Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

As discussed in Note 3, goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired, less assumed liabilities. We assess the goodwill of each of our reporting units for impairment at least annually as of the first day of the fourth quarter and as “triggering” events occur that indicate that it is more likely than not that an impairment exists. We elected to bypass the optional qualitative goodwill assessment allowed by applicable accounting standards and performed a quantitative impairment test for all reporting units as this was determined to be the most effective method to assess impairment across a large spectrum of reporting units.

We estimate the fair value of our reporting units primarily using a market approach, based on multiples of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) determined by current trading market multiples of earnings for companies operating in businesses similar to each of our reporting units, in addition to recent market available sale transactions of comparable businesses. In certain circumstances we also evaluate other factors including results of the estimated fair value utilizing a discounted cash flow analysis (i.e., an income approach), market positions of the businesses, comparability of market sales transactions, and financial and operating performance in order to validate the results of the market approach. If the estimated fair value of the reporting unit is less than its carrying value, we will impair the goodwill for the amount of the carrying value in excess of the fair value.

In 2021, we had five continuing operations reporting units for goodwill impairment testing. As of the date of the 2021 annual impairment test, the carrying value of goodwill in each reporting unit ranged from $171.3 million to approximately $3.3 billion. No goodwill impairment charges were recorded for continuing operations for the years ended December 31, 2021, 2020, and 2019, and no “triggering” events have occurred subsequent to the performance of the 2021 annual impairment test. The factors used by management in its impairment analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings. Refer to Note 4 for information on goodwill impairment charges for discontinued operations.

The following is a rollforward of our goodwill by segment ($ in millions):


	Intelligent Operating Solutions		Precision Technologies		Advanced Healthcare Solutions		Total
Balance, January 1, 2020	$	3,208.9	$	1,842.9	$	2,189.7	$	7,241.5
Measurement period adjustments for 2019 acquisitions	14.8		—		20.1		34.9
Attributable to 2020 acquisitions	21.0		—		9.9		30.9
Foreign currency translation and other	24.1		25.0		2.8		51.9
Balance, December 31, 2020	3,268.8		1,867.9		2,222.5		7,359.2
Measurement period adjustments for 2020 acquisitions	0.4		—		(2.7)		(2.3)
Attributable to 2021 acquisitions	873.4		—		969.6		1,843.0
Foreign currency translation and other	(16.6)		(27.9)		(3.4)		(47.9)
Balance, December 31, 2021	$	4,126.0	$	1,840.0	$	3,186.0	$	9,152.0

Finite-lived intangible assets are amortized over the shorter of their legal or estimated useful lives. The following summarizes the gross carrying value and accumulated amortization for each major category of intangible asset as of December 31 ($ in millions):


	2021				2020
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Finite-lived intangibles:
Patents and technology	$	1,130.0	$	(475.8)	$	983.3	$	(401.1)
Customer relationships and other intangibles	3,571.9		(1,064.4)		2,958.3		(896.8)
Trademarks and trade names	110.5		(4.2)		18.0		(1.4)
Total finite-lived intangibles	4,812.4		(1,544.4)		3,959.6		(1,299.3)
Indefinite-lived intangibles:
Trademarks and trade names	622.2		—		630.3		—
Total intangibles	$	5,434.6	$	(1,544.4)	$	4,589.9	$	(1,299.3)

During 2021 we acquired finite-lived intangible assets, consisting primarily of customer relationships, trade names and technology, with a weighted average life of 16 years. During 2020, we acquired finite-lived intangible assets, consisting primarily of customer relationships and developed technology, with a weighted average life of 11 years. Refer to Note 3 for additional information on the intangible assets acquired.

Total intangible amortization expense in 2021, 2020, and 2019 was $321 million, $310 million and $261 million, respectively. Based on the intangible assets recorded as of December 31, 2021, amortization expense is estimated to be $381 million during 2022, $369 million during 2023, $367 million during 2024, $364 million during 2025, and $362 million during 2026.