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Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2018
Fair Value Disclosures [Abstract]  
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
 
March 31,
2018
 
December 31,
2017
Measured at fair value on a recurring basis:
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
Investment securities
 
Level 1
 
$
13.8

 
$
17.0

 
 
 
 
 
 
 
Foreign currency forward contracts
 
Level 2
 
$
5.0

 
$
6.3

Funds associated with Israeli severance liability
 
Level 2
 
15.0

 
16.3

Total level 2 assets
 
 
 
$
20.0

 
$
22.6

 
 
 
 
 
 
 
Royalty Pharma contingent milestone payments
 
Level 3
 
$
124.9

 
$
134.5

 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
Foreign currency forward contracts
 
Level 2
 
$
3.8

 
$
3.8

 
 
 
 
 
 
 
Contingent consideration
 
Level 3
 
$
18.1

 
$
22.0

 
 
 
 
 
 
 
Measured at fair value on a non-recurring basis:
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
Definite-lived intangible assets(1)
 
Level 3
 
$
—

 
$
11.5



(1) 
As of December 31, 2017, definite-lived intangible assets with a carrying amount of $31.2 million were written down to a fair value of $11.5 million.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
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
 
March 31,
2018
Royalty Pharma Contingent Milestone Payments
 
Beginning balance
$
134.5

Change in fair value
(9.6
)
Ending balance
$
124.9
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 expense (income), net on the Condensed Consolidated Statements of Operations.
 
Three Months Ended
 
March 31,
2018
 
April 1,
2017
Contingent Consideration
 
 
 
Beginning balance
$
22.0

 
$
69.9

Net realized (gains) losses
0.4

 
(14.4
)
Currency translation adjustments
0.1

 
(0.1
)
Settlements
(4.4
)
 
(3.4
)
Ending balance
$
18.1

 
$
52.0
Schedule of fair value metrics used in valuations
Below is a summary of the various metrics used in our valuations:
 
Year Ended
 
December 31, 2017
 
Lumara Branded Intangible
5-year average growth rate
(4.1)%
Discount rate
13.5%
Valuation method
MPEEM
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments
Our fixed rate long-term debt consisted of public bonds, a private placement note, and a retail bond as follows:
 
Fair Value Hierarchy
 
March 31,
2018
 
December 31,
2017
(in billions)
 
 
 
 
 
Public Bonds
Level 1
 
 
 
 
Carrying Value (excluding discount)
 
 
$
2.6

 
$
2.6

Fair value
 
 
$
2.6

 
$
2.7

 
 
 
 
 
 
(in millions)
 
 
 
 
 
Retail bond and private placement note
Level 2
 
 
 
 
Carrying value (excluding premium)
 
 
$
314.3

 
$
306.0

Fair value
 
 
$
348.0

 
$
342.1