Goodwill and Other Intangible Assets

6 Months Ended

Dec. 28, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

The increase in goodwill in fiscal 2014 was due primarily to goodwill associated with the acquisition of Elan, totaling $2.1 billion. As a result of benefiting from the anticipated synergies of acquiring Elan, $831.3 million of the $2.1 billion of goodwill was allocated to certain segments as follows: $423.7 million to Consumer Healthcare, $316.1 million to Rx Pharmaceuticals and $91.5 million to Nutritionals. The Company performs its annual testing for goodwill and indefinite-lived intangible asset impairment at the beginning of the fourth fiscal quarter for all reporting units. Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions):



	Consumer Healthcare			Nutritionals		Rx Pharma-ceuticals		API		Specialty Sciences		Total
Balance as of June 29, 2013	$	279.9		$	331.7	$	385.5	$	92.2	$	—	$	1,089.3
Business acquisition	423.7			91.5		316.1		—		1,245.3		2,076.6
Purchase accounting adjustments	(1.9		)	—		1.3		—		—		(0.6		)
Currency translation adjustment	4.1			—		14.3		3.6		—		22.0
Balance as of December 28, 2013	$	705.8		$	423.2	$	717.2	$	95.8	$	1,245.3	$	3,187.3

Other intangible assets and related accumulated amortization consisted of the following (in millions):



	December 28, 2013				June 29, 2013
	Gross		Accumulated Amortization		Gross		Accumulated Amortization
Amortizable intangibles:
Distribution, license and supply agreements	$	6,307.3	$	41.7	$	192.7	$	28.9
Developed product technology/formulation and product rights	923.5		255.1		896.8		204.6
Customer relationships	360.2		84.8		358.2		72.4
Non-compete agreements	13.3		7.6		13.3		6.0
Trademarks	12.9		4.7		12.7		4.2
Total	7,617.2		393.9		1,473.7		316.1
Non-amortizable intangibles:
Trade names and trademarks	58.6		—		57.0		—
IPR&D	9.7		—		27.8		—
Total other intangible assets	$	7,685.5	$	393.9	$	1,558.5	$	316.1

Certain intangible assets are denominated in currencies other than the U.S. dollar; therefore, their gross and net carrying values are subject to foreign currency movements.

At December 28, 2013, distribution, license and supply agreements included $6.1 billion of intangible assets attributable to the Elan acquisition. During the second quarter of fiscal 2014, the Company recognized impairment charges of $4.0 million and $2.0 million related to the IPR&D assets acquired as part of the Paddock and Rosemont acquisitions, respectively, due to changes in the projected development and regulatory timelines for various projects. Both of the impairment charges were recorded in the Rx Pharmaceuticals segment as write-offs of IPR&D. Additionally, in the second quarter of fiscal 2014, the remaining $13.0 million of IPR&D assets acquired as part of the Paddock acquisition was reclassified to a definite-lived developed product technology asset and is being amortized on a proportionate basis consistent with the economic benefits derived therefrom over an estimated useful life of 12 years.

The Company recorded amortization expense of $73.6 million and $40.3 million for the six months ended December 28, 2013 and December 29, 2012, respectively, for intangible assets subject to amortization. The increase in amortization expense was due primarily to the incremental amortization expense incurred on the amortizable intangible assets acquired as part of the Elan, Rosemont, Sergeant's, Cobrek and Velcera acquisitions.

Estimated future amortization expense includes the additional amortization related to recently acquired intangible assets subject to amortization. The estimated amortization expense for each of the following five years is as follows (in millions):



Fiscal Year	Amount
2014⁽¹⁾	$	214.6
2015	437.8
2016	448.0
2017	444.2
2018	437.2

⁽¹⁾ Reflects remaining six months of fiscal 2014.

- 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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