GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements [Abstract]

The Company performed the required annual impairment tests of goodwill as of April 30, 2013 on thirteen reporting units. To determine the fair value of the Company’s reporting units, the Company uses a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five-year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross margin and operating expense assumptions consistent with historical trends. The total cash flows were discounted based on a range between 8.4% to 11.5%, which included assumptions regarding the Company’s weighted-average cost of capital. The Company considered the current market conditions both in the U.S. and globally, when determining its assumptions. Lastly, the Company reconciled the aggregated fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. As a result of the annual impairment tests of goodwill, no impairment was identified.

A reconciliation of changes in the Company’s goodwill is as follows:



(in thousands)	Dental Consumable and Laboratory Businesses			Orthodontics/Canada/Mexico/Japan			Select Distribution Businesses			Implants/Endodontics/Healthcare/Pacific Rim			Total

Balance at December 31, 2012	$	488,206		$	102,065		$	92,473		$	1,528,209		$	2,210,953
Business unit transfer (a)	—			(4,364		)	(13,770		)	18,134			—
Effects of exchange rate changes	(2,773		)	(3,568		)	(970		)	(45,113		)	(52,424		)
Balance at June 30, 2013	$	485,433		$	94,133		$	77,733		$	1,501,230		$	2,158,529

(a) Goodwill moved represents the business unit’s relative fair value within the segment from which it was moved from as required by US GAAP.

Identifiable definite-lived and indefinite-lived intangible assets consist of the following:



	June 30, 2013							December 31, 2012
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount

Patents	$	178,253	$	(85,481	)	$	92,772	$	179,512	$	(81,390	)	$	98,122
Trademarks	81,372		(34,859		)	46,513		83,073		(33,129		)	49,944
Licensing agreements	31,423		(19,801		)	11,622		30,695		(18,966		)	11,729
Customer relationships	477,507		(64,650		)	412,857		491,859		(50,632		)	441,227
Total definite-lived	$	768,555	$	(204,791	)	$	563,764	$	785,139	$	(184,117	)	$	601,022

Trademarks and In-process R&D	$	222,903	$	—		$	222,903	$	229,620	$	—		$	229,620

Total identifiable intangible assets	$	991,458	$	(204,791	)	$	786,667	$	1,014,759	$	(184,117	)	$	830,642

- 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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