XML 31 R9.htm IDEA: XBRL DOCUMENT
v3.2.0.727

GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended
--- | ---
Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS In the first quarter of 2015 the Company revised its reportable segments in connection with the realignment of its portfolio. Specifically, the Company integrated the five existing business divisions into three global divisions, no longer focusing on international as a separate reportable segment but managing each business globally. The change in reportable segments resulted in the Company's requirement to reallocate existing goodwill to the new reportable segments based on the relative-fair-value of the Company's four underlying reporting units. With the reportable segments now being managed at a global level, goodwill previously assigned to the EMEA, LAPAC, and Private Label reporting units was reallocated to the new global reporting units. The Company estimated the fair value of the reporting units using a discounted cash flow model, which incorporates significant estimates and assumptions made by management which, by their nature, are characterized by uncertainty. Inputs used to fair value the Company's reporting units are considered inputs of the fair value hierarchy. For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement. The key assumptions impacting the valuation included the following:
• | The reporting unit's financial projections, which are based on management's assessment of regional and macroeconomic variables, industry trends and market opportunities, and the Company's strategic objectives and future growth plans.
• | The projected terminal value for the reporting unit, which represents the present value of projected cash flows beyond the last period in the discounted cash flow analysis. The terminal value reflects the Company's assumptions related to long-term growth rates and profitability, which are based on several factors, including local and macroeconomic variables, market opportunities, and future growth plans.
• | The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data as well as the Company's specific risk factors that are likely to be considered by a market participant. The weighted-average cost of capital is the Company's estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.
Based on the Company's fair value calculations, with the exception of the Spine reporting unit, given the excess of the Specialty Surgical Solutions Instruments, Specialty Surgical Solutions Neurosurgery, and Orthopedics and Tissue Technologies estimated fair value over their carrying value after the reallocation of goodwill, management concluded that any future goodwill impairment is not likely. The Company's allocation of goodwill to the Spine reporting unit has been impaired during the first quarter of 2015 as a result of the carrying value of its goodwill exceeding the implied fair value. Refer to Note 12 - Segment and Geographic Information for more information on the change in reportable segments. Changes in the carrying amount of goodwill for the six months ended June 30, 2015 were as follows:
| Specialty Surgical Solutions |  | Orthopedics and Tissue Technologies |  | Spine |  | Total
| (In thousands)
Goodwill, gross | $ | 281,829 |  |  | $ | 81,650 |  |  | $ | 409 |  |  | $ | 363,888 |
Accumulated impairment losses | — |  |  | — |  |  | — |  |  | — |
Goodwill at December 31, 2014 | 281,829 |  |  | 81,650 |  |  | 409 |  |  | 363,888 |
MicroFrance working capital and purchase price adjustments | (828 | ) |  | — |  |  | — |  |  | (828 | )
Metasurg working capital and purchase price adjustment | — |  |  | 263 |  |  | — |  |  | 263 |
Goodwill impairment charge | — |  |  | — |  |  | (409 | ) |  | (409 | )
Foreign currency translation | (4,451 | ) |  | (1,441 | ) |  | — |  |  | (5,892 | )
Balance, June 30, 2015 | $ | 276,550 |  |  | $ | 80,472 |  |  | $ | — |  |  | $ | 357,022 |
The components of the Company’s identifiable intangible assets were as follows:
| June 30, 2015
| Weighted Average Life |  | Cost |  | Accumulated Amortization |  | Net
| (Dollars in thousands)
Completed technology | 18 years |  | $ | 344,406 |  |  | $ | (72,393 | ) |  | $ | 272,013 |
Customer relationships | 12 years |  | 159,548 |  |  | (91,621 | ) |  | 67,927 |
Trademarks/brand names | 34 years |  | 43,221 |  |  | (15,814 | ) |  | 27,407 |
Trademarks/brand names | Indefinite |  | 48,484 |  |  | — |  |  | 48,484 |
Supplier relationships | 27 years |  | 34,721 |  |  | (11,522 | ) |  | 23,199 |
All other (1) | 4 years |  | 2,721 |  |  | (1,168 | ) |  | 1,553 |
|  |  | $ | 633,101 |  |  | $ | (192,518 | ) |  | $ | 440,583 |
| December 31, 2014
| Weighted Average Life |  | Cost |  | Accumulated Amortization |  | Net
| (Dollars in thousands)
Completed technology | 18 years |  | $ | 345,082 |  |  | $ | (62,920 | ) |  | $ | 282,162 |
Customer relationships | 12 years |  | 162,031 |  |  | (87,653 | ) |  | 74,378 |
Trademarks/brand names | 34 years |  | 44,520 |  |  | (15,755 | ) |  | 28,765 |
Trademarks/brand names | Indefinite |  | 48,484 |  |  | — |  |  | 48,484 |
Supplier relationships | 27 years |  | 34,721 |  |  | (10,809 | ) |  | 23,912 |
All other (1) | 4 years |  | 4,810 |  |  | (3,052 | ) |  | 1,758 |
|  |  | $ | 639,648 |  |  | $ | (180,189 | ) |  | $ | 459,459 |
(1) | At June 30, 2015 and December 31, 2014, all other included in-process research and development ("IPR&D") of $1.4 million in both periods, which was indefinite-lived.
During the six months ended June 30, 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 resulting from 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 in-process research and development) is expected to approximate $31.9 million in 2015, $29.7 million in 2016, $27.6 million in 2017, $27.3 million in 2018 and $26.5 million in 2019. Identifiable intangible assets are initially recorded at fair market value at the time of acquisition using an income or cost approach.

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 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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration