Goodwill and Intangible Assets

12 Months Ended

May 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets other than goodwill are amortized over their estimated useful lives on either a straight-line basis or proportionately to the benefit being realized. Useful lives range from two to eighteen years. The Company periodically reviews the estimated useful lives of intangible assets and review such assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets or asset groups may not be recoverable. If an intangible asset or asset group is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset.

Goodwill is not amortized, but rather, is tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.

The Company's annual testing for impairment of goodwill was completed as of December 31, 2016. The Company operates as a single operating segment with one reporting unit and consequently evaluates goodwill for impairment based on an evaluation of the fair value of the Company as a whole. The Company determines the fair value of the reporting unit based on the market valuation approach and concluded that it was not more-likely-than-not that the fair value of the Company's reporting unit was less than its carrying value.

Even though the Company determined that there was no goodwill impairment as of December 31, 2016, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that the reporting unit or a significant portion of the reporting unit will be sold or disposed of, would require an interim assessment for the reporting unit prior to the next required annual assessment as of December 31, 2017. The Company continued to assess for potential impairment through May 31, 2017 and noted no events that would be considered a triggering event. There were no adjustments to goodwill for the years ended May 31, 2017 and 2016.

As of May 31, 2017 and 2016, intangible assets consisted of the following:



	May 31, 2017
	Gross carrying value		Accumulated amortization			Net carrying value
(in thousands)
Product technologies	$	147,172	$	(59,696	)	$	87,476
Customer relationships	56,375		(19,194		)	37,181
Trademarks	28,400		(9,069		)	19,331
Licenses	4,487		(3,821		)	666
Distributor relationships	1,250		(229		)	1,021
	$	237,684	$	(92,009	)	$	145,675



	May 31, 2016
	Gross carrying value		Accumulated amortization			Net carrying value
(in thousands)
Product technologies	$	148,387	$	(51,313	)	$	97,074
Customer relationships	88,389		(47,133		)	41,256
Trademarks	28,470		(6,242		)	22,228
Licenses	7,931		(6,716		)	1,215
Distributor relationships	2,150		(946		)	1,204
In process R&D	3,600		—			3,600
	$	278,927	$	(112,350	)	$	166,577

Amortization expense was $17.3 million, $18.0 million and $18.0 million for fiscal years 2017, 2016 and 2015, respectively.

Annual amortization of these intangible assets is expected to approximate the following amounts for each of the next five fiscal years:



(in thousands)
2018	$	16,500
2019	16,132
2020	14,578
2021	13,627
2022	12,952
2023 and thereafter	71,886
	$	145,675

- 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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