GOODWILL AND INTANGIBLE ASSETS
The changes in goodwill for the years ended December 31, 2013 and 2012 were as follows:
|
| | | | | | | |
| 2013 | | 2012 |
| | | |
Balance, beginning of year | $ | 5,536 |
| | $ | 5,796 |
|
Goodwill acquired during the year | 150 |
| | 28 |
|
Goodwill impairment and write-off associated with sale of businesses during the year | (37 | ) | | (85 | ) |
Reclassification to non-current assets held for sale | — |
| | (219 | ) |
Increase related to foreign currency translation | — |
| | 16 |
|
| | | |
Balance, end of year | $ | 5,649 |
| | $ | 5,536 |
|
Approximately 90% of the Company’s goodwill as of December 31, 2013 and 2012 was associated with its DIS business.
For the year ended December 31, 2013, goodwill acquired was principally associated with the UMass, ATN, Dignity and ConVerge acquisitions. Goodwill acquired associated with the UMass, ATN and Dignity acquisitions, totaling $131 million, is deductible for tax purposes. Goodwill acquired associated with the ConVerge acquisition totaled $19 million, of which $4 million is deductible for tax purposes. These acquisitions also resulted in $108 million of intangible assets, principally comprised of customer-related intangibles. For the year ended December 31, 2012, goodwill acquired was principally associated with the acquisition of S.E.D., which is deductible for tax purposes. This acquisition resulted in $19 million of intangible assets, principally comprised of customer-related intangibles. See Note 5 for further details regarding acquisitions.
For the year ended December 31, 2013, the $37 million of goodwill written-off was associated with the sale of Enterix.
For the year ended December 31, 2012, goodwill impairment was associated with the agreement to sell HemoCue and the write-off of goodwill was associated with the sale of OralDNA. For further details regarding the sale of Enterix, see Note 6. For further details regarding goodwill included in non-current assets held for sale as of December 31, 2012, see Note 19.
Intangible assets at December 31, 2013 and 2012 consisted of the following:
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted Average Amort-ization Period (Years) | | December 31, 2013 | | December 31, 2012 |
| | | Cost | | Accumulated Amortization | | Net | | Cost | | Accumulated Amortization | | Net |
Amortizing intangible assets: | | |
| | |
| | |
| | |
| | |
|
Customer-related intangibles | 18 | | $ | 670 |
| | $ | (210 | ) | | $ | 460 |
| | $ | 567 |
| | $ | (173 | ) | | $ | 394 |
|
Non-compete agreements | 4 | | 43 |
| | (27 | ) | | 16 |
| | 38 |
| | (17 | ) | | 21 |
|
Technology | 14 | | 119 |
| | (28 | ) | | 91 |
| | 131 |
| | (25 | ) | | 106 |
|
Other | 8 | | 141 |
| | (57 | ) | | 84 |
| | 142 |
| | (38 | ) | | 104 |
|
| | | | | | | | | | | | | |
Total | 16 | | 973 |
| | (322 | ) | | 651 |
| | 878 |
| | (253 | ) | | 625 |
|
| | | | | | | | | | | | | |
Intangible assets not subject to amortization: | | |
| | |
| | |
| | |
| | |
|
Tradenames | | | 244 |
| | — |
| | 244 |
| | 246 |
| | — |
| | 246 |
|
Other | | | 1 |
| | — |
| | 1 |
| | 1 |
| | — |
| | 1 |
|
| | | | | | | | | | | | | |
Total intangible assets | | | $ | 1,218 |
| | $ | (322 | ) | | $ | 896 |
| | $ | 1,125 |
| | $ | (253 | ) | | $ | 872 |
|
Amortization expense related to intangible assets was $79 million, $75 million and $61 million for the years ended December 31, 2013, 2012 and 2011, respectively.
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of December 31, 2013 is as follows:
|
| | | |
Year Ending December 31, | |
|
2014 | $ | 77 |
|
2015 | 66 |
|
2016 | 60 |
|
2017 | 57 |
|
2018 | 50 |
|
Thereafter | 341 |
|
| |
Total | $ | 651 |
|
For the year ended December 31, 2013, intangible assets associated with the sale of Enterix with a net book value of $6 million (original cost of $14 million and accumulated amortization of $8 million) were written-off. For further details regarding the sale of Enterix, see Note 6. In December 2012, $219 million of goodwill and $111 million of intangible assets, net were reclassified to non-current assets held for sale in the consolidated balance sheets. For further discussion regarding assets held for sale, see Note 19.
