Goodwill and Intangible Assets

6 Months Ended

Jun. 29, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

Goodwill

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



	December 31, 2018		Transfer to assets held-for-sale			Currency Translation Adjustments			June 29, 2019
CSCA⁽¹⁾	$	1,713.7	$	(42.2	)	$	2.1		$	1,673.6
CSCI⁽²⁾	1,151.3		—			(9.2		)	1,142.1
RX	1,114.8		—			4.8			1,119.6
Total goodwill	$	3,979.8	$	(42.2	)	$	(2.3	)	$	3,935.3


(1)	We had accumulated impairments of $24.5 million and $161.2 million as of June 30, 2018 and June 29, 2019, respectively.


(2)	We had accumulated impairments of $868.4 million as of June 30, 2018 and June 29, 2019.

During the three months ended June 29, 2019, our RX U.S. reporting unit had an indication of potential impairment which was driven by a combination of industry and market factors and uncertainty related to the timing

and associated cash flows of the projected ProAir launch. Goodwill remaining in this reporting unit was $1,119.6 million as of June 29, 2019. We prepared an impairment test as of June 29, 2019 and determined that the fair value of the RX U.S. reporting unit continued to exceed net book value by approximately 10%. The excess was lower than our annual impairment test as of October 1, 2018, in which fair value exceeded carrying value by more than 25%. While no impairment was recorded as of June 29, 2019, future developments such as deterioration in business performance or market multiples could reduce the fair value of this reporting unit and lead to impairment in a future period.

In conjunction with the test performed during the three months ended June 29, 2019, we early adopted ASU 2017-04 which removes the Step 2 requirement in instances when the carrying value of a reporting unit exceeds its fair value. Prospectively, if a reporting unit’s carrying value exceeds its fair value, we will record an impairment charge in the amount of the difference, limited to the amount of goodwill attributed to that reporting unit.

Intangible Assets

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



	June 29, 2019				December 31, 2018
	Gross		Accumulated Amortization		Gross		Accumulated Amortization
Indefinite-lived intangibles:
Trademarks, trade names, and brands	$	18.0	$	—	$	18.1	$	—
In-process research and development	14.5		—		31.2		—
Total indefinite-lived intangibles	$	32.5	$	—	$	49.3	$	—
Definite-lived intangibles:
Distribution and license agreements and supply agreements	$	173.7	$	105.2	$	178.6	$	99.0
Developed product technology, formulations, and product rights	1,321.0		706.1		1,318.8		654.6
Customer relationships and distribution networks	1,558.5		613.9		1,586.6		566.5
Trademarks, trade names, and brands	1,266.0		219.5		1,282.4		188.5
Non-compete agreements	8.3		7.6		12.9		11.8
Total definite-lived intangibles	$	4,327.5	$	1,652.3	$	4,379.3	$	1,520.4
Total intangible assets	$	4,360.0	$	1,652.3	$	4,428.6	$	1,520.4

We recorded amortization expense of $73.6 million and $149.0 million for the three and six months ended June 29, 2019, respectively, and $85.3 million and $172.4 million for the three and six months ended June 30, 2018, respectively.

During the three months ended June 29, 2019, we identified impairment indicators for a certain definite-lived asset related to changes in pricing and competition in the market, which lowered the projected cash flows we expect to generate from the asset. We determined the asset was impaired by $27.8 million in our RX segment.

We recorded an impairment charge of $4.1 million on an in process R&D asset in the CSCA segment during the three months ended March 30, 2019 due to changes in projected development and regulatory timelines.