Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

4. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:


	December 31, 2013							December 31, 2012
(In thousands)	Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net		Gross Carrying Amount		Accumulated Amortization			Intangible Assets, Net
Intangibles subject to amortization
Proprietary technology		$445,960		($231,634	)		$214,326		$361,660		($197,383	)		$164,277
Customer contracts and relationships		542,205		(352,560	)		189,645		534,355		(323,646	)		210,709

Total		$988,165		($584,194	)		$403,971		$896,015		($521,029	)		$374,986

Intangibles not subject to amortization
Registered trademarks							$52,000							$52,000
Goodwill							1,189,585							1,039,364

Total							$1,241,585							$1,091,364

During the fourth quarter of 2013, we revised our reportable segments in connection with changes to our organizational and management structure that were announced earlier in 2013. After the finalization of these changes and based upon the information used by our chief operating decision maker ("CODM") for making operating decisions and assessing performance, we identified the following reportable segments: Clinical and Financial Solutions, Population Health, and Managed Services. Refer to Note 14, “Business Segments” for additional information.

As a result of the changes to our reportable segments, we assessed our revised reporting units and allocated goodwill. As part of this assessment, we determined the fair value of each of our reporting units using a discounted cash flow analysis and a market approach considering benchmark company market multiples. A discount rate of 10% was applied to the cash flows used in the discounted cash flow analysis. We also considered our market capitalization on the date of the analysis. Goodwill balances, which could be traced to specific products acquired as part of businesses we purchased within the past year, were allocated to the reporting unit where such products are currently managed and sold. Any remaining goodwill was then allocated to each reporting unit based on the unit’s relative fair value. The resulting allocation of goodwill to our reportable segments is shown below.

In connection with our acquisitions of dbMotion and Jardogs during the year ended December 31, 2013, we recognized additional goodwill in the amount of $153.6 million which remains subject to future adjustments before the close of the measurement periods in the first quarter of 2014. Refer to Note 2, “Business Combinations” for additional information regarding the dbMotion and Jardogs acquisitions.

There were no changes to the total carrying value of goodwill during 2012 and no impairments were recorded during the years ended December 31, 2013, 2012 and 2011. Changes in the carrying amounts of goodwill by reportable segment for the year ended December 31, 2013 were as follows:


(In thousands)	Clinical and Financial Solutions			Population Health		Managed Services		Total
Balance as of December 31, 2012		$629,195			$271,569		$138,600		$1,039,364
Additions arising from business acquisitions:
dbMotion		0			136,631		0		136,631
Jardogs		0			17,016		0		17,016

Total additions to goodwill		0			153,647		0		153,647
Impairment of goodwill		0			0		0		0
Other adjustments to goodwill		(3,426	)		0		0		(3,426	)

Balance as of December 31, 2013		$625,769			$425,216		$138,600		$1,189,585

We performed our annual goodwill impairment test as of October 1, 2013 and again as of December 1, 2013 in conjunction with the allocation of goodwill to our revised reporting units. The fair value of each reporting unit exceeded its carrying value and no indicators of impairment were identified as a result of both tests.

Intangible assets are being amortized over their estimated useful lives and amortization expense related to intangible assets was as follows:


	Year Ended December 31,
(In thousands)	2013		2012		2011
Proprietary technology amortization included in cost of revenue, system sales		$33,970		$27,226		$27,478
Intangible amortization included in operating expenses		31,253		35,635		37,344

Total intangible amortization expense		$65,223		$62,861		$64,822

Estimated future amortization expense for the intangible assets that exist as of December 31, 2013 is as follows:


(Dollar amounts in thousands)	Year Ended December 31,
2014		$62,981
2015		56,698
2016		44,314
2017		39,317
2018		32,657
Thereafter		168,004

Total		$403,971

- 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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