Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

We performed our annual impairment test for goodwill as of October 31, 2022 and determined that the carrying value of the Spine reporting unit exceeded its fair value. As a result an impairment charge of $216 was recognized in the Goodwill impairment line in the Consolidated Statements of Earnings in 2022. As of December 31, 2022 goodwill of the Spine reporting unit is $1,002 after the impairment charge.

We estimated the fair value of the Spine reporting unit using a discounted cash flow analysis. Significant inputs to the analysis include assumptions for future revenue growth and operating margin. The analysis also included a rate to discount the estimated future cash flow projections to their present value, based on the reporting unit’s estimated weighted average cost of capital. The impairment charge for the Spine reporting unit was primarily driven by the slower than anticipated recovery of surgery volumes as we emerge from the COVID-19 pandemic, the competitive pressures in the spine market and rising interest rates in the current macroeconomic environment.

For our other reporting units, we considered qualitative indicators of impairment as it was considered more likely than not that the fair values of those reporting units exceeded their respective carrying values. No impairment was identified for those reporting units in 2022.

Future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill, including discount and tax rates and future cash flow projections, could result in significantly different estimates of the fair values. A significant reduction in the estimated fair values could result in impairment charges that could materially affect our results of operations.


Changes in the Net Carrying Value of Goodwill by Segment
	MedSurg and Neurotechnology		Orthopaedics and Spine		Total
2020	$	5,459	$	7,319	$	12,778

Additions and adjustments	223		59		282
Foreign exchange	(13)		(129)		(142)
2021	$	5,669	$	7,249	$	12,918
Goodwill impairment	—		(216)		(216)
Additions and adjustments	2,320		—		2,320
Foreign exchange	(54)		(88)		(142)
2022	$	7,935	$	6,945	$	14,880


Summary of Other Intangible Assets
	Weighted Average Amortization Period (Years)	Gross Carrying Amount		Less Accumulated Amortization		Net Carrying Amount
Developed technologies
2022	14	$	5,440	$	2,363	$	3,077
2021	13	5,326		1,956		3,370
Customer relationships
2022	15	$	2,847	$	1,322	$	1,525
2021	15	2,324		1,174		1,150
Patents
2022	11	$	343	$	297	$	46
2021	12	343		286		57
Trademarks
2022	16	$	425	$	220	$	205
2021	16	415		199		216
In-process research and development
2022	N/A	$	21	$	—	$	21
2021	N/A	29		—		29
Other
2022	6	$	105	$	94	$	11
2021	9	105		87		18
Total
2022	14	$	9,181	$	4,296	$	4,885
2021	14	8,542		3,702		4,840


Estimated Amortization Expense
2023		2024		2025		2026		2027
$	620	$	588	$	568	$	510	$	490