Investments in and Advances to Partially-Owned Affiliates

12 Months Ended

Dec. 31, 2012

Investments in and Advances to Partially-Owned Affiliates [Abstract]

Investments in and Advances to Partially-Owned Affiliates

(7)       Investments in and Advances to Partially-Owned Affiliates

The Company owns 51% of the equity in Zenara Pharma ("Zenara") and will purchase the remaining 49% in 2016 based upon a formula derived from future EBITDA. Zenara is a pharmaceutical company focused on the formulation of final dosage form products based in India.

Under current U.S. GAAP, the Company does not consolidate the results of Zenara as it does not meet the requirements of having control over the entity. The contractual arrangement includes substantial participating rights for the 49% interest holder. These rights were bargained for by the 49% interest holder to ensure that all significant transactions, as defined in the agreement, require a unanimous vote. Furthermore, the 49% minority owner will handle all daily operations of the business including all aspects of employee relations at the site. Therefore, the Company accounts for this investment under the equity method of accounting.

The impact of its ownership stake in Zenara was a loss of $1,976, $1,621 and $286 in 2012, 2011 and 2010, respectively, and is located within "Other expenses/(income)" as "Equity in losses of partially-owned affiliates" in the Company's income statement. These amounts include amortization expense of $965, $1,106 and $185 in 2012, 2011 and 2010, respectively, and depreciation expense of $132, $149 and $25 in 2012, 2011 and 2010, respectively. In 2012, the Company advanced $1,594 to Zenara.

Investments in and advances to partially-owned affiliates also includes a gain of $210 in 2012 related to an investment in a European joint venture. In 2012, the Company advanced $453 to the European joint venture.