Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in goodwill for the six months ended June 30, 2020 and for the year ended December 31, 2019 were as follows (in thousands):


	June 30, 2020		December 31, 2019
Balance, beginning of period	$	419,504	$	426,226
Impax acquisition adjustment	—		(1,255)
Goodwill acquired during the period	108,790		—
Goodwill divested during the period	—		(5,175)
Currency translation	(819)		(292)
Balance, end of period	$	527,475	$	419,504

As of June 30, 2020, $361 million, $93 million, and $73 million of goodwill was allocated to the Specialty, Generics, and AvKARE segments, respectively. As of December 31, 2019, $361 million and $59 million of goodwill was allocated to the

Specialty and Generics segment, respectively. For the year ended December 31, 2019, goodwill divested was associated with the sale of the Company's operations in the United Kingdom and Germany. For the year ended December 31, 2019, the adjustment to goodwill was associated with the Combination. Refer to Note 3. Acquisitions and Divestitures for additional information about the Acquisitions and the divestitures of the Company's operations in the United Kingdom and Germany.

Intangible assets at June 30, 2020 and December 31, 2019 are comprised of the following (in thousands):


	June 30, 2020													December 31, 2019
	Weighted-Average Amortization Period (in years)	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Amortizing intangible assets:
Product rights	9.5	$	1,189,785	$	(265,284)	$	924,501	$	1,197,535	$	(198,857)	$	998,678
Other intangible assets	6.0	133,800		(15,590)		118,210		3,000		(1,000)		2,000
Subtotal		$	1,323,585	$	(280,874)	$	1,042,711	$	1,200,535	$	(199,857)	$	1,000,678
In-process research and development		381,115		—		381,115		382,075		—		382,075
Total intangible assets		$	1,704,700	$	(280,874)	$	1,423,826	$	1,582,610	$	(199,857)	$	1,382,753

The Company evaluated assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. For the three months ended June 30, 2020, the Company recognized a total of $1 million of intangible asset impairment charges, which was recognized in cost of goods sold impairment charges. For the six months ended June 30, 2020, the Company recognized a total of $3 million of intangible asset impairment charges, of which $2 million was recognized in cost of goods sold impairment charges and $1 million was recognized in in-process research and development impairment charges.

The impairment charges for the three months ended June 30, 2020 are primarily related to three marketed products, two of which experienced significant price erosion during 2020. The contract with the remaining product was terminated with the customer.

The impairment charges for the six months ended June 30, 2020 are primarily related to five currently marketed products and two in-process research and development (“IPR&D”) products that were acquired as part of the Combination. For the currently marketed products, four products experienced significant price erosion during 2020, without an offsetting increase in customer demand, resulting in significantly lower than expected future cash flows and negative margins and one product had its contract terminated. The IPR&D charges are associated with two products, one of which experienced a delay in its estimated launch date and the other was canceled due to the withdrawal of our development partner.

During the six months ended June 30, 2020, the Company recognized $131 million of intangible assets associated with the Acquisitions, of which all are classified in other intangible assets in the table above. These intangible assets consist of government licenses, government contracts, national contracts, customer relationships and a trade name and are amortized to selling, general, and administrative over their estimated useful lives. Refer to Note 3. Acquisitions and Divestitures for additional information.

During the six months ended June 30, 2019, the Company recognized a $50 million product rights intangible asset for the exclusive rights to sell Levothyroxine in the U.S. market under a license and supply agreement with JSP. Refer to Note 5. Alliance and Collaboration for additional information.

For the six months ended June 30, 2019, included in the Company's divested United Kingdom operations were a net customer relationship intangible asset and a net trade name intangible asset of $5 million and $2 million, respectively. Refer to Note 3. Acquisitions and Divestitures for additional information.

Amortization expense related to intangible assets recognized is as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Amortization	$	43,976	$	34,796	$	86,552	$	65,759

The following table presents future amortization expense for the next five years and thereafter, excluding $381 million of IPR&D intangible assets (in thousands):


	Future Amortization
Remainder of 2020	$	88,633
2021	172,302
2022	157,964
2023	146,979
2024	140,021
Thereafter	336,812
Total	$	1,042,711