Acquisitions, Divestitures and Strategic Investments (Tables)

9 Months Ended

Sep. 30, 2024

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition

The preliminary purchase price was comprised of the amount presented below:

(in millions)	Silk Road Medical
Payment for acquisition, net of cash acquired	$	1,126
	$	1,126

(in millions)	Acotec(1)		Apollo
Payment for acquisition, net of cash acquired(2)	$	381	$	636
	$	381	$	636

(1) Excludes approximately $140 million of cash on hand at the closing of the transaction

(2) Related to Acotec, represents our majority stake investment

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The final determination of the fair value of certain assets and liabilities will be completed within the measurement period in accordance with FASB ASC Topic 805.

(in millions)	Silk Road Medical
Goodwill	$	563
Amortizable intangible assets	507
Other assets acquired	124
Liabilities assumed	(46)
Net deferred tax liabilities	(22)
	$	1,126

The final purchase price allocations were comprised of the components presented below, with the excess of the purchase price over the fair value of net assets acquired recorded to goodwill:

(in millions)	Acotec		Apollo
Goodwill	$	337	$	378
Amortizable intangible assets	334		248
Other assets acquired	93		50
Liabilities assumed	(48)		(33)
Net deferred tax liabilities	(76)		(5)
Fair value of noncontrolling interest	(259)		—
	$	381	$	636

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

We allocated a portion of the purchase price to the specific intangible asset categories as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Risk-Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	447	12	13%
Customer relationships	61		12	13%
	$	507

We allocated a portion of the purchase price to the specific intangible asset categories as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Risk-Adjusted Discount Rates used in Purchase Price Allocation
Acotec:
Amortizable intangible assets:
Technology-related	$	308	11	14%
Customer relationships	15		11	14%
Other intangible assets	11		13	14%
	$	334
Apollo:
Amortizable intangible assets:
Technology-related	$	222	11	12%
Customer relationships	26		11	12%
	$	248

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

Changes in the fair value of our contingent consideration liability during the first nine months of 2024 associated with prior period acquisitions were as follows:

(in millions)
Balance as of December 31, 2023	$	404
Amount recorded related to current year acquisitions	29
Contingent consideration net expense (benefit)	(4)
Contingent consideration payments and other adjustments	(258)
Balance as of September 30, 2024	$	171

Fair Value Measurement Inputs and Valuation Techniques

The recurring Level 3 fair value measurements of our contingent consideration liability that we expect to be required to settle include the following significant unobservable inputs:

Contingent Consideration Liability	Fair Value as of September 30, 2024	Valuation Technique	Unobservable Input	Range			Weighted Average(1)
Revenue-based Payments and Milestones	$171 million	Discounted Cash Flow	Discount Rate	6%	-	15%	7%
			Probability of Payment	90%	-	100%	98%
			Projected Year of Payment	2025	-	2029	2027

(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.

Investment

The aggregate carrying amount of our strategic investments was comprised of the following:

	As of
(in millions)	September 30, 2024		December 31, 2023
Equity method investments	$	256	$	219
Measurement alternative investments(1, 2)	276		194
	$	532	$	413

(1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer, recognized in Other, net within our accompanying unaudited consolidated statements of operations.

(2) Includes publicly-held securities and convertible notes measured at fair value with changes in fair value recognized in Other, net within our accompanying unaudited consolidated statements of operations.