012
Intangible assets with definite lives:
Customer relationships $9,950 9,870
Patents and technology 1,495 1,508
Total amortizable intangibles 11,445 11,378
Trademark and Trade name 1,420 1,420
In-process research and development 64 63
Total intangible assets $12,929 12,861
The weighted average life for the $11.4 billion of total amortizable intangibles is approximately 21 years.
The trade name asset values were determined to have an indefinite life based on a number of factors, including trade name
history, the competitive environment, market share and future operating plans. The intangible assets with definite lives were
assigned asset lives ranging from 7 to 22 years.
The majority of the intangible asset valuation relates to customer relationships, patents and technology and trade name
intangible assets in the Company’s trauma, cranio maxillofacial, spine and power tools business lines. Additionally, in-
process research and development intangible assets were valued for technology programs for unapproved products.
The value of the IPR&D was calculated using cash flow projections discounted for the risk inherent in such projects. The
discount rate applied was 14%.
The Company is in the process of executing the integration plans to combine businesses, sales organizations, systems
and locations as a result of which the Company has and will continue to incur integration costs.
52 •Johnson & Johnson 2012 Annual Report