Goodwill and Intangible Assets

12 Months Ended

Sep. 25, 2015

Goodwill and Intangible Assets Disclosure [Abstract]



11.	Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by segment were as follows:



	September 25, 2015					September 26, 2014
	Gross Carrying Amount		Accumulated Impairment			Gross Carrying Amount		Accumulated Impairment
Specialty Brands	$	3,442.4	$	—		$	2,194.9	$	—
Specialty Generics	207.0		—			207.0		—
Nuclear Imaging	119.5		(119.5		)	119.5		(119.5		)
Total	$	3,768.9	$	(119.5	)	$	2,521.4	$	(119.5	)

During the fiscal year ended September 25, 2015, the gross carrying value of goodwill in the Specialty Brands segment increased by $1,247.5 million, attributable to $792.4 million from the Ikaria Acquisition, $437.2 million from the Therakos Acquisition and $17.9 million resulting from adjustments to the Questcor Acquisition purchase price allocation.

Goodwill Impairment Analysis

The Company has identified the Specialty Brands, Specialty Generics and the Nuclear Imaging businesses as representing both segments and reporting units. For purposes of assessing impairment and the recoverability of goodwill for each reporting unit the Company makes various assumptions regarding estimated future cash flows, discount rates and other factors in determining the fair values of each reporting unit using the income approach. The Company's projections of future cash flows were then discounted based on a WACC determined from relevant market comparisons, adjusted upward for specific reporting unit risks (primarily the uncertainty of achieving projected operating cash flows). A terminal value growth rate was applied to the terminal year cash flows, both of which represent the Company's estimate of stable, sustainable growth. The fair value of the reporting unit represents the sum of the discounted cash flows from the discrete period and the terminal year cash flows. The fair values of the reporting units were assessed for reasonableness by aggregating the fair values and comparing this to the Company's market capitalization with a control premium.

The Company's projections in its Specialty Brands reporting unit include long-term revenue and operating income at levels higher than historical levels, which is primarily associated with revenue growth for Acthar, Inomax and Ofirmev. The projections also reflect the potential impacts from the future loss of exclusivity related to Ofirmev. The Company utilized a WACC of 12.0%. These assumptions resulted in a fair value of the Specialty Brands reporting unit in excess of its net book value. Should the Specialty Brands reporting unit fail to experience growth in the aforementioned products, revise its long-term projections for these products downward or market conditions dictate utilization of higher discount rates, the Specialty Brands reporting unit could be subject to impairment in future periods.

The Company's projections in its Specialty Generics and API reporting unit include long-term revenue and operating income at levels lower than historical levels primarily attributable to increased competition. The Company utilized a WACC of 11.0%. These assumptions resulted in a fair value of the Specialty Generics and API reporting unit in excess of its net book value.

In fiscal 2014, the Company recorded goodwill impairment charges related to our former Global Medical Imaging reporting unit (which included the CMDS business that is now included within discontinued operations and the remaining Nuclear Imaging reporting unit). The Company recorded an impairment charge related to goodwill in fiscal 2014 of $219.7 million, which eliminated all goodwill balances related to the Global Medical Imaging reporting unit. In fiscal 2015, the Company announced that it had entered into a definitive agreement to sell its CMDS business, therefore the business was deemed to be held for sale and the financial results of this business are presented as a discontinued operation. The Company reclassified $100.2 million of the impairment charge to discontinued operations.

The gross carrying amount and accumulated amortization of intangible assets, excluding held for sale intangible assets, at the end of each period were as follows:



	September 25, 2015				September 26, 2014
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable:
Completed technology	$	9,896.0	$	765.8	$	6,906.0	$	235.6
Licenses	185.1		99.8		185.1		87.3
Customer relationships	28.1		4.4		33.8		0.6
Trademarks	82.1		6.2		13.0		4.1
Other	6.7		6.7		6.7		5.0
Total	$	10,198.0	$	882.9	$	7,144.6	$	332.6
Non-Amortizable:
Trademarks	$	35.0			$	35.0
In-process research and development	316.2				235.2
Total	$	351.2			$	270.2

Finite-lived intangible asset amortization expense within continuing operations was $550.3 million, $154.8 million and $27.9 million in fiscal 2015, 2014 and 2013, respectively. The estimated aggregate amortization expense on intangible assets owned by the Company, excluding held for sale intangible assets, is expected to be as follows:




Fiscal 2016	$	693.7
Fiscal 2017	691.9
Fiscal 2018	682.9
Fiscal 2019	682.6
Fiscal 2020	682.0

- 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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