Stratasys Ltd. Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 7. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of the Company's goodwill for the years ended December 31, 2014 and 2013 are as follows:

	2014		2013

	(U.S. $ in millions)
Goodwill as of January 1	$	1,195.9	$	822.5
Goodwill impairment charges		(102.5)		-
Goodwill acquired		233.3		372.0
Translation differences		(3.2)		1.4
Goodwill as of December 31	$	1,323.5	$	1,195.9

Other Intangible Assets

Other intangible assets consisted of the following:

	December 31, 2014				December 31, 2013
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization

	(U.S. $ in thousands)
Developed technology	$	497,416	$	106,466	$	447,842	$	54,029
Patents		15,209		8,136		14,065		6,523
Trademarks and trade names		60,046		9,519		59,019		3,817
Customer relationships		148,338		26,219		100,679		10,793
Non-compete agreements		10,843		3,952		10,354		1,249
Capitalized software development costs		17,290		14,423		16,612		13,828
In process research and development		17,476		-		63,998		-
		766,618	$	168,715		712,569	$	90,239
Accumulated amortization		168,715				90,239
Net book value of other intangible assets	$	597,903			$	622,330

In process research and development projects with a gross carrying value of $49.5 million as of December 31, 2013, of which $24.7 million were acquired in connection with the Stratasys-Objet Merger and $23.7 million were acquired in connection with the MakerBot transaction, were launched during 2014 and are now classified as developed technology.

During 2014 the Company recorded impairment charges of $14.6 million related to one of its developed technology assets. The Company assessed the recoverability of the asset based on the estimated undiscounted future cash flows expected to result from it. The impairment charges were measured as the difference between the carrying amount of the asset and its fair value. The fair value of the asset was determined under the income approach based on a discounted cash flow model using updated future revenue and operating income projections.

Amortization expense relating to intangible assets for the years ended December 31, 2014, 2013 and 2012, was approximately $81.9 million, $61.3 million and $8.1 million, respectively.

As of December 31, 2014, estimated amortization expense relating to intangible assets currently subject to amortization for each of the next five years and thereafter was as follows:

	U.S. $ in thousands
Year ending December 31,
2015	$	88,095
2016		85,499
2017		83,742
2018		77,836
2019		71,910
Thereafter		173,345
Total	$	580,427

- 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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