GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Changes in the carrying amount of goodwill, by reportable segment, were as follows (in millions):



	December 31, 2015		Business acquisitions		Purchase accounting adjustments		Impairments			Changes in assets held for sale		Currency translation adjustment			July 2, 2016
Reporting Segments:	Restated		Restated		Restated		Restated			Restated		Restated			Restated
CHC	$	1,890.0	$	—	$	—	$	—		$	4.5	$	(5.7	)	$	1,888.8
BCH	1,769.4		—		0.7		(130.5		)	—		52.0			1,691.6
Rx	1,222.2		1.7		—		—			—		(13.0		)	1,210.9
Specialty Sciences	199.6		—		—		—			—		—			199.6
Other	71.5		—		—		—			7.2		0.9			79.6
Total goodwill	$	5,152.7	$	1.7	$	0.7	$	(130.5	)	$	11.7	$	34.2		$	5,070.5

In connection with the preparation of our financial statements for the three-month period ended April 2, 2016, we identified indicators of goodwill impairment in our BCH - rest of world (“BCH - ROW”) reporting unit, which comprises primarily operations attributable to the Omega acquisition in all geographic regions except for Belgium. The primary impairment indicators included the decline in our 2016 performance expectations and a reduction in our long-range revenue growth forecast. Step one of the goodwill impairment test involved determining the fair value of the reporting unit using a discounted cash flow technique and comparing it to the reporting unit’s carrying value. The main assumptions supporting the cash flow projections used to determine the reporting unit’s fair value included revenue growth based on product line extensions, product life cycle strategies, and geographical expansion within the markets in which the reporting unit distributes products, gross margins consistent with historical trends, and advertising and promotion investments largely consistent with the reporting unit's growth plans. The BCH-ROW reporting unit did not pass step one of goodwill impairment testing. The change in fair value from previous estimates was due primarily to the changes in the market and performance of the brands such that the evaluation of brand prioritization and product extensions or launches in new regions are being more focused to maximize the potential of all brands in the segment's portfolio.

The second step of the goodwill impairment test required that we determine the implied fair value of the BCH - ROW reporting unit’s goodwill, which involved determining the value of the reporting unit’s individual assets and liabilities. Based on our estimates of the fair values of the assets and liabilities and the deficit of the fair value when compared to the related book value, we recorded an impairment charge of $130.5 million in Impairment charges (credits) on the Condensed Consolidated Statements of Operations for the three months ended April 2, 2016.

While no impairment charges were recorded as a result of the goodwill impairment testing for the transition period of June 28, 2015 to December 31, 2015, our Specialty Sciences reporting unit's fair value exceeded the carrying value by less than 10%. Management evaluated the primary source of cash flow in this segment, the Tysabri^® royalty stream, based on a combination of factors including independent external research, information provided from our royalty partner, and internal estimates. Based on this information, management’s assessment of future cash flow from this royalty stream has been reduced primarily due to anticipated new competitors entering the market and unfavorable currency exchange effects. Future performance different from the assumptions utilized in our quantitative analysis may further reduce the fair value of the reporting unit, which may result in the fair value no longer exceeding the carrying value. In February 2016, a competitor’s pipeline product, Ocrevus^®, received breakthrough therapy designation from the FDA and in June 2016 the FDA granted priority review with target action date in December 2016. Although the product has not launched, industry analysts believe that based on released clinical study information and the recent announcements, Ocrevus^® will favorably compete against Tysabri^® in the relapsing, remitting multiple sclerosis market segment due to its high efficacy and convenient dosage form. The product will compete with Tysabri^® and could have a significant negative impact on the royalty we receive from Biogen Idec Inc. ("Biogen") and the performance of the Specialty Sciences segment. We continue to monitor the progress of all potential competing products and assess the reporting unit for potential impairment should impairment indicators arise, as applicable, and at least annually during our fourth quarter impairment testing.

During the three months ended June 27, 2015, we performed our annual goodwill impairment testing, which indicated that our CHC Mexico reporting unit's goodwill fair value was below its net book value as of March 28, 2015. As a result, we initiated the second step of the goodwill impairment test to measure the amount of impairment. We concluded that the goodwill was fully impaired and recorded an impairment of $6.8 million in the CHC segment during the three months ended June 27, 2015 in Impairment charges.

Intangible Assets

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



	July 2, 2016				December 31, 2015
	Restated				Restated
	Gross		Accumulated Amortization		Gross		Accumulated Amortization
Definite-lived intangibles:
Distribution and license agreements, supply agreements	$	245.7	$	96.5	$	242.4	$	77.7
Developed product technology, formulations, and product rights	1,788.9		492.1		1,387.6		426.0
Customer relationships and distribution networks	1,545.7		256.6		1,520.7		193.0
Trademarks, trade names, and brands	911.4		42.6		539.4		22.8
Non-compete agreements	14.6		10.9		15.2		12.7
Total definite-lived intangibles	$	4,506.3	$	898.7	$	3,705.3	$	732.2
Indefinite-lived intangibles:
Trademarks, trade names, and brands	$	1,288.4	$	—	$	1,868.1	$	—
In-process research and development	66.9		—		48.2		—
Total indefinite-lived intangibles	1,355.3		—		1,916.3		—
Total other intangible assets	$	5,861.6	$	898.7	$	5,621.6	$	732.2

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

We recorded amortization expense of $88.9 million and $70.1 million for the three months ended July 2, 2016 and June 27, 2015, respectively, and $174.1 million and $105.3 million for the six months ended July 2, 2016 and June 27, 2015, respectively. The increase in amortization expense for the 2016 six-month period was due primarily to the incremental amortization expense incurred on the definite-lived intangible assets acquired from Omega.

During our impairment testing for the transition period of June 28, 2015 to December 31, 2015, we identified an impairment of certain indefinite-lived intangible assets purchased in conjunction with the Omega acquisition based on management’s expectations of the prospects for future revenues, profits, and cash flows associated with these assets. The assessment resulted in an impairment charge of $185.1 million within our BCH segment, which represented the difference between the carrying amount of the intangible assets and their estimated fair value. See our Transition Report on Form 10-KT filed on February 25, 2016 for a further discussion of this impairment charge.

In connection with the preparation of our financial statements for the three-month period ended April 2, 2016, we identified indicators of impairment associated with certain indefinite-lived intangible assets acquired in conjunction with the Omega acquisition. The primary impairment indicators included the decline in our 2016 performance expectations and a reduction in our long-range revenue growth forecast. The assessment utilized the excess earnings method to determine fair value and resulted in an impairment charge of $273.4 million in Impairment charges (credits) on the Condensed Consolidated Statements of Operations within our BCH segment, which represented the difference between the carrying amount of the intangible assets and their estimated fair value. The change in fair value from previous estimates was due primarily to the changes in the market and performance of the brands such that the evaluation of brand prioritization and product extensions or launches in new regions are being more focused to maximize the potential of all brands in the segment's portfolio. The main assumptions supporting the fair value of these assets and cash flow projections included revenue growth based on product line extensions, product life cycle strategies, and geographical expansion within the markets in which the BCH segment distributes products, gross margins consistent with historical trends, and advertising and promotion investments largely consistent with the segment's growth plans.

The carrying value for certain intangible assets and goodwill equals estimated and implied fair values, respectively, and as a result, any further deterioration in those assets' fair value would lead to a further impairment charge. Future performance different from the assumptions utilized in our quantitative analyses may result in additional changes in the fair value. We will continue to monitor and assess these assets for potential impairment should further impairment indicators arise, as applicable, and at least annually during our fourth quarter annual impairment testing.

In addition, due to the reprioritization of certain brands in the BCH segment and change in performance expectations for our impaired lifestyle brands previously recorded as indefinite-lived assets, we reclassified the remaining asset balance of $364.5 million to definite-lived assets with a useful life of 20 years and began amortizing the asset during the three months ended July 2, 2016.