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ACQUISITIONS (Tables)
 12 Months Ended
Dec. 31, 2015
Business Combinations  
Schedule of pro forma impact of merger and acquisition
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
)
Amoun  
Business Combinations  
Schedule of estimated fair value of assets acquired and liabilities assumed
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:
 
 
Weighted-
 Average
Useful Lives
(Years)
 
Amounts
Recognized as of
Acquisition Date
Product brands
 
9
 
$
490.8

Corporate brand
 
15
 
37.2

Total identifiable intangible assets acquired
 
9
 
$
528.0


(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.
Summary of amounts and useful lives assigned to identifiable intangible assets
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
Product brands
 
9
 
$
490.8

Corporate brand
 
15
 
37.2

Total identifiable intangible assets acquired
 
9
 
$
528.0
Sprout  
Business Combinations  
Schedule of estimated fair value of assets acquired and liabilities assumed
The Company will finalize these amounts no later than one year from the acquisition date.
 
 
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.
Salix  
Business Combinations  
Schedule of estimated fair value of 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.
Summary of amounts and useful lives assigned to identifiable intangible assets
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
Schedule of acquisitions
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.
Schedule of fair value of long term debt
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.
2015 Acquisitions  
Business Combinations  
Schedule of estimated fair value of assets acquired and liabilities assumed
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.
Summary of amounts and useful lives assigned to identifiable intangible assets
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
2014 Acquisitions  
Business Combinations  
Schedule of estimated fair value of assets acquired and liabilities assumed
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:
 
 
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.
Summary of amounts and useful lives assigned to identifiable intangible assets
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
B&L  
Business Combinations  
Schedule of estimated fair value of assets acquired and liabilities assumed
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of acquisition date.
 
 
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).
Summary of amounts and useful lives assigned to identifiable intangible assets
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
Schedule of 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.
Summary of amounts and useful lives assigned to property, plant and equipment
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
2013 Other Business Combinations  
Business Combinations  
Schedule of estimated fair value of assets acquired and liabilities assumed
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.
 
 
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.
Summary of amounts and useful lives assigned to identifiable intangible assets
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