Goodwill and Other Intangible Assets (Notes)

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of goodwill, by business segment, are as follows (in thousands):



	LTC			SCG		Total
Goodwill balance as of January 1, 2013	$	3,570,866		$	490,437	$	4,061,303
Disposition of businesses	(4,145		)	—		(4,145		)
Other	298			—		298
Goodwill balance as of December 31, 2013	3,567,019			490,437		4,057,456
Goodwill acquired in the year ended December 31, 2014	1,123			—		1,123
Disposition of businesses	(41		)	—		(41		)
Other	3,268			—		3,268
Goodwill balance as of December 31, 2014	$	3,571,369		$	490,437	$	4,061,806

For the year ended December 31, 2014, “other” includes adjustments related to the final terms of the Retail divestiture. See “Note 3 - Discontinued Operations”. For the year ended December 31, 2013, “other” includes the settlement of acquisition matters relating to prior-year acquisitions.

In connection with the Company’s goodwill impairment analysis for the years ended December 31, 2014 and 2013, the Company performed step one of the quantitative goodwill impairment test. Using an estimated fair value based on discounted cash flows, which required significant management judgment, as well as a market approach that compared the reporting units’ earnings and revenue multiples to those of comparable public companies for the Company’s continuing operations, the estimated fair value of the Company’s reporting units was greater than the carrying value, indicating that goodwill was not impaired.

The table below presents the Company’s other identifiable intangible assets, all of which are subject to amortization, except trademark and trade names as described below (in thousands):



				December 31, 2014
	Original Amortization Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationship assets	6	—	15	$	318,464	$	(239,486	)	$	78,978
Trademarks and trade names			(a)	13,972		(1,944		)	12,028
Non-compete agreements	2	—	15	23,402		(15,757		)	7,645
Other	4	—	4	387		(96		)	291
Total				$	356,225	$	(257,283	)	$	98,942

				December 31, 2013
	Original Amortization Life (in years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationship assets	6	—	15	$	318,281	$	(211,191	)	$	107,090
Trademarks and trade names			(a)	13,972		(1,496		)	12,476
Non-compete agreements	2	—	15	24,991		(14,970		)	10,021
Other	4	—	4	$	387	$	—		$	387
Total				$	357,631	$	(227,657	)	$	129,974

(a)Certain of Omnicare’s trademarks and trade names are amortized over their useful lives ranging up to five years.

The remainder have indefinite useful lives as further discussed below. The value of intangible assets with indefinite lives is $12 million as of December 31, 2014 and 2013.

Amortization expense related to identifiable intangible assets was $31 million, $33 million and $39 million for the years ended December 31, 2014, 2013 and 2012, respectively. Omnicare’s trademarks and trade names primarily constitute identifiable intangible assets with indefinite useful lives. Accordingly, these trademarks and trade names are not amortized, but are reviewed annually for impairment. The Company performed an annual assessment for the years ended December 31, 2014 and 2013 and concluded that these assets had not been impaired. The fair value of these trademarks and trade names at December 31, 2014 and 2013 was determined using projected revenue and cash flows developed by the Company (Level 3 inputs).

Estimated annual amortization expense for intangible assets subject to amortization at December 31, 2014 for the next five fiscal years is as follows (in thousands):



Year ended	Amortization
December 31,	Expense
2015	$	30,245
2016	19,974
2017	11,911
2018	9,308
2019	6,491

- 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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