Forest Laboratories (FRX) 10-K 29 May 09 2009 FY Annual report Financial data

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Thousands	Mar. 31, 2009	Mar. 31, 2008
Current assets:
Cash and cash equivalent investments	$1,338,905	$833,052
Marketable securities	1,242,017	1,073,117
Accounts receivable, net	449,444	445,987
Inventories, net	393,527	425,138
Deferred income taxes	217,811	226,095
Other current assets	144,250	33,260
Total current assets	3,785,954	3,036,649
Other assets:
Marketable securities	449,793	534,480
Property, plant and equipment:
Land and buildings	309,285	309,474
Machinery, equipment and other	276,754	257,857
Property, plant and equipment, gross	586,039	567,331
Less: accumulated depreciation	240,104	217,294
Property, plant and equipment, net	345,935	350,037
Goodwill	14,965	14,965
License agreements, product rights and other intangibles, net	497,897	527,787
Deferred income taxes	100,758	59,778
Other assets	1,506	1,671
Total other assets	615,126	604,201
Total assets	5,196,808	4,525,367
Current liabilities:
Accounts payable	117,192	223,720
Accrued expenses	700,636	387,105
Total current liabilities	817,828	610,825
Long-term liabilities:
Income tax liabilities	264,389	198,410
Deferred income taxes	0	815
Total noncurrent liabilities	264,389	199,225
Stockholders' equity:
Common stock $.10 par; shares authorized 1,000,000; issued 422,268 shares in 2009 and 421,421 shares in 2008	42,227	42,142
Additional paid-in capital	1,491,239	1,434,172
Retained earnings	6,379,236	5,611,493
Accumulated other comprehensive (loss) income	(47,145)	34,592
Treasury stock, at cost (120,653 shares in 2009 and 110,014 shares in 2008)	(3,750,966)	(3,407,082)
Total stockholders' equity	4,114,591	3,715,317
Total liabilities and stockholders' equity	$5,196,808	$4,525,367

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Thousands	12 Months Ended Mar. 31, 2009	12 Months Ended Mar. 31, 2008	12 Months Ended Mar. 31, 2007
Revenues
Net sales	$3,636,055	$3,501,802	$3,183,324
Contract revenue	208,999	216,500	176,943
Interest income	74,410	108,680	80,200
Other income	3,318	9,347	1,318
Total revenue	3,922,782	3,836,329	3,441,785
Costs and expenses:
Cost of sales	816,680	800,114	745,602
Selling, general and administrative	1,474,274	1,154,845	1,046,336
Research and development	661,294	670,973	941,003
Total operating expenses	2,952,248	2,625,932	2,732,941
Income before income tax expense	970,534	1,210,397	708,844
Income tax expense	202,791	242,464	254,741
Net income	$767,743	$967,933	$454,103
Net income per share:
Net income per common share - basic	2.53	3.08	1.43
Net income per common share - diluted	2.52	3.06	1.41
Weighted average number of common shares outstanding:
Weighted average number of common shares outstanding - basic	303,609	314,660	318,539
Weighted average number of common shares outstanding - diluted	304,400	316,133	322,781

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (USD $)
In Thousands	12 Months Ended Mar. 31, 2009	12 Months Ended Mar. 31, 2008	12 Months Ended Mar. 31, 2007
Comprehensive income:
Net income	$767,743	$967,933	$454,103
Other comprehensive income (loss):
Foreign currency translation (losses) gains	(36,448)	25,815	13,753
Unrealized holding (loss) gain arising during the period, net of tax	(45,289)	(13,102)	1,364
Other comprehensive (loss) income	(81,737)	12,713	15,117
Comprehensive income	$686,006	$980,646	$469,220

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (USD $)
In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Total
Shares beginning balance at Mar. 31, 2006	412,124				90,784
Beginning balance at Mar. 31, 2006	$41,212	$1,023,079	$4,203,253	$6,762	$2,576,497	$2,697,809
Shares issued upon exercise of stock options and vesting of restricted stock, value	857	212,043				212,900
Shares issued upon exercise of stock options and vesting of restricted stock, shares	8,571
Treasury Stock acquired from employees upon exercise of stock options and vesting of restricted stock, value					1,979	1,979
Treasury Stock acquired from employees upon exercise of stock options and vesting of restricted stock, shares					44
Purchase of treasury stock					472,279	472,279
Purchase of treasury stock, shares					10,315
Tax benefit related to stock options exercised by employees		78,372				78,372
Stock-based compensation expense		40,770				40,770
Other comprehensive (loss) income				15,117		15,117
Net income			454,103			454,103
Shares ending balance at Mar. 31, 2007	420,695				101,143
Ending balance at Mar. 31, 2007	42,069	1,354,264	4,657,356	21,879	3,050,755	3,024,813
Adoption of new accounting standard			(13,796)			(13,796)
Shares issued upon exercise of stock options and vesting of restricted stock, value	73	26,582				26,655
Shares issued upon exercise of stock options and vesting of restricted stock, shares	726
Purchase of treasury stock					356,327	356,327
Purchase of treasury stock, shares					8,871
Tax benefit related to stock options exercised by employees		11,069				11,069
Stock-based compensation expense		42,257				42,257
Other comprehensive (loss) income				12,713		12,713
Net income			967,933			967,933
Shares ending balance at Mar. 31, 2008	421,421				110,014
Ending balance at Mar. 31, 2008	42,142	1,434,172	5,611,493	34,592	3,407,082	3,715,317
Shares issued upon exercise of stock options and vesting of restricted stock, value	85	10,545				10,630
Shares issued upon exercise of stock options and vesting of restricted stock, shares	847
Treasury Stock acquired from employees upon exercise of stock options and vesting of restricted stock, value					11,782	11,782
Treasury Stock acquired from employees upon exercise of stock options and vesting of restricted stock, shares					482
Purchase of treasury stock					332,102	332,102
Purchase of treasury stock, shares					10,157
Tax benefit related to stock options exercised by employees		2,419				2,419
Stock-based compensation expense		44,103				44,103
Other comprehensive (loss) income				(81,737)		(81,737)
Net income			767,743			767,743
Shares ending balance at Mar. 31, 2009	422,268				120,653
Ending balance at Mar. 31, 2009	$42,227	$1,491,239	$6,379,236	($47,145)	$3,750,966	$4,114,591

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Thousands	12 Months Ended Mar. 31, 2009	12 Months Ended Mar. 31, 2008	12 Months Ended Mar. 31, 2007
Cash flows from operating activities:
Net income	$767,743	$967,933	$454,103
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	43,266	47,101	45,444
Amortization, impairments and write-offs	53,241	44,646	55,699
Stock-based compensation expense	44,103	42,257	40,770
Deferred income tax benefit and other non-cash tax items	(26,770)	(21,477)	(84,919)
Foreign currency transaction gain	(2,095)	(2,051)	(779)
Net change in operating assets and liabilities:
Accounts receivable, net	(3,457)	(63,332)	(16,117)
Inventories, net	31,611	9,025	201,556
Other current assets	(110,990)	(6,408)	(6,690)
Other assets	165	7,811	(8,225)
Accounts payable	(106,528)	69,106	13,703
Accrued expenses	313,531	54,110	90,205
Income tax liabilities	65,979	44,615	102,733
Net cash provided by operating activities	1,069,799	1,193,336	887,483
Cash flows from investing activities:
Purchase of property, plant and equipment	(40,629)	(34,888)	(29,987)
Purchase of marketable securities	(2,236,142)	(3,141,953)	(2,559,653)
Redemption of marketable securities	2,151,929	2,983,699	2,018,325
Purchase of license agreements, product rights and other intangibles	(25,000)	(415,000)	0
Net cash used in investing activities	(149,842)	(608,142)	(571,315)
Cash flows from financing activities:
Net proceeds from common stock options exercised by employees under stock option plans	10,630	26,655	210,920
Tax benefit realized from the exercise of stock options by employees	2,419	1,755	80,225
Purchase of treasury stock	(343,884)	(356,327)	(472,279)
Net cash used in financing activities	(330,835)	(327,917)	(181,134)
Effect of exchange rate changes on cash	(83,269)	12,112	14,050
Increase in cash and cash equivalents	505,853	269,389	149,084
Cash and cash equivalents, beginning of year	833,052	563,663	414,579
Cash and cash equivalents, end of year	1,338,905	833,052	563,663
Income taxes	$266,401	$226,022	$135,555

Notes to Consolidated Financial

Notes to Consolidated Financial Statements
	12 Months Ended Mar. 31, 2009
Significant Accounting Policies [Text Block]	1.Summary of significant accounting policies (In thousands, except for estimated useful lives which are stated in years): Basis of consolidation: The consolidated financial statements include the accounts of Forest Laboratories, Inc. (or the Company) and its subsidiaries, all of which are wholly-owned.All significant intercompany accounts and transactions have been eliminated. Estimates and assumptions: The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and of revenues and expenses during the reporting period.Estimates are made when accounting for sales allowances, returns, rebates and other pricing adjustments, depreciation, amortization, tax assets and liabilities and certain contingencies.The Company is subject to risks and uncertainties, which may include but are not limited to competition, federal or local legislation and regulations, litigation and overall changes in the healthcare environment that may cause actual results to vary from estimates.The Company reviews all significant estimates affecting the financial statements on a recurring basis and records the effect of any adjustments when necessary. Reclassifications: Certain amounts as previously reported have been reclassified to conform to current year classifications. Foreign currency translation: The statements of earnings of the Companys foreign subsidiaries are translated into U.S. dollars using average exchange rates.The net assets of the Companys foreign subsidiaries are translated into U.S. dollars using current exchange rates.The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation adjustment account, which is included in Accumulated other comprehensive income. Cash equivalents: Cash equivalents consist of short-term, highly liquid investments purchased with original maturities of three months or less and are readily convertible into cash at par value (cost). Inventories: Inventories are stated at the lower of cost or market, with cost determined on the first-in, first-out basis. Pre-launch inventories: The Company may scale-up and make commercial quantities of certain of its product candidates prior to the date it anticipates that such products will receive final FDA approval.The scale-up and commercial production of pre-launch inventories involves the risk that such products may not be approved for marketing by the FDA on a timely basis, or ever.This risk notwithstanding, the Company plans to continue to scale-up and build pre-launch inventories of certain products that have not yet received final governmental approval when the Company believes that such action is appropriate in relation to the commercial value of the product launch opportunity.As of fiscal years ended March 31, 2009 and 2008, the Company had no such pre-launch inventory quantities. Marketable securities: Marketable securities, which are all accounted for as available-for-sale, are stated at fair value based on quoted ma
Net Income Per Share [Text Block]	2.Net income per share (In thousands): A reconciliation of shares used in calculating basic and diluted net income per share follows: Years ended March 31, 2009 2008 2007 Basic 303,609 314,660 318,539 Effect of assumed conversion of employee stock options and restricted stock 791 1,473 4,242 Diluted 304,400 316,133 322,781 Options to purchase approximately 16,571, 12,312 and 6,000 shares of common stock at exercise prices ranging from $20.55 to $76.66 per share were outstanding during a portion of fiscal years 2009, 2008 and 2007, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.These options expire through 2019.
Business Operations [Text Block]	3.Business operations (In thousands): The Company and its principal operating subsidiaries, which are located in the United States, Ireland and the United Kingdom, manufacture and market ethical pharmaceutical products and other healthcare products.The Company operates in only one segment.Sales are made primarily in the United States and European markets.The net sales and long-lived assets for the years ended March 31, 2009, 2008 and 2007, are from the Company's or one of its subsidiaries' country of origin, as follows: 2009 2008 2007 Net sales Long-lived assets Net sales Long-lived assets Net sales Long-lived assets United States $ 3,567,989 $ 333,345 $ 3,433,233 $ 371,442 $ 3,121,091 $ 410,211 Ireland 19,926 520,548 17,729 513,559 13,680 121,610 United Kingdom 48,140 6,410 50,840 9,459 48,553 10,761 $ 3,636,055 $ 860,303 $ 3,501,802 $ 894,460 $ 3,183,324 $ 542,582 Net sales exclude sales between the Company and its subsidiaries. Net sales by therapeutic class are as follows: Years ended March 31, 2009 2008 2007 Central nervous system (CNS) $ 3,268,561 $ 3,137,878 $ 2,794,685 Cardiovascular 94,359 35,616 50,199 Other 273,135 328,308 338,440 $ 3,636,055 $ 3,501,802 $ 3,183,324 The Company's CNS franchise consisting of Lexapro, Celexa and Namenda accounted for 90% of the Company's net sales for the years ended March 31, 2009 and 2008 and 88% for 2007. The following illustrates net sales to the Companys principal customers: 2009 2008 2007 McKesson Drug Company 37% 38% 37% Cardinal Health, Inc. 33% 30% 27% AmeriSource Bergen Corporation 19% 15% 13%
Accounts Receivable [Text Block]	4.Accounts receivable (In thousands): Accounts receivable, net, consists of the following: March 31, 2009 2008 Trade $ 351,697 $ 377,779 Other 97,747 68,208 $ 449,444 $ 445,987
Inventories [Text Block]	5.Inventories (In thousands): Inventories, net of reserves for obsolescence, consist of the following: March 31, 2009 2008 Raw materials $ 126,292 $ 234,288 Work in process 982 1,360 Finished goods 266,253 189,490 $ 393,527 $ 425,138
Acquisitions [Text Block]	6.Acquisitions (In thousands): On January 10, 2007, the Company acquired Cerexa, Inc. (or Cerexa), a biopharmaceutical company based in Oakland, California for approximately $494,000 in a merger pursuant to which Cerexa became a wholly-owned subsidiary of the Company. The Company acquired worldwide development and marketing rights (excluding Japan) to ceftaroline acetate (or ceftaroline), a next generation, broad-spectrum, hospital-based injectable cephalosporin antibiotic. The acquisition of Cerexa also included a second development-stage hospital-based antibiotic, ME1036, which had shown activity against both aerobic and anaerobic gram-positive and gram-negative bacteria in preclinical studies. The Company has discontinued development of the ME1036 compound.The rights to ceftaroline and ME1036 are in-licensed by Cerexa on an exclusive basis from Takeda Pharmaceutical Company and Meiji Seika Kaisha, Ltd., respectively. The Company will be obligated to pay an additional $100,000 in the event that annual United States sales of ceftaroline exceed $500,000 during the five year period following product launch.The acquisition was accounted for under the purchase method of accounting and accordingly, Cerexas results of operations are included in the accompanying consolidated financial statements from the acquisition date. Of the $494,000 purchase price, $476,000 was assigned as in-process research and development (or IPRD).Substantially all of this charge represented the value assigned to ceftaroline, which had completed a Phase II clinical trial program in patients with complicated skin and skin structure infections (or cSSSI).Ceftaroline is being developed initially for the cSSSI indication and the treatment of community acquired pneumonia (or CAP).Phase III studies of ceftaroline for cSSSI began in February 2007.ME1036 was still in preclinical development at the acquisition date.These compounds had not yet achieved regulatory approval for marketing and consequently, the IPRD was taken as a charge against income during the fourth quarter of fiscal 2007.This charge was not deductible for tax purposes. In order to determine the estimated fair value of IPRD, the income method was utilized.This method applies a probability weighting to the estimated future net cash flows that are derived from projected sales revenues and estimated costs.These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends.The estimated future net cash flows were then discounted to the present value using a discount rate of 16%.This analysis was performed for each compound independently. For purposes of applying the income method, the projected launch dates following FDA approval were estimated for ceftaroline and ME1036, at which times the Company would expect the resulting products to generate cash flows.The cost to complete these development programs will depend on whether these programs are brought to their final stages of development and are ultimately submitted to the FDA for approval.All internal and external research and development expenses are expensed as incurr
Fair Value Measurements [Text Block]	7.Fair value measurements (In thousands): In the first quarter of fiscal 2009, the Company adopted SFAS 157, Fair Value Measurements.This pronouncement defines fair value, establishes a framework for measuring fair value under GAAP and requires expanded disclosures about fair value measurements.SFAS 157 does not require any new fair value measurements, but rather generally applies to other accounting pronouncements that require or permit fair value measurements.SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and defines fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date.SFAS 157 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost).These valuation techniques are based upon observable and unobservable inputs.Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Companys market assumptions.SFAS 157 utilizes a fair value hierarchy that prioritizes inputs to fair value measurement techniques into three broad levels.The following is a brief description of those three levels: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Unobservable inputs that reflect the reporting entitys own assumptions. The Companys financial assets adjusted to fair value at March 31, 2009 are its commercial paper investments included in cash and cash equivalents, money market accounts, municipal bonds and notes, variable rate demand notes, floating rate notes and auction rate securities (or ARS).These assets are subject to the measurement and disclosure requirements of SFAS 157. The Company adjusts the value of these instruments to fair value each reporting period. No adjustment to retained earnings resulted from the adoption of SFAS 157. The following table presents the level within the fair value hierarchy at which the Companys financial assets are carried at fair value and measured on a recurring basis: Description Fair value at March 31, 2009 Quoted prices in active markets for identical assets (Level 1) Significant other observable market inputs (Level 2) Unobservable market inputs (Level 3) Money market accounts $ 1,144,662 $ 1,144,662 Municipal bonds and notes 218,246 $ 218,246 Commercial paper 969,446 411,530 557,916 V
Marketable Securities [Text Block]	8.Marketable securities (In thousands): Available-for-sale debt securities consist of the following: March31, 2009 Estimated fair value Gains in accumulated other comprehensive income Losses in accumulated other comprehensive income Current: Variable rate demand notes $ 158,309 Municipal bonds and notes 145,845 $ 1,269 Commercial paper 856,349 3,156 Floating rate notes 81,514 $ (1,287 ) Total current securities 1,242,017 4,425 (1,287 ) Noncurrent: Municipal bonds and notes 72,401 609 Commercial paper 54,320 (463 ) Auction rate notes 36,839 Floating rate notes 286,233 (68,503 ) Total noncurrent securities 449,793 609 (68,966 ) Total available-for-sale debt securities $ 1,691,810 $ 5,034 $ (70,253 ) March31, 2008 Estimated fair value Gains in accumulated other comprehensive income Losses in accumulated other comprehensive income Current: Variable rate demand notes $ 307,045 $ 10 Municipal bonds and notes 59,144 309 Commercial paper 684,506 3,393 Floating rate notes 22,422 $ (506 ) Total current securities 1,073,117 3,712 (506 ) Noncurrent: Municipal bonds and notes 70,009 798 Auction rate notes 55,340 Floating rate notes 409,131 ( 18,297 ) Total noncurrent securities 534,480 798 (18,297 ) Total available-for-sale debt securities $ 1,607,597 $ 4,510 $ (18,803 ) Proceeds from the sales of available-for-sale debt securities were $2,151,929 and $2,983,699 during fiscal years 2009 and 2008, respectively.Gross realized gains on those sales during fiscal years 2009 and 2008 were $20,077 and $22,318, respectively.For purposes of determining gross realized gains and losses, the cost of securities is based on average cost.Net unrealized holding losses on available-for-sale debt securities in the amount of $65,219 and $14,293 for the years ended March 31, 2009 and March 31, 2008, respectively, have been included in Stockholders equity:Accumulated other comprehensive income. Contractual maturities of available-for-sale debt securities at March 31, 2009, are as follows: Estimated fair value Within one year $ 1,242,017 1-5 years 360,327 5-10 years 44,007 After 10 years 45,459 $ 1,691,810 Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call penalties. The Company currently invests funds in variable rate demand notes that have major bank liquidity agreements, municipal bonds and notes, commercial paper including money market instruments, auction
Intangible Assets and License Agreements [Text Block]	9.Intangible assets and license agreements (In thousands, except amortization periods which are stated in years): License agreements, product rights and other intangibles consist of the following: March 31, 2009 March 31, 2008 Weighted average amortization period Gross carrying amount Accumulated amortization Gross carrying amount Accumulated amortization Amortized intangible assets: License agreements 12 $ 196,300 $ 110,643 $ 191,300 $ 95,374 Product rights 11 68,206 35,394 71,350 29,963 Buy-out of royalty agreements 11 465,061 91,274 465,061 82,768 Trade names 20 34,190 28,573 34,190 26,076 Non-compete agreements 13 16,000 16,000 16,000 16,000 Other 1 3,921 3,897 3,921 3,854 Total 11 $ 783,678 $ 285,781 $ 781,822 $ 254,035 Amortization of license agreements, product rights and other intangibles was charged to selling, general and administrative expense for fiscal years ended March 2009, 2008 and 2007 and amounted to approximately $53,241, $44,646 and $54,736, respectively.Future annual amortization expense expected is as follows: Years ending March 31, 2010 $ 30,675 2011 22,397 2012 38,186 2013 42,020 2014 42,303 $ 175,581 In January 2009, the Company received marketing approval for Savella, its selective serotonin and norepinephrine dual reuptake inhibitor for the management of fibromyalgia.Upon approval, the Company paid Cypress Bioscience, Inc., its licensor for the product, $25,000.This milestone payment is currently being amortized using the straight-line method over the useful life of the product and is being recorded to selling, general and administrative expense. In fiscal 2009, the Company entered into two license agreements: the first was with Phenomix Corporation to co-develop and co-promote dutogliptin, a proprietary orally administered, small molecule dipeptidyl-peptidase-4 (DPP-4) inhibitor that is being developed for Type II diabetes.The second was with Pierre Fabre Medicament to develop and commercialize F2695, a propriety selective norepinephrine and serotonin reuptake inhibitor that is being developed for the treatment of depression and other central nervous system disorders.Pursuant to each of these agreements, the Company paid an upfront license fee of $75,000 to each partner.These fees were recorded to research and development expense since these products are in the early stages of development. In fiscal 2008, the Company made a milestone payment of $20,000 to Daiichi Sankyo (or Sankyo) for the co-promotion rights to Azor.In May 2008 the Company and Sankyo terminated this co-promotion agreement for Azor, effective July 1, 2008.As a result of terminating the agreement, the Company recorded a one-time charge of approximately $44,100 to selling, general and administrative expense which was comprised of a termination fee of approximately $26,600 and $17,500 related to the
Accrued Expenses [Text Block]	10. Accrued expenses (In thousands): Accrued expenses consist of the following: March 31, 2009 2008 Managed care and Medicaid rebates $ 213,384 $ 173,705 Employee compensation and other benefits 101,041 111,129 Clinical research and development costs 51,085 65,608 Reserve for USAO investigation (see Note 14) 170,000 Other 165,126 36,663 $ 700,636 $ 387,105
Debt Facility [Text Block]	11.Debt facility (In thousands): On December 7, 2007, the Company established a $500,000 revolving credit facility for the purpose of providing additional financial liquidity for the financing of business development and corporate strategic initiatives.The facility can be increased up to $750,000 based upon agreement with the participating lenders and expires on December 7, 2012.As of May 28, 2009, the Company has not drawn any funds from the available credit.The utilization of the revolving credit facility is subject to the adherence to certain financial covenants such as leverage and interest coverage ratios.
Commitments [Text Block]	12.Commitments (In thousands): Leases:The Company leases manufacturing, office and warehouse facilities, equipment and automobiles under operating leases expiring through fiscal 2018.Rent expense approximated $35,857, $34,630 and $33,149 for fiscal years ended March 31, 2009, 2008 and 2007, respectively.Future minimum rental payments under noncancellable leases are as follows: Years ending March 31, 2010 $ 35,438 2011 28,605 2012 19,162 2013 13,310 2014 12,249 Thereafter 36,469 $ 145,233 Royalty agreements: The Company has royalty agreements on certain of its licensed products.Royalties are paid based on a percentage of sales, as defined.For fiscal years ended March 31, 2009, 2008 and 2007, royalty expense amounted to $616, $1,071 and $4,742, respectively. License agreements: The Company has entered into several license and collaboration agreements for products currently under development.Pursuant to these agreements, the Company may be obligated in future periods to make additional milestone payments totaling approximately $966,000.These milestone payments become due and are payable only upon the achievement of certain research and development (approximately $460,000) and regulatory approval (approximately $506,000) milestones.The specific timing of such milestones cannot be predicted and depend upon future clinical developments as well as regulatory agency actions which cannot be predicted with certainty (including actions which may never occur).Further, under the terms of certain licensing agreements, the Company may be obligated to pay commercial milestones contingent upon the achievement of specific sales levels.Due to the long-range nature of such commercial milestone amounts, they are neither probable at this time nor predictable. Inventory purchase commitments: The Company has inventory purchase commitments of $112,256 as of March 31, 2009.
Stockholders' Equity [Text Block]	13.Stockholders' equity (In thousands, except per share data): In August 2007, the stockholders of the Company voted to adopt the 2007 Equity Incentive Plan (or the 2007 Plan) which replaces and supersedes all prior stock option plans.Under the 2007 Plan, 13,950 shares were authorized to be issued to employees of the Company and its subsidiaries at prices not less than the fair market value of the common stock at the date of grant.The 2007 Plan provides for the granting of incentive and nonqualified stock options, restricted stock, stock appreciation rights and stock equivalent units.These awards generally vest in three to five years.Stock option grants may be exercisable for up to ten years from the date of issuance. The following table summarizes information about stock options outstanding at March 31, 2009: Options outstanding Options exercisable Range of exercise prices Number outstanding Weighted average remaining contractual life (in years) Weighted average exercise price Number exercisable Weighted average exercise price $ 12.29to$30.00 3,283 6.2 $ 19.86 1,288 $ 13.35 30.01to50.00 12,564 4.2 39.74 7,448 39.55 50.01to76.66 3,006 4.0 54.18 1,739 55.99 18,853 4.5 38.58 10,475 39.05 Transactions under the stock option plan are summarized as follows: Shares Weighted average exercise price Weighted average remaining contractual life (in years) Aggregate intrinsic value Stock options: Outstanding at March 31, 2006 (at $4.55 to $76.66 per share) 24,065 $ 33.98 Granted (at $38.94 to $51.54 per share) 3,859 49.35 Exercised (at $4.55 to $53.23 per share) (8,568 ) 24.84 Forfeited (1,132 ) 38.90 Outstanding at March 31, 2007 (at $5.64 to $76.66 per share) 18,224 40.91 Granted (at $37.26 to $51.96 per share) 3,248 38.68 Exercised (at $5.64 to $53.23 per share) (734 ) 36.68 Forfeited (1,444 ) 44.62 Outstanding at March 31, 2008 (at $9.77 to $76.66 per share) 19,294 40.38 Granted (at $20.55 to $38.33 per share) 2,989 28.62 Exercised (at $9.77 to $38.94 per share) (715 ) 14.88 Forfeited (2,715 ) 46.13 Outstanding at March 31, 2009 (at $12.29 to $76.66 per share) 18,853 $ 38.58 4.5 $ 11 Exercisable at March 31, 2009 10,475 $ 39.05 2.8 $ 11 Shares Weighted average grant date fair value Restricted stock: Outstanding at March 31, 2007 Granted 453 $ 37.33 Vested (2 ) 39.88 Out
Contingencies [Text Block]	14.Contingencies (In thousands): The Company remains a defendant in actions filed in various federal district courts alleging certain violations of the federal anti-trust laws in the marketing of pharmaceutical products.In each case, the actions were filed against many pharmaceutical manufacturers and suppliers and allege price discrimination and conspiracy to fix prices in the sale of pharmaceutical products.The actions were brought by various pharmacies (both individually and, with respect to certain claims, as a class action) and seek injunctive relief and monetary damages.The Judicial Panel on Multi-District Litigation ordered these actions coordinated (and, with respect to those actions brought as class actions, consolidated) in the Federal District Court for the Northern District of Illinois (Chicago) under the caption In re Brand Name Prescription Drugs Antitrust Litigation. On November 30, 1998, the defendants remaining in the consolidated federal class action (which proceeded to trial beginning in September 1998), including the Company, were granted a directed verdict by the trial court after the plaintiffs had concluded their case.In ruling in favor of the defendants, the trial judge held that no reasonable jury could reach a verdict in favor of the plaintiffs and stated the evidence of conspiracy is meager, and the evidence as to individual defendants paltry or non-existent.The Court of Appeals for the Seventh Circuit subsequently affirmed the granting of the directed verdict in the federal class case in the Companys favor. Following the Seventh Circuits affirmation of the directed verdict in the Companys favor, the Company secured the voluntary dismissal of the conspiracy allegations contained in all of the federal cases brought by individual plaintiffs who elected to opt-out of the federal class action, which cases were included in the coordinated proceedings, as well as the dismissal of similar conspiracy and price discrimination claims pending in various state courts.The Company remains a defendant, together with other manufacturers, in many of the federal opt-out cases included in the coordinated proceedings to the extent of claims alleging price discrimination in violation of the Robinson-Patman Act.While no discovery or other significant proceedings with respect to the Company has been taken to date in respect of such claims, there can be no assurance that the Company will not be required to actively defend such claims or to pay substantial amounts to dispose of such claims.However, by way of a decision dated January 25, 2007, the judge handling the Robinson-Patman Act cases for certain of a smaller group of designated defendants whose claims are being litigated on a test basis, granted summary judgment to those designated defendants due to plaintiffs failure to demonstrate any antitrust injury.Subsequently, the Court also granted the designated defendants motion for summary judgment with respect to plaintiffs effort to obtain injunctive relief.It is likely that the plaintiffs will pursue an appeal of both rulings. In December 2008, the Company entered into a definitive Stipulation of Settlement with respect to
Income Taxes [Text Block]	15.Income taxes (In thousands): The components of income before income tax expense were: Years ended March 31, 2009 2008 2007 U.S. $ 238,219 $ 440,271 $ (26,935 ) Foreign 732,315 770,126 735,779 Income before income tax expense $ 970,534 $ 1,210,397 $ 708,844 The provision for income taxes consists of the following: Years ended March 31, 2009 2008 2007 Current: U.S. federal $ 149,739 $ 194,491 $ 248,846 State and local 20,263 18,139 15,397 Foreign 46,884 56,885 61,230 216,886 269,515 325,473 Deferred: U.S. (11,943 ) (26,549 ) (79,147 ) Foreign (2,152 ) (502 ) 8,415 (14,095 ) (27,051 ) (70,732 ) $ 202,791 $ 242,464 $ 254,741 The reasons for the difference between the provision for income taxes and expected federal income taxes at statutory rates are as follows: Years ended March 31, (percentage of income before income tax expense) 2009 2008 2007 U.S. statutory rate 35.0% 35.0% 35.0% Acquired in-process research and development 23.5 Effect of foreign operations (18.9) (14.5) (21.8) Research credit (1.3) (1.6) (2.2) State and local taxes, less federal tax benefit 0.7 1.4 2.4 Government investigation 3.1 0.0 0.0 Permanent differences and other items 2.3 (0.3) (1.0) 20.9% 20.0% 35.9% The Companys effective tax rate for fiscal years 2009 and 2008 is lower than the federal statutory rate principally as a result of the proportion of earnings generated in lower-taxed foreign jurisdictions as compared with the United States.The Company's effective tax rate in fiscal 2007 was higher than the federal statutory rate principally as a result of the in-process RD expensed as part of the Cerexa acquisition completed in January 2007. Net deferred income taxes relate to the following timing differences: March 31, 2009 2008 Inventory reserves $ 53,505 $ 47,278 Receivable allowances and other reserves 40,302 93,900 Depreciation 1,430 (2,097 ) Amortization 82,871 52,212 Carryforwards and credits 73,305 81,334 Accrued liabilities 12,732 21,548 Employee stock option tax benefits 8,455 1,932 Other (includes reserve for legal contingencies) 67,242 12,723 339,842 308,830 Valuation allowance (21,273 ) (23,772 ) Deferred taxes, net $ 318,569 $ 285,058 The Company has certain state and local net operating loss carryforwards as well as excess charitable contribution carryovers which are available to reduce future U.S. federal and state taxable income, expiring at various times between 2009 and 2025.Although not material, valuation allowances have been established for a portion of deferred tax assets
Quarterly Financial Data (Unaudited) [Text Block]	16.Quarterly financial data (unaudited) (In thousands, except per share data): (In thousands, except per share data) Net sales Gross profit Net income Diluted earnings per share 2009 First quarter $ 893,745 $ 696,405 $ 242,920 $ 0.79 Second quarter 925,570 720,569 244,086 0.80 Third quarter 920,013 713,359 187,975 0.62 Fourth quarter 896,727 689,042 92,762 0.31 2008 First quarter $ 842,616 $ 656,376 $ 268,162 $ 0.83 Second quarter 842,337 652,345 225,244 0.71 Third quarter 918,146 704,640 301,757 0.96 Fourth quarter 898,703 688,327 172,770 0.55

Document Information

Document Information
	12 Months Ended Mar. 31, 2009
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-03-31

Entity Information

Entity Information (USD $)
	12 Months Ended Mar. 31, 2009
Entity Information [Line Items]
Entity Registrant Name	Forest Laboratories Inc
Entity Central Index Key	0000038074
Current Fiscal Year End Date	--03-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$8,460,949,990
Entity Common Stock, Shares Outstanding	301,616,739