Goodwill and Other Intangible Assets

9 Months Ended

Jan. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table presents the changes in the carrying amount of goodwill by segment:


(in millions)	Cardiovascular		Medical Surgical		Neuroscience		Diabetes		Total
April 30, 2021	$	7,209	$	21,195	$	11,300	$	2,257	$	41,961
Goodwill as a result of acquisitions	55		—		26		—		80
Purchase accounting adjustments	26		3		3		(2)		30
Currency translation and other	(58)		(575)		(92)		(1)		(726)
January 28, 2022	$	7,232	$	20,623	$	11,237	$	2,254	$	41,346

The Company assesses goodwill for impairment annually as of the first day of the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Impairment testing for goodwill is performed at the reporting unit level. The test for impairment of goodwill requires the Company to make several estimates related to projected future cash flows to determine the fair value of the goodwill reporting units. The Company calculates the excess of each reporting unit's fair value over its carrying amount, including goodwill, utilizing a discounted cash flow analysis. Internal operational budgets and long-range strategic plans are used as a basis for the cash flow analysis. The Company also utilizes assumptions for working capital, capital expenditures, and terminal growth rates. The discount rate applied to the cash flow analysis is based on the weighted average cost of capital ("WACC") for each reporting unit. An impairment loss is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. The Company did not recognize any goodwill impairments during the three and nine months ended January 28, 2022 and January 29, 2021.

Intangible Assets

The following table presents the gross carrying amount and accumulated amortization of intangible assets:


	January 28, 2022				April 30, 2021
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived:
Customer-related	$	16,990	$	(6,775)	$	17,036	$	(6,058)
Purchased technology and patents	10,834		(5,506)		11,286		(5,156)
Trademarks and tradenames	474		(262)		475		(251)
Other	78		(66)		82		(68)
Total	$	28,376	$	(12,609)	$	28,879	$	(11,533)
Indefinite-lived:
IPR&D	$	311	$	—	$	394	$	—

The Company assesses definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an intangible asset (asset group) may not be recoverable. When events or changes in circumstances indicate that the carrying value of an intangible asset may not be recoverable, the Company calculates the excess of an intangible asset's carrying value over its undiscounted future cash flows. If the carrying value is not recoverable, an impairment loss is recognized based on the amount by which the carrying value exceeds the fair value. During the nine months ended January 28, 2022, the Company recognized $409 million of definite-lived intangible asset charges in connection with MCS within the Cardiovascular Portfolio. Refer to Note 5 Restructuring and Other Costs for additional information on what led to the impairment. Intangible asset impairment charges are recognized in other operating (income) expense, net in the consolidated statements of income. The Company did not recognize any definite-lived intangible asset charges during the three months ended January 28, 2022 and the three and nine months ended January 29, 2021.

The Company assesses indefinite-lived intangibles for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate that the carrying value may be impaired. The Company did not recognize any indefinite-lived intangible asset impairments during the three and nine months ended January 29, 2021. Indefinite-lived intangible asset impairments were not significant for the three and nine months ended January 28, 2022. Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of clinical trials, delays or failures to

obtain required market clearances, other failures to achieve a commercially viable product, or the discontinuation of certain projects, and as a result, may recognize impairment losses in the future.

Amortization Expense

Intangible asset amortization expense for the three months ended January 28, 2022 and January 29, 2021 was $432 million and $453 million, respectively. For the nine months ended January 28, 2022 and January 29, 2021, intangible asset amortization expense was $1.3 billion. Estimated aggregate amortization expense by fiscal year based on the carrying value of definite-lived intangible assets at January 28, 2022, excluding any possible future amortization associated with acquired IPR&D which has not yet met technological feasibility, is as follows:


(in millions)	Amortization Expense
Remaining 2022	$	430
2023	1,663
2024	1,629
2025	1,606
2026	1,592
2027	1,568