Goodwill and other intangible assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets

Goodwill and other intangible assets

Changes in the carrying amount of goodwill, by reportable operating segment, for the years ended December 31, 2024 and 2023 were as follows:

	Americas		EMEA		Asia		Total
Balance as of December 31, 2022
Goodwill	$	1,843,103	$	468,524	$	225,103	$	2,536,730
Goodwill related to acquisitions	333,462		4,284		19,279		357,025
Translation and other adjustments	3,517		14,936		1,847		20,300
Balance as of December 31, 2023	2,180,082		487,744		246,229		2,914,055
Goodwill impairment charge	(240,000)		—		—		(240,000)
Goodwill related to acquisitions	(1,953)		—		—		(1,953)
Translation and other adjustments	(5,360)		(22,255)		(12,173)		(39,788)
Balance as of December 31, 2024	$	1,932,769	$	465,489	$	234,056	$	2,632,314

Our goodwill impairment testing is performed annually during the fourth quarter of each fiscal year in addition to periods where changes in circumstances indicate that the carrying value of our goodwill assets may not be recoverable. During the second quarter of 2024, we identified indicators of a potential impairment related to our Interventional Urology North America reporting unit (the “IU reporting unit”), included within our Americas operating segment. The indicators of a potential impairment primarily arose from lower than anticipated sales results from our UroLift product line (“UroLift"), primarily driven by the adverse impact of persistent end-market challenges within the U.S. office site of service. We performed a quantitative impairment test of the reporting unit using both the income and the market approaches and no impairment to goodwill was recognized in the second quarter of 2024 as the fair

value of the reporting unit exceeded the carrying value. During the third quarter of 2024, the IU reporting unit performed largely in line with the forecast used in the second quarter 2024 quantitative fair value test.

In connection with preparing the financial statements for the year ended December 31, 2024, we performed our annual impairment test for goodwill and determined that the carrying value of the IU reporting unit exceeded its fair value. Consequently, we recognized an impairment charge of $240 million in the goodwill impairment line in the Consolidated Statements of Income. The charge was primarily driven by updates to our UroLift forecast, done as part of our annual operating plan process, which reflects management's expectations of a prolonged period of subdued revenue growth due to persistent end-market challenges and changes in competitive pressures in the short to mid-term. Moreover, we anticipate that challenges related to a combination of price, mainly within the office site of service, and volume, will likely continue to impact growth rates.

As of December 31, 2024, goodwill of the IU reporting unit was $403.9 million after the impairment charge. We estimated the fair value of the reporting unit using both the income and the market approaches. The more significant judgments and assumptions in determining the fair value of the IU reporting unit for our 2024 impairment assessments included the revenue growth rates, the projected operating margins and the discount rate. The quantitative assessment utilized a discount rate of 10.75%.

Intangible assets at December 31, 2024 and 2023 consisted of the following:

	Gross Carrying Amount				Accumulated Amortization
	2024		2023		2024		2023
Customer relationships	$	1,354,087	$	1,363,839	$	(620,619)	$	(561,753)
In-process research and development	23,666		27,476		—		—
Intellectual property	1,870,407		1,890,957		(863,066)		(745,094)
Distribution rights	23,004		23,301		(22,524)		(22,048)
Trade names	603,202		610,146		(99,443)		(84,864)
Non-compete agreements	21,894		21,934		(21,894)		(21,934)
	$	3,896,260	$	3,937,653	$	(1,627,546)	$	(1,435,693)

As of December 31, 2024, trade names having a carrying value of $227.7 million are considered indefinite-lived. Acquired IPR&D is indefinite-lived until the completion of the related development project, at which point amortization of the carrying value of the technology will commence.

Amortization expense related to intangible assets was $197.7 million, $174.0 million, and $164.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. The estimated annual amortization expense for each of the five succeeding years is as follows:

2025	$	189,100
2026	186,300
2027	183,100
2028	179,100
2029	169,900