Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill And Other Intangible Assets [Abstract]

5. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the years ended December 31, 2011 and 2010 are as follows:


	Generics Segment			Specialty Segment			Total
(In thousands)
Balance at December 31, 2009
Goodwill	$	3,009,740		$	706,507		$	3,716,247
Accumulated impairment losses		—			(385,000	)		(385,000	)

		3,009,740			321,507			3,331,247
Goodwill acquired⁽¹⁾		212,749			—			212,749
Foreign currency translation and other		55,338			—			55,338

		3,277,827			321,507			3,599,334

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
Goodwill acquired		1,138			—			1,138
Foreign currency translation		(82,537	)		—			(82,537	)

		3,196,428			321,507			3,517,935

Balance at December 31, 2011
Goodwill		3,196,428			706,507			3,902,935
Accumulated impairment losses		—			(385,000	)		(385,000	)

	$	3,196,428		$	321,507		$	3,517,935

⁽¹⁾	Goodwill acquired primarily through the acquisition of Bioniche Pharma (see Note 3).

Intangible assets consist of the following components at December 31, 2011 and 2010:


	Weighted Average Life (Years)		Original Cost		Accumulated Amortization		Net Book Value
(In thousands)
December 31, 2011
Amortized intangible assets:
Patents and technologies		20	$	116,631	$	82,815	$	33,816
Product rights and licenses		10		3,364,263		1,418,492		1,945,771
Other⁽¹⁾		8		200,663		45,604		155,059

				3,681,557		1,546,911		2,134,646
IPR&D ⁽²⁾				496,101		—		496,101

			$	4,177,658	$	1,546,911		2,630,747

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 ⁽²⁾				148,443		—		148,443

			$	3,738,987	$	1,237,837	$	2,501,150

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

⁽²⁾	See Note 3.

Product rights and licenses are primarily comprised of the products marketed at the time of acquisition. These product rights and licenses relate to numerous individual products, the net book value of which, by therapeutic category, is as follows:


	December 31, 2011		December 31, 2010
(In thousands)
Allergy	$	78,557	$	120,563
Anti-infective Agents		179,386		208,537
Cardiovascular		353,026		413,296
Central Nervous System		293,106		277,835
Endocrine and Metabolic		92,482		102,113
Gastrointestinal		144,672		172,582
Respiratory Agents		331,342		367,103
Other⁽¹⁾		473,200		562,770

	$	1,945,771	$	2,224,799

⁽¹⁾	Other consists of numerous therapeutic classes, none of which individually exceeds 5% of total product rights and licenses.

Amortization expense, which is classified primarily within cost of sales in the Consolidated Statements of Operations, for the years ended December 31, 2011, 2010 and 2009 was $357.8 million, $290.3 million and $276.8 million, respectively, and is expected to be approximately $336 million, $330 million, $322 million, $300 million and $232 million for the years ended December 31, 2012 through 2016, 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 6. 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 year ended December 31, 2011, approximately $4.3 million was reclassified from acquired IPR&D to product rights and licenses.

- 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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