UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K/A

Amendment No. 1

þ		Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 2008

o		Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from     to     .

MYLAN INC.

(Exact name of registrant as specified in its charter)

Pennsylvania (State or other jurisdiction of incorporation or organization)		25-1211621 (I.R.S. Employer Identification No.)

1500 Corporate Drive, Canonsburg, Pennsylvania 15317
(Address of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:		Name of Each Exchange on Which Registered:
Common Stock, par value $0.50 per share 6.50% Mandatory Convertible Preferred Stock		The NASDAQ Stock Market The NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ     No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o     No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ     No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o     No þ

     The aggregate market value of the outstanding common stock, other than shares held by persons who may be deemed affiliates of the registrant, as of June 30, 2008, the last business day of the registrant’s most recently completed second fiscal quarter was approximately $3,668,813,108.

     The number of outstanding shares of common stock of the registrant as of February 16, 2009, was 304,704,472.

DOCUMENTS INCORPORATED BY REFERENCE

		Parts of Form 10-K
		into which
		Document is
Document		Incorporated
Proxy Statement for the 2009 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2008.		III

 

 

Explanatory Note

     On February 23, 2009, Mylan Inc. (the “Company”) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. The Company hereby amends its Annual Report on Form 10-K to amend Items 8 and 15 and the Exhibit Index and to include conformed signatures of Deloitte & Touche LLP (“D&T”) on each of D&T’s reports listed in Items 8 and 15 and in D&T’s consent filed as Exhibit 23. These conformed signatures were inadvertently omitted from the original filing of the Company’s Form 10-K. This Amendment No. 1 on Form 10-K/A does not reflect events occurring after the filing of the original Annual Report on Form 10-K. Other than amending Items 8 and 15 and the Exhibit Index and including the conformed signatures of D&T on each of D&T’s reports listed in Items 8 and15 and in D&T’s consent filed as Exhibit 23, this amendment does not modify or update in any way the disclosures in the Company’s original Annual Report on Form 10-K. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, new Certifications by the Company's CEO and CFO are filed as Exhibits to the Form 10-K/A.

MYLAN INC.
INDEX TO FORM 10-K/A
For the Year Ended December 31, 2008

		Page
PART I
ITEM 8. Financial Statements and Supplementary Data			4
ITEM 15. Exhibits and Financial Statement Schedules			49
Signatures			54
EX-23
EX-31.1
EX-31.2
EX-32

ITEM 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements and
Supplementary Financial Information

		Page
Consolidated Balance Sheets as of December 31, 2008 and December 31, 2007			5
Consolidated Statements of Operations for the Calendar Year Ended December 31, 2008, Nine Months Ended December 31, 2007, and Fiscal Year Ended March 31, 2007			6
Consolidated Statements of Shareholders’ Equity for the Calendar Year Ended December 31, 2008, Nine Months Ended December 31, 2007, and Fiscal Year Ended March 31, 2007			7
Consolidated Statements of Cash Flows for the Calendar Year Ended December 31, 2008, Nine Months Ended December 31, 2007, and Fiscal Year Ended March 31, 2007			9
Notes to Consolidated Financial Statements			10
Management’s Report on Internal Control over Financial Reporting			45
Reports of Independent Registered Public Accounting Firm			46
Supplementary Financial Information			48

MYLAN INC. AND SUBSIDIARIES

(in thousands, except share and per share amounts)

		December 31, 2008				December 31, 2007
Assets
Current assets:
Cash and cash equivalents		$	557,147			$	484,202
Restricted cash			40,309				—
Available-for-sale securities			42,260				91,361
Accounts receivable, net			1,164,613				1,132,121
Inventories			1,065,990				1,063,840
Deferred income tax benefit			199,278				192,113
Prepaid expenses and other current assets			105,076				95,664
Total current assets			3,174,673				3,059,301
Property, plant and equipment, net			1,063,996				1,102,932
Intangible assets, net			2,453,161				2,978,706
Goodwill			3,161,580				3,855,971
Deferred income tax benefit			16,493				18,703
Other assets			539,956				337,563
Total assets		$	10,409,859			$	11,353,176
Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Trade accounts payable		$	585,711			$	608,070
Short-term borrowings			151,109				144,355
Income taxes payable			92,158				169,518
Current portion of long-term debt and other long-term obligations			5,099				410,934
Deferred income tax liability			1,935				24,344
Other current liabilities			708,638				645,130
Total current liabilities			1,544,650				2,002,351
Deferred revenue			18,021				122,870
Long-term debt			5,165,419				4,706,716
Other long-term obligations			404,031				206,672
Deferred income tax liability			545,121				876,816
Total liabilities			7,677,242				7,915,425
Minority interest			29,108				34,325
Shareholders’ equity
Preferred stock — par value $0.50 per share
Shares authorized: 5,000,000 as of December 31, 2008 and 2007
Shares issued: 2,139,000 as of December 31, 2008 and 2007			1,070				1,070
Common stock — par value $0.50 per share
Shares authorized: 600,000,000 as of December 31, 2008 and 2007
Shares issued: 395,368,062 and 395,260,355 as of December 31, 2008 and 2007			197,684				197,630
Additional paid-in capital			3,873,743				3,785,729
Retained earnings			594,352				922,857
Accumulated other comprehensive (loss) earnings			(380,802	)			83,044
			4,286,047				4,990,330
Less treasury stock — at cost
Shares: 90,635,441 and 90,885,188 as of December 31, 2008 and 2007			1,582,538				1,586,904
Total shareholders’ equity			2,703,509				3,403,426
Total liabilities and shareholders’ equity		$	10,409,859			$	11,353,176

See Notes to Consolidated Financial Statements

MYLAN INC. AND SUBSIDIARIES

(in thousands, except per share amounts)

		Calendar Year Ended				Nine Months Ended				Fiscal Year Ended
		December 31, 2008				December 31, 2007				March 31, 2007
Revenues:
Net revenues		$	4,631,237			$	2,162,943			$	1,586,947
Other revenues			506,348				15,818				24,872
Total revenues			5,137,585				2,178,761				1,611,819
Cost of sales			3,067,364				1,304,313				768,151
Gross profit			2,070,221				874,448				843,668
Operating expenses:
Research and development			317,217				146,063				103,692
Acquired in-process research and development			—				1,269,036				147,000
Goodwill impairment			385,000				—				—
Selling, general and administrative			1,053,485				449,598				215,538
Litigation settlements, net			16,634				(1,984	)			(50,116	)
Total operating expenses			1,772,336				1,862,713				416,114
Earnings (loss) from operations			297,885				(988,265	)			427,554
Interest expense			357,045				179,410				52,276
Other income, net			11,337				86,611				50,234
(Loss) earnings before income taxes and minority interest			(47,823	)			(1,081,064	)			425,512
Income tax provision			137,423				60,073				208,017
(Loss) earnings before minority interest			(185,246	)			(1,141,137	)			217,495
Minority interest (income) expense			(4,031	)			(3,112	)			211
Net (loss) earnings before preferred dividends			(181,215	)			(1,138,025	)			217,284
Preferred dividends			139,035				15,999				—
Net (loss) earnings available to common shareholders		$	(320,250	)		$	(1,154,024	)		$	217,284
(Loss) earnings per common share:
Basic		$	(1.05	)		$	(4.49	)		$	1.01
Diluted		$	(1.05	)		$	(4.49	)		$	0.99
Weighted average common shares outstanding:
Basic			304,360				257,150				215,096
Diluted			304,360				257,150				219,120

See Notes to Consolidated Financial Statements

     

MYLAN INC. AND SUBSIDIARIES

(in thousands, except share and per share amounts)

																																										Accumulated
																										Additional																Other				Total
						Comprehensive				Preferred Stock								Common Stock								Paid-In				Retained				Treasury Stock								Comprehensive				Shareholders’
						Earnings (Loss)				Shares				Cost				Shares				Cost				Capital				Earnings				Shares				Cost				Earnings				Equity
Balance at March 31, 2006											—			$	—				309,150,251			$	154,575			$	418,954			$	1,939,045				(98,971,431	)		$	(1,727,373	)		$	2,450			$	787,651
Net earnings						$	217,284				—				—				—				—				—				217,284				—				—				—				217,284
Foreign currency translation adjustment							1,266				—				—				—				—				—				—				—				—				1,266				1,266
Net unrealized loss on marketable securities, net of tax			(1,569	)
Reclassification for losses included in net earnings			669				(900	)			—				—				—				—				—				—				—				—				(900	)			(900	)
Other comprehensive earnings							366
Comprehensive earnings							217,650
Issuance of common stock, net											—				—				26,162,500				13,081				476,015				—				—				—				—				489,096
Stock options exercised, net of shares tendered for payment											—				—				4,048,450				2,025				47,242				—				—				—				—				49,267
Sale of warrants											—				—				—				—				45,360								—				—								45,360
Issuance of restricted stock, net of shares withheld											—				—				—				—				(2,526	)			—				(35,665	)			(1,716	)			—				(4,242	)
Shares issued for the acquisition of Matrix											—				—				—				—				23,045				—				8,058,139				140,696				—				163,741
Purchase of bond hedge, net of tax of $44,100											—				—				—				—				(81,900	)			—				—				—				—				(81,900	)
Stock-based compensation expense											—				—				—				—				22,156				—				—				—				—				22,156
Tax benefit of stock option plans											—				—				—				—				14,419				—				—				—				—				14,419
Dividends declared ($0.24 per share)											—				—				—				—				—				(53,047	)			—				—				—				(53,047	)
Adjustment to intitially adopt SFAS No. 158, net of tax of $751											—				—				—				—				—				—				—				—				(1,272	)			(1,272	)
Other											—				—				—				—				(19	)			—				—				—				—				(19	)
Balance at March 31, 2007											—				—				339,361,201				169,681				962,746				2,103,282				(90,948,957	)			(1,588,393	)			1,544				1,648,860
Net loss						$	(1,138,025	)			—				—				—				—				—				(1,138,025	)			—				—				—				(1,138,025	)
Change in unrecognized losses and prior service cost related to post-retirement plans, net of tax							(663	)			—				—				—				—				—				—				—				—				(663	)			(663	)
Foreign currency translation adjustment							87,602				—				—				—				—				—				—				—				—				87,602				87,602
Net unrecognized losses on derivatives, net of tax							(4,723	)			—				—				—				—				—				—				—				—				(4,723	)			(4,723	)
Net unrealized loss on marketable securities, net of tax			(525	)
Reclassification for gains included in net earnings			(191	)			(716	)			—				—				—				—				—				—				—				—				(716	)			(716	)
Other comprehensive earnings							81,500
Comprehensive loss							(1,056,525	)
Issuance of common stock, net											—				—				55,440,000				27,720				720,331				—				—				—				—				748,051
Stock options exercised, net of shares tendered for payment											—				—				459,154				229				7,503				—				—				—				—				7,732
Issuance of preferred stock, net											2,139,000				1,070				—				—				2,072,816				—				—				—				—				2,073,886
Issuance of restricted stock, net of shares withheld											—				—				—				—				(1,485	)			—				63,769				1,489				—				4
Stock-based compensation expense											—				—				—				—				17,332				—				—				—				—				17,332
Tax benefit of stock option plans											—				—				—				—				5,648				—				—				—				—				5,648
Adoption of FIN 48, net of tax											—								—				—				—				(11,478	)			—				—				—				(11,478	)
Dividends on preferred shares											—				—				—				—				—				(15,999	)			—				—				—				(15,999	)
Dividends declared ($0.06 per share)											—				—				—				—				—				(14,923	)			—				—				—				(14,923	)
Other											—				—				—				—				838				—				—				—				—				838
Balance at December 31, 2007											2,139,000			$	1,070				395,260,355			$	197,630			$	3,785,729			$	922,857				(90,885,188	)		$	(1,586,904	)		$	83,044			$	3,403,426

See Notes to Consolidated Financial Statements

     

MYLAN INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity (Continued)
(in thousands, except share and per share amounts)

																																										Accumulated
																										Additional																Other				Total
						Comprehensive				Preferred Stock								Common Stock								Paid-In				Retained				Treasury Stock								Comprehensive				Shareholders’
						Earnings (Loss)				Shares				Cost				Shares				Cost				Capital				Earnings				Shares				Cost				Earnings				Equity
Net loss						$	(181,215	)			—				—				—				—				—				(181,215	)			—				—				—				(181,215	)
Change in unrecognized losses and prior service cost related to post-retirement plans, net of tax							(2,529	)			—				—				—				—				—				—				—				—				(2,529	)			(2,529	)
Foreign currency translation adjustment							(420,167	)			—				—				—				—				—				—				—				—				(420,167	)			(420,167	)
Net unrecognized gains on derivatives, net of tax							(40,633	)			—				—				—				—				—				—				—				—				(40,633	)			(40,633	)
Net unrealized loss on marketable securities, net of tax			(577	)
Reclassification for losses included in net earnings			60				(517	)			—				—				—				—				—				—				—				—				(517	)			(517	)
Other comprehensive loss							(463,846	)
Comprehensive loss						$	(645,061	)
Stock options exercised, net of shares tendered for payment											—				—				107,707				54				1,137				—				—				—				—				1,191
Issuance of restricted stock, net of shares withheld											—				—				—				—				(5,529	)			—				249,747				4,366				—				(1,163	)
Stock-based compensation expense											—				—				—				—				30,639				—				—				—				—				30,639
Tax expense of stock option plans											—				—				—				—				(223	)			—				—				—				—				(223	)
Sale of warrants, net											—				—				—				—				62,560				—				—				—				—				62,560
Adoption of EITF 06-10																															(8,255	)															(8,255	)
Dividends on preferred shares											—				—				—				—				—				(139,035	)			—				—				—				(139,035	)
Other											—				—				—				—				(570	)			—				—				—				—				(570	)
Balance at December 31, 2008											2,139,000			$	1,070				395,368,062			$	197,684			$	3,873,743			$	594,352				(90,635,441	)		$	(1,582,538	)		$	(380,802	)		$	2,703,509

See Notes to Consolidated Financial Statements

MYLAN INC. AND SUBSIDIARIES

(in thousands)

		Calendar Year Ended				Nine Months Ended				Fiscal Year Ended
		December 31, 2008				December 31, 2007				March 31, 2007
Cash flows from operating activities:
Net (loss) earnings before preferred dividends		$	(181,215	)		$	(1,138,025	)		$	217,284
Adjustments to reconcile net (loss) earnings before preferred dividends to net cash provided by operating activities:
Depreciation and amortization			425,279				157,800				61,512
Stock-based compensation expense			30,639				17,332				22,156
In-process research and development			—				1,269,036				147,000
Minority interest			(4,031	)			(3,112	)			211
Net income from equity method investees			(4,161	)			(2,573	)			(6,659	)
Change in estimated sales allowances			10,576				31,337				14,386
Deferred income taxes			(193,564	)			(77,131	)			(50,479	)
Non-cash impairments			457,517				—				—
Other non-cash items			31,076				54,408				7,914
Litigation settlements, net			16,635				(4,526	)			6,464
Cash received from Somerset			—				—				5,870
Gain on foreign exchange contract			—				(85,063	)			—
Changes in operating assets and liabilities:
Accounts receivable			(172,447	)			(124,385	)			(60,773	)
Inventories			(83,327	)			16,305				(28,987	)
Trade accounts payable			23,166				86,467				(29,312	)
Income taxes			73,983				(34,632	)			73,567
Deferred revenue			(113,998	)			34,864				(5,504	)
Other operating assets and liabilities, net			68,319				(30,413	)			15,542
Net cash provided by operating activities			384,447				167,689				390,192
Cash flows from investing activities:
Capital expenditures			(165,113	)			(110,538	)			(161,851	)
Acquisitions, net of cash acquired			—				(7,001,930	)			(761,049	)
Increase in restricted cash			(38,182	)			—				—
Purchase of available-for-sale securities			(18,032	)			(275,802	)			(655,948	)
Proceeds from sale of available-for-sale securities			65,712				357,922				848,520
Other items, net			2,785				(4,976	)			(407	)
Net cash used in investing activities			(152,830	)			(7,035,324	)			(730,735	)
Cash flows from financing activities:
Cash dividends paid			(137,495	)			(29,825	)			(50,751	)
Payment of financing fees			(15,074	)			(89,538	)			(15,329	)
Proceeds from the issuance of preferred stock, net			—				2,073,886				—
Proceeds from issuance of common stock, net			—				748,051				657,678
Purchase of bond hedge			(161,173	)			—				(126,000	)
Proceeds from issuance of warrants			62,560				—				45,360
Change in short-term borrowing, net			26,239				26,240				—
Proceeds from long-term debt			581,352				7,701,240				1,556,251
Payment of long-term debt			(524,536	)			(4,389,183	)			(689,938	)
Proceeds from exercise of stock options			1,191				7,732				49,824
Change in outstanding checks in excess of cash disburements accounts			—				18,008				10,403
Other items, net			—				2,171				5,318
Net cash (used in) provided by financing activities			(166,936	)			6,068,782				1,442,816
Effect on cash and cash equivalents of changes in exchange rates			8,264				30,690				(32	)
Net increase (decrease) in cash and cash equivalents			72,945				(768,163	)			1,102,241
Cash and cash equivalents — beginning of period			484,202				1,252,365				150,124
Cash and cash equivalents — end of period		$	557,147			$	484,202			$	1,252,365
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes		$	218,012			$	179,092			$	176,353
Interest		$	307,895			$	174,034			$	59,996

See Notes to Consolidated Financial Statements

Mylan Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Operations

     Mylan Inc. and its subsidiaries (the “Company” or “Mylan”) are engaged in the development, licensing, manufacture, marketing and distribution of generic, brand and branded generic pharmaceutical products for resale by others and active pharmaceutical ingredients (“API”) globally through three reportable segments in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS No. 131”), the Generics Segment, the Specialty Segment and the Matrix Segment. The principal markets for the Generics Segment products are proprietary and ethical pharmaceutical wholesalers and distributors, drug store chains, drug manufacturers, institutions, and public and governmental agencies primarily within the United States (“U.S.”) and Canada (collectively, “North America”), Europe, Middle East and Africa (collectively, “EMEA”), and Australia, Japan and New Zealand (collectively, “Asia Pacific”). The Matrix Segment has a wide range of products in multiple therapeutic categories and focuses mainly on developing API with non-infringing processes to partner with generic manufacturers in regulated markets such as the U.S. and the European Union (“EU”) at market formation. The principal market for the Specialty Segment is also pharmaceutical wholesalers and distributors primarily in the U.S.

     The Company amended its articles of incorporation to change its name from Mylan Laboratories Inc. to Mylan Inc., effective as of October 2, 2007.

     Effective October 2, 2007, the Company amended its bylaws, to change the Company’s fiscal year from beginning April 1st and ending on March 31st, to beginning January 1st and ending on December 31st.

Note 2. Summary of Significant Accounting Policies

     Principles of Consolidation. The Consolidated Financial Statements include the accounts of Mylan Inc. and those of its wholly-owned and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Non-controlling interests in the Company’s subsidiaries are recorded net of tax as minority interest.

     On October 2, 2007, Mylan completed its acquisition of Merck KGaA’s generics business (“the former Merck Generics business”). Accordingly, Mylan began consolidating the results of operations of the former Merck Generics business as of October 2, 2007 (see Note 3).

     Cash and Cash Equivalents. Cash and cash equivalents are comprised of highly liquid investments with an original maturity of three months or less at the date of purchase.

     Available-for-Sale Securities. Debt and marketable equity securities are classified as available-for-sale and are recorded at fair value, with net unrealized gains and losses, net of income taxes, reflected in accumulated other comprehensive earnings as a component of shareholders’ equity. Net realized gains and losses on sales of available-for-sale securities are computed on a specific security basis and are included in other income in the Consolidated Statements of Operations.

     Concentrations of Credit Risk. Financial instruments that potentially subject the Company to credit risk consist principally of interest-bearing investments, derivatives and accounts receivable.

     Mylan invests its excess cash in high-quality, liquid money market instruments, principally overnight deposits, highly rated money market funds and market auction securities. The Company maintains deposit balances at certain financial institutions in excess of federally insured amounts. Periodically, the Company reviews the creditworthiness of its counterparties to derivative transactions, and it does not expect to incur a loss from failure of any counterparties to perform under agreements it has with such counterparties.

     Mylan performs ongoing credit evaluations of its customers and generally does not require collateral. Approximately 37% and 34% of the accounts receivable balances represent amounts due from three customers at December 31, 2008 and December 31, 2007. Total allowances for doubtful accounts were $26.9 million and $38.1 million at December 31, 2008 and December 31, 2007.

     Inventories. Inventories are stated at the lower of cost or market, with cost determined by the first-in, first-out method. Provisions for potentially obsolete or slow-moving inventory, including pre-launch inventory, are made based on our analysis of inventory levels, historical obsolescence and future sales forecasts.

     Property, Plant and Equipment. Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed and recorded on a straight-line basis over the assets’ estimated service lives (3 to 19 years for machinery and equipment and 15 to 39 years for buildings and improvements). The Company periodically reviews the original estimated useful lives of assets and makes adjustments when appropriate. Depreciation expense was $122.8 million, $57.1 million and $39.1 million for the calendar year ended December 31, 2008, the nine months ended December 31, 2007 and fiscal year ended March 31, 2007, respectively.

     Intangible Assets and Goodwill. Intangible assets are stated at cost less accumulated amortization. Amortization is generally recorded on a straight-line basis over estimated useful lives ranging from 5 to 20 years. The Company periodically reviews the original estimated useful lives of assets and makes adjustments when events indicate that a shorter life is appropriate.

     The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. The cost to acquire a business, including transaction costs, is allocated to the underlying net assets of the acquired business in proportion to their respective fair values. Amounts allocated to acquired in-process research and development are expensed at the date of acquisition. Definite lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

     The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. Fair values and useful lives are determined based on, among other factors, the expected future period of benefit of the asset, the various characteristics of the asset and projected cash flows.

     Impairment of Long-Lived Assets. The carrying values of long-lived assets, which include property, plant and equipment and intangible assets with finite lives, are evaluated periodically in relation to the expected future cash flows of the underlying assets and monitored for other potential triggering events. Adjustments are made in the event that estimated undiscounted net cash flows are less than the carrying value.

     Goodwill is tested for impairment at least annually or when events or other changes in circumstances indicate that the carrying amount of the assets may not be recoverable based on management’s assessment of the fair value of the Company’s identified reporting units as compared to their related carrying value. If the fair value of a reporting unit is less than its carrying value, additional steps, including an allocation of the estimated fair value to the assets and liabilities of the reporting unit, would be necessary to determine the amount, if any, of goodwill impairment.

     Indefinite-lived intangibles are tested at least annually for impairment. Impairment is determined to exist when the fair value is less than the carrying value of the assets being tested.

     Other Assets. Investments in business entities in which the Company has the ability to exert significant influence over operating and financial policies (generally 20% to 50% ownership) are accounted for using the equity method. Under the equity method, investments are initially recorded at cost and are adjusted for dividends, distributed and undistributed earnings and losses, changes in foreign exchange rates, and additional investments. Other assets are periodically reviewed for other-than-temporary declines in fair value.

     Short-Term Borrowings. Matrix has a financing arrangement for the sale of its accounts receivable with certain commercial banks. The commercial banks purchase the receivables at a discount and Matrix records the proceeds as short-term borrowings. Upon receipt of payment of the receivable, the short-term borrowings are reversed. As the banks have recourse to Matrix on the receivables sold, the receivables are included in accounts receivable, net in the Consolidated Balance Sheets. Additionally, Matrix has working capital facilities with several banks which are secured first by Matrix’s current assets and second by Matrix’s property, plant and equipment. The working capital facilities carry interest rates of 4%-14%.

     Revenue Recognition. Mylan recognizes revenue for product sales when title and risk of loss pass to its customers and when provisions for estimates, including discounts, rebates, price adjustments, returns, chargebacks and other promotional programs, are reasonably determinable. No revisions were made to the methodology used in determining these provisions during the calendar year ended December 31, 2008. The following briefly describes the nature of each provision and how such provisions are estimated.

     Discounts are reductions to invoiced amounts offered to customers for payment within a specified period and are estimated upon sale utilizing historical customer payment experience.

     Rebates are offered to key customers to promote customer loyalty and encourage greater product sales. These rebate programs provide that upon the attainment of pre-established volumes or the attainment of revenue milestones for a specified period, the customer receives credit against purchases. Other promotional programs are incentive programs periodically offered to our customers. The Company is able to estimate provisions for rebates and other promotional programs based on the specific terms in each agreement at the time of sale.

     Consistent with industry practice, Mylan maintains a return policy that allows customers to return product within a specified period prior to and subsequent to the expiration date. The Company’s estimate of the provision for returns is generally based upon historical experience with actual returns.

     Price adjustments, which include shelf stock adjustments, are credits issued to reflect decreases in the selling prices of products. Shelf stock adjustments are based upon the amount of product which the customer has remaining in its inventory at the time of the price reduction. Decreases in selling prices are discretionary decisions made by the Company to reflect market conditions. Amounts recorded for estimated price adjustments are based upon specified terms with direct customers, estimated launch dates of competing products, estimated declines in market price and, in the case of shelf stock adjustments, estimates of inventory held by the customer.

     The Company has agreements with certain indirect customers, such as independent pharmacies, managed care organizations, hospitals, nursing homes, governmental agencies and pharmacy benefit management companies, which establish contract prices for certain products. The indirect customers then independently select a wholesaler from which to actually purchase the products at these contracted prices. Mylan will provide credit to the wholesaler for any difference between the contracted price with the indirect party and the wholesaler’s invoice price. Such credit is called a chargeback. The provision for chargebacks is based on expected sell-through levels by our wholesaler customers to indirect customers, as well as estimated wholesaler inventory levels.

     At March 31, 2007, as a result of significant uncertainties surrounding the Food and Drug Administration’s (“FDA’s”) approval of additional abbreviated new drug applications (“ANDAs”) with respect to a product launched by the Company in late March 2007, the Company was not able to reasonably estimate the amount of potential price adjustments that would occur as a result of the additional approvals. As a result, revenues on shipments of this product were deferred until such uncertainties were resolved. Initially, such uncertainties were considered to be resolved upon our customers’ sale of this product. During the quarter ended September 30, 2007, as a result of additional competition entering the market upon companies receiving final FDA approval, these uncertainties were resolved and the Company was able to reasonably estimate the amount of potential price adjustments. Accordingly, all revenues on shipments previously deferred were recognized and revenue is currently being recorded as described above.

     Accounts receivable are presented net of allowances relating to the above provisions. No revisions were made to the methodology used in determining these provisions during the calendar year ended December 31, 2008 and the nine months ended December 31, 2007. Such allowances were $496.5 million and $420.4 million at December 31, 2008 and December 31, 2007. Other current liabilities include $236.3 million and $301.8 million at December 31, 2008 and December 31, 2007, for certain rebates and other adjustments that are paid to indirect customers.

     The Company periodically enters into various types of revenue arrangements with third-parties, including agreements for the sale or license of product rights or technology, research and development agreements, collaboration agreements and others. These agreements may include the receipt of upfront and milestone payments, royalties, and payment for contract manufacturing and other services.

     The Company recognizes all non-refundable payments as revenue in accordance with the guidance provided in the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition, corrected copy, and Emerging Issues Task Force (“EITF”) Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. Non-refundable fees received upon entering into license and other collaborative agreements where the Company has continuing involvement are recorded as deferred revenue and recognized as other revenue over an appropriate period of time.

     Royalty revenue from licensees, which are based on third-party sales of licensed products and technology, is earned in accordance with the contract terms when third-party sales can be reliably measured and collection of the funds is reasonably assured. Royalty revenue is included in other revenue in the Consolidated Statements of Operations.

     The Company recognizes contract manufacturing and other service revenue when the service is performed or when the Company’s partners take ownership and title has passed, collectability is reasonably assured, the sales price is fixed or determinable and there is persuasive evidence of an arrangement.

     During the calendar year ended December 31, 2008, sales to McKesson Corporation and Cardinal Health, Inc. represented 12% and 10% of consolidated net revenues. Sales to Cardinal Health, Inc. and McKesson Corporation represented 11% and 16% of consolidated net revenues during the nine months ended December 31, 2007. Sales to AmerisourceBergen Corporation, Cardinal Health, Inc. and McKesson Corporation represented approximately 13%, 18% and 19%, respectively, of net revenues in fiscal 2007.

     Research and Development. Research and development expenses are charged to operations as incurred.

     Income Taxes. Income taxes have been provided for using an asset and liability approach in which deferred income taxes reflect the tax consequences on future years of events that the Company has already recognized in the financial statements or tax returns. Changes in enacted tax rates or laws will result in adjustments to the recorded tax assets or liabilities in the period that the new tax law is enacted.

     (Loss) Earnings per Common Share. Basic (loss) earnings per share excludes dilution and is computed by dividing net (loss) earnings available to common shareholders by the weighted average number of shares outstanding during the period. Diluted (loss) earnings per share is computed by dividing net (loss) earnings available to common shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding related to stock options, convertible instruments, warrants and other instruments indexed in the Company’s stock if the impact is dilutive.

     With respect to the Company’s convertible preferred stock, the Company considered the effect on diluted earnings per share of the preferred stock conversion feature using the if-converted method. The preferred stock is convertible into between 125,234,172 shares and 152,785,775 shares of the Company’s common stock, subject to anti-dilution adjustments, depending on the average stock price of its common stock over the 20 trading-day period ending on the third trading day prior to conversion. For the calendar year ended December 31, 2008 and the nine months ended December 31, 2007, the preferred stock conversion would have been anti-dilutive and, as such, was not assumed in the computation of diluted loss per share.

     Basic and diluted (loss) earnings per common share is calculated as follows:

		Calendar Year Ended				Nine Months Ended				Fiscal Year Ended
		December 31,				December 31,				March 31,
(in thousands, except per share amounts)		2008				2007				2007
Basic (loss) earnings available to common shareholders (numerator):
Net (loss) earnings before preferred dividends		$	(181,215	)		$	(1,138,025	)		$	217,284
Less: Preferred stock dividends			139,035				15,999				—
Net (loss) earnings available to common shareholders		$	(320,250	)		$	(1,154,024	)		$	217,284
Shares (denominator):
Weighted average shares outstanding			304,360				257,150				215,096
Basic (loss) earnings per common share		$	(1.05	)		$	(4.49	)		$	1.01
Dilutive (loss) earnings available to common shareholders (numerator):
Net (loss) earnings available to common shareholders		$	(320,250	)		$	(1,154,024	)		$	217,284
Add: Preferred stock dividend			—				—				—
Income available to common shareholders and assumed conversions		$	(320,250	)		$	(1,154,024	)		$	217,284
Shares (denominator):
Stock-based awards			—				—				4,024
Preferred stock conversion			—				—				—
Total dilutive shares outstanding assuming conversions			304,360				257,150				219,120
Diluted (loss) earnings per common share		$	(1.05	)		$	(4.49	)		$	0.99

     Additional stock options or restricted stock awards representing 20.7 million, 12.5 million and 1.6 million shares were outstanding for the calendar year ended December 31, 2008, the nine months ended December 31, 2007, and fiscal year ended March 31, 2007, respectively, but were not included in the computation of diluted (loss) earnings per share because the effect would be anti-dilutive.

     During the calendar year ended December 31, 2008, the Company paid dividends of $137.5 million on the preferred stock. On January 29, 2009, the Company announced that a quarterly dividend of $16.25 per share was declared (based on the annual dividend rate of 6.5% and a liquidation preference of $1,000 per share) payable on February 17, 2009, to the holders of preferred stock of record as of February 1, 2009.

     Stock Options. The Company adopted SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123R”), effective April 1, 2006. SFAS No. 123R requires the recognition of the fair value of stock-based compensation in net earnings. Prior to April 1, 2006, the Company accounted for its stock options using the intrinsic value method of accounting provided under Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees, (“APB No. 25”), and related Interpretations, as permitted by SFAS No. 123, Accounting for Share Based Compensation (“SFAS No. 123”).

     Mylan adopted the provisions of SFAS No. 123R, using the modified prospective transition method. Under this method, compensation expense recognized in the calendar year ended December 31, 2008, the nine-month period ended December 31, 2007, and the fiscal year ended March 31, 2007 includes: (a) compensation cost for all share-based payments granted prior to April 1, 2006, but for which the requisite service period had not been completed as of April 1, 2006 based on the grant date fair value, estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted subsequent to April 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R.

     Foreign Currencies. The Consolidated Financial Statements are presented in the reporting currency of Mylan, U.S. Dollars (“USD”). Statements of Operations and Cash Flows of all of the Company’s subsidiaries that have functional currencies other than USD are translated at a weighted average exchange rate for the period, whereas assets and liabilities are translated at the end of the period exchange rates. Translation differences are recorded directly in shareholders’ equity as cumulative translation adjustments. Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency, which arise as a result of changes in foreign currency exchange rates, are recorded in the Consolidated Statements of Operations.

     Derivatives. From time to time the Company may enter into derivative instruments (mainly foreign currency exchange forward contracts, purchased currency options, interest rate swaps and purchased equity call options) designed to hedge the cash flows resulting from existing assets and liabilities and transactions expected to be entered into over the next twelve months, in currencies other than the functional currency, to hedge the variability in interest expense on floating rate debt or to hedge cash or share payments required on conversion of issued convertible notes. When such instruments qualify for hedge accounting under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133”), they are recognized on the balance sheet with the change in the fair value recorded as a component of other comprehensive income until the underlying hedged item is recognized in the Consolidated Statements of Operations. When such derivatives do not qualify for hedge accounting under SFAS No. 133, they are recognized on the balance sheet at their fair value, with changes in the fair value recorded in the Consolidated Statements of Operations and included in other income, net.

     Financial Instruments. The Company’s financial instruments consist primarily of short-term and long-term debt, interest rate swaps, forward contracts, and option contracts. The Company’s financial instruments also include cash and cash equivalents as well as accounts and other receivables and accounts payable, the fair values of which approximate their carrying values. As a policy, the Company does not engage in speculative or leveraged transactions, nor does the Company hold or issue financial instruments for trading purposes.

     The Company uses derivative financial instruments for the purpose of hedging foreign currency and interest rate exposures, which exist as part of ongoing business operations or to hedge cash or share payments required on conversion of issued convertible notes. The Company carries derivative instruments on the balance sheet at fair value, determined by reference to market data such as forward rates for currencies, implied volatilities and interest rate swap yield curves. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.

     Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the uncertainty inherent in such estimates, actual results could differ from those estimates.

     Recent Accounting Pronouncements. In June 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP No. EITF 03-6-1”). FSP No. EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP No. EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. The adoption of FSP No. EITF 03-6-01 will not have a material impact on the Company’s Consolidated Financial Statements.

     In May 2008, the FASB issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement) (“FSP No. APB 14-1”). Under the new rules for convertible debt instruments (including our Senior Convertible Notes) that may be settled entirely or partially in cash upon conversion, an entity should separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s economic interest cost. The effect of the new rules for the debentures is that the equity component would be included in the paid-in-capital section of stockholders’ equity on our consolidated balance sheet and the value of the equity component would be treated as original issue discount for purposes of accounting for the debt component of the Senior Convertible Notes. FSP No. APB 14-1 will be effective for fiscal years beginning after December 15, 2008, and for interim periods within those fiscal years, with retrospective application required. Higher interest expense will result through the accretion of the discounted carrying value of the Senior Convertible Notes to their face amount over the term of the Senior Convertible Notes. Prior period interest expense will also be higher than previously reported interest expense due to retrospective application. Early adoption is not permitted. The Company evaluated the impact of adopting FSP No. APB 14-1 on its Consolidated Financial Statements and determined that the retrospective application will increase the net loss available to common shareholders by approximately $10.0 million for the nine months ended December 31, 2007, and $15.0 million for calendar year ended December 31, 2008. In addition, at December 31, 2008, additional paid-in capital will increase by $85.0 million and long-term debt, retained earnings and tax assets will decrease by $87.0 million, $26.0 million and $28.0 million, respectively.

     In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP No. FAS 142-3”). FSP No. FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”) in order to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), Business Combinations (“SFAS No. 141(R)”), and other GAAP. FSP No. FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The adoption of FSP No. FAS 142-3 will not have a material impact on the Company’s Consolidated Financial Statements.

     In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133 (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities, including (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This standard is effective for fiscal years beginning after November 15, 2008. Management is currently assessing the impact of the disclosures on the Company’s Consolidated Financial Statements.

     In March 2008, the Emerging Issues Task Force (“EITF”) issued EITF No. 07-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock (“EITF No. 07-5”). EITF No. 07-5 states that if an instrument (or an embedded feature) has the characteristics of a derivative instrument under paragraphs 6-9 of SFAS No. 133, and is indexed to an entity’s own stock, it is necessary to evaluate whether it is classified in shareholders’ equity (or would be classified in shareholders’ equity if it were a freestanding instrument). EITF No. 07-5 is effective for fiscal years beginning after December 15, 2008. The adoption of EITF No. 07-5 will not have a material impact on the Company’s Consolidated Financial Statements.

     On January 1, 2008, the Company adopted Statement 133 Implementation Issue No. E23, Hedging — General: Issues Involving the Application of the Shortcut Method under Paragraph 58 (“Issue No. E23”). Issue No. E23 provides guidance on certain practice issues related to the application of the shortcut method by amending paragraph 68 of SFAS No. 133 with respect to the conditions that must be met in order to apply the shortcut method for assessing hedge effectiveness of interest rate swaps. In addition to applying the provisions of Issue No. E23 on hedging arrangements designated on or after January 1, 2008, an assessment was required to be made on January 1, 2008 to determine whether preexisting hedging arrangements met the provisions of Issue No. E23 as of their original inception. Management performed such an assessment and determined that the adoption of Issue No. E23 did not have a material impact on preexisting hedging arrangements.

     On January 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115 (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis (the fair value option) with changes in fair value reported in earnings. The Company already records marketable securities at fair value in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities (“SFAS No. 115”), and derivative contracts and hedging activities at fair value in accordance with SFAS No. 133. The adoption of SFAS No. 159 did not have a material impact on the Company’s Consolidated Financial Statements as management did not elect the fair value option for any other financial instruments or certain other assets and liabilities.

     In December 2007, the FASB issued SFAS No. 141(R). SFAS No. 141(R) replaces SFAS No. 141, Business Combinations, (“SFAS No. 141”) and retains the fundamental requirements in SFAS No. 141, including that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination. This standard defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control instead of the date that the consideration is transferred. SFAS No. 141(R) requires an acquirer in a business combination, including business combinations achieved in stages (step acquisition), to recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values at that date, with limited exceptions. It also requires the recognition of assets acquired and liabilities assumed arising from certain contractual contingencies as of the acquisition date, measured at their acquisition-date fair values. SFAS No. 141(R) is effective for any business combination with an acquisition date on or after January 1, 2009. The Company is currently evaluating the potential impact of SFAS No. 141(R) on the Consolidated Financial Statements.

     In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS No. 160”). SFAS No. 160 amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This standard defines a noncontrolling interest, sometimes called a minority interest, as the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS No. 160 requires, among other items, that a noncontrolling interest be included in the consolidated balance sheet within equity separate from the parent’s equity; consolidated net income to be reported at amounts inclusive of both the parent’s and noncontrolling interest’s shares and, separately, the amounts of consolidated net income attributable to the parent and noncontrolling interest all on the consolidated statement of operations; and if a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be measured at fair value and a gain or loss be recognized in net income based on such fair value. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. Although certain captions and disclosures will be revised, the adoption of SFAS No. 160 will not have a material impact on the Company’s Consolidated Financial Statements.

     In March 2007, the EITF issued EITF No. 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements (“EITF No. 06-10”). Under the provisions of EITF No. 06-10, an employer is required to recognize a liability for the postretirement benefit related to a collateral assignment split-dollar life insurance arrangement with the employee. The provisions of EITF No. 06-10 also require an employer to recognize and measure the asset in a collateral assignment split-dollar life insurance arrangement based on the nature and substance of the arrangement. The Company adopted the provisions of EITF No. 06-10 as of January 1, 2008. As a result of the adoption, the Company recognized a liability of $8.3 million, representing the present value of the future premium payments to be made under the existing policies. In accordance with the transition provisions of EITF No. 06-10, this amount was recorded as a direct decrease to retained earnings.

     In March 2007, the EITF issued EITF No. 06-04, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsed Split-Dollar Life Insurance Arrangements (“EITF No. 06-4”), which concludes that an employer should recognize a liability for post-employment benefits promised an employee based on the substantive arrangement between the employer and the employee. The Company adopted the provisions of EITF No. 06-04 as of January 1, 2008. The adoption of EITF No. 06-04 did not have a material impact on the Company’s Consolidated Financial Statements.

Note 3. Acquisitions

Acquisition of the Former Merck Generics Business

     On May 12, 2007, Mylan and Merck KGaA announced the signing of a definitive agreement under which Mylan agreed to purchase Merck’s generic pharmaceutical business in an all-cash transaction. On October 2, 2007, Mylan completed its acquisition of the former Merck Generics business.

     In accordance with SFAS No. 141, the Company used the purchase method of accounting to account for this transaction. Under the purchase method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at the date of acquisition at the estimate of their respective fair values.

     The purchase price plus acquisition costs exceeded the estimate of fair values of acquired assets and assumed liabilities resulting in the recognition of goodwill in the preliminary amount of $3.17 billion. This was a cash-free/debt-free transaction as defined in the Share Purchase Agreement (“SPA”). The total purchase price, including acquisition costs of $38.7 million, was approximately $7.0 billion. The operating results of the former Merck Generics business from October 2, 2007 are included in the Consolidated Financial Statements. The allocation of assets acquired and liabilities assumed for the former Merck Generics business as of the acquisition date is as follows:

(in thousands)
Current assets (excluding inventories)		$	765,495
Inventories			645,449
Property, plant and equipment, net(4)			344,454
Identified intangible assets			2,654,163
Other non-current assets(2)			140,015
In-process research and development(1)			1,269,036
Goodwill			3,166,005
Total assets acquired			8,984,617
Current liabilities(3)			(820,444	)
Deferred tax liabilities			(1,020,040	)
Other non-current liabilities			(142,203	)
Net assets acquired		$	7,001,930

     At December 31, 2007, as a result of the Company’s preliminary allocation of goodwill, approximately $2.4 billion and $711.2 million were allocated to its Generics Segment and Specialty Segment.

     As of December 31, 2008, the Company has finalized the purchase price allocation. Finalization of the purchase price allocation consisted of net adjustments to deferred tax liabilities, adjustments to certain asset fair values, and additional restructuring liabilities. During the calendar year ended December 31, 2008, a net decrease of approximately $53.1 million was recorded to goodwill related to the finalization of the purchase price allocation (see Note 10).

     The Company has finalized its plans to exit certain activities of the former Merck Generics business as of December 31, 2008. As a result, the Company has a $67.0 million reserve at December 31, 2008 related to involuntary termination benefits and certain other exit costs accounted for in accordance with EITF No. 95-3, Recognition of Liabilities in Conjunction with a Purchased Business Combination (“EITF No. 95-3”) (see Note 6).

     In conjunction with the acquisition of the former Merck Generics business, the Company assumed certain loss contingencies. As disclosed in Note 19 — Contingencies, Merck KGaA has indemnified Mylan under the provisions of the SPA for certain of these contingencies.

     Also in conjunction with the acquisition, Mylan entered into a deal-contingent foreign currency option contract in order to mitigate the risk of foreign currency exposure related to the Euro-denominated purchase price. The contract was contingent upon the closing of the acquisition, and included a premium of $121.9 million, which was paid upon such closing on October 2, 2007. The value of the foreign currency option contract fluctuated depending on the value of the U.S. dollar compared to the Euro. The Company accounted for this instrument under the provisions of SFAS No. 133. This instrument did not qualify for hedge accounting treatment under SFAS No. 133 and therefore was required to be adjusted to fair value with the change in the fair value of the instrument recorded in current earnings. The Company recorded a gain of $85.0 million (net of the premium), during the nine-month period ended December 31, 2007, related to the deal-contingent foreign currency option contract. This amount is included within other income, net in the Consolidated Statements of Operations. In conjunction with the closing on October 2, 2007 of the acquisition of the former Merck Generics business, this foreign currency option contract was settled (net of the premium).

Acquisition of Matrix Laboratories Limited

     On August 28, 2006, Mylan Inc. entered into a Share Purchase Agreement (the “Share Purchase Agreement”) to acquire, through MP Laboratories (Mauritius) Ltd, its wholly-owned indirect subsidiary, a controlling interest in Matrix, a publicly traded company in India. Matrix is engaged in the manufacture of APIs and solid oral dosage forms and is headquartered in Hyderabad, India.

     Pursuant to the Share Purchase Agreement, Mylan agreed to pay a cash purchase price of 306 Rupees per share for approximately 51.5% of the outstanding share capital of Matrix held by certain selling shareholders (the “Selling Shareholders”).

     In accordance with applicable Indian law, MP Laboratories (Mauritius) Ltd, along with the Company, commenced an open offer to acquire up to an additional 20% of the outstanding shares of Matrix (the “Public Offer”) from Matrix’s shareholders (other than the Selling Shareholders) on November 22, 2006, which Public Offer expired on December 11, 2006. The price in the Public Offer was 306 Rupees per share, in accordance with applicable Indian regulations.

     On December 21, 2006, the Public Offer was completed and a total of 54,585,189 shares were validly tendered, of which Mylan accepted 30,836,662 shares. Payment in the amount of $210.6 million for the shares properly tendered and accepted was dispatched to the shareholders. On January 8, 2007, Mylan completed its acquisition of approximately 51.5% of Matrix’s outstanding shares from the Selling Shareholders for approximately $545.6 million, thereby increasing its ownership to approximately 71.5% of the voting share capital of Matrix. Including the Matrix shareholdings maintained by Prasad Nimmagadda (one of the Selling Shareholders), which are subject to a voting arrangement with Mylan, Mylan controls in excess of 75% of the voting share capital of Matrix.

     Following the closing of this transaction, certain of the Selling Shareholders used approximately $168.0 million of their proceeds to acquire Mylan Inc. common stock from the Company in a private sale at a price of $20.85 per share. In connection with these transactions a total of 8,058,139 shares were issued to the Selling Shareholders. For purchase accounting purposes, the Company valued these shares at $20.32 per share, which represents Mylan’s average stock price for the period two business days before and two business days after the August 28, 2006 announcement of the acquisition.

     As a result of Mylan’s aggregate ownership in Matrix, Mylan accounted for this transaction as a purchase under SFAS No. 141 and has consolidated the results of operations of Matrix since January 8, 2007. The purchase price has been allocated to the fair value of the tangible and intangible assets and liabilities with the excess being recorded as goodwill as of the effective date of the acquisition. As the acquisition was structured as a purchase of equity, the amortization of the portion of the purchase price assigned to assets in excess of Matrix’s historic tax basis will not be deductible for income tax purposes.

     The total purchase price of $776.2 million, including acquisition costs of $24.3 million, less cash acquired of $10.9 million, was $765.2 million. The allocation of assets acquired and liabilities assumed for Matrix is as follows:

(in thousands)
Current assets (excluding cash and inventories)		$	129,621
Inventories			123,000
Property, plant and equipment, net			152,580
Identified intangible assets			270,440
Other non-current assets			65,878
In-process research and development(1)			147,000
Goodwill			505,801
Total assets acquired			1,394,320
Current liabilities			(374,458	)
Deferred tax liabilities			(106,470	)
Other non-current liabilities			(104,045	)
Total liabilities assumed			(584,973	)
Total minority interest			(44,117	)
Net assets acquired		$	765,230

     In conjunction with the Matrix transaction, the Company entered into a foreign exchange forward contract to purchase Indian Rupees with U.S. Dollars in order to mitigate the risk of foreign currency exposure related to the Indian Rupee-denominated purchase price. The Company accounted for this instrument under the provisions of SFAS No. 133. This instrument did not qualify for hedge accounting treatment under SFAS No. 133 and therefore was required to be adjusted to fair value with the change in the fair value of the instrument recorded in current earnings. The Company recorded a gain of $16.2 million for the fiscal year ended March 31, 2007 related to this deal-contingent forward contract. This amount is included within other income, net in the Consolidated Statements of Operations.

Pro forma financial results

     The operating results of the former Merck Generics business have been included in Mylan’s Consolidated Financial Statements since October 2, 2007. The operating results of Matrix have been included in Mylan’s Consolidated Financial Statements since January 8, 2007. Pro forma results of operations for the nine months ended December 31, 2007 included below assumes that the former Merck Generics business acquisition occurred on April 1, 2007. Matrix’s actual results of operations are included in the calendar year ended December 31, 2008 and the nine months ended December 31, 2007. Pro forma results of operations for the fiscal year ended March 31, 2007 included below assume both acquisitions occurred on April 1, 2006. This summary of the unaudited pro forma results of operations is not necessarily indicative of what Mylan’s results of operations would have been had the former Merck Generics business and Matrix been acquired at the beginning of the periods indicated, nor does it purport to represent results of operations for any future periods.

     The unaudited pro forma financial information for each of periods below includes the following material, non-recurring charges directly attributable to the accounting for the acquisitions: In the nine-month period ended December 31, 2007, amortization of the step-up of inventory of $109.4 million and an acquired in-process research and development charge of $1.27 billion for the former Merck Generics business. For the fiscal year ended March 31, 2007, $141.7 million related to the amortization of the step-up of inventory and an acquired in-process research and development charge of $147.0 million for Matrix and $1.27 billion for the former Merck Generics business. In addition, the pro forma financial information for each period presented includes the effects of the preferred and common stock offerings closed in November 2007, the proceeds of which were used to repay the Interim Term Loans (see Notes 12 and 14).

		Nine Months Ended				Fiscal Year Ended
(in thousands, except per share data)		December 31, 2007				March 31, 2007
Total revenues		$	3,428,231			$	4,197,786
Net loss before preferred dividend		$	(1,290,242	)		$	(1,311,466	)
Preferred dividend			(104,276	)			(121,656	)
Net loss available to common shareholders		$	(1,394,518	)		$	(1,433,122	)
Loss per common share
Basic		$	(4.91	)		$	(5.35	)
Diluted		$	(4.91	)		$	(5.35	)
Weighted average shares
Basic			283,900				267,984
Diluted			283,900				267,984