BUSINESS COMBINATIONS (Tables)

3 Months Ended

Mar. 31, 2012

Schedule of pro forma impact of merger and acquisition

	Three Months Ended March 31

	2012			2011
Revenues	$	864,643		$	752,120
Net (loss) income		(64	)		14,042
Basic (loss) earnings per share	$	—		$	0.05
Diluted (loss) earnings per share	$	—		$	0.04

Gerot Lannach

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date

Property and equipment	$	1,204
Deferred tax asset		536
Identifiable intangible assets^(a)		169,276

Total indentifiable net assets		171,016
Goodwill^(b)		9,739

Total fair value of consideration transferred	$	180,755

(a): The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:

		Amounts Recognized as of Acquisition Date

Product brands	11	$	153,140
Partner relationships	5		16,136

Total identifiable intangible assets acquired	10	$	169,276

(b)

Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. The Company expects that the goodwill will be deductible for tax purposes in Switzerland. The goodwill recorded represents the following:

•: cost savings, operating synergies and other benefits expected to result from combining the operations of Gerot Lannach with those of the Company; and
•: intangible assets that do not qualify for separate recognition (for instance, Gerot Lannach's assembled workforce).

The provisional amount of goodwill has been allocated to the Company's Emerging Markets segment as indicated in note 9.

Summary of amounts and useful lives assigned to identifiable intangible assets

		Amounts Recognized as of Acquisition Date

Product brands	11	$	153,140
Partner relationships	5		16,136

Total identifiable intangible assets acquired	10	$	169,276

Probiotica

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date

Cash and cash equivalents	$	1,125
Accounts receivable^(a)		11,078
Inventories		5,438
Property, plant and equipment		2,579
Deferred tax assets		460
Identifiable intangible assets^(b)		37,938
Indemnification assets^(c)		27,901
Current liabilities		(6,417	)
Liability for uncertain tax position		(6,682	)
Other non-current liabilities^(c)		(27,901	)

Total indentifiable net assets		45,519
Goodwill^(d)		45,104

Total fair value of consideration transferred	$	90,623

(a): The fair value of trade accounts receivable acquired was $11.1 million, with the gross contractual amount being $12.1 million, of which the Company expects that $1.0 million will be uncollectible.

(b): The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:

		Amounts Recognized as of Acquisition Date

Corporate brands	15	$	19,026
Partner relationships	5		14,557
Product brands	10		4,355

Total identifiable intangible assets acquired	11	$	37,938

(c)

Other non-current liabilities, and the corresponding indemnification assets, primarily relate to certain asserted and unasserted claims against Probiotica, which include potential tax-related obligations that existed at the acquisition date. The Company is indemnified by the sellers in accordance with indemnification provisions under its contractual arrangements. Indemnification assets and contingent liabilities were recorded at the same amount and classified in the same manner, as components of the purchase price, representing our best estimates of these amounts at the acquisition date, in accordance with guidance for loss contingencies and uncertain tax positions. Under the Company's contractual arrangement, there is no limitation on the amount or value of indemnity claims that can be made by the Company. However there is a time restriction of either two or five years, depending on the nature of the claim. Approximately $12.9 million (R$22.5 million) of the purchase price has been placed in escrow in accordance with the indemnification provisions. The escrow account will be maintained for two years, with 50% being released to the sellers after the first year, and the remaining balance released after the second year. The Company expects the total amount of the indemnification assets to be collectible from the sellers. The Company is continuing to gather and assess information with respect to the non-current liabilities and indemnification assets.

(d)

•: the Company's expectation to develop and market new product brands and product lines in the future;
•: the value associated with the Company's ability to develop relationships with new customers;
•: the value of the continuing operations of Probiotica's existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and
•: intangible assets that do not qualify for separate recognition (for instance, Probiotica's assembled workforce).

The provisional amount of goodwill has been allocated to the Company's Emerging Markets segment as indicated in note 9.

Summary of amounts and useful lives assigned to identifiable intangible assets

		Amounts Recognized as of Acquisition Date

Corporate brands	15	$	19,026
Partner relationships	5		14,557
Product brands	10		4,355

Total identifiable intangible assets acquired	11	$	37,938

iNova

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date^(a)			Measurement Period Adjustments^(b)			Amounts Recognized (as adjusted)

Cash and cash equivalents	$	8,792		$	—		$	8,792
Accounts receivable^(c)		30,525			—			30,525
Inventories		43,387			(1,400	)		41,987
Property, plant and equipment		15,257			(1,996	)		13,261
Identifiable intangible assets^(d)		423,950			(2,188	)		421,762
Current liabilities		(32,500	)		(1,713	)		(34,213	)

Total indentifiable net assets		489,411			(7,297	)		482,114
Goodwill^(e)		211,770			7,297			219,067

Total fair value of consideration transferred	$	701,181		$	—		$	701,181

(a): As previously reported in the 2011 Form 10-K.
(b): The measurement period adjustments primarily reflect: (i) changes in the estimated fair value of an intangible asset and the related inventory; (ii) additional information obtained with respect to the fair value of an acquired manufacturing facility; and (iii) additional information obtained with respect to the valuation of compensation-related liabilities. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company's previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.
(c): The fair value of trade accounts receivable acquired was $30.5 million, with the gross contractual amount being $31.5 million, of which the Company expects that $1.0 million will be uncollectible.
(d): The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:

		Amounts Recognized as of Acquisition Date		Measurement Period Adjustments			Amounts Recognized (as adjusted)

Product brands	8	$	418,252	$	(2,188	)	$	416,064
Corporate brands	4		5,698		—			5,698

Total identifiable intangible assets acquired	8	$	423,950	$	(2,188	)	$	421,762

(e)

Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:

•: cost savings, operating synergies and other benefits expected to result from combining the operations of iNova with those of the Company;
•: the value of the continuing operations of iNova's existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and
•: intangible assets that do not qualify for separate recognition (for instance, iNova's assembled workforce).

The provisional amount of goodwill has been allocated to the Company's Canada and Australia segment ($136.0 million) and the Company's Emerging Markets segment ($83.1 million).

Summary of amounts and useful lives assigned to identifiable intangible assets

		Amounts Recognized as of Acquisition Date		Measurement Period Adjustments			Amounts Recognized (as adjusted)

Product brands	8	$	418,252	$	(2,188	)	$	416,064
Corporate brands	4		5,698		—			5,698

Total identifiable intangible assets acquired	8	$	423,950	$	(2,188	)	$	421,762

Dermik

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date^(a)

Inventories	$	32,360
Property, plant and equipment		39,581
Identifiable intangible assets^(b)		341,680
Deferred tax liability		(1,262	)

Total indentifiable net assets		412,359
Goodwill^(c)		8,141

Total fair value of consideration transferred	$	420,500

(a): As previously reported in the 2011 Form 10-K. To date, the Company has not recognized any measurement period adjustments related to this acquisition.
(b): The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:

		Amounts Recognized as of Acquisition Date

Product brands	9	$	292,472
Product rights	5		33,857
Manufacturing agreement	5		15,351

Total identifiable intangible assets acquired	9	$	341,680

(c): Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. The Company expects that $6.4 million of the goodwill will be deductible for tax purposes. The goodwill recorded represents primarily the value of Dermik's assembled workforce. The provisional amount of goodwill has been allocated to the Company's U.S. Dermatology segment.

Summary of amounts and useful lives assigned to identifiable intangible assets

		Amounts Recognized as of Acquisition Date

Product brands	9	$	292,472
Product rights	5		33,857
Manufacturing agreement	5		15,351

Total identifiable intangible assets acquired	9	$	341,680

Ortho Dermatologics

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date^(a)

Inventories	$	6,169
Property, plant and equipment		206
Identifiable intangible assets, excluding acquired IPR&D^(b)		333,599
Acquired IPR&D^(c)		4,318
Deferred tax liability		(1,690	)

Total indentifiable net assets		342,602
Goodwill^(d)		3,507

Total fair value of consideration transferred	$	346,109

(a): As previously reported in the 2011 Form 10-K. To date, the Company has not recognized any measurement period adjustments related to this acquisition.
(b): The identifiable intangible assets acquired relate to product brands intangible assets with an estimated weighted-average useful life of approximately nine years.
(c): The acquired IPR&D asset relates to the development of the MC5 program, a topical treatment for acne vulgaris.
(d): Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations of Ortho Dermatologics with those of the Company. The provisional amount of goodwill has been allocated to the Company's U.S. Dermatology segment.

Afexa

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date^(a)			Measurement Period Adjustments^(b)			Amounts Recognized (as adjusted)

Cash	$	1,558		$	—		$	1,558
Accounts receivable^(c)		9,436			(1,524	)		7,912
Inventories		22,489			—			22,489
Other current assets		5,406			—			5,406
Property and equipment		8,766			—			8,766
Identifiable intangible assets^(d)		80,580			(5,850	)		74,730
Current liabilities		(18,104	)		—			(18,104	)
Deferred income taxes, net		(20,533	)		1,462			(19,071	)
Other non-current liabilities		(1,138	)		—			(1,138	)

Total indentifiable net assets		88,460			(5,912	)		82,548
Goodwill^(e)		3,070			5,912			8,982

Total fair value of consideration transferred	$	91,530		$	—		$	91,530

(a): As previously reported in the 2011 Form 10-K.
(b): The measurement period adjustments primarily reflect: (i) changes in the estimated fair value of certain intangible assets; (ii) changes in estimated sales reserves; and (iii) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company's previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.
(c): Both the fair value and gross contractual amount of trade accounts receivable acquired were $7.9 million, as the Company expects that the amount to be uncollectible is negligible.
(d): The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:

		Amounts Recognized as of Acquisition Date		Measurement Period Adjustments			Amounts Recognized (as adjusted)

Product brands	11	$	65,194	$	(5,850	)	$	59,344
Patented technology	7		15,386		—			15,386

Total identifiable intangible assets acquired	10	$	80,580	$	(5,850	)	$	74,730

(e)

Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:

•: cost savings, operating synergies and other benefits expected to result from combining the operations of Afexa with those of the Company; and
•: intangible assets that do not qualify for separate recognition (for instance, Afexa's assembled workforce).

The provisional amount of goodwill has been allocated to the Company's Canada and Australia segment.

Summary of amounts and useful lives assigned to identifiable intangible assets

		Amounts Recognized as of Acquisition Date		Measurement Period Adjustments			Amounts Recognized (as adjusted)

Product brands	11	$	65,194	$	(5,850	)	$	59,344
Patented technology	7		15,386		—			15,386

Total identifiable intangible assets acquired	10	$	80,580	$	(5,850	)	$	74,730

Sanitas

Business Combinations

Summary of estimated fair value of assets acquired and liabilities assumed as of the acquisition date

	Amounts Recognized as of Acquisition Date^(a)

Cash and cash equivalents	$	5,607
Accounts receivable^(b)		25,645
Inventories		22,010
Other current assets		3,166
Property, plant and equipment		83,288
Identifiable intangible assets, excluding acquired IPR&D^(c)		247,127
Acquired IPR&D		747
Other non-current assets		2,662
Current liabilities		(30,428	)
Long-term debt, including current portion^(d)		(67,134	)
Deferred income taxes, net		(43,269	)
Other non-current liabilities		(6,049	)

Total indentifiable net assets		243,372
Goodwill^(e)		204,791

Total fair value of consideration transferred	$	448,163

(a): As previously reported in the 2011 Form 10-K. To date, the Company has not recognized any measurement period adjustments related to this acquisition.
(b): The fair value of trade accounts receivable acquired was $25.6 million, with the gross contractual amount being $27.8 million, of which the Company expects that $2.2 million will be uncollectible.
(c): The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:

		Amounts Recognized as of Acquisition Date

Product brands	7	$	164,823
Product rights	7		43,027
Corporate brands	15		25,227
Partner relationships	7		14,050

Total identifiable intangible assets acquired	8	$	247,127

(d)

Effective December 1, 2011, Sanitas terminated its Facility Agreement and Revolving Credit Line Agreement, repaid the amounts outstanding under its credit facilities and cancelled the undrawn credit facilities.

(e)

Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:

•: cost savings, operating synergies and other benefits expected to result from combining the operations of Sanitas with those of the Company;
•: the value of the continuing operations of Sanitas's existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and
•: intangible assets that do not qualify for separate recognition (for instance, Sanitas's assembled workforce).

Summary of amounts and useful lives assigned to identifiable intangible assets

		Amounts Recognized as of Acquisition Date

Product brands	7	$	164,823
Product rights	7		43,027
Corporate brands	15		25,227
Partner relationships	7		14,050

Total identifiable intangible assets acquired	8	$	247,127

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

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