Goodwill And Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill And Intangible Assets

Goodwill And Intangible Assets

8. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the nine months ended September 30, 2011 are as follows:

	Generics Segment			Specialty Segment			Total
	(In thousands)
Balance at December 31, 2010
Goodwill	$	3,277,827		$	706,507		$	3,984,334
Accumulated impairment losses		—			(385,000	)		(385,000	)
		3,277,827			321,507			3,599,334
Foreign currency translation		(40,657	)		—			(40,657	)
		3,237,170			321,507			3,558,677
Balance at September 30, 2011
Goodwill		3,237,170			706,507			3,943,677
Accumulated impairment losses		—			(385,000	)		(385,000	)
	$	3,237,170		$	321,507		$	3,558,677

Intangible assets consist of the following components:

	Weighted Average  Life (Years)		Original Cost		Accumulated Amortization		Net Book Value
					(In thousands)
September 30, 2011
Amortized intangible assets:
Patents and technologies		20	$	116,631	$	81,447	$	35,184
Product rights and licenses		10		3,343,110		1,347,329		1,995,781
Other (1)		8		112,619		45,551		67,068
				3,572,360		1,474,327		2,098,033
IPR&D				128,250		—		128,250
			$	3,700,610	$	1,474,327	$	2,226,283
December 31, 2010
Amortized intangible assets:
Patents and technologies		20	$	122,926	$	83,563	$	39,363
Product rights and licenses		10		3,323,902		1,099,103		2,224,799
Other (1)		8		143,716		55,171		88,545
				3,590,544		1,237,837		2,352,707
IPR&D				148,443		—		148,443
			$	3,738,987	$	1,237,837	$	2,501,150

⁽¹⁾  Other intangibles consist principally of customer lists and contracts.

Amortization expense, which is classified primarily within cost of sales on Mylan's Condensed Consolidated Statements of Operations, for the nine months ended September 30, 2011 and 2010 was $273.0 million and $209.9 million, respectively, and is expected to be approximately $80.9 million for the remainder of 2011 and $322.1 million, $316.4 million, $308.8 million and $286.5 million for the years ended December 31, 2012 through 2015, respectively.

Indefinite-lived intangibles, such as the Company's IPR&D assets, are tested at least annually for impairment, but may be tested whenever certain impairment indicators are present. Impairment is determined to exist when the fair value is less than the carrying value of the assets being tested.

During the quarter ended September 30, 2011, the Company performed its annual impairment review of its IPR&D assets and recorded an impairment charge in the amount of $16.2 million, which has been recorded as a component of amortization expense.  These IPR&D assets were acquired as part of the Bioniche Pharma acquisition. This impairment charge resulted from the Company's updated estimate of the fair value of these assets, which was based upon updated forecasts, compared with the assigned fair values as of the Bioniche Pharma acquisition date, September 7, 2010. The fair value was determined based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note 9. These valuations reflect, among other things, the impact of changes to the development programs, the projected development and regulatory timeframes and the current competitive environment. Changes in any of the Company's assumptions may result in a further reduction to the estimated fair value of the IPR&D asset and could result in additional future impairment charges.

During the nine months ended September 30, 2011, approximately $4.3 million was reclassified from acquired IPR&D to product rights and licenses.