Intangible Assets, net:

($ amounts in thousands)



	December 31, 2013							December 31, 2012
	(Successor)							(Successor)
			Accumulated Amortization							Accumulated Amortization
	Cost					Net		Cost					Net
Developed products	$	530,759	$	(155,744	)	$	375,015	$	552,700	$	(33,321	)	$	519,379
Other product related royalty streams	115,600		(22,709		)	92,891		115,600		(5,289		)	110,311
IPR&D	293,400		—			293,400		584,000		—			584,000
Subsequently Developed IPR&D	262,553		(25,331		)	237,222		24,600		(257		)	24,343
Par trade name	26,400		—			26,400		26,400		—			26,400
Watson/Actavis Divestiture Products	85,295		(23,143		)	62,152		101,200		(3,934		)	97,266
Watson/Actavis related IPR&D	4,700		—			4,700		14,300		—			14,300
Other	1,000		(132		)	868		—		—			—
	$	1,319,707	$	(227,059	)	$	1,092,648		$1,418,800		($42,801	)		$1,375,999

We recorded amortization expense related to intangible assets of approximately $184,258 thousand for the year ended December 31, 2013 (Successor), $42,801 thousand for the period September 29, 2012 to December 31, 2012 (Successor), $31,196 thousand for the period January 1, 2012 to September 28, 2012 (Predecessor), and $14,822 thousand for the year ended December 31, 2011 (Predecessor). After the Merger, amortization expense was included in cost of goods sold.

Intangible Asset Impairment

During the twelve months ended December 31, 2013, we recorded intangible asset impairment totaling approximately $100,093 thousand. 2013 activity included a fourth quarter charge of approximately $60,147 thousand for IPR&D classes of products and projects that were evaluated as part of the annual evaluation of indefinite lived intangible assets. The approximate $60,147 thousand charge represented the reduction to the appropriate fair values. During the third quarter of 2013, we recorded intangible assets impairment totaling approximately $39,480 thousand related to five products not expected to achieve their originally forecasted operating results. During the second quarter of 2013, we also ceased selling a product that had been acquired with the divested products from the Watson/Actavis Merger and recorded a total corresponding intangible asset impairment of $466 thousand. During the period from January 1, 2012 to September 28, 2012, we abandoned an in-process research and development project that was acquired in the Anchen Acquisition and recorded a corresponding intangible asset impairment of $2,000 thousand, and we exited the market of a commercial product that was acquired in the Anchen Acquisition and recorded a corresponding intangible asset impairment of $3,700 thousand.

Intangible assets presented in the Successor period are principally comprised of product related assets recognized at fair value in accordance with ASC 805, Business Combinations, and are inclusive of assets that had previously been recognized in the Predecessor period and revalued as part of the Merger as well as assets initially recognized in connection with the Merger. Intangible assets presented in the Predecessor period are principally comprised of assets previously recognized at estimated fair value under ASC 805 as well as numerous asset acquisitions and acquisition of product and intellectual property rights recorded at cost. Intangible assets are amortized over the period in which the related cash flows are expected to be generated or on a straight-line basis over the products’ estimated useful life if the estimated cash flows method approximates straight-line basis. We evaluate all intangible assets for impairment whenever events or other changes in circumstances indicate that the carrying value of an asset may no longer be recoverable. Such evaluations utilize forecasted financial information. As of December 31, 2013, we believe our net intangible assets are recoverable. The intangible assets included on our consolidated balance sheet at December 31, 2013 and December 31, 2012 includes the following:

Intangible Assets Acquired in the Merger

We were acquired on September 28, 2012 through a merger transaction with Holdings. Refer to Note 2, “Sky Growth Merger” for details of the transaction. As part of the Merger, we revalued intangible assets related to commercial products (developed technology), royalty streams, IPR&D, and our trade name.

The fair value of the developed technology and in-process research and development intangible assets were estimated using the discounted cash flow method of the income approach. Under this method, an intangible asset’s fair value is equal to the present value of the after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, we estimated the present value of cash flows discounted at rates commensurate with the inherent risks associated with each type of asset. We believe that the level and timing of cash flows appropriately reflect market participant assumptions. Some of the significant assumptions inherent in the development of the identifiable intangible asset valuations, from the perspective of a market participant, include the estimated net cash flows by year by project or product (including net revenues, costs of sales, research and development costs, selling and marketing costs and other charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset's life cycle, competitive trends impacting the asset and each cash flow stream and other factors. The major risks and uncertainties associated with the timely and successful completion of the IPR&D projects include legal risk and regulatory risk.

The developed product intangible assets are composite assets, comprising the market position of the product, the developed technology utilized and the customer base to which the products are sold. Developed technology and the customer base were considered but have not been identified separately as any related cash flows would be intertwined with the product related intangibles. Developed Products held by the Company are considered separable from the business as they could be sold to a third party. The Developed Products were valued using an excess earnings method, with the exception of the royalty revenue stream products not manufactured by us, which were valued using a relief from royalty method of the income approach. The remaining net book value of the related intangible asset related to developed products will be amortized over a weighted average amortization period of approximately six years.

IPR&D is related to R&D projects that were incomplete at the Merger. There are 68 projects associated with IPR&D. As of the Merger, we grouped and valued IPR&D based on the projected year of launch for each group. IPR&D are considered separable from the business as they could be sold to a third party. The value of IPR&D was accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until the completion or abandonment of each group. Upon the successful completion and launch of a product in an annual group, we will make a separate determination of useful life of the IPR&D intangible and commence amortization.

Trade names constitute intellectual property rights and are marketing-related intangible assets. Our corporate trade name was valued using a relief from royalty method of the income approach and accounted for as an indefinite-lived intangible asset that will be subject to annual impairment testing or whenever events or changes in business circumstances necessitate an evaluation for impairment using a fair value approach.

Intangible Assets acquired with the Divested Products from the Watson/Actavis Merger

On November 6, 2012, we acquired the U.S. marketing rights to five generic products that were currently marketed by Watson or Actavis, as well as eight Abbreviated New Drug Applications currently awaiting regulatory approval and a generic product in late-stage development, in connection with the merger of Watson and Actavis. Refer to Note 3, “Acquisition of Divested Products from the Watson/Actavis Merger” for details of the transaction.

Developed products are defined as products that are commercialized, all research and development efforts have been completed by the Seller, and final regulatory approvals have been received. The developed product intangible assets are composite assets, comprising the market position of the product, the developed technology utilized and the customer base to which the products are sold. Developed technology and the customer base were considered but have not been identified separately as any related cash flows would be very much intertwined with the product related intangibles. Developed Products held by the Company are considered separable from the business as they could be sold to a third party. The Developed Products were valued using a multi-period excess earnings method under the income approach. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset only. The remaining net book value of the related intangible asset related to developed products will be amortized over a weighted average amortization period of approximately seven years.

IPR&D consists of technology-related intangible assets used in R&D activities, which are still incomplete. IPR&D products held by the Company are considered separable from the business as they could be sold to a third party. The IPR&D products were valued using multi-period excess earnings method under the income approach as the most reasonable approach for estimating the fair value of acquired IPR&D Products. The value of IPR&D was accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until the completion or abandonment of the group of projects. Upon the successful completion and launch of a product in the group, we will make a separate determination of useful life of the related IPR&D intangible and commence amortization.

Estimated Amortization Expense for Existing Intangible Assets at December 31, 2013

The following table does not include estimated amortization expense for future milestone payments that may be paid and result in the creation of intangible assets after December 31, 2013 and assumes the intangible asset related to the Par Trade Name as an indefinite lived asset will not be amortized in the future.

($ amounts in thousands)



	Estimated Amortization Expense
2014		$173,926
2015	149,025
2016	154,756
2017	178,103
2018	142,779
2019 and thereafter	267,659
		$1,066,248