Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets. The carrying amount of goodwill increased approximately $381,000 for the nine months ended September 30, 2013 due to an adjustment related to a previous acquisition (see Note 5).

Other intangible assets at September 30, 2013 and December 31, 2012, consisted of the following (in thousands):



	September 30, 2013
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patents	$	8,906	$	(2,298	)	$	6,608
Distribution agreements	5,176		(1,660		)	3,516
License agreements	2,733		(1,156		)	1,577
Trademarks	7,255		(1,719		)	5,536
Covenants not to compete	1,029		(339		)	690
Customer lists	20,204		(10,213		)	9,991
Royalty agreements	267		(267		)	—

Total	$	45,570	$	(17,652	)	$	27,918



	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patents	$	7,843	$	(2,045	)	$	5,798
Distribution agreements	5,176		(1,301		)	3,875
License agreements	2,733		(861		)	1,872
Trademarks	7,311		(1,362		)	5,949
Covenants not to compete	1,035		(160		)	875
Customer lists	20,468		(8,038		)	12,430
Royalty agreements	267		(267		)	—

Total	$	44,833	$	(14,034	)	$	30,799

Aggregate amortization expense was approximately $3.4 million and $10.4 million for the three and nine-month periods ended September 30, 2013, respectively, and approximately $1.9 million and $5.7 million for the three and nine-month periods ended September 30, 2012, respectively.

Estimated amortization expense for intangible assets for the next five years consisted of the following as of September 30, 2013 (in thousands):



Year Ending December 31
Remaining 2013	$	3,363
2014	12,684
2015	12,140
2016	11,515
2017	11,150

We evaluate long-lived assets, including amortizing intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We perform the impairment analysis at the asset group for which the lowest level of identifiable cash flows are largely independent of the cash flows of other assets and liabilities. We compared the carrying value of the amortizing intangible assets acquired in our Ostial acquisition in January 2012 (see Note 5) to the undiscounted cash flows expected to result from the asset group and determined that the carrying amount was not recoverable. We then determined the fair value of the amortizing assets related to the Ostial acquisition based on estimated future cash flows discounted back to their present value using a discount rate that reflects the risk profiles of the underlying activities. Some of the factors that influenced our estimated cash flows were slower than anticipated sales growth in the products acquired from our Ostial acquisition and uncertainty about future sales growth. The excess of the carrying value compared to the fair value was recognized as an intangible asset impairment charge. During the three months ended September 30, 2013, we recorded an impairment charge of approximately $8.1 million, which was offset by approximately $3.8 million of fair value reductions to the contingent consideration liability.

- 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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