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



Balance at December 31, 2023:	7,107.4		932.8		645.7		1,181.2		9,867.1
Acquisitions	19.5		—		—		—		19.5

Impairment	—		—		(321.0)		—		(321.0)
Foreign currency translation	15.7		(0.5)		(17.3)		(1.8)		(3.9)
Balance at September 30, 2024:	$	7,142.6	$	932.3	$	307.4	$	1,179.4	$	9,561.7

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, 2024.

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, 2023, due to certain macroeconomic conditions, the Company has experienced fluctuations in foreign exchange rates in certain international markets, combined with an increase in market interest rates. These conditions impacted all reporting units, with the most significant impact in JANZ and Emerging Markets. The impact in the other reporting units was offset by changes in other discount rate assumptions.

As of April 1, 2024, the allocation of the Company’s total goodwill was as follows: North America $3.12 billion, Europe $3.86 billion, Emerging Markets $1.17 billion, JANZ $0.62 billion and Greater China $0.93 billion.

In conjunction with its annual goodwill impairment test, the Company recorded a goodwill impairment charge of $321.0 million during the second quarter of 2024 related to its JANZ reporting unit, which was recorded within SG&A in the condensed consolidated statement of operations. The impairment charge was primarily the result of a 1.0% increase in the discount rate and a 0.5% reduction in the terminal growth rate assumption for the reporting unit.

For the JANZ reporting unit at April 1, 2024, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately negative 0.3%. A terminal year value was calculated with a 1.0% revenue growth rate applied. The discount rate utilized was 8.0% and the estimated tax rate was 30.3%.

Following the goodwill impairment charge recorded in the JANZ reporting unit, the carrying value of the reporting unit was equal to its estimated fair value as of April 1, 2024. If market conditions or the projected results were to change materially, it may be necessary to record further impairment charges to the JANZ reporting unit in future periods.

As of April 1, 2024, the Company determined that the fair values of the North America, Greater China, and Emerging Markets reporting units were substantially in excess of the respective unit’s carrying value.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $882 million or 7.9% for the annual goodwill impairment test. As it relates to the discounted cash flow approach for the Europe reporting unit at April 1, 2024, the Company forecasted cash flows for the next 10 years. During the forecast period, the revenue compound annual growth rate was approximately 2.5%. A terminal year value was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 10.0% and the estimated tax rate was 15.7%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 1.5% or an increase in discount rate by 1.0% would result in an impairment charge for the Europe reporting unit.

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)	Original Cost		Accumulated Amortization		Net Book Value
September 30, 2024
Product rights, licenses and other (1)	13	$	34,275.2	$	17,187.9	$	17,087.3
In-process research and development		891.6		—		891.6
		$	35,166.8	$	17,187.9	$	17,978.9
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

During the nine months ended September 30, 2024, the Company recorded IPR&D assets of approximately $675.0 million as part of the Idorsia Transaction. Refer to Note 4 Acquisitions and Other Transactions for additional information.

Amortization expense, intangible asset disposal & impairment charges and IPR&D intangible asset impairment charges (which are included as a component of amortization expense) are classified primarily within Cost of Sales in the condensed consolidated statements of operations and were as follows for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2024		2023		2024		2023
Intangible asset amortization expense	$	574.7	$	584.0	$	1,772.9	$	1,778.5
Intangible asset disposal & impairment charges	—		—		—		32.0
IPR&D intangible asset impairment charges	—		—		102.0		—
Total intangible asset amortization expense (including disposal & impairment charges)	$	574.7	$	584.0	$	1,874.9	$	1,810.5

In the second quarter of 2024, the Company concluded that one of its IPR&D assets was fully impaired due to unfavorable clinical results and the termination of the development program.

During the nine months ended September 30, 2023, the Company recognized an intangible asset charge of approximately $32.0 million, which was recorded within Cost of Sales in the condensed consolidated statement 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 were classified as held for sale. Refer to Note 5 Divestitures for additional information.