Forest Laboratories (FRX) 10-K 26 May 10 2010 FY Annual report Financial data

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	Mar. 31, 2010	Mar. 31, 2009
Current assets:
Cash (including cash equivalent investments of $1,859,321 in 2010 and $1,337,871 in 2009)	$1,863,484	$1,338,905
Marketable securities	1,458,778	1,242,017
Accounts receivable, less allowance for doubtful accounts of $17,192 in 2010 and $18,511 in 2009	475,653	449,444
Inventories, net	467,769	393,527
Deferred income taxes	236,545	217,811
Other current assets	76,962	144,250
Total current assets	4,579,191	3,785,954
Marketable securities and investments	742,335	449,793
Property, plant and equipment:
Land and buildings	310,263	309,285
Machinery, equipment and other	292,517	276,754
Property, plant and equipment total	602,780	586,039
Less: accumulated depreciation	279,496	240,104
Property, plant and equipment, net	323,284	345,935
Other assets:
Goodwill	14,965	14,965
License agreements, product rights and other intangibles, net	466,742	497,897
Deferred income taxes	96,490	100,758
Other assets	524	1,506
Total other assets	578,721	615,126
Total assets	6,223,531	5,196,808
Current liabilities:
Accounts payable	130,205	117,192
Accrued expenses	849,441	700,636
Total current liabilities	979,646	817,828
Long-term liabilities:
Income tax liabilities	353,978	264,389
Stockholders' equity:
Series preferred stock, $1.00 par; shares authorized 1,000; no shares issued or outstanding	0	0
Common stock $.10 par; shares authorized 1,000,000; issued 424,090 shares in 2010 and 422,268 shares in 2009	42,409	42,227
Additional paid-in capital	1,565,585	1,491,239
Retained earnings	7,061,619	6,379,236
Accumulated other comprehensive income (loss)	3,695	(47,145)
Treasury stock, at cost (121,700 shares in 2010 and 120,653 shares in 2009)	(3,783,401)	(3,750,966)
Total stockholders' equity	4,889,907	4,114,591
Total liabilities and stockholders' equity	$6,223,531	$5,196,808

PARENTHETICAL DATA TO THE CONSO

PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, except Share data	Mar. 31, 2010	Mar. 31, 2009
Current assets:
Cash equivalent investments	$1,859,321	$1,337,871
Accounts receivable, allowance for doubtful accounts	$17,192	$18,511
Stockholders' equity:
Series preferred stock, par value	1	1
Series preferred stock, shares authorized	1,000	1,000
Series preferred stock, shares issued	0	0
Series preferred stock, shares outstanding	0	0
Common stock, par value	0.1	0.1
Common stock, shares authorized	1,000,000	1,000,000
Common stock, issued shares	424,090	422,268
Treasury stock, shares	121,700	120,653

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Thousands, except Per Share data	12 Months Ended Mar. 31, 2010	12 Months Ended Mar. 31, 2009	12 Months Ended Mar. 31, 2008
Income Statement [Abstract]
Net sales	$3,903,524	$3,636,055	$3,501,802
Contract revenue	208,474	208,999	216,500
Interest income	35,472	74,410	108,680
Other income	45,392	3,318	9,347
Total revenue	4,192,862	3,922,782	3,836,329
Costs and expenses:
Cost of sales	924,346	816,680	800,114
Selling, general and administrative	1,264,269	1,474,274	1,154,845
Research and development	1,053,561	661,294	670,973
Total costs and expenses	3,242,176	2,952,248	2,625,932
Income before income tax expense	950,686	970,534	1,210,397
Income tax expense	268,303	202,791	242,464
Net income	$682,383	$767,743	$967,933
Net income per common share:
Basic	2.25	2.52	3.07
Diluted	2.25	2.52	3.06
Weighted average number of common shares outstanding:
Basic	303,386	304,363	314,949
Diluted	303,781	305,121	316,412

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Thousands	12 Months Ended Mar. 31, 2010	12 Months Ended Mar. 31, 2009	12 Months Ended Mar. 31, 2008
Statement of Income and Comprehensive Income [Abstract]
Net income	$682,383	$767,743	$967,933
Other comprehensive income (loss):
Foreign currency translation (losses) gains	(2,398)	(34,542)	25,815
Pension liability adjustment, net of tax	(11,752)	0	0
Unrealized gains (losses) on securities:
Unrealized holding gain (loss) arising during the period, net of tax	64,990	(47,195)	(13,102)
Other comprehensive income (loss)	50,840	(81,737)	12,713
Comprehensive income	$733,223	$686,006	$980,646

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, 2007	420,695				101,143
Beginning balance at Mar. 31, 2007	$42,069	$1,354,264	$4,657,356	$21,879	$3,050,755
Adoption of new accounting standard			(13,796)
Shares issued upon exercise of stock options and vesting of restricted stock	73	26,582
Shares issued upon exercise of stock options and vesting of restricted stock, shares	726
Purchase of treasury stock					356,327
Purchase of treasury stock, shares					8,871
Tax benefit related to stock options exercised by employees		11,069
Stock-based compensation expense		42,257				42,257
Other comprehensive income (loss)				12,713		12,713
Net income			967,933			967,933
Ending balance at Mar. 31, 2008	42,142	1,434,172	5,611,493	34,592	3,407,082
Shares ending balance at Mar. 31, 2008	421,421				110,014
Shares issued upon exercise of stock options and vesting of restricted stock	85	10,545
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					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
Purchase of treasury stock, shares					10,157
Tax benefit related to stock options exercised by employees		2,419
Stock-based compensation expense		44,103				44,103
Other comprehensive income (loss)				(81,737)		(81,737)
Net income			767,743			767,743
Ending balance at Mar. 31, 2009	42,227	1,491,239	6,379,236	(47,145)	3,750,966	4,114,591
Shares ending balance at Mar. 31, 2009	422,268				120,653
Shares issued upon exercise of stock options and vesting of restricted stock	182	16,970
Shares issued upon exercise of stock options and vesting of restricted stock, shares	1,822
Treasury Stock acquired from employees upon exercise of stock options and vesting of restricted stock					32,435
Treasury Stock acquired from employees upon exercise of stock options and vesting of restricted stock, shares					1,047
Tax benefit related to stock options exercised by employees		8,868
Stock-based compensation expense		48,508				48,508
Other comprehensive income (loss)				50,840		50,840
Net income			682,383			682,383
Ending balance at Mar. 31, 2010	$42,409	$1,565,585	$7,061,619	$3,695	$3,783,401	$4,889,907
Shares ending balance at Mar. 31, 2010	424,090				121,700

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	12 Months Ended Mar. 31, 2010	12 Months Ended Mar. 31, 2009	12 Months Ended Mar. 31, 2008
Cash flows from operating activities:
Net income	$682,383	$767,743	$967,933
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	45,025	43,266	47,101
Amortization, impairments and write-offs	41,485	53,241	44,646
Stock-based compensation expense	48,508	44,103	42,257
Deferred income tax benefit and other non-cash tax items	(16,376)	(26,770)	(21,477)
Foreign currency transaction gain	(303)	(2,095)	(2,051)
Decrease (increase) in:
Accounts receivable, net	(26,209)	(3,457)	(63,332)
Inventories, net	(74,242)	31,611	9,025
Other current assets	67,288	(110,990)	(6,408)
Other assets	982	165	7,811
Increase (decrease) in:
Accounts payable	13,013	(106,528)	69,106
Accrued expenses	148,805	313,531	54,110
Income tax liabilities	89,589	65,979	44,615
Net cash provided by operating activities	1,019,948	1,069,799	1,193,336
Cash flows from investing activities:
Purchase of property, plant and equipment	(32,252)	(40,629)	(34,888)
Purchase of marketable securities	(2,638,354)	(2,236,142)	(3,141,953)
Redemption of marketable securities	2,140,826	2,151,929	2,983,699
Purchase of license agreements, product rights and other intangibles	0	(25,000)	(415,000)
Net cash used in investing activities	(529,780)	(149,842)	(608,142)
Cash flows from financing activities:
Net proceeds from common stock options exercised by employees under stock option plans	1,374	3,378	26,655
Tax benefit related to stock-based compensation	8,868	2,419	1,755
Treasury stock transactions	(16,657)	(336,632)	(356,327)
Net cash used in financing activities	(6,415)	(330,835)	(327,917)
Effect of exchange rate changes on cash	40,826	(83,269)	12,112
Increase in cash and cash equivalents	524,579	505,853	269,389
Cash and cash equivalents, beginning of year	1,338,905	833,052	563,663
Cash and cash equivalents, end of year	1,863,484	1,338,905	833,052
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$156,083	$266,401	$226,022

Summary of significant accounti

Summary of significant accounting policies
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Summary of significant accounting policies	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. and its subsidiaries, (Forest or the Company) all of which are wholly-owned.All 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, restructuring reserves 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, 2010 and 2009, 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

Net income per share

Net income per share
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Net income per share	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, 2010 2009 2008 Basic 303,386 304,363 314,949 Effect of assumed conversion of employee stock options 395 758 1,463 Diluted 303,781 305,121 316,412 Options to purchase approximately 18,453, 16,290 and 12,312 shares of common stock at exercise prices ranging from $20.55 to $76.66 per share were outstanding during a portion of fiscal years 2010, 2009 and 2008, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.These options expire through 2020.

Business operations

Business operations
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Business operations	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, 2010, 2009 and 2008, are from the Company's or one of its subsidiaries' country of origin, as follows: 2010 2009 2008 Net sales Long-lived assets Net sales Long-lived assets Net sales Long-lived assets United States $ 3,831,553 $ 293,716 $ 3,567,989 $ 333,345 $ 3,433,233 $ 371,442 Ireland 22,862 505,725 19,926 520,548 17,729 513,559 United Kingdom 49,109 6,074 48,140 6,410 50,840 9,459 $ 3,903,524 $ 805,515 $ 3,636,055 $ 860,303 $ 3,501,802 $ 894,460 Net sales exclude sales between the Company and its subsidiaries. Net sales by therapeutic class are as follows: Years ended March 31, 2010 2009 2008 Central nervous system (CNS) $ 3,455,700 $ 3,268,561 $ 3,137,878 Cardiovascular 218,365 94,359 35,616 Other 229,459 273,135 328,308 $ 3,903,524 $ 3,636,055 $ 3,501,802 The Company's CNS franchise consisting of Lexapro, Celexa, Namenda and Savella accounted for 89% of the Company's net sales for the year ended March 31, 2010 and 90% for the years ended March 31, 2009 and 2008. The following illustrates net sales to the Companys principal customers: 2010 2009 2008 McKesson Drug Company 36% 37% 38% Cardinal Health, Inc. 33% 33% 30% AmeriSource Bergen Corporation 20% 19% 15%

Accounts Receivable

Accounts Receivable
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Accounts Receivable	4.Accounts receivable (In thousands): Accounts receivable, net, consists of the following: March 31, 2010 2009 Trade $ 410,203 $ 351,697 Other 65,450 97,747 $ 475,653 $ 449,444

Inventories

Inventories
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Inventories	5.Inventories (In thousands): Inventories, net of reserves for obsolescence, consist of the following: March 31, 2010 2009 Raw materials $ 139,860 $ 94,373 Work in process 35,767 13,022 Finished goods 292,142 286,132 $ 467,769 $ 393,527

Fair value measurements

Fair value measurements
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Fair value measurements	6.Fair value measurements (In thousands): In the first quarter of fiscal 2009, the Company adopted the provisions of ASC 820, Fair Value Measurements and Disclosures.This pronouncement defines fair value, establishes a framework for measuring fair value under GAAP and requires expanded disclosures about fair value measurements.ASC 820 does not require any new fair value measurements, but rather generally applies to other accounting pronouncements that require or permit fair value measurements.ASC 820 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.ASC 820 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.ASC 820 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, 2010 are its commercial paper investments included in cash and cash equivalents, money market accounts, municipal bonds and notes, government agency bonds, corporate bonds, certificates of deposit, variable rate demand notes, floating rate notes and auction rate securities (ARS).These assets are subject to the measurement and disclosure requirements of ASC 820. The Company adjusts the value of these instruments to fair value each reporting period. No adjustment to retained earnings resulted from the adoption of ASC 820. 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, 2010 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 $ 1,839,944 $ 1,390,393 $ 449,551 Municipal bonds and notes

Marketable securities

Marketable securities
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Marketable securities	7.Marketable securities (In thousands): Available-for-sale debt securities consist of the following: March31, 2010 Estimated fair value Gains in accumulated other comprehensive income Losses in accumulated other comprehensive income Current: Variable rate demand notes $ 157,199 Municipal bonds and notes 218,146 $ 800 Commercial paper 433,952 620 Certificates of deposit 451,184 40 Corporate bonds 118,280 615 Floating rate notes 80,017 2 $ ( 213 ) Total current securities 1,458,778 2,077 (213 ) Noncurrent: Municipal bonds and notes 208,726 111 (20 ) Government agency bonds 14,941 (42 ) Corporate bonds 180,927 156 Auction rate notes 36,089 Floating rate notes 273,277 (11,202 ) Total noncurrent securities 713,960 267 (11,264 ) Total available-for-sale debt securities $ 2,172,738 $ 2,344 $ (11,477 ) 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 Certificates of deposit 331,941 475 Corporate bonds 41,528 $ (255 ) Commercial paper 482,880 2,936 Floating rate notes 81,514 (1,287 ) Total current securities 1,242,017 4,680 (1,542 ) Noncurrent: Municipal bonds and notes 72,401 675 (66 ) Corporate bonds 54,320 (463 ) Auction rate notes 36,839 Floating rate notes 286,233 (68,503 ) Total noncurrent securities 449,793 675 (69,032 ) Total available-for-sale debt securities $ 1,691,810 $ 5,355 $ (70,574 ) Proceeds from the sales of available-for-sale debt securities were $2,140,826 and $2,151,929 during fiscal years 2010 and 2009, respectively.Gross realized gains on those sales during fiscal years 2010 and 2009 were $13,024 and $20,077, 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 $9,133 and $65,219 for the years ended March 31, 2010 and March 31, 2009, respectively, have been included in Stockholders equity:accumulated other comprehensive income. The preceding table does not include the Companys $28,375 investment in Ironwood Pharmaceuticals, Inc. (Ironwood), which is held at fair market value based on the quoted market price for the related security and described in Note 8 to the Consolidated Financial Statements. Contractual maturities of available-for-sale debt

Intangible assets and license a

Intangible assets and license and collaboration agreements
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Intangible assets and license and collaboration agreements	8.Intangible assets and license and collaboration agreements (In thousands, except amortization periods which are stated in years): License agreements, product rights and other intangibles consist of the following: March 31, 2010 March 31, 2009 Weighted average amortization period Gross carrying amount Accumulated amortization Gross carrying amount Accumulated amortization Amortized intangible assets: License agreements 12 $ 196,300 $ 128,285 $ 196,300 $ 110,643 Product rights 11 68,662 43,056 68,206 35,394 Buy-out of royalty agreements 11 465,061 95,061 465,061 91,274 Trade names 20 34,190 31,069 34,190 28,573 Non-compete agreements 13 16,000 16,000 16,000 16,000 Other 1 3,921 3,921 3,921 3,897 Total 11 $ 784,134 $ 317,392 $ 783,678 $ 285,781 Amortization of license agreements, product rights and other intangibles was charged to selling, general and administrative expense for fiscal years ended March 31, 2010, 2009 and 2008 and amounted to approximately $31,432, $53,241 and $44,646, respectively.Future annual amortization expense expected is as follows: Years ending March 31, 2011 $ 26,917 2012 39,305 2013 43,249 2014 43,603 2015 35,414 $ 188,488 In fiscal 2010, the Company entered into four license agreements.The first was with Nycomed GmbH (Nycomed) to develop and commercialize Daxas (roflumilast), an orally administered selective phosphodiesterase 4 (PDE4) enzyme inhibitor developed for the treatment of chronic obstructive pulmonary disease (COPD).The second was with AstraZeneca AB (AstraZeneca) to acquire additional rights to NXL104 and amended the Companys prior agreement with Novexel S.A.Pursuant to this amended agreement, the Company acquired full worldwide rights to the ceftaroline/NXL104 combination while simultaneously licensing rights outside the United States, Canada and Japan to AstraZeneca.We also acquired co-development and exclusive commercialization rights in the United States and Canada to all other products containing NXL104 including the ceftazidime/NXL104 combination.The third agreement was with Almirall, S.A. (Almirall) to develop, market and distribute LAS100977, an inhaled long-acting beta2 agonist that will be developed in combination with an undisclosed corticosteroid as a monotherapy for the treatment of asthma and COPD.Pursuant to each of these agreements, the Company paid upfront license fees of $100,000 to Nycomed, $229,000 to AstraZeneca and $75,000 to Almirall.These fees were recorded to research and development expense.The fourth agreement was with AstraZeneca, pursuant to which AstraZeneca will co-develop and commercialize ceftaroline worldwide, excluding the United States, Canada and Japan.Ceftaroline is the Companys, next generation, broad-spectrum, hospital-based injectable cephalosporin being investigated for the treatment of complicated skin and skin st

Accrued expenses

Accrued expenses
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Accrued expenses	9.Accrued expenses (In thousands): Accrued expenses consist of the following: March 31, 2010 2009 Managed care and Medicaid rebates $ 232,337 $ 213,384 Employee compensation and other benefits 117,833 101,041 Clinical research and development costs 103,114 51,085 Reserve for USAO investigation (see Note 13) 170,000 170,000 Other 226,157 165,126 $ 849,441 $ 700,636

Debt facility

Debt facility
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Debt facility	10.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 25, 2010, 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

Commitments
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Commitments	11.Commitments (In thousands): Leases:The Company leases manufacturing, laboratory, office and warehouse facilities, equipment and automobiles under operating leases expiring through fiscal 2027.Rent expense approximated $35,380, $35,857 and $34,630 for fiscal years ended March 31, 2010, 2009 and 2008, respectively.Future minimum rental payments under noncancellable leases are as follows: Years ending March 31, 2011 $ 34,906 2012 31,280 2013 24,792 2014 19,898 2015 19,501 Thereafter 121,596 $ 251,973 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 $1,387,000.These milestone payments become due and are payable only upon the achievement of certain research and development (approximately $534,000) and regulatory approval (approximately $853,000) 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 and consequently are not included in this disclosure. Inventory purchase commitments: The Company has inventory purchase commitments of $79,921 as of March 31, 2010.

Stockholders equity

Stockholders equity
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Stockholders' Equity	12.Stockholders' equity (In thousands, except per share data): In August 2007, the stockholders of the Company voted to adopt the 2007 Equity Incentive Plan (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, 2010: 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 $ 20.55to$30.00 2,761 8.9 $ 24.68 539 $ 24.20 30.01to 50.00 13,652 4.3 38.26 8,424 39.60 50.01to 63.44 2,288 3.8 52.97 1,407 53.89 18,701 4.9 38.05 10,370 40.74 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, 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 Granted (at $22.19 to $31.27 per share) 3,011 29.65 Exercised (at $12.29 to $24.67 per share) (1,296 ) 13.41 Forfeited (1,867 ) 47.07 Outstanding at March 31, 2010 (at $20.55 to $63.44 per share) 18,701 $ 38.05 4.9 $ 18,714 Exercisable at March 31, 2010 10,370 $ 40.74 2.9 $ 3,855 Shares Weighted average grant date fair value Restricted stock: Outstanding at March 31, 2007 Granted 453 $ 37.33 Vested (2 ) 39.88

Contingencies

Contingencies
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Contingencies	13.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 Forest, 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 has 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 against a group of designated plaintiffs due to those plaintiffs failure to demonstrate any antitrust injury.Subsequently, the Court also granted the designated defendants motion for summary judgment with respect to the designated plaintiffs effort to obtain injunctive relief.The litigation is continuing with discovery regarding the claims of other plaintiffs. The Companys directors

Income Taxes

Income Taxes
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Income Taxes	14.Income taxes (In thousands): The components of income before income tax expense were: Years ended March 31, 2010 2009 2008 United States $ 386,214 $ 238,219 $ 440,271 Foreign 564,472 732,315 770,126 Income before income tax expense $ 950,686 $ 970,534 $ 1,210,397 The provision for income taxes consists of the following: Years ended March 31, 2010 2009 2008 Current: U.S. federal $ 227,181 $ 149,739 $ 194,491 State and local 19,905 20,263 18,139 Foreign 43,558 46,884 56,885 290,644 216,886 269,515 Deferred: United States (23,216 ) (11,943 ) (26,549 ) Foreign 875 (2,152 ) (502 ) (22,341 ) (14,095 ) (27,051 ) $ 268,303 $ 202,791 $ 242,464 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) 2010 2009 2008 U.S. statutory rate 35.0% 35.0% 35.0% Effect of foreign operations (11.3) (18.9) (14.5) Research credit (1.1) (1.3) (1.6) State and local taxes, less federal tax benefit 1.4 0.7 1.4 Government investigation 0.0 3.1 0.0 Permanent differences and other items 4.2 2.3 (0.3) 28.2% 20.9% 20.0% The Companys effective tax rate for fiscal years 2010, 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. Net deferred income taxes relate to the following timing differences: March 31, 2010 2009 Inventory reserves $ 44,297 $ 53,505 Receivable allowances and other reserves 45,497 40,302 Depreciation (8,301 ) 1,430 Amortization 88,620 82,871 Carryforwards and credits 63,720 73,305 Accrued liabilities 23,486 12,732 Employee stock option tax benefits 26,673 8,455 Other (includes reserve for legal contingencies) 64,325 67,242 348,317 339,842 Valuation allowance (15,282 ) (21,273 ) Deferred taxes, net $ 333,035 $ 318,569 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 2010 and 2026.Although not material, valuation allowances have been established for a portion of deferred tax assets acquired as part of the Cerexa purchase as the Company determined that it was more likely than not that these benefits will not be realized. No provision has been made for income taxes on the undistributed earnings of the Companys foreign subsidiaries of ap

Quarterly financial data

Quarterly financial data (unaudited)
	12 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Quarterly financial data (unaudited)	15.Quarterly financial data (unaudited) (In thousands, except per share data): Net sales Gross profit Net income Diluted earnings per share 2010 First quarter $ 948,242 $ 731,498 $ 262,898 $ 0.87 Second quarter 962,714 741,553 186,662 0.61 Third quarter 997,002 749,354 210,232 0.69 Fourth quarter 995,566 756,773 22,591 0.07 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

VALUATION AND QUALIFYING ACCOUN

VALUATION AND QUALIFYING ACCOUNTS
	12 Months Ended Mar. 31, 2010
Schedule to Financial Statements [Abstract]
Schedule II - Valuation and Qualifying Accounts	SCHEDULE II FOREST LABORATORIES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (In thousands) Description Balance at beginning of period Additions Deductions Balance at end of period Year ended March 31, 2010: Allowance for doubtful accounts $ 18,511 $ 458 $ 1,777 (i) $ 17,192 Allowance for cash discounts 11,875 95,678 94,283 (ii) 13,270 Inventory reserve 14,173 7,811 1,741 (i) 20,243 Year ended March 31, 2009: Allowance for doubtful accounts $ 19,882 $ 618 $ 1,989 (i) $ 18,511 Allowance for cash discounts 11,815 88,388 88,328 (ii) 11,875 Inventory reserve 18,770 1,817 6,414 (i) 14,173 Year ended March 31, 2008: Allowance for doubtful accounts $ 20,033 $ 906 $ 1,057 (i) $ 19,882 Allowance for cash discounts 11,237 84,722 84,144 (ii) 11,815 Inventory reserve 22,165 5,100 8,495 (i) 18,770 (i)Represents actual amounts written off. (ii)Represents cash discounts given.

Document Information

Document Information
	12 Months Ended Mar. 31, 2010
Document Information [Text Block]
Document Type	10-K
Amendment Flag	false
Document Period End Date	2010-03-31

Entity Information

Entity Information (USD $)
	12 Months Ended Mar. 31, 2010	May. 25, 2010	Sep. 30, 2009
Entity [Text Block]
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			$8,947,486,908
Entity Common Stock, Shares Outstanding		302,394,739
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	FY