Issue link: http://catalog.e-digitaleditions.com/i/275023
30 Dollar amounts in millions except per share amounts or as otherwise specified December 31, 2013 December 31, 2012 Prepaid expenses and other current assets Other Assets- Noncurrent Accrued expenses and other current liabilities Other Liabilities – Noncurrent Prepaid expenses and other current assets Other Assets- Noncurrent Accrued expenses and other current liabilities Other Liabilities – Noncurrent Derivatives designated as hedging instruments: Foreign exchange forward contracts $ 11 $ 1 $ 1 $ — $ — $ — $ — $ — Derivatives not designated as hedging instruments: Foreign exchange forward contracts 10 3 1 — 3 — 1 — Total derivative instruments $ 21 $ 4 $ 2 $ — $ 3 $ — $ 1 $ — The amount and location of gains in the consolidated statements of earnings and amounts recorded in AOCI related to the derivative instruments designated as hedges for the year ended December 31, 2013 were: Amount of gain reported as a component of AOCI on derivatives, net of tax (effective portion) Amount of pre- tax gain reclassified from AOCI into income (effective portion) Amount of pre-tax gain recognized in other income (expense) (ineffective portion and amount excluded from effectiveness testing) Foreign exchange contracts $ 8 $ — $ 9 At December 31, 2013, deferred pretax gains on derivatives designated as hedges of $12, which are recorded in AOCI, are expected to be reclassified to current earnings during the next twelve months. This reclassification is primarily due to the sale of inventory that includes previously hedged purchases. NOTE 5 - ACQUISITIONS In December 2013 we announced our intent to acquire Patient Safety Technologies, Inc. (PST) for an aggregate purchase price of approximately $120. PST conducts its business through its wholly owned subsidiary, SurgiCount Medical, Inc. PST's proprietary Safety- Sponge ® System and SurgiCount 360™ compliance software help prevent Retained Foreign Objects in the operating room. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2014. The acquisition of PST is expected to enhance our product offerings within our MedSurg segment. In December 2013 we acquired MAKO Surgical Corp. (MAKO) for an aggregate purchase price of approximately $1,679. The acquisition of MAKO, combined with our strong history in joint reconstruction, capital equipment (operating room integration and surgical navigation) and surgical instruments, will help further advance the growth of robotic assisted surgery. Our combined expertise offers the potential to simplify joint reconstruction procedures, reduce variability and enhance the surgeon and patient experience. The acquisition of MAKO enhances our product offerings within our Reconstructive segment. Intangible assets acquired with MAKO will be amortized over a weighted-average life of 9 years, except for the trade name that is deemed to have an indefinite life. IPRD is considered to be an indefinite- lived intangible asset until such time as the research is completed (at which time it becomes a determinable-lived intangible asset) or determined to have no future use (at which time it is impaired). In March 2013 we acquired Trauson Holdings Company Limited (Trauson) for a total consideration of $751. The acquisition of Trauson enhances our product offerings, primarily within our Reconstructive segment, broadens our presence in China and enables us to expand into the fast growing value segment of the emerging markets. Intangible assets acquired with Trauson will be amortized over a weighted- average life of 15 years, except for the trade name that is deemed to have an indefinite life. IPRD is considered to be an indefinite-lived intangible asset until such time as the research is completed (at which time it becomes a determinable-lived intangible asset) or determined to have no future use (at which time it is impaired). The purchase price allocations for the MAKO and Trauson acquisitions were based upon preliminary valuations, and our estimates and assumptions are subject to change within the measurement period as the valuations are finalized. Management is currently in the process of verifying data and finalizing information related to the MAKO valuation and recording of identifiable intangible assets, deferred income taxes and the corresponding effect on the value of goodwill. For the Trauson acquisition, the measurement period has been completed; revisions to our original estimates include an increase to customer relationship intangible assets of $40, an increase to liabilities of $14, and a reduction to goodwill of $31. In November 2012 we acquired Surpass Medical, Ltd. (Surpass) for $100, with an additional $35 to be paid upon the completion of certain milestones. Surpass develops and commercializes next-generation flow diversion stent technology to treat brain aneurysms using