Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment and in total:



(in millions)	Pharmaceutical (1)			Medical			Total
Balance at June 30, 2012	$	2,876		$	1,102		$	3,978
Goodwill acquired, net of purchase price adjustments	40			1,409			1,449
Foreign currency translation adjustments and other	7			(4		)	3
Impairment	(829		)	—			(829		)
Balance at June 30, 2013	$	2,094		$	2,507		$	4,601
Goodwill acquired, net of purchase price adjustments	68			216			284
Foreign currency translation adjustments and other	(4		)	(3		)	(7		)
Balance at June 30, 2014	$	2,158		$	2,720		$	4,878


(1)	At June 30, 2014 and 2013, the accumulated goodwill impairment loss was $829 million.

Fiscal 2014

The increase in the Medical segment goodwill during fiscal 2014 is primarily due to the AccessClosure acquisition. Goodwill recognized in connection with this acquisition primarily represents the expected benefits from synergies of integrating this business, the existing workforce of the acquired entity, and expected growth from new customers, new products, and improvements to existing technologies. See Note 2 for further discussion of this acquisition.

Fiscal 2013

The increase in the Medical segment goodwill during fiscal 2013 is primarily due to the AssuraMed acquisition. Goodwill recognized in connection with this acquisition primarily represents the expected benefits from synergies of integrating this business, the existing workforce of the acquired entity, expected growth from new customers and long-term brand value. See Note 2 for further discussion of this acquisition.

The decrease in the Pharmaceutical segment goodwill during fiscal 2013 is primarily due to an $829 million ($799 million, net of tax) non-cash goodwill impairment charge related to our Nuclear Pharmacy Services division, which is included in impairments and loss on disposal of assets in our consolidated statements of earnings. This impairment charge did not impact our liquidity, cash flows from operations, or compliance with debt covenants.

As a result of significant softness in the low-energy diagnostics market, we performed interim goodwill impairment testing for our Nuclear Pharmacy Services division during the three months ended December 31, 2012 and determined that there was no impairment, as the fair value of the reporting unit was estimated to be in excess of its carrying amount. During the second half of fiscal 2013, we experienced sustained volume declines and price erosion for the core, low-energy products provided by this division. In addition, we experienced reduced sales for some existing high-energy diagnostic products, slower-than-expected adoption of new high-energy diagnostic products, and reimbursement developments that could have adversely impacted the future growth of these products. Using this information, we adjusted our outlook and long-term business plans for this division during our annual budgeting process. This update resulted in significant reductions in the anticipated future cash flows and estimated fair value for this reporting unit.

We completed our annual goodwill impairment test for fiscal 2013, which we perform annually in the fourth quarter, in conjunction with the preparation of our fiscal 2013 consolidated financial statements. Using a combination of the income-based approach (using a discount rate of 10 percent) and the market-based approach, the fair value of this reporting unit was estimated to be below the carrying amount and therefore indicated impairment. The second step of the impairment test resulted in the impairment of the entire $829 million carrying amount of goodwill for this reporting unit. Our fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements.

Other Intangible Assets

Other intangible assets are amortized over periods ranging from one to twenty years. The following tables summarize other intangible assets by class at June 30:



	2014
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	14	$	—	$	14
Total indefinite-life intangibles	14		—		14

Definite-life intangibles:
Customer relationships	1,043		388		655
Trademarks, trade names and patents	213		69		144
Non-compete agreements	15		11		4
Developed technology and other	243		68		175
Total definite-life intangibles	1,514		536		978
Total other intangible assets	$	1,528	$	536	$	992



	2013
(in millions)	Gross Intangible		Accumulated Amortization		Net Intangible
Indefinite-life intangibles:
Trademarks and other	$	11	$	—	$	11
Total indefinite-life intangibles	11		—		11

Definite-life intangibles:
Customer relationships	982		230		752
Trademarks, trade names and patents	209		49		160
Non-compete agreements	15		10		5
Developed technology and other	101		56		45
Total definite-life intangibles	1,307		345		962
Total other intangible assets	$	1,318	$	345	$	973

Total amortization of intangible assets was $188 million, $121 million and $79 million for fiscal 2014, 2013 and 2012, respectively. Estimated annual amortization of intangible assets for fiscal 2015 through 2019 is as follows: $177 million, $165 million, $153 million, $116 million and $65 million.

The increase in amortization during fiscal 2014 and 2013 is primarily due to the acquisition of AssuraMed. See Note 2 for further discussion of this acquisition.

- 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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