Goodwill and Other Intangible Assets
 9 Months Ended
Feb. 28, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets.
The balance of goodwill as of February 28, 2014 and May 31, 2013 was $3,656.8 million and $3,600.9 million, respectively. The change in goodwill is primarily related to the $73.8 million of goodwill recorded related to the 2013 Spine Acquisition, which is described in Note 2 — Acquisitions, and foreign currency fluctuations.
The Company uses an accelerated method for amortizing customer relationship intangibles, as the value for those relationships is greater at the beginning of their life. The accelerated method was calculated using historical customer attrition rates. The remaining finite-lived intangibles are amortized on a straight line basis. The decrease in the net intangible asset balance is primarily due to amortization, partially offset by the 2013 Spine Acquisition.
The Company operates in one reportable segment and evaluates goodwill for impairment at the reporting unit level. The reporting units are based on the Company's current administrative organizational structure and the availability of discrete financial information.
During the third quarter of fiscal year 2013, the Company recorded a $334.1 million goodwill and definite and indefinite-lived intangible assets impairment charge related to its Dental Reconstructive reporting unit, primarily due to declining industry market growth rates in certain European and Asia Pacific markets and corresponding unfavorable margin trends.
The Company used the income approach, specifically the discounted cash flow method, to determine the fair value of the Dental Reconstructive reporting unit and the associated amount of the impairment charges. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. This methodology is consistent with how the Company estimates the fair value of its reporting units during its annual goodwill and indefinite lived intangible asset impairment tests. In applying the income approach to calculate the fair value of the Dental Reconstructive reporting unit, the Company used assumptions about future revenue contributions and cost structures. The application of the income approach for both goodwill and intangibles requires judgment in determining a risk-adjusted discount rate at the reporting unit level. The Company based this determination on estimates of the weighted-average costs of capital of market participants. The Company performed a peer company analysis and considered the industry weighted-average return on debt and equity from a market participant perspective.
To calculate the amount of the impairment charge related to the Dental Reconstructive reporting unit, the Company allocated the reporting unit's fair value to all of its assets and liabilities, including certain unrecognized intangible assets, in order to determine the implied fair value of goodwill. This allocation process required judgment and the use of additional valuation assumptions in deriving the individual fair values of the Company's Dental Reconstructive reporting unit's assets and liabilities as if the reporting units had been acquired in a business combination.
The Company determined the fair value of intangible assets using an income based approach to determine the fair value. The approach calculated the fair value by estimating the after-tax cash flows attributable to the asset and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. The calculated fair value was compared to the carrying value to determine if any impairment existed.
The Company performs its annual assessment for impairment as of March 31 for all reporting units, or on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The estimates and assumptions underlying the fair value calculations used in the Company’s annual impairment tests are uncertain by their nature and can vary significantly from actual results. Factors that management must estimate include, but are not limited to, industry and market conditions, sales volume and pricing, raw material costs, capital expenditures, working capital changes, cost of capital, and tax rates. These factors are especially difficult to predict when global financial markets are volatile. The estimates and assumptions used in its impairment tests are consistent with those the Company uses in its internal planning. These estimates and assumptions may change from period to period. If the Company uses different estimates and assumptions in the future, impairment charges may occur and could be material.

Intangible assets consisted of the following at February 28, 2014 and May 31, 2013:
 
(in millions)
February 28, 2014
 
Gross
 
 
 
Net
 
Carrying
 
Accumulated
 
Carrying
 
Amount
 
Amortization
 
Amount
Core technology
$
1,733.3

 
$
(548.0
)
 
$
1,185.3

Completed technology
610.1

 
(252.0
)
 
358.1

Product trade names
214.4

 
(75.2
)
 
139.2

Customer relationships
2,386.1

 
(918.1
)
 
1,468.0

Non-compete contracts
4.6

 
(4.6
)
 
—

Sub-total
4,948.5

 
(1,797.9
)
 
3,150.6

Corporate trade names
308.2

 
—

 
308.2

Total
$
5,256.7

 
$
(1,797.9
)
 
$
3,458.8

 
(in millions)
May 31, 2013
 
Gross
 
 
 
New
 
 
 
 
 
Net
 
Carrying
 
Impairment
 
Carrying
 
Accumulated
 
Impairment
 
Carrying
 
Amount
 
Charge
 
Amount
 
Amortization
 
Charge
 
Amount
Core technology
$
1,772.6

 
$
(39.0
)
 
$
1,733.6

 
$
(481.1
)
 
$
4.1

 
$
1,256.6

Completed technology
628.8

 
(48.5
)
 
580.3

 
(254.9
)
 
36.7

 
362.1

Product trade names
204.2

 
—

 
204.2

 
(65.9
)
 
—

 
138.3

Customer relationships
2,429.5

 
(46.1
)
 
2,383.4

 
(828.4
)
 
9.9

 
1,564.9

Non-compete contracts
4.6

 
—

 
4.6

 
(3.8
)
 
—

 
0.8

Sub-total
5,039.7

 
(133.6
)
 
4,906.1

 
(1,634.1
)
 
50.7

 
3,322.7

Corporate trade names
319.0

 
(11.5
)
 
307.5

 
—

 
—

 
307.5

Total
$
5,358.7

 
$
(145.1
)
 
$
5,213.6

 
$
(1,634.1
)
 
$
50.7

 
$
3,630.2


The weighted average useful life of the intangibles at February 28, 2014 is as follows:
 
 
 
  
Weighted Average
Useful Life
Core technology
15 years
Completed technology
9 years
Product trade names
13 years
Customer relationships
14 years
Non-compete contracts
1 year
Corporate trade names
Indefinite life

Expected amortization expense for the intangible assets stated above for the years ending May 31, 2014 through 2018 is $285.6 million, $278.6 million, $273.7 million, $270.0 million, and $252.6 million, respectively.