Goodwill and Long-lived Assets

9 Months Ended

Sep. 30, 2017

Notes To Financial Statements [Abstract]

Goodwill

The change in the carrying value of goodwill for the nine months ended September 30, 2017, all attributable to our Clear Aligner reporting unit, is as follows (in thousands):



	Total
Balance as of December 31, 2016	$	61,044
Goodwill from distributor acquisitions	3,247
Adjustments¹	324
Balance as of September 30, 2017	$	64,615

¹The adjustments to goodwill during the period were related to foreign currency translation and purchase accounting adjustments within the measurement period.

During the fourth quarter of fiscal 2016, we performed the annual goodwill impairment testing and found no impairment as the fair value of our Clear Aligner reporting unit was significantly in excess of the carrying value.

Intangible Long-Lived Assets

Acquired intangible long-lived assets are being amortized as follows (in thousands):



	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of September 30, 2017		Accumulated Amortization			Accumulated Impairment Loss			Net Carrying Value as of September 30, 2017
Trademarks	15	$	7,100	$	(1,734	)	$	(4,179	)	$	1,187
Existing technology	13	12,600		(4,563		)	(4,328		)	3,709
Customer relationships	11	33,500		(14,216		)	(10,751		)	8,533
Reacquired rights¹	3	7,500		(749		)	—			6,751
Patents	8	6,316		(1,307		)	—			5,009
Other	2	618		(352		)	—			266
Total intangible assets		$	67,634	$	(22,921	)	$	(19,258	)	$	25,455



	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of December 31, 2016		Accumulated Amortization			Accumulated Impairment Loss			Net Carrying Value as of December 31, 2016
Trademarks	15	$	7,100	$	(1,631	)	$	(4,179	)	$	1,290
Existing technology	13	12,600		(4,141		)	(4,328		)	4,131
Customer relationships	11	33,500		(12,819		)	(10,751		)	9,930
Patents	8	6,316		(713		)	—			5,603
Total intangible assets		$	59,516	$	(19,304	)	$	(19,258	)	$	20,954

¹ The fair value of reacquired rights obtained from distributor acquisitions during the the first quarter of fiscal year 2017 is valued using the income approach. In addition, we effectively settled the pre-existing relationship with the distributors by assessing whether the distributor agreements include favorable or unfavorable terms compared to current market rates. Based on the assessment, we determined that the distributor agreements had terms that are consistent with market rates and, therefore, no settlement gains or losses are recorded associated with the acquisitions during the first quarter of fiscal year 2017.

The total estimated annual future amortization expense for these acquired intangible assets as of September 30, 2017 is as follows (in thousands):




Remainder of 2017	$	2,215
2018	6,002
2019	5,887
2020	3,772
2021	3,349
Thereafter	4,230
Total	$	25,455

Amortization for the nine months ended September 30, 2017 was $4.7 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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