ACQUISITIONS

The Company’s business strategy has involved selective acquisitions with a focus on core geographies and therapeutic classes.

(a) Business combinations in 2015 included the following:

Amoun

Description of the Transaction

On October 19, 2015, the Company acquired Mercury (Cayman) Holdings, the holding company of Amoun Pharmaceutical Company S.A.E. (“Amoun”), for consideration of approximately $910 million, including contingent payments (the “Amoun Acquisition”). Amoun develops and markets a wide range of pharmaceutical brands in therapeutic areas such as anti-hypertensives, broad spectrum antibiotics, and anti-diarrheals primarily in North Africa and the Middle East.

Fair Value of Consideration Transferred

The fair value of consideration transferred to effect the Amoun Acquisition consisted of $846 million in cash, plus contingent consideration based upon the achievement of specified sales-based milestones. The range of potential milestone payments as of the acquisition date is from nil if none of the milestones is achieved to a maximum of up to approximately $75 million over time if all milestones are achieved, in the aggregate. The total fair value of the contingent consideration of $64 million as of the acquisition date was determined using probability-weighted discounted cash flows. Refer to Note 7 for additional information regarding contingent consideration. The Company recognized a post-combination expense of $12 million within Other expense (income) in the fourth quarter of 2015 related to cash bonuses paid to Amoun employees.

Assets Acquired and Liabilities Assumed

The transaction has been accounted for as a business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. Due to the timing of this acquisition, these amounts are provisional and subject to change. The Company will finalize these amounts as it obtains the information necessary to complete the measurement process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the provisional amounts recognized at the acquisition date. These changes could be significant. The Company will finalize these amounts no later than one year from the acquisition date.



	Amounts Recognized as of Acquisition Date
Cash	$	43.5
Accounts receivable^(a)	64.2
Inventories	37.9
Other current assets	12.2
Property, plant and equipment	96.4
Identifiable intangible assets, excluding acquired IPR&D^(b)	528.0
Acquired IPR&D	18.5
Other non-current assets	0.1
Current liabilities	(30.8		)
Deferred tax liability, net^(c)	(130.5		)
Other non-current liabilities	(11.2		)
Total identifiable net assets	628.3
Goodwill^(d)	282.0
Total fair value of consideration transferred	$	910.3

________________________


(a)	The fair value of trade accounts receivable acquired was $64 million, with the gross contractual amount being $66 million, of which the Company expects that $2 million will be uncollectible.


(b)	The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:


(c)	Comprised of deferred tax liabilities partially offset by nominal deferred tax assets.


(d)	Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:


•	the Company’s expectation to develop and market new products and expand its business to new geographic markets;


•	the value of the continuing operations of Amoun's existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and


•	intangible assets that do not qualify for separate recognition (for instance, Amoun's assembled workforce).

The provisional amount of goodwill has been allocated to the Company’s Emerging Markets segment.

Acquisition-Related Costs

The Company has incurred to date $4 million of transaction costs directly related to the Amoun Acquisition, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs.

Revenue and Net Loss of Amoun

The revenues of Amoun for the period from the acquisition date to December 31, 2015 were $48 million and net loss was $9 million. The net loss includes the effects of the acquisition accounting adjustments and acquisition-related costs.

Sprout

Description of the Transaction

On October 1, 2015, the Company acquired Sprout Pharmaceuticals, Inc. (“Sprout”), pursuant to the merger agreement, among Sprout, the Company, Valeant, Miranda Acquisition Sub, Inc., a wholly owned subsidiary of Valeant, and Shareholder Representative Services LLC, as stockholder representative, on a debt-free basis (the “Sprout Acquisition”), for an aggregate purchase price of $1.45 billion, which includes cash plus contingent consideration. Sprout has focused solely on the delivery of a treatment option for the unmet need of pre-menopausal women with acquired, generalized hypoactive sexual desire disorder (HSDD) as characterized by low sexual desire that causes marked distress or interpersonal difficulty and is not due to a co-existing medical or psychiatric condition, problems within the relationship, or the effects of a medication or other drug substance. In August 2015, Sprout received approval from the U.S. Food and Drug Administration ("FDA") on its New Drug Application ("NDA") for flibanserin, which is being marketed as Addyi® in the U.S. (launched in the U.S. in the fourth quarter of 2015). Sprout also has global rights to flibanserin. In connection with the acquisition of Sprout, the Company has a contractual obligation for expenditures of at least $200 million with respect to Addyi® for selling, general and administrative, marketing and research and development expenses from the period commencing January 1, 2016 through June 30, 2017.

Fair Value of Consideration Transferred

The Company paid approximately $530 million, inclusive of customary purchase price adjustments, upon closing of the transaction in October 2015, and an additional payment in the amount of $500 million (acquisition date fair value of $495 million) was paid in the first quarter of 2016. In addition, the transaction includes contingent consideration representing payments to the former shareholders and former holders of vested stock appreciation rights of Sprout for a share of future profits. The share of future profits with the former shareholders and former holders of vested stock appreciation rights of Sprout is uncapped and commences on the date that the earlier of the following events occurs (a) net cumulative worldwide sales of flibanserin products (plus any amounts received from sublicenses on the sale of flibanserin products) exceeds $1 billion or (b) July 1, 2017 and it continues until December 31, 2030. The total fair value of the contingent consideration of $422 million as of the acquisition date was determined using a Monte Carlo Simulation. Refer to Note 7 for additional information regarding contingent consideration.

Assets Acquired and Liabilities Assumed



	Amounts Recognized as of Acquisition Date
Cash and cash equivalents	$	26.6
Inventories	11.0
Other assets	1.6
Identifiable intangible assets^(a)	993.7
Current liabilities	(4.4		)
Deferred income taxes, net	(351.9		)
Total identifiable net assets	676.6
Goodwill^(b)	769.9
Total fair value of consideration transferred	$	1,446.5

________________________


(a)	Consists of product rights with a weighted-average useful life of 11 years.


(b)	Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:


•	the Company’s potential ability to develop and market the product to additional types of patients/indications and launch the product in a variety of new geographies;


•	the value of the continuing operations of Sprout's existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and


•	intangible assets that do not qualify for separate recognition (for instance, Sprout's assembled workforce).

The provisional amount of goodwill has been allocated to the Company’s Developed Markets segment.

Acquisition-Related Costs

The Company has incurred to date $4 million of transaction costs directly related to the Sprout Acquisition, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs.

Revenue and Net Loss of Sprout

The revenues of Sprout for the period from the acquisition date to December 31, 2015 were nominal and net loss was $37 million. The net loss includes the effects of the acquisition accounting adjustments and acquisition-related costs. The Company is recording revenue for Addyi® on a sell-through basis, as the Company has determined that it does not have the ability to reasonably estimate returns. Refer to Note 3 for additional information.

Salix

Description of the Transaction

On April 1, 2015, the Company acquired Salix, pursuant to the Salix Merger Agreement, among the Company, Valeant, Sun Merger Sub, Inc., a wholly owned subsidiary of Valeant (“Sun Merger Sub”), and Salix. Salix is a specialty pharmaceutical company dedicated to developing and commercializing prescription drugs and medical devices used in treatment of variety of gastrointestinal (GI) disorders with a portfolio of over 20 marketed products, including Xifaxan®, Uceris®, Apriso®, Glumetza®, and Relistor®.

In accordance with the terms of the Salix Merger Agreement, Sun Merger Sub commenced a tender offer (the “Offer”) for all of Salix’s outstanding shares of common stock, par value $0.001 per share (the “Salix Shares”), at a purchase price of $173.00 per Salix Share, net to the holder in cash, without interest, less any applicable withholding taxes. The Offer expired on April 1, 2015, as scheduled. A sufficient number of Salix Shares were validly tendered in the Offer such that the minimum tender condition to the Offer was satisfied, and Sun Merger Sub accepted for payment all such tendered Salix Shares. Following the expiration of the Offer on April 1, 2015, Sun Merger Sub merged with and into Salix, with Salix surviving as a wholly owned subsidiary of Valeant (the “Merger”). The Merger was governed by Section 251(h) of the General Corporation Law of the State of Delaware, with no stockholder vote required to consummate the Merger. At the effective time of the Merger, each Salix Share then outstanding was converted into the right to receive $173.00 in cash, without interest, less any applicable withholding taxes, except for Salix Shares then owned by the Company or Salix or their respective wholly owned subsidiaries, which Salix Shares were cancelled for no consideration.

In connection with the Merger, each unexpired and unexercised option to purchase Salix Shares (the “Salix Options”), whether or not then exercisable or vested, was cancelled and, in exchange therefor, each former holder of any such cancelled Salix Option was entitled to receive, a payment in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) of an amount equal to the product of (i) the total number of Salix Shares previously subject to such Salix Option and (ii) the excess, if any, of $173.00 over the exercise price per Salix Share previously subject to such Salix Options. Each unvested Salix Share subject to forfeiture restrictions, repurchase rights or other restrictions (the “Salix Restricted Stock”) automatically became fully vested and was cancelled and, in exchange therefor, each former holder of such cancelled Salix Restricted Stock was entitled to receive, a payment in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) equal to $173.00 per share of Salix Restricted Stock.

The Salix Acquisition (including the Offer and the Merger), as well as related transactions and expenses, were funded through a combination of: (i) the proceeds from an issuance of senior unsecured notes that closed on March 27, 2015; (ii) the proceeds from incremental term loan commitments; (iii) the proceeds from a registered offering of Valeant’s common shares in the United States that closed on March 27, 2015; and (iv) cash on hand.

For further information regarding the debt and equity issuances, see Note 13 and Note 15, respectively.

Fair Value of Consideration Transferred

The following table indicates the consideration transferred to effect the Salix Acquisition:



(In millions except per share data)	Conversion Calculation		Fair Value
Number of shares of Salix common stock outstanding as of acquisition date	64.3
Multiplied by Per Share Merger Consideration	$	173.00	$	11,123.9
Number of outstanding stock options of Salix cancelled and exchanged for cash^(a)	0.1		10.1
Number of outstanding restricted stock of Salix cancelled and exchanged for cash^(a)	1.1		195.0
			11,329.0
Less: Cash consideration paid for Salix’s restricted stock that was accelerated at the closing of the Salix Acquisition^(a)			(164.5		)
Add: Payment of Salix’s Term Loan B Credit Facility^(b)			1,125.2
Add: Payment of Salix’s 6.00% Senior Notes due 2021^(b)			842.3
Total fair value of consideration transferred			$	13,132.0

___________________________________

(a)

The purchase consideration paid to holders of Salix stock options and restricted stock attributable to pre-combination services was included as a component of the purchase price. Purchase consideration of $165 million paid for outstanding restricted stock that was accelerated by the Company in connection with the Salix Acquisition was excluded from the purchase price and accounted for as post-combination expense within Other expense (income) in the second quarter of 2015.

(b)

The repayment of Salix’s Term Loan B Credit Facility has been reflected as part of the purchase consideration as the debt was repaid concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition. Similarly, the redemption of Salix’s 6.00% Senior Notes due 2021 has been reflected as part of the purchase consideration as the indenture governing the 6.00% Senior Notes due 2021 was satisfied and discharged concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition.

Assets Acquired and Liabilities Assumed



	Amounts Recognized as of Acquisition Date (as previously reported)^(a)			Measurement Period Adjustments^(b)			Amounts Recognized as of December 31, 2015 (as adjusted)
Cash and cash equivalents	$	113.7		$	—		$	113.7
Inventories^(c)	233.2			(0.6		)	232.6
Other assets^(d)	1,400.3			10.1			1,410.4
Property, plant and equipment, net	24.3			—			24.3
Identifiable intangible assets, excluding acquired IPR&D^(e)	6,756.3			—			6,756.3
Acquired IPR&D^(f)	5,366.8			(183.9		)	5,182.9
Current liabilities^(g)	(1,764.2		)	(175.0		)	(1,939.2		)
Contingent consideration, including current and long-term portion^(h)	(327.9		)	(6.2		)	(334.1		)
Long-term debt, including current portion⁽ⁱ⁾	(3,123.1		)	—			(3,123.1		)
Deferred income taxes, net^(j)	(3,512.0		)	84.1			(3,427.9		)
Other non-current liabilities	(7.3		)	(36.0		)	(43.3		)
Total identifiable net assets	5,160.1			(307.5		)	4,852.6
Goodwill^(k)	7,971.9			307.5			8,279.4
Total fair value of consideration transferred	$	13,132.0		$	—		$	13,132.0

________________________


(a)	As previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

(b)

The measurement period adjustments primarily reflect: (i) a reduction in acquired IPR&D assets, specifically for the Oral Relistor® program based mainly on refinement of the pricing assumptions and cost projections (see further discussion of IPR&D programs in (f) below) and (ii) the tax impact of pre-tax measurement period adjustments as well as reclassifications of certain tax balances impacting current liabilities. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s consolidated financial statements for the current period.


(c)	Includes an estimated fair value step-up adjustment to inventory of $108 million.

(d)

Primarily includes an estimated fair value of $1.27 billion to record the capped call transactions and convertible bond hedge transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 and 2.75% Convertible Senior Notes due 2015. These instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts. Other assets also includes an estimated insurance recovery of $80 million, based on estimated fair value, related to the legal matters discussed in (g) below.


(e)	The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:



	Weighted- Average Useful Lives (Years)	Amounts Recognized as of Acquisition Date (as previously reported)		Measurement Period Adjustments			Amounts Recognized as of December 31, 2015 (as adjusted)
Product brands	10	$	6,088.3	$	1.3		$	6,089.6
Corporate brand	20	668.0		(1.3		)	666.7
Total identifiable intangible assets acquired	11	$	6,756.3	$	—		$	6,756.3

(f)

A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from a market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and the Company used risk-adjusted discount rates of 9.5%-11% to present value the projected cash flows.

The IPR&D assets primarily relate to Xifaxan® 550 mg for the treatment of irritable bowel syndrome with diarrhea (new indication) in adults ("Xifaxan® IBS-D"). In determining the fair value of Xifaxan® IBS-D ($4.79 billion as of the acquisition date), the Company assumed material cash inflows would commence in 2015. In May 2015, Xifaxan® IBS-D received approval from the FDA, and, accordingly, such asset has been reclassified to an amortizable intangible asset as of the approval date and is being amortized over a period of 10 years.

Other IPR&D assets include, among others, Oral Relistor® for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain and Rifaximin soluble solid dispersion ("SSD") for the treatment of early decompensated liver cirrhosis. In September 2015, the Company announced that the FDA accepted for review the Company's NDA for Oral Relistor®, and the FDA assigned a Prescription Drug User Fee Act (PDUFA) action date of April 19, 2016. In April 2016, the Company announced that the FDA had extended the PDUFA action date for Oral Relistor® to July 19, 2016 to allow time for a full review of the Company's responses to certain information requests from the FDA. In the third quarter of 2015, the Company terminated the Rifaximin SSD IPR&D program and recognized an impairment charge as described in Note 11.

(g)

Primarily includes an estimated fair value of $1.08 billion to record the warrant transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 (these instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts), as well as accruals for (i) the estimated fair value of $336 million (exclusive of the related insurance recovery described in (d) above) for potential losses and related costs associated with legal matters relating to the legacy Salix business (See Note 21 for additional information regarding these legal matters) and (ii) product returns and rebates of $375 million.

(h)

The contingent consideration consists of potential payments to third parties including developmental milestone payments due upon specified regulatory achievements, commercialization milestones contingent upon achieving specified targets for net sales, and royalty-based payments. As of the acquisition date, the range of potential milestone payments (excluding royalty-based payments) is from nil if none of the milestones are achieved to a maximum of up to approximately $650 million (the majority of which relates to sales-based milestones) over time if all milestones are achieved, in the aggregate, to third parties. This amount includes up to $250 million in developmental and sales-based milestones to Progenics Pharmaceuticals, Inc. related to Relistor® (including Oral Relistor®), and various other developmental and sales-based milestones. The total fair value of the contingent consideration of $334 million as of the acquisition date was determined using probability-weighted discounted cash flows. Refer to Note 7 for additional information regarding contingent consideration.


(i)	The following table summarizes the fair value of long-term debt assumed as of the acquisition date:



	Amounts Recognized as of Acquisition Date
1.5% Convertible Senior Notes due 2019⁽¹⁾	$	1,837.1
2.75% Convertible Senior Notes due 2015⁽¹⁾	1,286.0
Total long-term debt assumed	$	3,123.1

____________________________________


(1)	The Company subsequently redeemed these amounts in full in the second quarter of 2015, except for a nominal amount of the 1.5% Convertible Senior Notes due 2019.


(j)	Comprises deferred tax assets ($303 million) and deferred tax liabilities ($3.73 billion).


(k)	Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:


•	the Company’s expectation to develop and market new product brands, product lines and technology;


•	cost savings and operating synergies expected to result from combining the operations of Salix with those of the Company;


•	the value of the continuing operations of Salix’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and


•	intangible assets that do not qualify for separate recognition (for instance, Salix’s assembled workforce).

The amount of goodwill has been allocated to the Company’s Developed Markets segment.

Acquisition-Related Costs

The Company has incurred to date $15 million of transaction costs directly related to the Salix Acquisition, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs.

Revenue and Net Loss of Salix

The revenues of Salix for the period from the acquisition date to December 31, 2015 were $1.28 billion and net loss was $302 million. The net loss includes the effects of the acquisition accounting adjustments and acquisition-related costs.

Other 2015 Business Combinations (excluding the Amoun Acquisition, the Sprout Acquisition, and the Salix Acquisition)

Description of the Transactions

In the year ended December 31, 2015, the Company completed other business combinations (excluding the Amoun Acquisition, the Sprout Acquisition, and the Salix Acquisition), which included the acquisition of the following businesses, for an aggregate purchase price of $1.41 billion. The other business combinations completed during the year ended December 31, 2015 included contingent consideration arrangements with an aggregate acquisition date fair value of $191 million, primarily related to the acquisition of certain assets of Marathon Pharmaceuticals, LLC ("Marathon") (see below), as well as milestone payments and royalties related to other smaller acquisitions. Refer to Note 7 for additional information regarding contingent consideration.

•

On February 23, 2015, the Company, completed via a "stalking horse bid" in a sales process conducted under the U.S. Bankruptcy Code, acquired certain assets of Dendreon Corporation ("Dendreon") for a purchase price of $415 million, net of cash received ($495 million less cash received of $80 million). The purchase price included approximately $50 million in stock consideration, and such shares were issued in June 2015. The assets acquired from Dendreon included the worldwide rights to the Provenge® product (an immunotherapy treatment designed to treat men with advanced prostate cancer).

•

On February 10, 2015, the Company acquired certain assets of Marathon. The assets acquired from Marathon comprised a portfolio of hospital products, including Nitropress®, Isuprel®, Opium Tincture, Pepcid®, Seconal Sodium®, Amytal® Sodium, and Iprivask® for an aggregate purchase price of $286 million (which is net of a $64 million assumed liability owed to a third party which is reflected in the table below). Also, as part of this acquisition, the Company assumed a contingent consideration liability as described further below.


•	During the year ended December 31, 2015, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below.

Assets Acquired and Liabilities Assumed

These transactions have been accounted for as business combinations under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. The following recognized amounts related to certain smaller acquisitions, are provisional and subject to change:


•	amounts for intangible assets, property and equipment, inventories, receivables and other working capital adjustments pending finalization of the valuation;


•	amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transactions; and


•	amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed.

The Company will finalize these amounts as it obtains the information necessary to complete the measurement processes. Any changes resulting from facts and circumstances that existed as of the acquisition dates may result in adjustments to the provisional amounts recognized at the acquisition dates. These changes could be significant. The Company will finalize these amounts no later than one year from the respective acquisition dates.



	Amounts Recognized as of Acquisition Dates			Measurement Period Adjustments^(a)			Amounts Recognized as of December 31, 2015 (as adjusted)
Cash	$	92.2		$	—		$	92.2
Accounts receivable^(b)	49.5			(0.7		)	48.8
Inventories	142.9			(0.6		)	142.3
Other current assets	20.2			(0.3		)	19.9
Property, plant and equipment	94.6			(14.7		)	79.9
Identifiable intangible assets, excluding acquired IPR&D^(c)	1,121.6			(37.4		)	1,084.2
Acquired IPR&D	57.5			(3.7		)	53.8
Other non-current assets	2.9			—			2.9
Deferred tax (liability) asset, net	(54.7		)	59.7			5.0
Current liabilities^(d)	(123.9		)	(0.9		)	(124.8		)
Long-term debt	(6.1		)	—			(6.1		)
Non-current liabilities^(d)	(117.4		)	0.2			(117.2		)
Total identifiable net assets	1,279.3			1.6			1,280.9
Goodwill^(e)	141.9			(10.6		)	131.3
Total fair value of consideration transferred	$	1,421.2		$	(9.0	)	$	1,412.2

________________________

(a)

The measurement period adjustments primarily relate to the acquisition of certain assets of Dendreon and reflect: (i) an increase to the deferred tax assets based on further assessment of the Dendreon net operating losses ("NOLs") available to the Company post-acquisition, (ii) a reduction in the estimated fair value of intangible assets based on further assessment of assumptions related to the probability-weighted cash flows, (iii) a reduction in the estimated fair value of property, plant and equipment driven by further assessment of the fair value of a manufacturing facility, and (iv) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s consolidated financial statements for the current period.


(b)	The fair value of trade accounts receivable acquired was $49 million, with the gross contractual amount being $51 million, of which the Company expects that $2 million will be uncollectible.


(c)	The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:



	Weighted- Average Useful Lives (Years)	Amounts Recognized as of Acquisition Dates		Measurement Period Adjustments			Amounts Recognized as of December 31, 2015 (as adjusted)
Product brands	7	$	741.2	$	0.1		$	741.3
Product rights	3	42.7		(0.7		)	42.0
Corporate brands	16	6.6		—			6.6
Partner relationships	8	7.8		—			7.8
Technology/know-how	10	321.3		(36.8		)	284.5
Other	6	2.0		—			2.0
Total identifiable intangible assets acquired	8	$	1,121.6	$	(37.4	)	$	1,084.2

(d)

As part of the acquisition of certain assets of Marathon, the Company assumed a contingent consideration liability related to potential payments, in the aggregate, of up to approximately $200 million as of the acquisition date, for Isuprel® and Nitropress®, the amounts of which are dependent on the timing of generic entrants for these products. The fair value of the liability as of the acquisition date was determined using probability-weighted projected cash flows, with $41 million classified in Current liabilities and $46 million classified in Non-current liabilities in the table above. As of December 31, 2015, the assumptions used for determining the fair value of the contingent consideration liability have not changed significantly from those used as of the acquisition date. Through December 31, 2015, the Company has made contingent consideration payments of $35 million related to the acquisition of certain assets of Marathon.

(e)

The goodwill relates primarily to certain smaller acquisitions and the acquisition of certain assets of Marathon. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. The majority of the goodwill is not expected to be deductible for tax purposes. The goodwill represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company.

The provisional amount of goodwill has been allocated primarily to the Company’s Developed Markets segment.

Acquisition-Related Costs

The Company has incurred to date $16 million, in the aggregate, of transaction costs directly related to these business combinations, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs.

Revenue and Net Income

The revenues of these business combinations for the period from the respective acquisition dates to December 31, 2015 were $771 million, in the aggregate, and net income was $208 million, in the aggregate. The net income includes the effects of the acquisition accounting adjustments and acquisition-related costs.

2015 Asset Acquisitions

On October 1, 2015, pursuant to an agreement entered into with AstraZeneca Collaboration Ventures, LLC (“AstraZeneca”), the Company was granted an exclusive license to develop and commercialize brodalumab. Brodalumab is an IL-17 receptor monoclonal antibody in development for patients with moderate-to-severe plaque psoriasis and psoriatic arthritis. Under the agreement, the Company holds the exclusive rights to develop and commercialize brodalumab globally, except in Japan and certain other Asian countries where rights are held by Kyowa Hakko Kirin Co., Ltd under a prior arrangement with Amgen Inc., the originator of brodalumab. The Company assumed all remaining development obligations associated with the regulatory approval for brodalumab subsequent to the acquisition. Regulatory submission in the U.S. and European Union for brodalumab in moderate-to-severe psoriasis occurred in November 2015, and, in January 2016, the Company announced that the FDA accepted for review the Biologics License Application ("BLA") for brodalumab and assigned a PDUFA action date of November 16, 2016. Under the terms of the agreement, the Company made an up-front payment to AstraZeneca of $100 million in October 2015, which was recognized in In-process research and development impairments and other charges in the fourth quarter of 2015 in the consolidated statement of (loss) income as the product has not yet received regulatory approval at the time of the acquisition. In addition, the Company may pay additional pre-launch milestones of up to $170 million and sales-related milestone payments of up to $175 million following launch. After approval, AstraZeneca and the Company will share profits.

(b) Business combinations in 2014 included the following:

In the year ended December 31, 2014, the Company completed business combinations, which included the acquisition of the following businesses, for an aggregate purchase price of $1.35 billion. The aggregate purchase price included contingent consideration payment obligations with an aggregate acquisition date fair value of $132 million, primarily related to sales-based milestones. Refer to Note 7 for additional information regarding contingent consideration.

•

On July 7, 2014, the Company acquired all of the outstanding common stock of PreCision Dermatology, Inc. (“PreCision”) for an aggregate purchase price of $459 million. Under the terms of the merger agreement, the Company agreed to pay contingent consideration of $25 million upon the achievement of a sales-based milestone for 2014. The fair value of this contingent consideration was determined to be nominal as of the acquisition date, based on the sales forecast. As the sales-based milestone was not achieved, no such payment was made. The Company recognized a post-combination expense of $20 million within Other expense (income) in the third quarter of 2014 related to the acceleration of unvested stock options for PreCision employees. In connection with the acquisition of PreCision, the Company was required by the Federal Trade Commission (“FTC”) to divest the rights to PreCision’s Tretin-X® (tretinoin) cream product and PreCision’s generic tretinoin gel and cream products (see Note 5 for additional information). PreCision develops and markets a range of medical dermatology products, treating a number of topical disease states such as acne and atopic dermatitis with products such as Locoid® and Clindagel®.

•

On January 23, 2014, the Company acquired all of the outstanding common stock of Solta Medical, Inc. (“Solta Medical”) for $293 million, which includes $2.92 per share in cash and $44 million for the repayment of Solta Medical’s long-term debt, including accrued interest. Solta Medical designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications, and its products include the Thermage CPT® system, the Fraxel® repair system, the Clear + Brilliant® system, and the Liposonix® system.

•

During the year ended December 31, 2014, the Company completed other smaller acquisitions which were not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below. Beginning in December 2014, the Company consolidated the Philidor pharmacy network. The Company determined that based on its rights, including its option to acquire Philidor, Philidor was a variable interest entity for which the Company was the primary beneficiary, given its power to direct Philidor’s key activities and its obligation to absorb their losses and rights to receive their benefits. As a result, since December 2014, the Company included the assets and liabilities and results of operations of Philidor in its consolidated financial statements. In October 2015, the Company announced that it would be severing all ties with Philidor. Effective November 2015, the Company signed an agreement terminating all arrangements with or relating to Philidor, other than certain transition services which ended on January 30, 2016. Philidor will be deconsolidated from the Company's consolidated financial statements in the first quarter of 2016. Net sales recognized through Philidor represented approximately 5% of the Company's total consolidated net revenue for the year ended December 31, 2015, and the total assets of Philidor represented less than 1% of the Company's total consolidated assets as of December 31, 2015. The impact of Philidor as a consolidated entity on the Company's net revenue for 2014 was nominal. Refer to Note 2 for additional information regarding the restatement impact on the consolidation of Philidor.

Assets Acquired and Liabilities Assumed



	Amounts Recognized as of Acquisition Dates (Restated)			Measurement Period Adjustments^(a) (Restated)			Amounts Recognized as of December 31, 2015 (as adjusted)
Cash and cash equivalents	$	33.6		$	1.1		$	34.7
Accounts receivable^(b)	87.7			(5.9		)	81.8
Assets held for sale^(c)	125.7			(0.8		)	124.9
Inventories	90.5			(15.9		)	74.6
Other current assets	19.1			(4.9		)	14.2
Property, plant and equipment, net	60.3			(2.4		)	57.9
Identifiable intangible assets, excluding acquired IPR&D^(d)	719.2			0.4			719.6
Acquired IPR&D^(e)	65.8			(2.8		)	63.0
Other non-current assets	4.0			(2.1		)	1.9
Current liabilities	(152.0		)	(16.9		)	(168.9		)
Long-term debt, including current portion	(11.2		)	0.3			(10.9		)
Deferred income taxes, net	(116.0		)	45.1			(70.9		)
Other non-current liabilities	(13.4		)	(0.1		)	(13.5		)
Total identifiable net assets	913.3			(4.9		)	908.4
Noncontrolling interest	(15.0		)	(4.9		)	(19.9		)
Goodwill^(f)	425.4			33.2			458.6
Total fair value of consideration transferred	$	1,323.7		$	23.4		$	1,347.1

________________________

(a)

The measurement period adjustments primarily reflect: (i) a net increase in the fair value of contingent consideration related to smaller acquisitions based on assessment of probability and timing assumptions for potential milestone payments, related to factors that existed as of the respective acquisition dates, (ii) a decrease in the net deferred tax liability primarily related to the PreCision and Solta Medical acquisitions, (iii) an increase in current liabilities primarily related to the PreCision acquisition and other smaller acquisitions, and (iv) a decrease in inventory primarily related to the Solta Medical acquisition and other smaller acquisitions. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.


(b)	The fair value of trade accounts receivable acquired was $82 million, with the gross contractual amount being $88 million, of which the Company expects that $6 million will be uncollectible.


(c)	Assets held for sale relate to the Tretin-X® product rights and the product rights for the generic tretinoin gel and cream products acquired in the PreCision acquisition, which were subsequently divested in the third quarter of 2014.


(d)	The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:



	Weighted- Average Useful Lives (Years)	Amounts Recognized as of Acquisition Dates (Restated)		Measurement Period Adjustments (Restated)			Amounts Recognized as of December 31, 2015 (as adjusted)
Product brands	10	$	506.0	$	2.0		$	508.0
Product rights	8	95.2		(3.3		)	91.9
Corporate brand	15	30.9		2.0			32.9
In-licensed products	9	1.5		(0.3		)	1.2
Partner relationships	9	51.1		—			51.1
Other	9	34.5		—			34.5
Total identifiable intangible assets acquired	10	$	719.2	$	0.4		$	719.6


(e)	The acquired IPR&D assets primarily relate to programs from smaller acquisitions. In addition, the Solta Medical acquisition includes a program for the development of a next generation Thermage® product.

(f)

The goodwill relates primarily to the PreCision and Solta Medical acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is not expected to be deductible for tax purposes. The goodwill recorded from the PreCision and Solta Medical acquisitions represents the following:


•	cost savings, operating synergies and other benefits expected to result from combining the operations of PreCision and Solta Medical with those of the Company;


•	the Company’s expectation to develop and market new products and technology; and


•	intangible assets that do not qualify for separate recognition (for instance, PreCision’s and Solta Medical’s assembled workforces).

The goodwill from the PreCision acquisition has been allocated to the Company’s Developed Markets segment ($194 million). The goodwill from the Solta Medical acquisition has been allocated to both the Company’s Developed Markets segment ($56 million) and Emerging Markets segment ($38 million). The goodwill from the other acquisitions has been allocated primarily to the Company’s Developed Markets segment.

B&L

Description of the Transaction

On August 5, 2013, the Company acquired Bausch & Lomb Holdings Incorporated ("B&L") for an aggregate purchase price equal to $8.70 billion minus B&L’s existing indebtedness for borrowed money (which was paid off by Valeant in accordance with the terms of the merger agreement dated May 24, 2013, as amended (the "B&L Merger Agreement") among the Company, Valeant, B&L and Stratos Merger Corp., a wholly-owned subsidiary of Valeant) and related fees and costs, minus certain of B&L’s transaction expenses, minus certain payments with respect to certain cancelled B&L performance-based options (which were not outstanding immediately prior to such effective time), plus the aggregate exercise price applicable to B&L’s outstanding options immediately prior to such effective time, and plus certain cash amounts, all as further described in the B&L Merger Agreement (the "B&L Acquisition"). The B&L Acquisition was financed with debt and equity issuances (see Note 13 for additional information). Each B&L restricted share and stock option, whether vested or unvested, that was outstanding immediately prior to such effective time, was cancelled and converted into the right to receive the per share merger consideration in the case of restricted shares or, in the case of stock options, the excess, if any, of the per share merger consideration over the exercise price of such stock option.

Fair Value of Consideration Transferred

The following table indicates the consideration transferred to effect the B&L Acquisition:



	Fair Value
Enterprise value	$	8,700.0
Adjusted for the following:
B&L’s outstanding debt, including accrued interest	(4,248.3		)
B&L’s company expenses	(6.4		)
Payment for B&L’s performance-based option^(a)	(48.5		)
Payment for B&L’s cash balance^(b)	149.0
Additional cash payment^(b)	75.0
Other	(3.2		)
Equity purchase price	4,617.6
Less: Cash consideration paid for B&L’s unvested stock options^(c)	(4.3		)
Total fair value of consideration transferred	$	4,613.3

_________________________________


(a)	The cash consideration paid for previously cancelled B&L’s performance-based options was recognized as a post-combination expense within Other expense (income) in the third quarter of 2013.


(b)	As defined in the B&L Merger Agreement.


(c)	The cash consideration paid for B&L stock options and restricted stock attributable to pre-combination services has been included as a component of purchase price. The remaining $4 million balance related to the acceleration of unvested stock options for B&L employees was recognized as a post-combination expense within Other expense (income) in the third quarter of 2013.

Assets Acquired and Liabilities Assumed



	Amounts Recognized as of Acquisition Date (as previously reported)			Measurement Period Adjustments^(a)			Amounts Recognized as of December 31, 2014 (as adjusted)
Cash and cash equivalents	$	209.5		$	(31.4	)	$	178.1
Accounts receivable^(b)	547.9			(7.2		)	540.7
Inventories^(c)	675.8			(34.0		)	641.8
Other current assets	146.6			0.3			146.9
Property, plant and equipment, net^(d)	761.4			33.2			794.6
Identifiable intangible assets, excluding acquired IPR&D^(e)	4,316.1			17.3			4,333.4
Acquired IPR&D^(f)	398.1			17.0			415.1
Other non-current assets	58.8			(1.9		)	56.9
Current liabilities	(885.6		)	2.1			(883.5		)
Long-term debt, including current portion^(g)	(4,209.9		)	—			(4,209.9		)
Deferred income taxes, net^(h)	(1,410.9		)	36.0			(1,374.9		)
Other non-current liabilities⁽ⁱ⁾	(280.2		)	(1.0		)	(281.2		)
Total identifiable net assets	327.6			30.4			358.0
Noncontrolling interest^(j)	(102.3		)	(0.4		)	(102.7		)
Goodwill^(k)	4,388.0			(30.0		)	4,358.0
Total fair value of consideration transferred	$	4,613.3		$	—		$	4,613.3

________________________

(a)

The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability, (ii) a reduction in the estimated fair value of inventory, (iii) an increase in the estimated fair value of property, plant and equipment mainly related to certain machinery and equipment in Western Europe and the U.S., partially offset by a reduction in the estimated fair value related to certain manufacturing facilities and an office building, (iv) an adjustment between cash and accounts payable, and (v) increases in the estimated fair value of intangible assets, which included a net increase to IPR&D assets driven by a higher fair value for the next generation silicone hydrogel lens (Bausch + Lomb Ultra®). The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.


(b)	The fair value of trade accounts receivable acquired was $541 million, with the gross contractual amount being $556 million, of which the Company expects that $15 million will be uncollectible.


(c)	Includes an estimated fair value adjustment to inventory of $269 million.


(d)	The following table summarizes the amounts and useful lives assigned to property, plant and equipment:



	Weighted- Average Useful Lives (Years)	Amounts Recognized as of Acquisition Date (as previously reported)		Measurement Period Adjustments			Amounts Recognized as of December 31, 2014 (as adjusted)
Land	NA	$	47.4	$	(12.6	)	$	34.8
Buildings	24	273.1		(23.8		)	249.3
Machinery and equipment	5	273.5		76.3			349.8
Leasehold improvements	5	22.5		(0.3		)	22.2
Equipment on operating lease	3	13.8		(0.2		)	13.6
Construction in progress	NA	131.1		(6.2		)	124.9
Total property, plant and equipment acquired		$	761.4	$	33.2		$	794.6

The Company sold an office building in Rochester, New York, with an adjusted carrying amount of $14 million, in the third quarter of 2014. There was no gain or loss associated with the sale.


(e)	The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:



	Weighted- Average Useful Lives (Years)	Amounts Recognized as of Acquisition Date (as previously reported)		Measurement Period Adjustments		Amounts Recognized as of December 31, 2014 (as adjusted)
Product brands	10	$	1,770.2	$	4.6	$	1,774.8
Product rights	8	855.4		5.7		861.1
Corporate brand	Indefinite	1,690.5		7.0		1,697.5
Total identifiable intangible assets acquired	9	$	4,316.1	$	17.3	$	4,333.4

The corporate brand represents the B&L corporate trademark and has an indefinite useful life as there are no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of this intangible asset. The estimated fair value was determined using the relief from royalty method.

(f)

The significant components of the acquired IPR&D assets primarily relate to the development of (i) various vision care products ($223 million in the aggregate), such as the next generation silicone hydrogel lens (Bausch + Lomb Ultra®), (ii) various pharmaceutical products ($171 million, in the aggregate), such as latanoprostene bunod, and (iii) various surgical products ($21 million, in the aggregate). See Note 22 for further information related to the worldwide licensing agreement with NicOx, S.A. (“NicOx”) for latanoprostene bunod. A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and a risk-adjusted discount rate of 10% was used to present value the projected cash flows. In determining fair value for latanoprostene bunod and Bausch + Lomb Ultra®, the Company assumed, as of the acquisition date, that material cash inflows for these products would commence in 2016 and 2014, respectively. In September 2013, the FDA approved Bausch + Lomb Ultra®, and the product was launched in February 2014. In September 2015, the Company announced that the FDA had accepted for review the NDA for latanoprostene bunod and set a PDUFA action date of July 21, 2016.


(g)	In 2013, the Company repaid in full the amounts outstanding, with the exception of certain debentures. In connection with the redemption of the assumed 9.875% senior notes, the Company recognized a loss on extinguishment of debt of $8 million in the third quarter of 2013. As of December 31, 2015 and 2014, the debentures have an outstanding balance of $12 million, in the aggregate.


(h)	Comprises current net deferred tax assets ($62 million) and non-current net deferred tax liabilities ($1.44 billion).


(i)	Includes $224 million related to the estimated fair value of pension and other benefits liabilities.


(j)	Represents the estimated fair value of B&L’s noncontrolling interest related primarily to Chinese joint ventures. A discounted cash flow methodology was used to determine the estimated fair values as of the acquisition date.


(k)	Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following:


•	the Company’s expectation to develop and market new product brands, product lines and technology;


•	cost savings and operating synergies expected to result from combining the operations of B&L with those of the Company;


•	the value of the continuing operations of B&L’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and


•	intangible assets that do not qualify for separate recognition (for instance, B&L’s assembled workforce).

The amount of goodwill has been allocated to the Company’s Developed Markets segment ($3.30 billion) and Emerging Markets segment ($1.10 billion).

Other 2013 Business Combinations (excluding the B&L Acquisition)

Description of the Transactions

In the year ended December 31, 2013, the Company completed other business combinations, which included the acquisition of the following businesses, for an aggregate purchase price of $898 million. The aggregate purchase price included contingent consideration payment obligations with an aggregate acquisition date fair value of $59 million.

•

On April 25, 2013, the Company acquired all of the outstanding shares of Obagi Medical Products, Inc. (“Obagi”) at a price of $24.00 per share in cash. The aggregate purchase price paid by the Company was approximately $437 million. Obagi is a specialty pharmaceutical company that develops, markets, and sells topical aesthetic and therapeutic skin-health systems with a product portfolio of dermatology brands including Obagi Nu-Derm®, Condition & Enhance®, Obagi-C® Rx, ELASTIDerm® and Obagi CLENZIDerm®.

•

On February 1, 2013, the Company acquired Natur Produkt International, JSC (“Natur Produkt”), a specialty pharmaceutical company in Russia, for a purchase price of $150 million, including a $20 million contingent refund of purchase price relating to the outcome of certain litigation involving AntiGrippin® that commenced prior to the acquisition. Subsequent to the acquisition, during the three-month period ended March 31, 2013, the litigation was resolved, and the $20 million was refunded back to the Company. Natur Produkt’s key brand products include AntiGrippin®, Anti-Angin®, Sage™ and Eucalyptus MA™.


•	During the year ended December 31, 2013, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below.

Assets Acquired and Liabilities Assumed



	Amounts Recognized as of Acquisition Dates (as previously reported)			Measurement Period Adjustments^(a)			Amounts Recognized as of December 31, 2014 (as adjusted)
Cash	$	43.1		$	—		$	43.1
Accounts receivable^(b)	64.0			0.5			64.5
Inventories	33.6			1.9			35.5
Other current assets	14.0			—			14.0
Property, plant and equipment	13.9			(3.3		)	10.6
Identifiable intangible assets, excluding acquired IPR&D^(c)	722.9			3.9			726.8
Acquired IPR&D^(d)	18.7			0.2			18.9
Indemnification assets	3.2			(0.7		)	2.5
Other non-current assets	0.2			3.7			3.9
Current liabilities	(36.2		)	(0.4		)	(36.6		)
Short-term borrowings^(e)	(33.3		)	0.5			(32.8		)
Long-term debt^(e)	(24.0		)	—			(24.0		)
Deferred tax liability, net	(147.8		)	(1.1		)	(148.9		)
Other non-current liabilities	(1.5		)	—			(1.5		)
Total identifiable net assets	670.8			5.2			676.0
Noncontrolling interest^(f)	(11.2		)	—			(11.2		)
Goodwill^(g)	224.3			9.0			233.3
Total fair value of consideration transferred	$	883.9		$	14.2		$	898.1

________________________

(a)

The measurement period adjustments primarily reflect an increase in the total fair value of consideration transferred with respect to the Natur Produkt acquisition pursuant to a purchase price adjustment. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.


(b)	The fair value of trade accounts receivable acquired was $65 million, with the gross contractual amount being $68 million, of which the Company expects that $3 million will be uncollectible.


(c)	The following table summarizes the amounts and useful lives assigned to identifiable intangible assets:



	Weighted- Average Useful Lives (Years)	Amounts Recognized as of Acquisition Dates (as previously reported)		Measurement Period Adjustments		Amounts Recognized as of December 31, 2014 (as adjusted)
Product brands	7	$	517.2	$	3.1	$	520.3
Corporate brand	13	86.1		0.8		86.9
Patents	3	71.7		—		71.7
Royalty Agreement	5	26.5		—		26.5
Partner relationships	5	16.0		—		16.0
Technology	10	5.4		—		5.4
Total identifiable intangible assets acquired	8	$	722.9	$	3.9	$	726.8

(d)

The acquired IPR&D assets relate to the Obagi and Natur Produkt acquisitions. Obagi’s acquired IPR&D assets primarily relate to the development of dermatology products for anti-aging and suncare. Natur Produkt’s acquired IPR&D assets include a product indicated for the prevention of viral diseases, specifically cold and flu, and a product indicated for the treatment of inflammation and muscular disorders.


(e)	Short-term borrowings and long-term debt primarily relate to the Natur Produkt acquisition. In March 2013, the Company settled all of Natur Produkt’s outstanding third party short-term borrowings and long-term debt.


(f)	Represents the estimated fair value of noncontrolling interest related to a smaller acquisition completed in the third quarter of 2013.

(g)

The goodwill relates primarily to the Obagi and Natur Produkt acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of Obagi’s and Natur Produkt’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the Obagi and the Natur Produkt acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company.

The amount of goodwill from the Obagi acquisition has been allocated primarily to the Company’s Developed Markets segment. The amount of goodwill from the Natur Produkt acquisition has been allocated to the Company’s Emerging Markets segment.

Pro Forma Impact of Business Combinations

The following table presents unaudited pro forma consolidated results of operations for the years ended December 31, 2015, 2014 and 2013, as if the 2015 acquisitions had occurred as of January 1, 2014, the 2014 acquisitions had occurred as of January 1, 2013, and the 2013 acquisitions occurred as of January 1, 2012.



	Unaudited
	2015			2014 (Restated)			2013
Revenues	$	10,709.6		$	10,247.6		$	7,929.9
Net loss attributable to Valeant Pharmaceuticals International, Inc.	(619.1		)	(374.7		)	(801.9		)
Loss per share attributable to Valeant Pharmaceuticals International, Inc.:
Basic	$	(1.80	)	$	(1.09	)	$	(2.43	)
Diluted	$	(1.80	)	$	(1.09	)	$	(2.43	)

Pro forma revenues in the year ended December 31, 2015 as compared to the year ended December 31, 2014 were impacted by the following:


•	growth from the existing business, including the impact of recent product launches;


•	negative foreign currency exchange impact; and


•	lower sales resulting from the July 2014 divestiture of facial aesthetic fillers and toxins.

The unaudited pro forma consolidated results of operations were prepared using the acquisition method of accounting and are based on the historical financial information of the Company and the acquired businesses described above. Except to the extent realized in the years ended December 31, 2015, 2014 and 2013, the unaudited pro forma information does not reflect any cost savings, operating synergies and other benefits that the Company may achieve as a result of these acquisitions, or the costs necessary to achieve these cost savings, operating synergies and other benefits. In addition, except to the extent recognized in the years ended December 31, 2015, 2014 and 2013, the unaudited pro forma information does not reflect the costs to integrate the operations of the Company with those of the acquired businesses.

The unaudited pro forma information is not necessarily indicative of what the Company’s consolidated results of operations actually would have been had the 2015 acquisitions, the 2014 acquisitions, and the 2013 acquisitions been completed on January 1, 2014, January 1, 2013, and January 1, 2012, respectively. In addition, the unaudited pro forma information does not purport to project the future results of operations of the Company. The unaudited pro forma information reflects primarily the following adjustments:


•	elimination of historical intangible asset amortization expense of these acquisitions;


•	additional amortization expense related to the fair value of identifiable intangible assets acquired;


•	additional depreciation expense related to fair value adjustment to property, plant and equipment acquired;


•	additional interest expense associated with the financing obtained by the Company in connection with the Salix acquisition; and

•

the exclusion from pro forma earnings in the years ended December 31, 2015, 2014 and 2013 of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of $130 million, $20 million and $370 million, in the aggregate, respectively, and the acquisition-related costs of $35 million, $2 million and $25 million, in the aggregate, respectively, incurred for these acquisitions in the years ended December 31, 2015, 2014 and 2013 and the inclusion of those amounts in pro forma earnings of the respective preceding fiscal years.

In addition, all of the above adjustments were adjusted for the applicable tax impact.

Weighted-
Average
Useful Lives
(Years)

Amounts
Recognized as of
Acquisition Date

Product brands

Corporate brand

Total identifiable intangible assets acquired