XML 28 R13.htm IDEA: XBRL DOCUMENT
v3.22.4

GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended
--- | ---
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill The following is a reconciliation of goodwill by business segment.
(in millions) | Americas | EMEA | APAC | Hillrom | Total
December 31, 2020 | $ | 2,574 |  | $ | 406 |  | $ | 237 |  | $ | — |  | $ | 3,217 |
Reallocation of Goodwill | 81 |  | (81) |  | — |  | — |  | — |
Additions | 4 |  | 1 |  | — |  | 6,785 |  | 6,790 |
Currency translation | (142) |  | (17) |  | (13) |  | 1 |  | (171) |
December 31, 2021 | $ | 2,517 |  | $ | 309 |  | $ | 224 |  | $ | 6,786 |  | $ | 9,836 |
Impairments | — |  | — |  | — |  | (2,812) |  | (2,812) |
Measurement period adjustments | — |  | — |  | — |  | 49 |  | 49 |
Currency translation | (161) |  | (20) |  | (14) |  | (35) |  | (230) |
December 31, 2022 | $ | 2,356 |  | $ | 289 |  | $ | 210 |  | $ | 3,988 |  | $ | 6,843 |
Goodwill Impairments As described in Note 2, we acquired Hillrom on December 13, 2021 and recognized $6.8 billion of goodwill and $6.0 billion of other intangible assets, including $1.9 billion of indefinite-lived intangible assets, in connection with that acquisition. Our Hillrom segment includes the following three reporting units: Patient Support Systems, Front Line Care and Surgical Solutions. During the third quarter of 2022, we performed trigger-based impairment tests of the goodwill of each of those three reporting units, as well as the indefinite-lived intangible assets, consisting primarily of trade names, that we acquired in connection with the Hillrom acquisition. We performed those tests as of September 30, 2022 due to (a) current macroeconomic conditions, including the rising interest rate environment and broad declines in equity valuations, and (b) reduced earnings forecasts for our three Hillrom reporting units, driven primarily by current shortages of certain component parts used in our products, raw materials inflation and increased supply chain costs. Those impairment tests resulted in total pre-tax goodwill impairment charges of $2.8 billion in the third quarter of 2022 relating to our Patient Support Systems, Front Line Care and Surgical Solutions reporting units. In connection with our annual goodwill impairment assessment in the fourth quarter of 2022, we performed quantitative impairment tests for all of our reporting units and recorded an additional $27 million goodwill impairment related to our Surgical Solutions reporting unit. No goodwill impairments were recorded for our remaining reporting units in connection with our annual goodwill impairment tests because the fair values of those reporting units exceeded their carrying amounts. See further discussion below for information regarding intangible asset impairment charges recognized during the third and fourth quarters of 2022. The fair values of the reporting units tested for impairment during 2022 were determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method. Significant assumptions used in the determination of fair value of our reporting units generally include forecasted cash flows, discount rates, terminal growth rates and earnings multiples. The discounted cash flow models used to determine the fair values of our reporting units during 2022 reflected our most recent cash flow projections, discount rates ranging from 9% to 10% and terminal growth rates ranging from 2% to 3%. Our reporting unit fair value measurements are classified as Level 3 in the fair value hierarchy because they involve significant unobservable inputs. Other Intangible Assets, Net The following is a summary of our other intangible assets.
|  |  |  | Indefinite-lived intangible assets |
(in millions) | Customer relationships | Developed technology, including patents | Other amortized intangible assets | Trade Names | In process Research and Development | Total
December 31, 2022 |  |  |  |  |  |
Gross other intangible assets | $ | 3,452 |  | $ | 3,836 |  | $ | 325 |  | $ | 1,571 |  | $ | 202 |  | $ | 9,386 |
Accumulated amortization | (470) |  | (1,888) |  | (235) |  | — |  | — |  | $ | (2,593) |
Other intangible assets, net | $ | 2,982 |  | $ | 1,948 |  | $ | 90 |  | $ | 1,571 |  | $ | 202 |  | $ | 6,793 |
December 31, 2021 |  |  |  |  |  |
Gross other intangible assets | $ | 3,437 |  | $ | 3,801 |  | $ | 344 |  | $ | 1,910 |  | $ | 230 |  | $ | 9,722 |
Accumulated amortization | (162) |  | (1,556) |  | (212) |  | — |  | — |  | $ | (1,930) |
Other intangible assets, net | $ | 3,275 |  | $ | 2,245 |  | $ | 132 |  | $ | 1,910 |  | $ | 230 |  | $ | 7,792 |
Intangible asset amortization expense was $753 million in 2022, $298 million in 2021 and $222 million in 2020. The anticipated annual amortization expense for definite-lived intangible assets recorded as of December 31, 2022 is $635 million in 2023, $615 million in 2024, $583 million in 2025, $553 million in 2026 and $385 million in 2027. Intangible Asset Impairments In addition to the goodwill impairments discussed above, we recognized pre-tax impairment charges of $332 million in the third quarter of 2022 to reduce the carrying amounts of certain indefinite-lived intangible assets, which primarily related to the Hillrom and Welch Allyn trade names acquired in the Hillrom acquisition, to their estimated fair values. Those intangible asset impairment charges are classified within cost of sales in the accompanying consolidated statements of income (loss) for the year ended December 31, 2022. The fair values of the trade name intangible assets were determined using the relief from royalty method. Significant assumptions used in the determination of the fair value of the trade name intangible assets included revenue growth rates, terminal growth rates, discount rates and royalty rates. The relief from royalty models used in the determination of the fair values of our trade name intangible assets during 2022 reflected our most recent revenue projections, a discount rate of 9.5%, royalty rates ranging from 3% to 5% and terminal growth rates ranging from 2% to 3%. Our trade name intangible asset fair value measurements are classified as Level 3 in the fair value hierarchy because they involve significant unobservable inputs. In the fourth quarter of 2022 and second quarter of 2020, we recognized impairment charges of $12 million and $17 million, respectively, related to developed-technology intangible assets due to declines in market expectations for the related products. The fair values of the intangible assets were measured using a discounted cash flow approach and the charges are classified within cost of sales in the accompanying consolidated statements of income (loss) for the years ended December 31, 2022 and 2020. We consider the fair values of the assets to be Level 3 measurements due to the significant estimates and assumptions, including forecasted future cash flows, that we used in establishing the estimated fair values.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration