Goodwill And Other Intangible Assets

3 Months Ended

12 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

The following is a rollforward of the Company’s goodwill ($ in millions):



Balance, December 31, 2016	$	23,826.9
Adjustments due to finalization of purchase price allocations	(64.7		)
Foreign currency translation and other	252.8
Balance, March 31, 2017	$	24,015.0

The carrying value of goodwill by segment is summarized as follows ($ in millions):



	March 31, 2017		December 31, 2016
Life Sciences	$	11,751.6	$	11,610.3
Diagnostics	6,910.7		6,903.0
Dental	3,239.9		3,215.6
Environmental & Applied Solutions	2,112.8		2,098.0
Total	$	24,015.0	$	23,826.9

The Company has not identified any “triggering” events which indicate a potential impairment of goodwill in the first quarter of 2017.

GOODWILL AND OTHER INTANGIBLE ASSETS

As discussed in Note 2, goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities and noncontrolling interests. Management assesses the goodwill of each of its reporting units for impairment at least annually at the beginning of the fourth quarter and as “triggering” events occur that indicate that it is more likely than not that an impairment exists. The Company elected to bypass the optional qualitative goodwill assessment allowed by applicable accounting standards and performed a quantitative impairment test for all reporting units as this was determined to be the most effective method to assess for impairment across a large spectrum of reporting units.

The Company estimates the fair value of its reporting units primarily using a market approach, based on current trading multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”) for companies operating in businesses similar to each of the Company’s reporting units, in addition to recent available market sale transactions of comparable businesses. In certain circumstances the Company also estimates fair value utilizing a discounted cash flow analysis (i.e., an income approach) in order to validate the results of the market approach. If the estimated fair value of the reporting unit is less than its carrying value, the Company must perform additional analysis to determine if the reporting unit’s goodwill has been impaired.

As of December 31, 2016, the Company had eight reporting units for goodwill impairment testing. As of the date of the 2016 annual impairment test, the carrying value of the goodwill included in each individual reporting unit ranged from $503 million to approximately $11.7 billion. No goodwill impairment charges were recorded for the years ended December 31, 2016, 2015 and 2014 and no “triggering” events have occurred subsequent to the performance of the 2016 annual impairment test. The factors used by management in its impairment analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings.

The following is a rollforward of the Company’s goodwill by segment ($ in millions):



	Life Sciences				Diagnostics			Dental				Environmental & Applied Solutions			Total
Balance, January 1, 2015	$	1,933.2			$	4,412.1		$	3,142.9			$	2,086.9		$	11,575.1
Attributable to 2015 acquisitions	9,560.2				180.3			7.0				93.5			9,841.0
Adjustments due to finalization of purchase price adjustments	(4.6		)		(6.9		)	197.9			^(a)	—			186.4
Foreign currency translation and other	(180.3		)		(198.1		)	(111.7		)		(97.5		)	(587.6		)
Balance, December 31, 2015	11,308.5				4,387.4			3,236.1				2,082.9			21,014.9
Attributable to 2016 acquisitions	438.6				2,590.5			4.2				28.5			3,061.8
Adjustments due to finalization of purchase price adjustments	89.7			^(b)	(2.2		)	—				5.1			92.6
Foreign currency translation and other	(226.5		)		(72.7		)	(24.7		)		(18.5		)	(342.4		)
Balance, December 31, 2016	$	11,610.3			$	6,903.0		$	3,215.6			$	2,098.0		$	23,826.9


^(a)	This adjustment is primarily related to finalization of the Nobel Biocare purchase price adjustments.


^(b)	This adjustment is primarily related to finalization of the Pall purchase price adjustments.

Finite-lived intangible assets are amortized over their legal or estimated useful life. The following summarizes the gross carrying value and accumulated amortization for each major category of intangible asset as of December 31 ($ in millions):



	2016					2015
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Finite-lived intangibles:
Patents and technology	$	2,211.3	$	(618.5	)	$	1,857.2	$	(488.7	)
Customer relationships and other intangibles	6,990.9		(1,627.1		)	5,994.1		(1,199.9		)
Total finite-lived intangibles	9,202.2		(2,245.6		)	7,851.3		(1,688.6		)
Indefinite-lived intangibles:
Trademarks and trade names	4,861.4		—			4,382.6		—
Total intangibles	$	14,063.6	$	(2,245.6	)	$	12,233.9	$	(1,688.6	)

During 2016, the Company acquired finite-lived intangible assets, consisting primarily of customer relationships, with a weighted average life of 14 years. Refer to Note 2 for additional information on the intangible assets acquired.

Total intangible amortization expense in 2016, 2015 and 2014 was $583 million, $397 million and $269 million, respectively. Based on the intangible assets recorded as of December 31, 2016, amortization expense is estimated to be $649 million during 2017, $633 million during 2018, $625 million during 2019, $620 million during 2020 and $608 million during 2021.

- 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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