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GOODWILL AND OTHER INTANGIBLES
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLES
NOTE 11. GOODWILL AND OTHER INTANGIBLES
Goodwill
Changes in the carrying amounts of our goodwill for the years ended December 31, 2021 and December 31, 2020 were as follows (in thousands):
Branded PharmaceuticalsSterile InjectablesGeneric PharmaceuticalsInternational PharmaceuticalsTotal
Goodwill as of December 31, 2019$828,818 $2,731,193 $— $35,173 $3,595,184 
Effect of currency translation— — — (2,387)(2,387)
Goodwill impairment charges— — — (32,786)(32,786)
Goodwill as of December 31, 2020$828,818 $2,731,193 $— $— $3,560,011 
Goodwill impairment charges— (363,000)— — (363,000)
Goodwill as of December 31, 2021$828,818 $2,368,193 $— $— $3,197,011 
The carrying amounts of goodwill at December 31, 2021 and December 31, 2020 are net of the following accumulated impairments (in thousands):
Branded PharmaceuticalsSterile InjectablesGeneric PharmaceuticalsInternational PharmaceuticalsTotal
Accumulated impairment losses as of December 31, 2020$855,810 $— $3,142,657 $546,251 $4,544,718 
Accumulated impairment losses as of December 31, 2021$855,810 $363,000 $3,142,657 $550,355 $4,911,822 
Other Intangible Assets
Changes in the amounts of other intangible assets for the year ended December 31, 2021 are set forth in the table below (in thousands). This table excludes changes related to assets classified as held for sale to the extent such changes occurred after the assets were classified as held for sale.
Cost basis:Balance as of December 31, 2020AcquisitionsImpairmentsOther (1)Effect of Currency TranslationBalance as of December 31, 2021
Indefinite-lived intangibles:
In-process research and development$3,000 $— $— $(3,000)$— $— 
Total indefinite-lived intangibles$3,000 $— $— $(3,000)$— $— 
Finite-lived intangibles:
Licenses (weighted average life of 14 years)
$439,230 $4,177 $(1,300)$— $— $442,107 
Tradenames6,409 — — — — 6,409 
Developed technology (weighted average life of 11 years)
6,442,734 — (6,511)(212,043)1,959 6,226,139 
Total finite-lived intangibles (weighted average life of 12 years)
$6,888,373 $4,177 $(7,811)$(212,043)$1,959 $6,674,655 
Total other intangibles$6,891,373 $4,177 $(7,811)$(215,043)$1,959 $6,674,655 
Accumulated amortization:Balance as of December 31, 2020AmortizationImpairmentsOther (1)Effect of Currency TranslationBalance as of December 31, 2021
Finite-lived intangibles:
Licenses$(415,193)$(4,739)$— $— $— $(419,932)
Tradenames(6,409)— — — — (6,409)
Developed technology(3,728,963)(368,168)— 212,764 (1,124)(3,885,491)
Total other intangibles$(4,150,565)$(372,907)$— $212,764 $(1,124)$(4,311,832)
Net other intangibles$2,740,808 $2,362,823 
__________
(1)Amounts include: (i) reclassification adjustments of $3.0 million for certain developed technology intangible assets, previously classified as in-process research and development, that were placed in service during the year ended December 31, 2021; (ii) the transfer, during the third quarter of 2021, of certain developed technology intangible assets with a cost basis of $213.5 million and accumulated amortization of $211.2 million to assets held for sale, as further discussed in Note 3. Discontinued Operations; and (iii) the removal of certain fully amortized developed technology intangible assets.
Amortization expense for the years ended December 31, 2021, 2020 and 2019 totaled $372.9 million, $427.5 million and $543.9 million, respectively. Amortization expense is included in Cost of revenues in the Consolidated Statements of Operations. For intangible assets subject to amortization, estimated amortization expense for the five fiscal years subsequent to December 31, 2021 is as follows (in thousands):
2022$357,119 
2023$314,955 
2024$280,325 
2025$258,660 
2026$230,644 
Impairments
Goodwill and, if applicable, indefinite-lived intangible assets are tested for impairment annually and when events or changes in circumstances indicate that the asset might be impaired. Our annual assessment is performed as of October 1.
As part of our goodwill and intangible asset impairment assessments, we estimate the fair values of our reporting units and our intangible assets using an income approach that utilizes a discounted cash flow model or, where appropriate, a market approach.
The discounted cash flow models are dependent upon our estimates of future cash flows and other factors including estimates of (i) future operating performance, including future sales, long-term growth rates, gross margins, operating expenses, discount rate and the probability of achieving the estimated cash flows and (ii) future economic conditions. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The discount rates applied to the estimated cash flows for the Company’s October 1, 2021, 2020 and 2019 annual goodwill and indefinite-lived intangible assets impairment tests ranged from 11.0% to 14.5%, from 10.0% to 15.0% and from 9.5% to 13.5%, respectively, depending on the overall risk associated with the particular assets and other market factors. We believe the discount rates and other inputs and assumptions are consistent with those that a market participant would use. Any impairment charges resulting from annual or interim goodwill and intangible asset impairment assessments are recorded to Asset impairment charges in our Consolidated Statements of Operations.
During the years ended December 31, 2021, 2020 and 2019, the Company incurred the following goodwill and other intangible asset impairment charges (in thousands):
202120202019
Goodwill impairment charges$363,000 $32,786 $171,908 
Other intangible asset impairment charges$7,811 $79,917 $347,706 
Except as described below, pre-tax non-cash asset impairment charges related primarily to certain in-process research and development and/or developed technology intangible assets that were tested for impairment following changes in market conditions and certain other factors impacting recoverability.
Annual Goodwill Impairment Tests
As a result of our annual tests performed as of October 1, 2021, the Company determined that the carrying amount of the Sterile Injectables reporting unit exceeded its estimated fair value; therefore, the Company recorded a pre-tax non-cash goodwill impairment charge of $363.0 million during the fourth quarter of 2021. The Sterile Injectables impairment was primarily a result of changes in assumptions related to competition, including assumptions related to competing generic alternatives to VASOSTRICT®, which were subsequently introduced beginning with Eagle’s at-risk launch in January 2022.
As a result of our annual tests performed as of October 1, 2019, the Company determined that the carrying amount of the Paladin reporting unit exceeded its estimated fair value; therefore, the Company recorded a pre-tax non-cash goodwill impairment charge of $20.8 million during the fourth quarter of 2019. The Paladin impairment was primarily a result of certain anticipated product discontinuation activities. The impairment also reflects the estimated impact of Canadian pricing regulations that were issued in the second half of 2019.
We did not record any other goodwill impairment charges as a result of our October 1, 2021, 2020 and 2019 annual impairment tests.
Other Impairment Tests
As a result of certain business decisions that occurred during the first quarter of 2020, we tested the goodwill of our Paladin reporting unit for impairment as of March 31, 2020. The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model. The discount rate utilized in this test was 9.5%. This goodwill impairment test resulted in a pre-tax non-cash goodwill impairment charge of $32.8 million during the three months ended March 31, 2020, representing the remaining carrying amount. This impairment was primarily attributable to portfolio decisions and updated market expectations during the quarter.
As a result of certain competitive events that occurred during the first quarter of 2019, we tested the goodwill of our Generic Pharmaceuticals reporting unit for impairment as of March 31, 2019. The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model. The discount rate utilized in this test was 10.5%. This goodwill impairment test resulted in a pre-tax non-cash goodwill impairment charge of $86.0 million during the three months ended March 31, 2019, representing the excess of this reporting unit’s carrying amount over its estimated fair value. This Generic Pharmaceuticals impairment can be primarily attributed to the impact of the competitive events referenced above and an increase in the discount rate used in the determination of fair value.
During the second quarter of 2019, unfavorable competitive and pricing events occurred that caused us to update certain assumptions from those used in our first-quarter 2019 Generic Pharmaceuticals goodwill impairment test. We considered these events, together with the fact that this reporting unit’s carrying amount equaled its fair value immediately subsequent to the first-quarter 2019 goodwill impairment charge, as part of our qualitative assessment of goodwill triggering events for the second quarter of 2019. As a result, we concluded that it was more likely than not that the fair value of this reporting unit was below its carrying amount as of June 30, 2019 and a goodwill impairment test was required. After performing this quantitative test, we determined that this reporting unit’s carrying amount exceeded its estimated fair value. The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model. The discount rate utilized in this test was 10.5%. Based on the excess of this reporting unit’s carrying amount over its estimated fair value, we recorded a pre-tax non-cash goodwill impairment charge of $65.1 million during the three months ended June 30, 2019, representing the entire remaining amount of this reporting unit’s goodwill.