Goodwill and Other Intangible Assets

12 Months Ended

Jun. 28, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

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 30, 2012	$	138.9		$	331.7	$	220.8	$	86.3	$	—	$	777.8
Business acquisitions	144.7			—		163.9		—		—		308.6
Currency translation adjustment	(3.7		)	—		0.7		5.9		—		2.9
Balance as of June 29, 2013	279.9			331.7		385.4		92.2		—		1,089.2
Business acquisitions	1,118.8			178.4		851.0		—		201.8		2,350.0
Currency translation adjustment	7.6			—		21.9		5.4				34.9
Balance as of June 28, 2014	$	1,406.3		$	510.1	$	1,258.3	$	97.6	$	201.8	$	3,474.1

The increase in goodwill in fiscal 2014 was due primarily to goodwill associated with the acquisition of Elan, which totaled $2.3 billion. The Company allocated $2.1 billion of goodwill to the reporting units that are expected to benefit from the synergies related to the transaction. See Note 2 for additional information. Additionally, the Company recorded $4.6 million of goodwill to the Consumer Healthcare segment due to the acquisition of the Aspen product portfolio.

During fiscal 2013, additions to goodwill in the Consumer Healthcare segment related to the Sergeant's and Velcera acquisitions and in the Rx Pharmaceuticals segment related to the Cobrek and Rosemont acquisitions, and the acquisition of the Fera product portfolio.

No impairment charges were recorded as a result of the annual goodwill impairment testing during fiscal 2014, fiscal 2013, or fiscal 2012.

Intangible Assets

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



	June 28, 2014				June 29, 2013
	Gross		Accumulated Amortization		Gross		Accumulated Amortization
Amortizable intangibles:
Distribution and license agreements	$	6,027.3	$	192.1	$	192.7	$	28.9
Developed product technology/formulation and product rights	931.7		302.5		896.8		204.6
Customer relationships	372.0		97.5		358.2		72.4
Trade names and trademarks	47.8		5.6		12.7		4.2
Non-compete agreements	15.3		9.4		13.3		6.0
Total	$	7,394.1	$	607.1	$	1,473.7	$	316.1
Non-amortizable intangibles:
Trade names and trademarks	$	59.5	$	—	$	57.0	$	—
In-process research and development	10.2		—		27.8		—
Total	69.7		—		84.8		—
Total other intangible assets	$	7,463.8	$	607.1	$	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.

The increase in gross amortizable intangible assets during fiscal 2014 was due primarily to the Elan acquisition, and the Aspen and Fera product acquisitions, as discussed in Note 2. No impairment charges were recorded as a result of the annual intangible asset impairment testing during fiscal 2014 or fiscal 2013. However, the Company recorded an impairment charge on certain IPR&D assets during both years due to changes in the projected development and regulatory timelines for various projects. These impairments totaled $6.0 million and $9.0 million for fiscal 2014 and fiscal 2013, respectively.

Also during 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 and is being amortized on a proportionate basis consistent with the economic benefits derived therefrom over an estimated useful life of 12 years. During fiscal 2013, $10.0 million was reclassified from IPR&D to a definite-lived developed product technology intangible asset and is being amortized on a straight-line basis over an estimated useful life of 12 years.

The Company recorded amortization expense of $281.0 million, $94.0 million and $74.8 million during fiscal 2014, 2013 and 2012, respectively. The increase in amortization expense in fiscal 2014 was due primarily to the incremental amortization expense incurred on the amortizable intangible assets acquired as part of the Elan acquisition.

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 years is as follows (in millions):



Fiscal Year	Amount
2015	$	427.0
2016	438.0
2017	434.0
2018	427.0
2019	416.0
Thereafter	4,645.0

- 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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