Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

In our annual impairment tests of goodwill as of October 31, 2024 and 2023 we performed a quantitative assessment of the Spine reporting unit using a discounted cash flow analysis to estimate the fair value. Significant inputs to the analysis included 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.

In 2024 the carrying value of the Spine reporting unit exceeded its fair value and a charge of $273 was recognized in goodwill and other impairments in the Consolidated Statements of Earnings. The impairment charge for the Spine reporting unit was driven by a decrease in future product demand due to the competitive environment and an increase in the Spine reporting unit’s weighted average cost of capital. Subsequent to the annual goodwill impairment test management committed to a plan to sell certain assets associated with the Spinal Implants business (disposal group). Goodwill was allocated to the disposal group based on the relative fair values of the disposal group and the portion of the Spine reporting unit that will be retained. Goodwill allocated to the disposal group was tested for impairment which resulted in an impairment charge of $183 recognized in goodwill and other impairments. Refer to Note 16 for additional information on the assets classified as held for sale. For our annual impairment test in 2023 we also elected to perform a quantitative assessment. As a result of that assessment we concluded that the goodwill of the Spine reporting unit was not impaired in 2023.

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 2024 or 2023.

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.

Goodwill of $117 previously reported within Orthopaedics was reclassified to MedSurg and Neurotechnology to reflect the reclassification of the interventional spine reporting unit from Orthopaedics to MedSurg and Neurotechnology to align with certain updates in our internal reporting structure. Goodwill recorded in the first three quarters of 2024 related to interventional spine is presented in the additions and adjustments line within MedSurg and Neurotechnology.


Changes in the Net Carrying Value of Goodwill by Segment
	MedSurg and Neurotechnology		Orthopaedics		Total
2022	$	7,935	$	6,945	$	14,880

Additions and adjustments	301		—		301
Foreign exchange and other	34		28		62
2023	$	8,270	$	6,973	$	15,243
Goodwill impairment	—		(456)		(456)
Additions and adjustments	852		300		1,152
Foreign exchange and other	86		(170)		(84)
2024	$	9,208	$	6,647	$	15,855


Summary of Other Intangible Assets
	Gross Carrying Amount		Less Accumulated Amortization		Net Carrying Amount
Developed technologies
2024	$	5,698	$	2,931	$	2,767
2023	5,769		2,815		2,954
Customer relationships
2024	$	3,055	$	1,636	$	1,419
2023	2,907		1,504		1,403
Patents
2024	$	153	$	136	$	17
2023	329		302		27
Trademarks
2024	$	413	$	256	$	157
2023	427		246		181
In-process research and development
2024	$	34	$	—	$	34
2023	21		—		21
Other
2024	$	63	$	62	$	1
2023	96		89		7
Total
2024	$	9,416	$	5,021	$	4,395
2023	9,549		4,956		4,593


Estimated Amortization Expense
2025		2026		2027		2028		2029
$	605	$	550	$	528	$	480	$	465