Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

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



	CHCA⁽¹⁾			CHCI⁽²⁾			RX			Other			Total
Balance at December 31, 2016	$	1,810.6		$	1,070.8		$	1,086.6		$	81.4		$	4,049.4
Re-allocation of goodwill ⁽³⁾	35.3			—			27.7			(63.0		)	—
Business divestitures	—			(4.1		)	—			(26.4		)	(30.5		)
Currency translation adjustments	1.5			139.0			8.0			8.0			156.5
Balance at December 31, 2017	1,847.4			1,205.7			1,122.3			—			4,175.4
Impairments	(136.7		)	—			—			—			(136.7		)
Currency translation adjustments	3.0			(54.4		)	(7.5		)	—			(58.9		)
Balance at December 31, 2018	$	1,713.7		$	1,151.3		$	1,114.8		$	—		$	3,979.8

(1) We had accumulated impairments of $161.2 million and $24.5 million for the years ended December 31, 2018 and December 31, 2017, respectively.

(2) We had accumulated impairments of $868.4 million for the years ended December 31, 2018 and December 31, 2017.

(3) Certain cash flows associated with the API business were retained. We performed a relative fair value allocation of the business retained and allocated it among the two segments where the business was allocated.

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



	Year Ended
	December 31, 2018				December 31, 2017
	Gross		Accumulated Amortization		Gross		Accumulated Amortization
Indefinite-lived intangibles:
Trademarks, trade names, and brands	$	18.1	$	—	$	52.1	$	—
In-process research and development	31.2		—		38.2		—
Total indefinite-lived intangibles	$	49.3	$	—	$	90.3	$	—
Definite-lived intangibles:
Distribution and license agreements and supply agreements	$	178.6	$	99.0	$	311.2	$	169.8
Developed product technology, formulations, and product rights	1,318.8		654.6		1,358.4		598.7
Customer relationships and distribution networks	1,586.6		566.5		1,642.0		460.6
Trademarks, trade names, and brands	1,282.4		188.5		1,335.4		129.5
Non-compete agreements	12.9		11.8		14.7		12.6
Total definite-lived intangibles	$	4,379.3	$	1,520.4	$	4,661.7	$	1,371.2
Total other intangible assets	$	4,428.6	$	1,520.4	$	4,752.0	$	1,371.2

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

The remaining weighted-average useful life for our amortizable intangible assets by asset class at December 31, 2018 was as follows:



Amortizable Intangible Asset Category		Remaining Weighted-Average Useful Life (Years)
Distribution and license agreements and supply agreements		7
Developed product technology, formulations, and product rights		12
Customer relationships and distribution networks		16
Trademarks, trade names, and brands		17
Non-compete agreements		2

We recorded amortization expense of $333.6 million, $349.6 million, and $356.8 million during the years ended December 31, 2018, December 31, 2017, and December 31, 2016, respectively.

Our estimated future amortization expense is as follows (in millions):



Year	Amount
2019	$	300.0
2020	269.6
2021	242.2
2022	213.2
2023	196.1
Thereafter	1,637.8

Animal Health

During the year ended December 31, 2016, we identified indicators of goodwill impairment in the animal health reporting unit related to changes in the market and performance of certain brands. We prepared a goodwill impairment test as of October 2, 2016 as part of our annual goodwill impairment testing process. Step one of the goodwill impairment test indicated that the fair value of the animal health reporting unit was below its net book value. As a result, we performed the second step of the goodwill impairment test to measure the amount of impairment. We concluded that animal health goodwill was impaired by $24.5 million within our CHCA segment.

During the year ended December 31, 2018, the animal health reporting unit continued to experience declines in its year-to-date financial results and had additional indications of potential impairment due to changes in channel dynamics, a strategic decision to re-prioritize our brands, and a decline in the forecasted outlook of the reporting unit. Step one of the goodwill impairment test indicated that the fair value of the animal health reporting unit was below its net book value. We also performed a recoverability test of the definite-lived intangibles and determined a significant asset group was not recoverable and determined the fair value of the indefinite-lived intangible asset had fallen below its net book value. Based on our evaluation, we recorded a $213.3 million impairment charge in the third quarter in our CHCA segment comprised of a goodwill impairment of $136.7 million, a brand indefinite-lived intangible asset impairment charge of $27.7 million, a developed product technology and distribution agreement definite-lived intangible asset impairment of $41.6 million, a supply agreement definite-lived intangible asset impairment of $2.8 million, and a trade name and trademark definite-lived intangible asset impairment of $4.5 million.

As a result of the strategic decision to re-prioritize a brand within the indefinite-lived asset, we reassessed the useful life of the indefinite-lived intangible asset and reclassified a $5.4 million indefinite-lived intangible asset to a definite-lived asset within the CHCA segment as of September 29, 2018.

BCH, Omega and Herron

During the year ended December 31, 2016, we identified impairment indicators for our Branded Consumer Healthcare (“BCH”) reporting unit, certain indefinite-lived and definite-lived intangible assets acquired in conjunction with the Omega and our Herron definite-lived intangible assets. These impairment indicators related to the decline in our 2016 performance expectations and a reduction in our long-range revenue growth forecast and margin forecasts. We determined goodwill was impaired by $868.4 million, the indefinite-lived intangible assets were impaired by $849.1 million, and definite-lived assets were impaired by $321.4 million within our CHCI segment.

Entocort^®

During the year ended December 31, 2016, we identified impairment indicators for our Entocort^® definite-lived intangible assets which related to the entrance of new market competition and resulting negative impacts on sales volume and pricing. We determined the Entocort^® product assets were impaired by $342.2 million within our RX segment.

Lumara

During the year ended December 31, 2017, we identified impairment indicators for our Lumara Health, Inc. ("Lumara") definite-lived intangible assets which related to the decline in our 2017 performance expectations and a reduction in our long-range revenue growth forecast. We determined the Lumara product assets were impaired by $18.5 million within our RX segment.

Specialty Sciences

During the year ended December 31, 2016, we identified impairment indicators associated with our former Specialty Sciences reporting unit related to our decision to review strategic alternatives for the Tysabri^®financial asset. We prepared a goodwill impairment test and determined the Specialty Sciences reporting unit was fully impaired by $199.6 million.

IPR&D

We recorded an impairment charge of $8.7 million, $12.7 million, and $3.5 million on certain IPR&D assets during the years ended December 31, 2018, December 31, 2017, and December 31, 2016, respectively, due to changes in the projected development and regulatory timelines for various projects.