STRYKER

Stryker 2014 Annual Report

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In March 2013 we acquired Trauson Holdings Company Limited (Trauson) for an aggregate purchase price of approximately $751. The acquisition of Trauson enhances our product offerings, primarily within our Orthopaedics 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. For the MAKO and Trauson acquisitions, the measurement periods have been completed and revisions to our original estimates are included in the table below. The effects of all the acquisitions described above are included in our Consolidated Financial Statements prospectively from the date of acquisition. Pro forma consolidated results of operations for 2014 and 2013 would not differ significantly as a result of these acquisitions. The allocation of the purchase price to the acquired net assets of the acquisitions described above are as follows: 2014 SBi Berchtold PST Other Purchase price paid $ 358 $ 184 $ 120 $ 216 Tangible assets acquired: Cash — 12 — — Inventory 34 22 7 5 Other assets 4 38 19 25 Liabilities (2) (45) (33) (37) Intangible assets: Customer relationship 19 11 33 5 Trade name — 7 — — Developed technology & patents 82 32 26 115 IPRD — — — 2 Goodwill 221 107 68 101 $ 358 $ 184 $ 120 $ 216 Goodwill acquired associated with the SBi acquisition in 2014 is deductible for tax purposes. 2013 MAKO Original Revised Change Trauson Purchase price paid $ 1,679 $ 1,677 $ (2 ) $ 751 Tangible assets acquired: Cash 56 56 — 98 Inventory 50 41 (9) 43 Other assets 118 191 73 65 Liabilities (277) (239) 38 (87) Intangible assets: Customer relationship 91 80 (11) 112 Trade name 24 4 (20) 34 Developed technology & patents 231 213 (18 ) 31 IPRD 169 171 2 5 Goodwill 1,217 1,160 (57) 450 $ 1,679 $ 1,677 $ (2 ) $ 751 STRYKER CORPORATION 2014 Form 10-K 28 Dollar amounts in millions except per share amounts or as otherwise specified. NOTE 6 - GOODWILL AND OTHER INTANGIBLE ASSETS We completed our annual impairment tests of goodwill in 2014 and 2013 and concluded in each year that no impairments exist. The changes in the net carrying value of goodwill by segment are as follows: Orthopedics MedSurg Neurotechnology and Spine Total December 31, 2012 $ 691 $ 513 $ 938 $ 2,142 Goodwill acquired during the year 1,559 2 108 1,669 Foreign currency and other (23 ) (9 ) 65 33 December 31, 2013 $ 2,227 $ 506 $ 1,111 $ 3,844 Goodwill acquired during the year 243 231 23 497 Foreign currency and other (84 ) (11 ) (60 ) (155 ) December 31, 2014 $ 2,386 $ 726 $ 1,074 $ 4,186 Measurement period adjustments that reflect changes to goodwill for acquisitions completed in a previous year are included in "Foreign currency translation effects & other." The following is a summary of our other intangible assets: Weighted Average Amortization Period (Years) Gross Carrying Amount Less Accumulated Amortization Net Carrying Amount Developed technologies 2014 13 $ 1,468 466 1,002 2013 12 1,450 380 1,070 Customer relationships 2014 15 $ 801 239 562 2013 17 677 189 488 Patents 2014 12 $ 293 175 118 2013 13 238 190 48 Trademarks 2014 14 $ 112 37 75 2013 14 127 34 93 In-process research and development 2014 $ 201 — 201 2013 223 — 223 Other 2014 12 $ 111 51 60 2013 13 118 51 67 Total 2014 13 $ 2,986 968 2,018 2013 13 2,833 844 1,989 Amortization expense related to intangible assets was $188, $138 and $123 for 2014, 2013 and 2012, respectively. The estimated amortization expense for each of the next five years is: 2015 2016 2017 2018 2019 Estimated amortization expense $ 196 $ 166 $ 164 $ 148 $ 132 NOTE 7 - CONTINGENCIES AND COMMITMENTS We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor and intellectual property, and other matters that are more fully described below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings, the claimants seek damages, as well as other compensatory and equitable relief, that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management has sufficient information to

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