INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

The major components of intangible assets as of December 31, 2015 and 2014 were as follows:



	Weighted- Average Useful Lives (Years)	2015							2014 (Restated)
	Weighted- Average Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization, Including Impairments			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization, Including Impairments			Net Carrying Amount
Finite-lived intangible assets:
Product brands	9	$	22,082.8	$	(5,236.4	)	$	16,846.4	$	10,320.1	$	(3,579.8	)	$	6,740.3
Corporate brands	17	1,066.1		(107.1		)	959.0		366.1		(65.2		)	300.9
Product rights/patents	8	4,339.9		(1,711.7		)	2,628.2		3,225.9		(1,263.8		)	1,962.1
Partner relationships	3	217.6		(170.3		)	47.3		236.8		(107.5		)	129.3
Technology and other	7	480.3		(186.1		)	294.2		282.0		(124.3		)	157.7
Total finite-lived intangible assets⁽¹⁾	8	28,186.7		(7,411.6		)	20,775.1		14,430.9		(5,140.6		)	9,290.3
Indefinite-lived intangible assets:
Acquired IPR&D⁽²⁾	NA	610.4		—			610.4		290.1		—			290.1
Corporate brand⁽³⁾	NA	1,697.5		—			1,697.5		1,697.5		—			1,697.5
		$	30,494.6	$	(7,411.6	)	$	23,083.0	$	16,418.5	$	(5,140.6	)	$	11,277.9

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(1)

In the fourth quarter of 2015, the Company recognized impairment charges of $79 million related to the write-off of intangible assets and $23 million related to the write-off of property, plant and equipment, in connection with the termination (the termination was announced in October 2015) of the arrangements with and relating to Philidor (Developed Markets segment). Refer to Note 4 for additional information regarding the Philidor arrangements and their termination. In addition, in the fourth quarter of 2015, the Company recognized an impairment charge of $27 million related to the write-off of ezogabine/retigabine (immediate-release formulation) (Developed Markets segment) resulting from further analysis of commercialization strategy and projections. GSK controls all sales force promotion for ezogabine/retigabine. See Note 7 for information regarding impairment charges recognized in 2013 relating to ezogabine/retigabine.

In the third quarter of 2015, the Company recognized an impairment charge of $26 million related to Zelapar® (Developed Markets segment), resulting from declining sales trends.

In the fourth quarter of 2014, the Company recognized a write-off of $55 million related to the Kinerase® product (Developed Markets segment). The write-off was driven by the discontinuation of the product.

In the third quarter of 2014, the Company recognized a write-off of $32 million related to Grifulvin®, an anti-fungal product (Developed Markets segment). The write-off was driven by withdrawal of the supplemental Abbreviated New Drug Application, which resulted from assessment of extended timelines and increased costs associated with a change in the supplier and the manufacturing process, based on feedback received from the FDA.

These impairment charges were recognized in Amortization and impairments of finite-lived intangible assets in the consolidated statements of (loss) income.


(2)	The Company acquired certain IPR&D assets as part of the Salix Acquisition, as described further in Note 4.

In the fourth quarter of 2015, the Company wrote off an IPR&D asset of $28 million related to the Emerade® development program in the U.S. (Developed Markets segment) based on analysis of feedback received from the FDA, and such program was terminated in the U.S.

In the third quarter of 2015, the Company wrote off an IPR&D asset of $90 million related to the Rifaximin SSD development program (Developed Markets segment) based on analysis of Phase 2 study data, and the program was subsequently terminated.

In the second quarter of 2015, the Company wrote off an IPR&D asset of $12 million related to the Arestin® Peri-Implantitis development program (Developed Markets segment), resulting from analysis of Phase 3 study data.

In the third quarter of 2014, the Company wrote off IPR&D assets of $20 million primarily related to analysis of Phase 2 study data for a dermatological product candidate (Developed Markets segment) acquired in the December 2012 Medicis acquisition.

The write-offs of the IPR&D assets were recognized in In-process research and development impairments and other charges in the consolidated statements of (loss) income.


(3)	Represents the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See Note 4 for further information.

Estimated aggregate amortization expense for each of the five succeeding years ending December 31 is as follows:



	2016		2017		2018		2019		2020
Amortization expense⁽¹⁾	$	2,733.2	$	2,659.0	$	2,522.7	$	2,383.9	$	2,176.6

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(1)	Estimated amortization expense shown in the table above does not include potential future impairments of finite-lived intangible assets, if any.

Goodwill

The changes in the carrying amount of goodwill for years ended December 31, 2015 and 2014 were as follows:



	Developed Markets			Emerging Markets			Total
Balance, December 31, 2013	$	7,428.7		$	2,323.4		$	9,752.1
Additions (Restated)⁽¹⁾	332.4			78.9			411.3
Adjustments⁽²⁾	(19.6		)	(4.3		)	(23.9		)
Divestitures⁽³⁾	(428.9		)	—			(428.9		)
Foreign exchange and other	(182.6		)	(166.6		)	(349.2		)
Balance, December 31, 2014 (Restated)	7,130.0			2,231.4			9,361.4
Additions⁽⁴⁾	9,154.1			308.6			9,462.7
Adjustments⁽⁵⁾	33.5			3.7			37.2
Foreign exchange and other	(176.3		)	(132.2		)	(308.5		)
Balance, December 31, 2015	$	16,141.3		$	2,411.5		$	18,552.8

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(1)	Primarily relates to the PreCision and Solta Medical acquisitions.


(2)	Primarily reflects the impact of measurement period adjustments related to the B&L Acquisition.


(3)	See Note 5 for additional information regarding divestitures.


(4)	Primarily relates to the Salix Acquisition and the Sprout Acquisition (as described in Note 4).


(5)	Primarily reflects the impact of measurement period adjustments for 2014 acquisitions, including PreCision and other smaller acquisitions.

As describe in Note 4, the allocations of the goodwill balance associated with certain acquisitions are provisional and subject to the completion of the valuation of the assets acquired and liabilities assumed.

- 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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