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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-11083
BOSTON SCIENTIFIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware04-2695240
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
    300 Boston Scientific Way, Marlborough, Massachusetts                    01752-1234
        (Address of Principal Executive Offices)                         (Zip Code)
508 683-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareBSXNew York Stock Exchange
0.625% Senior Notes due 2027BSX27New York Stock Exchange
5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per shareBSX PR ANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The number of shares outstanding of Common Stock, $0.01 par value per share, as of July 29, 2022 was 1,431,614,313.


TABLE OF CONTENTS
  Page No.
 
   
   
 
   
 
   
 
   
 
   
   
   
   
   
   
 
2

PART I
FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions, except per share data)2022202120222021
Net sales$3,244 $3,077 $6,270 $5,829 
Cost of products sold1,011 945 1,966 1,839 
Gross profit2,233 2,132 4,304 3,990 
Operating expenses:
Selling, general and administrative expenses1,165 1,121 2,225 2,139 
Research and development expenses335 298 654 574 
Royalty expense11 12 23 24 
Amortization expense204 180 402 365 
Intangible asset impairment charges7 45 7 45 
Contingent consideration net expense (benefit)36 (85)48 (91)
Restructuring net charges (credits)11 3 14 8 
Litigation-related net charges (credits)42 298 42 302 
Gain on disposal of businesses and assets (2) (9)
 1,810 1,870 3,415 3,358 
Operating income (loss)423 262 889 632 
Other income (expense):
Interest expense(64)(86)(343)(168)
Other, net(14)(26)(46)11 
Income (loss) before income taxes345 149 501 474 
Income tax expense (benefit)85 (37)131 (53)
Net income (loss)260 186 370 527 
Preferred stock dividends(14)(14)(28)(28)
Net income (loss) available to common stockholders$246 $172 $342 $500 
Net income (loss) per common share — basic$0.17 $0.12 $0.24 $0.35 
Net income (loss) per common share — assuming dilution$0.17 $0.12 $0.24 $0.35 
Weighted-average shares outstanding
Basic1,429.7 1,421.3 1,428.8 1,420.0 
Assuming dilution1,437.8 1,432.5 1,438.1 1,431.7 




Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.
3

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2022202120222021
Net income (loss)$260 $186 $370 $527 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment77 2 13 (81)
Net change in derivative financial instruments134 (18)157 111 
Net change in defined benefit pensions and other items0 0 0 1 
Total other comprehensive income (loss)211 (16)170 30 
Total comprehensive income (loss)$471 $170 $540 $558 









































Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.
4

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 As of
(in millions, except share and per share data)June 30, 2022December 31, 2021
ASSETS  
Current assets:  
Cash and cash equivalents$276 $1,925 
Trade accounts receivable, net1,917 1,778 
Inventories1,752 1,610 
Prepaid income taxes264 205 
Other current assets874 799 
Total current assets5,083 6,317 
Property, plant and equipment, net2,246 2,252 
Goodwill12,883 11,988 
Other intangible assets, net6,349 6,121 
Deferred tax assets4,059 4,142 
Other long-term assets1,569 1,410 
TOTAL ASSETS$32,189 $32,229 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Current debt obligations$170 $261 
Accounts payable732 794 
Accrued expenses2,197 2,436 
Other current liabilities784 783 
Total current liabilities3,883 4,274 
Long-term debt8,802 8,804 
Deferred income taxes265 310 
Other long-term liabilities1,988 2,220 
Commitments and contingencies
Stockholders’ equity  
Preferred stock, $0.01 par value - authorized 50,000,000 shares - issued 10,062,500 shares as of June 30, 2022 and December 31, 2021
  
Common stock, $0.01 par value - authorized 2,000,000,000 shares - issued 1,693,192,785 shares as of June 30, 2022 and 1,688,810,052 shares as of December 31, 2021
17 17 
Treasury stock, at cost - 263,289,848 shares as of June 30, 2022 and December 31, 2021
(2,251)(2,251)
Additional paid-in capital20,103 19,986 
Accumulated deficit(1,050)(1,392)
Accumulated other comprehensive income (loss), net of tax433 263 
Total stockholders’ equity17,251 16,622 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$32,189 $32,229 



Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.
5


BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions, except share data)2022202120222021
Preferred stock shares issued
   Beginning10,062,500 10,062,500 10,062,500 10,062,500 
Preferred stock issuance— — — — 
   Ending10,062,500 10,062,500 10,062,500 10,062,500 
Common stock shares issued
   Beginning1,692,828,987 1,683,861,226 1,688,810,052 1,679,911,918 
Common stock issuance— — — — 
Impact of stock-based compensation plans363,798 1,145,382 4,382,733 5,094,690 
   Ending1,693,192,785 1,685,006,608 1,693,192,785 1,685,006,608 
Preferred stock
   Beginning$ $ $ $ 
Preferred stock issuance    
   Ending$ $  $ 
Common stock
   Beginning$17 $17 $17 $17 
Common stock issuance    
Impact of stock-based compensation plans    
   Ending$17 $17 $17 $17 
Treasury Stock
Beginning$(2,251)$(2,251)$(2,251)$(2,251)
Repurchase of common stock    
Ending$(2,251)$(2,251)$(2,251)$(2,251)
Additional Paid-In Capital
Beginning$20,043 $19,750 $19,986 $19,732 
Impact of stock-based compensation plans60 66 117 85 
Ending$20,103 $19,817 $20,103 $19,817 
Accumulated Deficit
Beginning$(1,296)$(2,050)$(1,392)$(2,378)
Net income (loss)260 186 370 527 
Preferred stock dividends(14)(14)(28)(28)
Ending$(1,050)$(1,878)$(1,050)$(1,878)
Accumulated Other Comprehensive Income (Loss), Net of Tax
Beginning$222 $254 $263 $207 
Changes in other comprehensive income (loss)211 (16)170 30 
Ending$433 $237 $433 $237 
Total stockholders' equity$17,251 $15,942 17,251 15,942 







Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.
6

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30,
(in millions)20222021
Net income (loss)$370 $527 
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities
Gain on disposal of businesses and assets (9)
Depreciation and amortization558 531 
Deferred and prepaid income taxes(93)(88)
Stock-based compensation expense107 94 
Goodwill and other intangible asset impairment charges7 45 
Net loss (gain) on investments and notes receivable36 (22)
Contingent consideration net expense (benefit)48 (91)
Inventory step-up amortization25 8 
Debt extinguishment costs194  
Other, net31 35 
Increase (decrease) in operating assets and liabilities, excluding purchase accounting:
Trade accounts receivable(162)(145)
Inventories(180)(100)
Other assets(244)(200)
Accounts payable, accrued expenses and other liabilities(449)340 
Cash provided by (used for) operating activities249 927 
Investing activities:  
Purchases of property, plant and equipment and internal use software(226)(181)
Proceeds from sale of property, plant and equipment9 7 
Payments for acquisitions of businesses, net of cash acquired(1,471)(706)
Proceeds from (payments for) investments and acquisitions of certain technologies(14)92 
Proceeds from disposal of certain businesses and assets5 801 
Proceeds from royalty rights36 43 
Proceeds from settlements of hedge contracts56 15 
Cash provided by (used for) investing activities(1,603)71 
Financing activities:  
Payment of contingent consideration previously established in purchase accounting(283)(14)
Payments for royalty rights(39)(42)
Payments on short-term borrowings(250) 
Net increase (decrease) in commercial paper154  
Payments on long-term borrowings and debt extinguishment costs(3,184) 
Proceeds from long-term borrowings, net of debt issuance costs3,270  
Cash dividends paid on preferred stock(28)(28)
Cash used to net share settle employee equity awards(47)(47)
Proceeds from issuances of common stock pursuant to employee stock compensation and purchase plans58 38 
Cash provided by (used for) financing activities(350)(93)
Effect of foreign exchange rates on cash(6)(2)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents(1,710)903 
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period2,168 1,995 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$458 $2,898 

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.
7

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(SUPPLEMENTAL INFORMATION)

Six Months Ended June 30,
(in millions)20222021
Supplemental Information
Stock-based compensation expense$107 $94 
Fair value of contingent consideration recorded in purchase accounting 221 
Non-cash impact of transferred royalty rights(36)(43)

As of June 30,
Reconciliation to amounts within the unaudited consolidated balance sheets:20222021
Cash and cash equivalents$276 $2,675 
Restricted cash and restricted cash equivalents included in Other current assets
132 167 
Restricted cash equivalents included in Other long-term assets
50 57 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$458 $2,898 
























Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.
8

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A – BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. When used in this report, the terms, "we," "us," "our," and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Accordingly, our unaudited consolidated financial statements and footnotes thereto should be read in conjunction with our audited consolidated financial statements and footnotes thereto included in Item 8 of our most recent Annual Report on Form 10-K.

In the first quarter of 2022, we reorganized our operational structure in order to strengthen our category leadership in the markets we serve and, in particular, benefit our Cardiology customers and patients. Following the reorganization, we have aggregated our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. We have revised prior periods to conform to the current year presentation.

Amounts reported in millions within this Quarterly Report on Form 10-Q are computed based on the amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.
Subsequent Events
We evaluate events occurring after the date of our accompanying unaudited consolidated balance sheet for potential recognition or disclosure in our financial statements. Those items requiring recognition in the financial statements have been recorded and disclosed accordingly.
Those items requiring disclosure (non-recognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note H – Commitments and Contingencies and Note I – Stockholders' Equity for further details.

NOTE B – ACQUISITIONS, DIVESTITURES AND STRATEGIC INVESTMENTS

Our accompanying unaudited consolidated financial statements include the operating results for acquired entities from the respective dates of acquisition. We completed one acquisition in the first six months of 2022, and one acquisition and one divestiture in the first six months of 2021. We have not presented supplemental pro forma financial information for completed acquisitions or divestitures given their results are not material to our accompanying unaudited consolidated financial statements. Further, transaction costs were immaterial to our accompanying unaudited consolidated financial statements and were expensed as incurred.

On June 15, 2022, we announced our entry into a definitive agreement with Synergy Innovation Co, Ltd, to purchase its majority stake of M.I. Tech Co., Ltd., (M.I. Tech), a publicly traded Korean manufacturer and distributor of medical devices for endoscopic and urologic procedures. The agreement, whereby we will purchase approximately 64 percent of the outstanding shares of M.I. Tech, consists of a purchase price of KRW 291.2 billion or approximately $230 million, subject to closing adjustments. The acquisition is expected to close during the second half of 2022, subject to customary closing conditions. The M.I. Tech stent portfolio complements our existing Endoscopy portfolio which will give physicians more treatment options to meet specific patient needs.

2022 Acquisition

On February 14, 2022, we completed our acquisition of Baylis Medical Company Inc. (Baylis Medical), a privately-held company which has developed the radiofrequency (RF) NRG and VersaCrossTransseptal Platforms as well as a family of guidewires, sheaths and dilators used to support left heart access, which expands our electrophysiology and structural heart product portfolios. The transaction consisted of an upfront cash payment of $1.471 billion, net of cash acquired, subject to closing adjustments. We are integrating the Baylis Medical business into our Cardiology division.

9

Purchase Price Allocation

The preliminary purchase price was comprised of the amounts presented below, which represent the preliminary determination of the fair value of identifiable 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 Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations (FASB ASC Topic 805).

(in millions)
Payment for acquisition, net of cash acquired$1,471 
$1,471 

The preliminary purchase price allocation was comprised of the following components:
(in millions)
Goodwill$989 
Amortizable intangible assets657 
Other assets acquired113 
Liabilities assumed(280)
Net deferred tax liabilities(8)
$1,471 

Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies and is not deductible for tax purposes.

We allocated a portion of the preliminary 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$622 1111%
Other intangible assets36 1111%
$657 
2021 Acquisition

On March 1, 2021, we completed the acquisition of Preventice Solutions, Inc. (Preventice), a privately-held company which offers a full portfolio of mobile cardiac health solutions and services, ranging from ambulatory cardiac monitors, to cardiac event monitors and mobile cardiac telemetry. The transaction consisted of an upfront cash payment of $925 million and up to an additional $300 million in a potential commercial milestone payment. We had been an investor in Preventice since 2015 and held an equity stake of approximately 22 percent immediately prior to the acquisition date. We remeasured the fair value of our previously-held investment based on the allocation of the purchase price according to priority of equity interests, which resulted in a $195 million gain recognized within Other, net in the first quarter of 2021. The transaction price for the remaining stake consisted of an upfront cash payment of $706 million, net of cash acquired, and an additional revenue-based milestone payment of $216 million made during the second quarter of 2022. The Preventice business is being managed by our Cardiology division.

10

Purchase Price Allocation

We accounted for the acquisition of Preventice as a business combination, and in accordance with FASB ASC Topic 805, we recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price was comprised of the following components:

(in millions)
Payment for acquisition, net of cash acquired$706 
Fair value of contingent consideration221 
Fair value of prior interest269 
$1,197 

(in millions)
Goodwill$926 
Amortizable intangible assets237 
Other assets acquired65 
Liabilities assumed(32)
$1,197 

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$215 910%
Other intangible assets22 810%
$237 

Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, and is not deductible for tax purposes.

In the second quarter of 2022 we recorded certain measurement period adjustments related to our prior year acquisition of the surgical business of Lumenis, LTD. (Lumenis). We recorded an accrued income tax liability within Other non-current liabilities within our accompanying unaudited consolidated balance sheets of $177 million related to uncertain tax positions assumed in connection with the acquisition. We were indemnified by the sellers for the majority of such tax obligations and recognized a corresponding indemnification asset of $172 million at the acquisition date within Other non-current assets within our accompanying unaudited consolidated balance sheets. Subsequent to the acquisition date, interest and penalties accrued on the tax liability are being recorded within Income tax expense (benefit) and corresponding adjustments to the indemnification asset are being recorded in Other, net within our accompanying unaudited consolidated statements of operations. The outcome of these matters is subject to uncertainty and ultimately, the amount of tax due and the related indemnification reimbursement we receive will be dependent on the outcome of tax return examinations by relevant authorities. Refer to Note F – Supplemental Balance Sheet Information for further details regarding our indemnification asset.

2021 Divestiture

On March 1, 2021, we completed the divestiture of the Specialty Pharmaceuticals business to Stark International Lux S.A.R.L., and SERB SAS, affiliates of SERB, a European specialty pharmaceutical group, for a purchase price of approximately $800 million, subject to certain adjustments including cash on hand at the closing of the transaction. The agreement included the transfer of five facilities and approximately 280 employees globally.

In the second quarter and first six months of 2021, we recognized a Gain on disposal of businesses and assets associated with the transaction of $2 million and $9 million, respectively, within our accompanying unaudited consolidated statements of
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operations. Refer to Note C – Assets and Liabilities Held for Sale to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K for additional information.

Contingent Consideration

Changes in the fair value of our contingent consideration liability during the first six months of 2022 were as follows:

(in millions)
Balance as of December 31, 2021$486 
Contingent consideration net expense (benefit)48 
Contingent consideration payments(314)
Balance as of June 30, 2022$219 

As of June 30, 2022, the maximum amount of future contingent consideration (undiscounted) that we could be required to pay associated with our completed acquisitions was $544 million. Refer to Note B – Acquisitions and Strategic Investments to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K for additional information.

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 LiabilityFair Value as of June 30, 2022Valuation TechniqueUnobservable InputRange
Weighted Average(1)
R&D, Regulatory and Commercialization-based Milestones$107 millionDiscounted Cash FlowDiscount Rate1%-2%1%
Probability of Payment80%-100%90%
Projected Year of Payment2022-20252023
Revenue-based Payments$112 millionDiscounted Cash FlowDiscount Rate6%-14%7%
Probability of Payment100%100%
Projected Year of Payment2023-20242023
(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.

Projected contingent payment amounts related to research and development (R&D), regulatory and commercialization-based milestones and revenue-based payments are discounted back to the current period, primarily using a discounted cash flow model. Significant increases or decreases in projected revenues, probabilities of payment, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement as of June 30, 2022.

Strategic Investments

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

As of
(in millions)June 30, 2022December 31, 2021
Equity method investments$212 $259 
Measurement alternative investments(1)
159 142 
Publicly-held securities(2)
5 10 
Notes receivable8  
$384 $412 
(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)    Publicly-held securities are measured at fair value with changes in fair value recognized in Other, net within our accompanying unaudited consolidated statements of operations.

12

These investments are classified as Other long-term assets within our accompanying unaudited consolidated balance sheets, in accordance with U.S. GAAP and our accounting policies.

As of June 30, 2022, the cost of our aggregated equity method investments exceeded our share of the underlying equity in net assets by $233 million, which represents amortizable intangible assets, in-process research and development (IPR&D), goodwill and deferred tax liabilities.

NOTE C – GOODWILL AND OTHER INTANGIBLE ASSETS

The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated goodwill impairment charges are as follows:
As of June 30, 2022As of December 31, 2021
(in millions)Gross Carrying AmountAccumulated Amortization/ Write-offsGross Carrying AmountAccumulated Amortization/ Write-offs
Technology-related$12,515 $(7,078)$11,957 $(6,754)
Patents487 (392)494 (398)
Other intangible assets1,953 (1,368)1,900 (1,325)
Amortizable intangible assets$14,955 $(8,838)$14,351 $(8,476)
    
Goodwill$22,783 $(9,900)$21,888 $(9,900)
IPR&D$112 $126 
Technology-related120 120 
Indefinite-lived intangible assets$232 $246 

The increase in our balance of goodwill and amortizable intangible assets is primarily related to our acquisition of Baylis Medical completed in the first quarter of 2022.

The following represents our goodwill balance by global reportable segment:
(in millions)MedSurgCardiovascularTotal
As of December 31, 2021$4,246 $7,741 $11,988 
Impact of foreign currency fluctuations and other changes in carrying value(5)(88)(93)
Goodwill acquired 989 989 
As of June 30, 2022$4,241 $8,642 $12,883 

In the first quarter of 2022, we reorganized our operational structure in order to strengthen our category leadership in the markets we serve and, in particular, benefit our Cardiology customers and patients. Following the reorganization, we have aggregated our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. We have revised prior periods to conform to the current year presentation.

Goodwill and Intangible Asset Impairments

We did not record any goodwill impairment charges in the first six months of 2022 or 2021. We test our goodwill balances in the second quarter of each year as of April 1 for impairment, or more frequently if impairment indicators are present or changes in circumstances suggest an impairment may exist.

We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. Following the reorganization of our operational structure in the first quarter of 2022, we identified the following reporting units for purposes of our annual goodwill impairment test: Interventional Cardiology, Rhythm Management, Peripheral Interventions, Endoscopy, Urology and Pelvic Health and Neuromodulation. Based on the criteria prescribed in FASB ASC Topic 350, Intangibles - Goodwill and Other (FASB ASC Topic 350), we aggregated the Interventional Cardiology Therapies and Watchman components of our Cardiology operating segment into a
13

single Interventional Cardiology reporting unit, and aggregated the Cardiac Rhythm Management and Electrophysiology components into a single Rhythm Management reporting unit.

In the second quarter of 2022, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASC Topic 350. The qualitative approach was used for testing reporting units where fair value has historically exceeded carrying value by greater than 100 percent, and all other reporting units were tested using the quantitative approach. For those tested using the qualitative approach, after assessing the totality of events, it was determined that it was not more likely than not that the fair value of the reporting units was less than their carrying value, and it was not deemed necessary to proceed to the quantitative test. For all reporting units tested using the quantitative approach, we determined that the fair value of each reporting unit exceeded their carrying value and concluded that goodwill was not impaired or at risk of impairment.

We recorded Intangible asset impairment charges of $7 million in the second quarter and first six months of 2022, and $45 million in the second quarter and first six months of 2021. We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets. In addition, we review our indefinite-lived intangible assets for classification and impairment more frequently if impairment indicators exist. During the second quarter of 2021, we determined it was more likely than not that one of our indefinite-lived intangible assets was impaired based on our qualitative assessment of impairment indicators. We tested the intangible asset for recoverability and recorded an impairment charge associated with incremental time and cost to complete the associated in-process research and development (IPR&D) project.

Refer to Note A – Basis of Presentation to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K for further discussion of our annual goodwill and intangible asset impairment testing.

NOTE D – HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

Derivative Instruments and Hedging Activities

We address market risk from changes in foreign currency exchange rates and interest rates through risk management programs which include the use of derivative and nonderivative financial instruments. We manage concentration of counterparty credit risk by limiting acceptable counterparties to major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to individual counterparties and by actively monitoring counterparty credit ratings. We also employ master netting arrangements that limit the risk of counterparty non-payment on a particular settlement date to the net gain that would have otherwise been received from the counterparty. Although not completely eliminated, we do not consider the risk of counterparty default to be significant as a result of these protections. Further, none of our derivative instruments are subject to collateral or other security arrangements, nor do they contain provisions that are dependent on our credit ratings from any credit rating agency.

Currency Hedging Instruments

Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities, forecasted intercompany and third-party transactions, and net investments in certain subsidiaries. We manage currency exchange rate risk at a consolidated level to reduce the cost of hedging by taking adv