XML 52 R19.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Goodwill and Intangible Assets, Net | 12 Months Ended
--- | ---
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | GOODWILL AND INTANGIBLE ASSETS, NET A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Our business combinations regularly include contingent consideration arrangements that require additional consideration to be paid based on the achievement of established objectives, most commonly related to the retention or growth of the customer base during the post-combination period. We assess contingent consideration to determine if it is part of the business combination or if it should be accounted for separately from the business combination in the post-combination period. Contingent consideration is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved, with changes in fair value recognized in earnings. Changes in fair value of contingent consideration and differences arising upon settlement were not material during the years ended December 31, 2018, 2017 and 2016. See "Note 4. Acquisitions and Investments" for additional information regarding contingent consideration arising from recent business acquisitions. We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. The more likely than not threshold is defined as having a likelihood of more than 50%. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we would assess the fair value of all of our reporting unit and compare the fair value of the reporting unit to carrying value to determine if any impairment is necessary. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to assess the fair value of all of our reporting units and compare the fair value of the reporting units to carrying value to determine if any impairment is necessary. Doing so does not preclude us from performing the qualitative assessment in any subsequent period. In the fourth quarter of 2018, we elected to bypass the qualitative approach that allows the assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and instead proceeded directly to assessing the fair value of all of our reporting units and comparing the fair value of the reporting units to the carrying value to determine if any impairment is necessary. We estimate the fair values of applicable reporting units using an income approach based on discounted forecasted cash flows. We make significant assumptions about the extent and timing of future cash flows, growth rates and discount rates. Model assumptions are based on our projections and best estimates, using appropriate and customary market participant assumptions. In addition, we make certain assumptions in allocating shared assets and liabilities to individual reporting units in determining the carrying value of each reporting unit. Changes in forecasted cash flows or the discount rate would affect the estimated fair values of our reporting units and could result in a goodwill impairment charge in a future period. No goodwill impairments were identified during the years ended December 31, 2018, 2017 or 2016. We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to adjust the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset, and applying a risk-adjusted discount rate. We had no impairments of our intangible assets during the years ended December 31, 2018 and 2017. During the first half of 2016, management reviewed the OPTI Medical product offerings. As a result of this review, we discontinued certain development activities in the human point-of-care medical diagnostics market during March 2016 that was devoted to a new platform and focused our efforts in this market on supporting our current generation OPTI CCA-TS2 Blood Gas and Electrolyte analyzer. Non-cash intangible asset impairments of $2.2 million were recorded within our condensed consolidated statements of income, within general and administrative expenses, within our Other segment, during 2016. The intangibles associated with our OPTI Medical human point-of-care medical diagnostics market are fully written off. We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:
Asset Classification |  | Estimated Useful Life
﻿ |  |
Product rights(1) |  | 5 to 15 years
Customer-related intangible assets(2) |  | 3 to 17 years
Noncompete agreements |  | 3 to 5 years
(1) | Product rights comprise certain technologies, intellectual property, licenses, and trade names acquired from third parties.
(2) | Customer-related intangible assets are comprised of customer lists and customer relationships acquired from third parties.
Intangible assets other than goodwill consisted of the following (in thousands):
﻿ |  | December 31, 2018 |  | December 31, 2017
﻿ |  | Cost |  | Accumulated Amortization |  | Net |  | Cost |  | Accumulated Amortization |  | Net
Product rights(1) |  | 27,060 |  |  | 19,153 |  |  | 7,907 |  |  | 32,558 |  |  | 25,251 |  |  | 7,307 |
Customer-related intangible assets(2) |  | 77,015 |  |  | 43,352 |  |  | 33,663 |  |  | 80,398 |  |  | 44,382 |  |  | 36,016 |
Noncompete agreements |  | 856 |  |  | 601 |  |  | 255 |  |  | 1,271 |  |  | 748 |  |  | 523 |
﻿ |  | $ | 104,931 |  |  | $ | 63,106 |  |  | $ | 41,825 |  |  | $ | 114,227 |  |  | $ | 70,381 |  |  | $ | 43,846 |
The above table excludes fully amortized intangible assets for the periods presented.
(1) | Product rights comprise certain technologies, licenses and trade names acquired from third parties.
(2) | Customer-related intangible assets are comprised of customer lists and customer relationships acquired from third parties.
Amortization expense of intangible assets other than goodwill was $8.9 million, $9.0 million, and $9.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. At December 31, 2018, the aggregate amortization expense associated with intangible assets is estimated to be as follows for each of the next five years and thereafter (in thousands):
﻿ | Amortization Expense
﻿ |  |
2019 | $ | 8,450 |
2020 | 7,087 |
2021 | 6,232 |
2022 | 5,063 |
2023 | 3,330 |
Thereafter | 11,663 |
﻿ | $ | 41,825 |
The changes in the carrying amount of goodwill for the years ended December 31, 2018, 2017 and 2016, were as follows (in thousands):
﻿ |  | CAG |  | Water |  | LPD |  | Other |  | Consolidated Total
Balance as of December 31, 2015 |  | $ | 145,191 |  |  | $ | 13,038 |  |  | $ | 14,174 |  |  | $ | 6,531 |  |  | $ | 178,934 |
Business combinations |  | 1,720 |  |  | — |  |  | — |  |  | — |  |  | 1,720 |
Impact of changes in foreign currency exchange rates |  | (717 | ) |  | (2,148 | ) |  | 439 |  |  | — |  |  | (2,426 | )
Balance as of December 31, 2016 |  | $ | 146,194 |  |  | $ | 10,890 |  |  | $ | 14,613 |  |  | $ | 6,531 |  |  | $ | 178,228 |
Business combinations |  | 13,541 |  |  | — |  |  | — |  |  | — |  |  | 13,541 |
Impact of changes in foreign currency exchange rates |  | 6,501 |  |  | 1,061 |  |  | 542 |  |  | — |  |  | 8,104 |
Balance as of December 31, 2017 |  | $ | 166,236 |  |  | $ | 11,951 |  |  | $ | 15,155 |  |  | $ | 6,531 |  |  | $ | 199,873 |
Business combinations |  | 20,282 |  |  | — |  |  | — |  |  | — |  |  | 20,282 |
Impact of changes in foreign currency exchange rates |  | (4,132 | ) |  | (730 | ) |  | (804 | ) |  | — |  |  | (5,666 | )
Balance as of December 31, 2018 |  | $ | 182,386 |  |  | $ | 11,221 |  |  | $ | 14,351 |  |  | $ | 6,531 |  |  | $ | 214,489 |
See "Note 4. Acquisitions and Investments" for information regarding goodwill and other intangible assets recognized in connection with the acquisition of businesses and other assets during the years ended December 31, 2018, 2017 and 2016.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration