Henry Schein 2012 Annual Report Download - page 82
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(in thousands, except per share data)
72
Note 3 – Goodwill and Other Intangibles, Net
The changes in the carrying amount of goodwill for the years ended December 29, 2012 and December 31,
2011 were as follows:
Health Care
Distribution
Technology and
Value-Added
Services Total
Balance as of December 25, 2010 .................................................
.
$ 1,346,825 $ 77,969 $1,424,794
Adjustments to goodwill:
Acquisitions ..........................................................................
.
52,613 20,630 73,243
Foreign currency translation .................................................
.
(1,190) 261 (929)
Balance as of December 31, 2011 .................................................
.
1,398,248 98,860 1,497,108
Adjustments to goodwill:
Acquisitions ..........................................................................
.
30,765 61,788 92,553
Foreign currency translation .................................................
.
9,909 1,476 11,385
Balance as of December 29, 2012 .................................................
.
$ 1,438,922 $ 162,124 $ 1,601,046
Other intangible assets consisted of the following:
December 29, 2012 December 31, 2011
Accumulated Accumulated
Cost Amortization Net Cost Amortization Net
N
on-compete agreements ................................$ 47,351 $(7,949) $39,402 $46,327 $ (6,186) $40,141
Trademarks / trade names - definite lived ....... 72,948 (18,474) 54,474 52,619 (18,770) 33,849
Trademarks / trade names - indefinite lived .... 3,681 - 3,681 24,850 - 24,850
Customer relationships and lists ...................... 504,387 (179,566) 324,821 412,194 (135,723) 276,471
Other ............................................................... 57,397 (17,593) 39,804 48,005 (13,704) 34,301
Total ..........................................................$ 685,764 $(223,582) $462,182 $583,995 $ (174,383) $409,612
Non-compete agreements represent amounts paid primarily to key employees and prior owners of acquired
businesses, as well as certain sales persons, in exchange for placing restrictions on their ability to pose a
competitive risk to us. Such amounts are amortized, on a straight-line basis over the respective non-compete
period, which generally commences upon termination of employment or separation from us. The weighted-average
non-compete period for agreements currently being amortized was approximately five years as of December 29,
2012.
Trademarks, trade names, customer lists and customer relationships were established through business
acquisitions. Definite-lived trademarks and trade names are amortized on a straight-line basis over a weighted-
average period of approximately eight years as of December 29, 2012. The decrease in indefinite-lived trademarks
during the year ended December 29, 2012 was the result of certain trademarks beginning to be amortized in 2012.
Customer relationships and customer lists are definite-lived intangible assets that are amortized on a straight-line
basis over a weighted-average period of approximately 11 years as of December 29, 2012.
Amortization expense related to definite-lived intangible assets for the years ended December 29, 2012,
December 31, 2011 and December 25, 2010 was $68.6 million, $59.0 million and $48.4 million. The annual
amortization expense expected for the years 2013 through 2017 is $66.3 million, $59.3 million, $54.2 million,
$48.7 million and $45.9 million.