
(In millions)	Developed Markets (1)		Greater China		JANZ (2)		Emerging Markets (3)		Total



Balance at December 31, 2021	$	8,723.4	$	969.5	$	776.3	$	1,644.5	$	12,113.7
Disposition (4)	(743.9)		(2.7)		(32.6)		(140.5)		(919.7)
Impairment	—		—		—		(117.0)		(117.0)
Foreign currency translation	(518.0)		(26.2)		(54.7)		(52.3)		(651.2)
Balance at December 31, 2022	$	7,461.5	$	940.6	$	689.0	$	1,334.7	$	10,425.8




Acquisitions	95.9		—		—		—		95.9

Impairment (4)	(544.0)		—		(30.0)		(7.0)		(581.0)
Reclassification to assets held for sale	(52.0)		—		—		(137.0)		(189.0)
Foreign currency translation	146.0		(7.8)		(13.3)		(9.5)		115.4
Balance at December 31, 2023	$	7,107.4	$	932.8	$	645.7	$	1,181.2	$	9,867.1

The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company performed the annual goodwill impairment test as of April 1, 2023.

The Company performed its annual goodwill impairment test on a quantitative basis for its five reporting units, North America, Europe, Emerging Markets, JANZ, and Greater China. In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing a discounted cash flow approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are not limited to, the discount rate, terminal growth rates, operating income before depreciation and amortization, capital expenditures forecasts and control premiums.

When compared to the prior year’s annual goodwill impairment test completed on April 1, 2022, the Company has experienced significant fluctuations in foreign exchange rates in certain international markets, combined with a significant increase in market interest rates. These market factors have caused the discount rate utilized in all our reporting units to increase between 1.0% to 4.5%, resulting in a significant reduction in the calculated fair values at April 1, 2023 for all our reporting units. Also, in conjunction with the Company’s annual strategic planning process which included determining long-term growth rate targets for our business, operational results during the forecast period were reduced and long-term growth rates were increased. As a result of these changes, the calculated fair values of the North America, Greater China and Europe reporting units declined in excess of 10% and the JANZ and Emerging Markets reporting units declined in excess of 15% when compared to the prior year fair values.

As of April 1, 2023, the allocation of the Company’s total goodwill was as follows: North America $3.15 billion, Europe $4.47 billion, Emerging Markets $1.34 billion, JANZ $0.68 billion and Greater China $0.94 billion.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $535 million or 3.9% for the annual goodwill impairment test. As it relates to the discounted cash flow approach for the Europe reporting unit at April 1, 2023, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 2.4%. A terminal year value was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 11.0% and the estimated tax rate was 14.9%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 1.0% or an increase in discount rate by 0.5% would result in an impairment charge for the Europe reporting unit.

For the JANZ reporting unit, the estimated fair value exceeded its carrying value by approximately $145 million or 5.5% for the annual goodwill impairment test. As it relates to the discounted cash flow approach for the JANZ reporting unit at April 1, 2023, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately negative 2.0%. A terminal year value was calculated with a 1.5% revenue growth rate applied. The discount rate utilized was 7.0% and the estimated tax rate was 30.6%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 0.5% or an increase in discount rate by 0.5% would result in an impairment charge for the JANZ reporting unit.

For the Emerging Markets reporting unit, the estimated fair value exceeded its carrying value by approximately $513 million or 7.7% for the annual goodwill impairment test. As it relates to the discounted cash flow approach for the Emerging Markets reporting unit at April 1, 2023, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 1.8%. A terminal year value was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 11.5% and the estimated tax rate was 17.4%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 2.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Emerging Markets reporting unit.

In the fourth quarter of 2023, the OTC Business met the criteria to be classified as held for sale. The Company allocated goodwill to its OTC Business using a relative fair value approach and recorded a goodwill impairment charge of $580.1 million in that quarter within the Europe (majority of the charge), JANZ and Emerging Markets reporting units, which was recorded within SG&A in the consolidated statement of operations. The goodwill impairment charge was the result of the estimated proceeds less selling costs from the planned divestiture of the OTC Business being below the carrying value of the net assets of the disposal group.

In conjunction with the Biocon Biologics Transaction, the Company allocated goodwill to its biosimilars portfolio using a relative fair value approach and reclassified the amount to assets held for sale. Upon closing of the Biocon Biologics Transaction on November 29, 2022, we derecognized goodwill of $919.7 million allocated to the biosimilars portfolio.

In the fourth quarter of 2022, the commercialization rights in the Upjohn Distributor Markets met the criteria to be classified as held for sale. The Company allocated goodwill to its commercialization rights in the Upjohn Distributor Markets using a relative fair value approach and recorded a goodwill impairment charge of $117.0 million in that quarter within the Emerging Markets reporting unit, which was recorded within SG&A in the consolidated statement of operations. The goodwill impairment charge was the result of the estimated proceeds less selling costs from the disposal of the commercialization rights in the Upjohn Distributor Markets being below the carrying value of the net assets of the disposal group.

Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition, changes in underlying assumptions, especially as they relate to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.


(In millions)	Weighted Average Life (Years)	Cost		Accumulated Amortization		Net Book Value
December 31, 2023
Product rights, licenses and other (1)	13	$	34,178.1	$	15,316.4	$	18,861.7
In-process research and development		319.4		—		319.4
		$	34,497.5	$	15,316.4	$	19,181.1
December 31, 2022
Product rights, licenses and other (1)	15	$	37,490.5	$	14,923.6	$	22,566.9
In-process research and development		40.2		—		40.2
		$	37,530.7	$	14,923.6	$	22,607.1

During the year ended December 31, 2023, the Company reclassified intangible assets of approximately $1.93 billion relating to the remaining announced divestitures that have not been consummated as of December 31, 2023 to Assets Held for Sale. Refer to Note 5 Divestitures for additional information.

During the year ended December 31, 2023, the Company recorded intangible assets of approximately $334.0 million as part of the Oyster Point acquisition, and IPR&D of approximately $290.0 million as part of the Famy Life Sciences acquisition. Refer to Note 4 Acquisitions and Other Transactions for additional information.

Product rights and licenses are primarily comprised of the products marketed at the time of acquisition. These product rights and licenses relate to numerous individual products, the net book value of which, by product category, is as follows:


(In millions)	Developed Markets		Greater China		JANZ		Emerging Markets		December 31, 2023
Brands	$	7,723.4	$	5,206.8	$	961.0	$	2,855.9	$	16,747.1

Generics	1,708.2		9.7		216.2		179.8		2,113.9
Total Product Rights and Licenses	$	9,431.6	$	5,216.5	$	1,177.2	$	3,035.7	$	18,861.0


(In millions)	Developed Markets		Greater China		JANZ		Emerging Markets		December 31, 2022
Brands	$	8,762.2	$	5,632.3	$	1,061.3	$	3,122.5	$	18,578.3

Generics	3,448.9		10.6		264.2		263.9		3,987.6
Total Product Rights and Licenses	$	12,211.1	$	5,642.9	$	1,325.5	$	3,386.4	$	22,565.9

(a)As a result of the contribution of the biosimilars business to Biocon Biologics in November 2022, Complex Gx and Biosimilars, which were previously presented as a separate line item, are now included within Generics. Reclassifications were made to prior periods to conform to the current period presentation.

Amortization expense and intangible asset disposal & impairment charges (which are included as a component of amortization expense) are classified primarily within Cost of Sales in the consolidated statements of operations, and were as follows for the years ended December 31, 2023, 2022 and 2021:


	Year ended December 31,
(In millions)	2023		2022		2021
Intangible asset amortization expense	$	2,317.1	$	2,504.6	$	2,702.2
IPR&D intangible asset impairment charges	—		0.6		19.4
Finite-lived intangible asset disposal & impairment charges	32.0		172.9		83.4
Total intangible asset amortization expense (including disposal & impairment charges)	$	2,349.1	$	2,678.1	$	2,805.0

The assessment for impairment of finite-lived intangibles is based on our ability to recover the carrying value of the long-lived assets or asset grouping by analyzing the expected future undiscounted pre-tax cash flows specific to the asset or asset grouping. If the carrying amount is greater than the undiscounted cash flows, the Company recognizes an impairment loss for the excess of the carrying amount over the estimated fair value based on discounted cash flows.

Significant management judgment is involved in estimating the recoverability of these assets and is dependent upon the accuracy of the assumptions used in making these estimates, as well as how the estimates compare to the eventual future operating performance of the specific asset or asset grouping. The fair value of finite-lived intangible assets was calculated as the present value of the estimated future net cash flows using a market rate of return. The assumptions inherent in the estimated future cash flows include, among other things, the impact of the current competitive environment and future market expectations. Any future long-lived assets impairment charges could have a material impact on the Company’s consolidated financial condition and results of operations.

During the years ended December 31, 2023, and 2022, the Company recognized intangible asset charges of approximately $32.0 million and $172.9 million, respectively, recorded within Cost of Sales in the consolidated statements of operations, to write down the disposal group to fair value, less cost to sell, related to our commercialization rights in the Upjohn Distributor Markets, which was classified as held for sale. Refer to Note 5 Divestitures for additional information. On April 30, 2021, the Company completed an agreement to divest a group of OTC products in the U.S. As a result of this transaction, the Company recognized an intangible asset impairment charge of approximately $83.4 million during the year ended December 31, 2021.

The Company’s IPR&D assets are tested at least annually for impairment or upon the occurrence of a triggering event. Impairment is determined to exist when the fair value of IPR&D assets, which is based upon updated forecasts and commercial development plans, is less than the carrying value of the assets being tested. The fair value of IPR&D was calculated as the present value of the estimated future net cash flows using a market rate of return. The assumptions inherent in the estimated future cash flows include, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Discount rates ranging between 10.0% and 24.0% were utilized in the valuations performed during the year ended December 31, 2023. A discount rate of 10.5% was utilized in the valuations performed during the year ended December 31, 2022. Discount rates ranging between 7.0% and 9.0% were utilized in the valuations performed during the year ended December 31, 2021.

The fair value of both IPR&D and finite-lived intangible assets was determined based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note 9, Financial Instruments and Risk Management. Changes to any of the Company’s assumptions including changes to or abandonment of development programs, regulatory timelines, discount rates or the competitive environment related to the assets could lead to future material impairment charges.