GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

The Company reviews goodwill for impairment annually during its third quarter and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company performed its most recent annual assessment on July 31, 2013 which resulted in a non-cash goodwill impairment charge of $46.7 million for its U.S. Spine reporting unit, which is a part of the U.S. Spine and Other reportable segment.

Changes in the carrying amount of goodwill for the three months ended March 31, 2014 were as follows:



	U.S. Neurosurgery		U.S. Instruments		U.S. Extremities		U.S. Spine and Other			International		Total
	(In thousands)
Goodwill, gross	$	95,165	$	58,033	$	61,079	$	56,325		$	25,900	$	296,502
Accumulated impairment losses							(46,738		)			(46,738		)
Goodwill at December 31, 2013	95,165		58,033		61,079		9,587			25,900		249,764
Confluent Surgical acquisition - preliminary allocation	94,315		—		—		—			23,400		117,715
Foreign currency translation	88		27		28		4			23		170
Goodwill at March 31, 2014	$	189,568	$	58,060	$	61,107	$	9,591		$	49,323	$	367,649

The components of the Company’s identifiable intangible assets were as follows:



	March 31, 2014
	Weighted Average Life	Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Completed technology	18 years	$	320,460	$	(49,607	)	$	270,853
Customer relationships	12 years	146,701		(81,926		)	64,775
Trademarks/brand names	31 years	33,601		(15,726		)	17,875
Trademarks/brand names	Indefinite	48,484		—			48,484
Supplier relationships	27 years	34,721		(9,677		)	25,044
All other⁽¹⁾	4 years	4,652		(2,237		)	2,415
		$	588,619	$	(159,173	)	$	429,446



	December 31, 2013
	Weighted Average Life	Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Completed technology	12 years	$	81,238	$	(45,343	)	$	35,895
Customer relationships	12 years	146,627		(79,624		)	67,003
Trademarks/brand names	31 years	33,703		(15,648		)	18,055
Trademarks/brand names	Indefinite	48,484		—			48,484
Supplier relationships	27 years	34,721		(9,305		)	25,416
All other⁽¹⁾	5 years	4,251		(1,941		)	2,310
		$	349,024	$	(151,861	)	$	197,163


⁽¹⁾	At March 31, 2014 and December 31, 2013, all other included in-process research and development ("IPR&D") of $1.4 million in both periods, which was indefinite-lived.

During the three months ended March 31, 2014, the Company recorded an impairment charge of $0.6 million in cost of goods sold related to technology assets acquired from Confluent Surgical that will no longer be sold due to a regulatory event that occurred after the acquisition date.

Based on quarter-end exchange rates, annual amortization expense (including amounts reported in cost of product revenues, but excluding any possible future amortization associated with acquired IPR&D) is expected to approximate $30.9 million in 2014, $28.8 million in 2015, $26.5 million in 2016, $24.4 million in 2017 and $24.1 million in 2018. Identifiable intangible assets are initially recorded at fair market value at the time of acquisition using an income or cost approach.

- 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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