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Intangible Assets | 12 Months Ended
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Mar. 31, 2022
Intangible Assets, Net (Excluding Goodwill) [Abstract] |
Intangible Assets | Intangible Assets A reconciliation of the activity affecting intangible assets, net for each of 2022 and 2021 is as follows:
| Year Ended March 31, 2022
(In thousands) | Indefinite- Lived Tradenames |  | Finite-Lived Tradenames and Customer Relationships |  | Totals
Gross Carrying Amounts |  |  |  |  |
Balance – March 31, 2021 | $ | 2,281,988 |  |  | $ | 389,347 |  |  | $ | 2,671,335 |
Additions(a) | 195,900 |  |  | 47,642 |  |  | 243,542 |
Tradename impairment | — |  |  | (1,700) |  |  | (1,700) |
Effects of foreign currency exchange rates | (1,329) |  |  | 885 |  |  | (444) |
Balance – March 31, 2022 | $ | 2,476,559 |  |  | $ | 436,174 |  |  | $ | 2,912,733 |
Accumulated Amortization |  |  |  |  |
Balance – March 31, 2021 | $ | — |  |  | $ | 195,606 |  |  | $ | 195,606 |
Additions | — |  |  | 21,499 |  |  | 21,499 |
Tradename impairment | — |  |  | (983) |  |  | (983) |
Effects of foreign currency exchange rates | — |  |  | (24) |  |  | (24) |
Balance – March 31, 2022 | $ | — |  |  | $ | 216,098 |  |  | $ | 216,098 |
Intangible assets, net – March 31, 2022 | $ | 2,476,559 |  |  | $ | 220,076 |  |  | $ | 2,696,635 |
Intangible Assets, net by Reportable Segment: |  |  |  |  |
North American OTC Healthcare | $ | 2,391,517 |  |  | $ | 198,353 |  |  | $ | 2,589,870 |
International OTC Healthcare | 85,042 |  |  | 21,723 |  |  | 106,765 |
Intangible assets, net – March 31, 2022 | $ | 2,476,559 |  |  | $ | 220,076 |  |  | $ | 2,696,635 |
(a) On July 1, 2021, we completed the acquisition of certain assets from Akorn (see Note 2) and on December 15, 2021 our Australian subsidiary acquired the rights to the Zaditen brand in certain territories from Novartis Pharma AG. In connection with these acquisitions, we allocated $225.4 million to intangible assets based on our preliminary analysis for Akorn and $18.1 million for Zaditen.
| Year Ended March 31, 2021
(In thousands) | Indefinite- Lived Tradenames |  | Finite-Lived Tradenames and Customer Relationships |  |  | Totals
Gross Carrying Amounts |  |  |  |  |  |
Balance – March 31, 2020 | $ | 2,265,331 |  |  | $ | 389,801 |  |  |  | $ | 2,655,132 |
Tradename impairment | — |  |  | (1,186) |  |  |  | (1,186) |
Effects of foreign currency exchange rates | 16,657 |  |  | 732 |  |  |  | 17,389 |
Balance – March 31, 2021 | $ | 2,281,988 |  |  | $ | 389,347 |  |  |  | $ | 2,671,335 |
Accumulated Amortization |  |  |  |  |  |
Balance – March 31, 2020 | $ | — |  |  | $ | 175,741 |  |  |  | $ | 175,741 |
Additions |  |  | 19,580 |  |  |  | 19,580 |
Effects of foreign currency exchange rates | — |  |  | 285 |  |  |  | 285 |
Balance – March 31, 2021 | $ | — |  |  | $ | 195,606 |  |  |  | $ | 195,606 |
Intangible assets, net – March 31, 2021 | $ | 2,281,988 |  |  | $ | 193,741 |  |  |  | $ | 2,475,729 |
Intangible Assets, net by Reportable Segment: |  |  |  |  |  |
North American OTC Healthcare | $ | 2,195,617 |  |  | $ | 190,462 |  |  |  | $ | 2,386,079 |
International OTC Healthcare | 86,371 |  |  | 3,279 |  |  |  | 89,650 |
Intangible assets, net – March 31, 2021 | $ | 2,281,988 |  |  | $ | 193,741 |  |  |  | $ | 2,475,729 |
During the fourth quarter of each fiscal year, in conjunction with our strategic planning process, we perform our annual impairment analysis. We utilized the excess earnings method to estimate the fair value of our individual indefinite-lived intangible assets. The assumptions subject to significant uncertainties include the discount rate utilized in the analyses, as well as future sales, gross margins and advertising and marketing expenses. The discount rate assumption may be influenced by such factors as changes in interest rates and rates of inflation, which can have an impact on the determination of fair value. Additionally, should the related fair values of intangible assets be adversely affected as a result of declining sales or margins caused by competition, changing consumer needs or preferences, technological advances, increased product costs, changes in advertising and marketing expenses, or the potential impacts of COVID-19, we may be required to record impairment charges in the future. During the third quarter of 2021, we determined that the fair value of one of our finite-lived intangible assets in our International OTC Healthcare segment, Painstop, did not exceed its carrying amount. As such, we recorded an impairment charge of $1.2 million. The decline in the fair value of Painstop was primarily related to a decline in expected future sales due to a regulatory change that now requires Painstop to be prescribed by physicians rather than sold over-the-counter direct to consumers. At February 28, 2022, in conjunction with the annual test for impairment of intangible assets, we recorded an impairment charge of $0.7 million. In connection with our long-term planning, two non-core brands in our North American OTC Healthcare segment were discontinued and therefore the related finite-lived intangible assets were written off. As a result of our analysis at February 28, 2022, all indefinite-lived intangible assets tested had a fair value that exceeded their carrying value by at least 10%, with the exception of our TheraTears tradename which had a fair value exceeding its carrying value by 7%. We performed a sensitivity analysis of our weighted average cost of capital, and we determined that a 50 basis point increase in the weighted average cost of capital used to value the indefinite-lived intangible assets would not have resulted in any of our indefinite-lived intangible assets' fair value being less than their carrying value, with the exception of our TheraTears tradename. The TheraTears tradename was acquired on July 1, 2021 and given the close proximity of the acquisition to the annual impairment test, we would expect the fair value to more closely approximate the carrying value. A 50 basis point increase in the weighted average cost of capital would result in an impairment charge of $4.3 million on our TheraTears tradename. Additionally, a 50 basis point decrease in the terminal growth rate used for each of our indefinite-lived intangible assets' would not have resulted in any of our indefinite-lived intangible assets' fair value being less than their carrying value. The weighted average remaining life for finite-lived intangible assets at March 31, 2022 was approximately 9.8 years, and the amortization expense for the year ended March 31, 2022 was $21.5 million. At March 31, 2022, finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period of 10 to 30 years, and the estimated amortization expense for each of the five succeeding years and periods thereafter is as follows (in thousands):
(In thousands) |
Year Ending March 31, | Amount
2023 | $ | 22,576 |
2024 | 22,533 |
2025 | 20,479 |
2026 | 18,232 |
2027 | 16,591 |
Thereafter | 119,665 |
| $ | 220,076 |

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