GOODWILL AND INTANGIBLE ASSETS

Goodwill Impairment Testing and Charges

Under ASC Topic 350, Intangibles - Goodwill and Other, goodwill and intangible assets determined to have indefinite useful lives are not amortized. Instead these assets are evaluated for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. We perform our annual impairment test on the first day of the fiscal fourth quarter for each of our reporting units. Our reporting units for purposes of assessing goodwill impairment are organized primarily based on operating segments and geography and include: (a) North America Plasma, (b) North America Blood Center, (c) North America Hospital, (d) EMEA, (e) Asia-Pacific and (f) Japan. In the prior period, North America Blood Center and North America Hospital were components of a single reporting unit, Americas Blood Center and Hospital. During the fourth quarter of fiscal 2017, we completed certain organizational changes which resulted in the disaggregation of Americas Blood Center and Hospital into two separate reporting units. The goodwill associated with the legacy Americas Blood Center and Hospital reporting unit was allocated to the North America Blood Center and North America Hospital reporting units based on their relative fair values. The North America Plasma reporting unit is a separate operating segment with dedicated segment management due the size and scale of the Plasma business unit.

In fiscal 2017, we early adopted ASU No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for Goodwill Impairment. Under this amendment, entities perform their goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. We utilized a discounted cash flow approach in order to value our reporting units for the test, which required that we forecast future cash flows of the reporting units and discount the cash flow stream based upon a weighted average cost of capital that was derived, in part, from comparable companies within similar industries. The discounted cash flow calculations also included a terminal value calculation that was based upon an expected long-term growth rate for the applicable reporting unit. We believe that our procedures for estimating discounted future cash flows, including the terminal valuation, were reasonable and consistent with market conditions at the time of estimation. We corroborated the valuations that arose from the discounted cash flow approach by performing both a market multiple valuation and by reconciling the aggregate fair value of our reporting units to our market capitalization at the time of the test.

The results of the goodwill impairment test performed in the fourth quarter of fiscal 2017 indicated that the estimated fair value of all of our reporting units exceeded their respective carrying values, with the exception of North America Blood Center. For North America Blood Center we recorded an impairment charge of $57.0 million, which represented the entire goodwill balance associated with this reporting unit. There were no other reporting units at risk of impairment as of the fiscal 2017 annual test date.

During fiscal 2016, we recorded a goodwill impairment charge of $66.3 million associated with the EMEA reporting unit. At the time the impairment assessment was performed, this represented the entire goodwill balance of this reporting unit. During the first quarter of fiscal 2017, management reorganized its operating segments such that certain components of the Americas Blood Center and Hospital operating segment became components of the EMEA operating segment. As a result, we transferred $20.5 million of goodwill to the EMEA operating segment, which represented the portion of the goodwill associated with these components.

The changes in the carrying amount of goodwill by operating segment for fiscal 2017 and 2016 are as follows:



(In thousands)	Japan			EMEA			North America Plasma		All Other			Total
Carrying amount as of March 28, 2015	$	24,899		$	72,695		$	26,415	$	210,301		$	334,310
Impairment charge	—			(66,305		)	—		—			(66,305		)
Transfer of goodwill between segments	—			(6,390		)	—		6,390			—
Currency translation	(16		)	—			—		(149		)	(165		)
Carrying amount as of April 2, 2016	$	24,883		$	—		$	26,415	$	216,542		$	267,840
Impairment charge	—			—			—		(56,989		)	(56,989		)
Transfer of goodwill between segments	—			20,545			—		(20,545		)	—
Currency translation	(3		)	(2		)	—		(5		)	(10		)
Carrying amount as of April 1, 2017	$	24,880		$	20,543		$	26,415	$	139,003		$	210,841

Intangible Asset Impairment

During fiscal 2017, we impaired $4.8 million of intangible assets as a result of our review of non-core and underperforming assets and our decision to discontinue the use of and investment in certain assets, of which $4.0 million was included within cost of goods sold and $0.8 million was included within impairment of assets on the consolidated statements of (loss) income. These impairments impacted our All Other reportable segment.

During fiscal 2016, we recorded intangible asset impairment charges of $25.8 million, of which $6.6 million was included within cost of goods sold, while the remaining $19.2 million was included within impairment of assets on the consolidated statements of (loss) income. Of these intangible impairments, $6.6 million related to EMEA and the remaining $19.2 million related to our All Other reportable segment. These impairment charges primarily related to the SOLX technology acquired from Hemerus Medical, LLC, which resulted in impairment charges of $18.7 million and included the reversal of the $4.9 million of contingent consideration associated with the acquisition. The remaining $7.1 million of impairment charges recorded in fiscal 2016 was due to changes in the strategic direction of the Company.

The gross carrying amount of intangible assets and the related accumulated amortization as of April 1, 2017 and April 2, 2016 is as follows:



(In thousands)	Gross Carrying Amount		Accumulated Amortization⁽¹⁾		Net
As of April 1, 2017
Amortizable:
Patents	$	9,183	$	8,043	$	1,140
Capitalized software	49,948		21,563		28,385
Other developed technology	117,712		72,594		45,118
Customer contracts and related relationships	194,876		108,073		86,803
Trade names	7,017		5,499		1,518
Total	$	378,736	$	215,772	$	162,964
Non-amortizable:
In-process software development	$	12,743
In-process patents	1,833
Total	$	14,576



(In thousands)	Gross Carrying Amount		Accumulated Amortization⁽¹⁾		Net
As of April 2, 2016
Amortizable:
Patents	$	8,545	$	7,542	$	1,003
Capitalized software	40,488		14,791		25,697
Other developed technology	126,142		73,475		52,667
Customer contracts and related relationships	196,085		89,804		106,281
Trade names	7,083		5,204		1,879
Total	$	378,343	$	190,816	$	187,527
Non-amortizable:
In-process software development	$	14,427
In-process patents	2,504
Total	$	16,931
⁽¹⁾Includes impairment of SOLX and other intangible assets, as discussed above.

Intangible assets include the value assigned to license rights and other developed technology, patents, customer contracts and relationships and trade names. The estimated useful lives for all of these intangible assets are 2 to 19 years. The changes to the net carrying value of our intangible assets from April 2, 2016 to April 1, 2017 reflect the impact of amortization expense and impairments of intangible assets, partially offset by the investment in capitalized software.

Aggregate amortization expense for amortized intangible assets for fiscal 2017 and 2016 was $37.2 million and $59.3 million, respectively, which included $4.0 million and $25.4 million, respectively, of amortization expense as a result of the intangible asset impairments discussed above. Fiscal 2015 amortization expense was $33.5 million. Future annual amortization expense on intangible assets is estimated to be as follows:



(In thousands)
Fiscal 2018	$	31,495
Fiscal 2019	$	30,089
Fiscal 2020	$	28,091
Fiscal 2021	$	26,190
Fiscal 2022	$	25,485