XML 53 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
The table below presents a reconciliation for the Royalty Pharma contingent milestone payments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in millions). Change in fair value in the table was recorded in Change in financial assets on the Condensed Consolidated Statements of Operations.
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2017
 
September 30,
2017
Royalty Pharma Contingent Milestone Payments
 
 
 
Beginning balance
$
145.8

 
$
—

Additions
—

 
184.5

Foreign currency effect
0.3

 
0.8

Change in fair value
(2.9
)
 
(42.1
)
Ending balance
$
143.2

 
$
143.2
Fair value, assets measured on recurring and nonrecurring basis
The following table summarizes the valuation of our financial instruments carried at fair value and measured at fair value on a recurring and non-recurring basis by the above pricing categories (in millions):
 
 
 
 
Fair Value
 
 
Fair Value Hierarchy
 
September 30,
2017
 
December 31,
2016
Measured at fair value on a recurring basis:
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
Investment securities
 
Level 1
 
$
6.1

 
$
38.2

 
 
 
 
 
 
 
Foreign currency forward contracts
 
Level 2
 
$
13.1

 
$
3.8

Funds associated with Israeli severance liability
 
Level 2
 
16.1

 
15.9

Total level 2 assets
 
 
 
$
29.2

 
$
19.7

 
 
 
 
 
 
 
Royalty Pharma contingent milestone payments
 
Level 3
 
$
143.2

 
$
—

Financial assets
 
Level 3
 
—

 
2,350.0

Total level 3 assets
 
 
 
$
143.2

 
$
2,350.0

 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
Foreign currency forward contracts
 
Level 2
 
$
3.3

 
$
5.0

 
 
 
 
 
 
 
Contingent consideration
 
Level 3
 
$
44.9

 
$
69.9

 
 
 
 
 
 
 
Measured at fair value on a non-recurring basis:
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
Goodwill(1)
 
Level 3
 
$
—

 
$
1,148.4

Indefinite-lived intangible assets(2)
 
Level 3
 
13.3

 
0.3

Definite-lived intangible assets(3)
 
Level 3
 
11.5

 
758.0

Assets held for sale, net
 
Level 3
 
95.1

 
18.2

Total level 3 assets
 
 
 
$
119.9

 
$
1,924.9



(1) 
As of December 31, 2016, goodwill with a carrying amount of $2.2 billion was written down to its implied fair value of $1.1 billion.
(2) 
As of September 30, 2017, indefinite-lived intangible assets with a carrying amount of $26.0 million were written down to a fair value of $13.3 million. As of December 31, 2016, indefinite-lived intangible assets with a carrying amount of $0.7 million were written down to a fair value of $0.3 million.
(3) 
As of July 1, 2017, definite-lived intangible assets with a carrying amount of $31.1 million were written down to a fair value of $11.5 million. As of December 31, 2016, definite-lived intangible assets with a carrying amount of $2.3 billion were written down to a fair value of $758.0 million. Included in this balance are indefinite-lived intangible assets with a fair value of $364.5 million and $674.2 million that were reclassified to definite-lived assets at April 3, 2016 and October 2, 2016, respectively.
Reconciliation of Level 3 Liabilities
The table below presents a reconciliation for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in millions). Net realized losses in the table were recorded in Other (income) expense, net on the Condensed Consolidated Statements of Operations.
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2017
 
October 1,
2016
 
September 30,
2017
 
October 1,
2016
Contingent Consideration
 
 
 
 
 
 
 
Beginning balance
$
49.7

 
$
44.9

 
$
69.9

 
$
17.9

Net realized losses
(2.9
)
 
(0.4
)
 
(18.5
)
 
(4.0
)
Purchases or additions
—

 
30.6

 
—

 
61.1

Foreign currency effect
0.2

 
—

 
1.5

 
0.1

Settlements
(2.1
)
 
(0.1
)
 
(8.0
)
 
(0.1
)
Ending balance
$
44.9

 
$
75.0

 
$
44.9

 
$
75.0
Schedule of fair value metrics used in valuations
Below is a summary of the various metrics used in our valuations:
 
Nine Months Ended
 
September 30, 2017
 
Lumara
5-year average growth rate
(4.1)%
Discount rate
13.5%
Valuation method
MPEEM

 
Year Ended
 
December 31, 2016
 
Omega - Lifestyle
 
Omega - XLS
 
Entocort® - Branded Products
 
Entocort® - AG Products
 
Herron Trade Names and Trademarks
5-year average growth rate
2.5%
 
3.2%
 
(31.7)%
 
(30.4)%
 
4.6%
Long-term growth rates
2.0%
 
NA
 
(10.0)%
 
(4.7)%
 
2.5%
Discount rate
9.3%
 
9.5%
 
13.0%
 
10.5%
 
10.8%
Royalty rate
NA
 
4.0%
 
NA
 
NA
 
11.0%
Valuation method
MPEEM
 
Relief from Royalty
 
MPEEM
 
MPEEM
 
Relief from Royalty