GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of goodwill for the three-month period ended March 31, 2018 were as follows:



	Codman Specialty Surgical			Orthopedics and Tissue Technologies		Total
	(In thousands)
Goodwill at December 31, 2017	$	634,767		$	303,138	$	937,905
Codman acquisition purchase price allocation adjustments	(2,783		)	—		(2,783		)
Foreign currency translation	6,335			3,038		9,373
Balance, March 31, 2018	$	638,319		$	306,176	$	944,495

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



	March 31, 2018
	Weighted Average Life	Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Completed technology	19 years	$	873,943	$	(135,897	)	$	738,046
Customer relationships	13 years	233,922		(95,942		)	137,980
Trademarks/brand names	28 years	105,187		(23,258		)	81,929
Codman trade name	Indefinite	162,900		—			162,900
Supplier relationships	27 years	34,721		(15,449		)	19,272
All other⁽¹⁾	4 years	11,347		(3,520		)	7,827
		$	1,422,020	$	(274,066	)	$	1,147,954



	December 31, 2017
	Weighted Average Life	Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Completed technology	19 years	$	869,174	$	(124,096	)	$	745,078
Customer relationships	13 years	233,430		(91,961		)	141,469
Trademarks/brand names	28 years	104,879		(22,293		)	82,586
Codman trade name	Indefinite	162,900		—			162,900
Supplier relationships	27 years	34,721		(15,092		)	19,629
All other⁽¹⁾	4 years	11,511		(3,546		)	7,965
		$	1,416,615	$	(256,988	)	$	1,159,627


⁽¹⁾	At March 31, 2018 and December 31, 2017, all other included in-process research and development ("IPR&D") costs of $1.0 million in both periods, which was indefinite-lived.

During the third quarter of 2017, the Company recorded an impairment charge of $3.3 million in cost of goods sold related to completed technology assets acquired from Tarsus Medical, Inc. ("Tarsus Technology"), since the underlying product will no longer be sold. Tarsus Technology was included in the Orthopedic and Tissue Technology segment.

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 be approximately $67.5 million in 2018, $67.4 million in 2019, $67.2 million in 2020, $66.2 million in 2021, $62.7 million in 2022, $61.8 million in 2023 and $603.9 million thereafter. 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.

+ References + Details