Goodwill And Other Intangibles

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 8. GOODWILL AND OTHER INTANGIBLES

Goodwill

Changes in the carrying amount of our goodwill for the three months ended March 31, 2013 were as follows:



	Carrying Amount
	Endo Pharmaceuticals		Qualitest		AMS			HealthTronics			Total Consolidated
Balance as of December 31, 2012:
Goodwill	$	290,793	$	275,201	$	1,795,100		$	210,677		$	2,571,771
Accumulated impairment losses	—		—		(507,528		)	(49,892		)	(557,420		)
	$	290,793	$	275,201	$	1,287,572		$	160,785		$	2,014,351
Goodwill acquired during the period	—		—		—			4,592			4,592
Measurement period adjustments	—		—		—			(6		)	(6		)
Effect of currency translation	—		—		(1,574		)	—			(1,574		)
Balance as of March 31, 2013:
Goodwill	290,793		275,201		1,793,526			215,263			2,574,783
Accumulated impairment losses	—		—		(507,528		)	(49,892		)	(557,420		)
	$	290,793	$	275,201	$	1,285,998		$	165,371		$	2,017,363

The goodwill acquired during the period relates to immaterial acquisitions in 2013.

Other Intangible Assets

The following is a summary of other intangible held by the Company at March 31, 2013 and December 31, 2012 (in thousands):



	March 31, 2013			December 31, 2012
Indefinite-lived intangibles:
In-process research and development	$	135,400		$	165,400
Total indefinite-lived intangibles	$	135,400		$	165,400
Definite-lived intangibles:
Licenses (weighted average life of 9 years)	$	605,850		$	605,850
Less accumulated amortization	(349,334		)	(329,120		)
Licenses, net	$	256,516		$	276,730
Customer relationships (weighted average life of 16 years)	159,389			160,210
Less accumulated amortization	(18,139		)	(15,682		)
Customer relationships, net	$	141,250		$	144,528
Tradenames (weighted average life of 22 years)	91,600			91,600
Less accumulated amortization	(9,891		)	(8,742		)
Tradenames, net	$	81,709		$	82,858
Developed technology (weighted average life of 16 years)	1,733,586			1,694,336
Less accumulated amortization	(291,505		)	(266,350		)
Developed technology, net	$	1,442,081		$	1,427,986
Other (weighted average life of 13 years)	1,742			1,742
Less accumulated amortization	(300		)	(271		)
Other, net	$	1,442		$	1,471
Total definite-lived intangibles, net (weighted average life of 15 years)	$	1,922,998		$	1,933,573
Other intangibles, net	$	2,058,398		$	2,098,973

As of March 31, 2013, the weighted average amortization period for our definite-lived intangible assets in total was approximately 15 years.

Amortization expense for the three month periods ended March 31, 2013 and 2012 totaled $49.1 million and $53.5 million, respectively. Estimated amortization of intangibles for the 5 years subsequent to December 31, 2012 is as follows (in thousands):



2013	$	184,765
2014	$	159,090
2015	$	153,809
2016	$	152,582
2017	$	141,111

Changes in the gross carrying amount of our other intangible assets for the three months ended March 31, 2013 were as follows:



	Gross Carrying Amount
December 31, 2012	$	2,719,138
Patents acquired	9,250
Effect of currency translation	(821		)
March 31, 2013	$	2,727,567

Impairments

There were no goodwill or other intangible impairments during the three months ended March 31, 2013. A summary of other intangible asset impairment charges for the three months ended March 31, 2012 is included below by reportable segment.

Endo Pharmaceuticals Segment

Pursuant to the Sanctura XR^® Amended and Restated License, Commercialization and Supply Agreement with Allergan USA, Inc. (Allergan), the Company received royalties based on net sales of Sanctura XR^® made by Allergan. In March 2009, Watson Pharmaceuticals Inc. (now doing business as Actavis, Inc. and referred to herein as Watson or Actavis) filed an Abbreviated New Drug Application (ANDA) seeking FDA approval to market generic versions of Sanctura XR^® before the expiration of Allergan’s patents listed in the Orange Book. Subsequent to Watson’s ANDA filing, Sandoz Inc. and Paddock Laboratories, Inc. (acquired by Perrigo Company in August 2011) also filed ANDAs for a generic version of Sanctura XR^®. In April 2012, the U.S. District Court for the District of Delaware ruled that five patents covering Allergan’s Sanctura XR^® (trospium chloride) extended-release capsules were invalid. The Company and Allergan appealed this ruling, and subsequently in June 2012, this appeal was dismissed.

As part of our first quarter 2012 financial close and reporting process, the Company concluded that an impairment assessment was required to evaluate the recoverability of the Sanctura XR^® indefinite-lived intangible asset. The Company assessed the recoverability of this asset and determined the fair value of the Sanctura XR^® intangible asset to be $21.6 million at March 31, 2012. Accordingly, the Company recorded a pre-tax non-cash impairment charge of $40.0 million in March 2012, representing the difference between the carrying amount of the intangible asset and its estimated fair value at March 31, 2012.

There were no other intangible asset impairment charges for any of our other segments for the three months ended March 31, 2012.

- 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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