Acquisitions (Tables)

12 Months Ended

Dec. 31, 2014

The components of the aggregate preliminary purchase price for Bayer and IoGyn acquisitions are as follows (in millions):



Cash, net of cash acquired	$	479
Fair value of prior interests	31
	$	510

The components of the aggregate purchase price for the acquisitions consummated in 2012 are as follows (in millions):



Cash, net of cash acquired	$	367
Fair value of contingent consideration	467
Fair value of prior interests	79
Fair value of debt assumed	9
	$	922

The following summarizes the aggregate purchase price allocation for the 2013 acquisition (in millions):



Goodwill	$	140
Amortizable intangible assets	112
Indefinite-lived intangible assets	—
Other net assets	19
Deferred income taxes	3
	$	274

The components of the aggregate preliminary purchase price for the acquisition consummated in 2013 are as follows (in millions):



Cash, net of cash acquired	$	274
Fair value of contingent consideration	—
Fair value of prior interests	—
Fair value of debt assumed	—
	$	274

The following summarizes the aggregate preliminary purchase price allocation for Bayer and IoGyn as of December 31, 2014:



Goodwill	$	210
Amortizable intangible assets	263
Inventory	23
Property, Plant and Equipment	17
Prepaid Transaction Service Agreement	5
Other net assets	(1		)
Deferred income taxes	(7		)
	$	510

The following summarizes the aggregate purchase price allocation for the 2012 acquisitions (in millions):



Goodwill (non-deductible for tax purposes)	$	566
Amortizable intangible assets	189
Indefinite-lived intangible assets	132
Other net assets	15
Deferred income taxes	20
	$	922

The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs:



Contingent Consideration Liability	Fair Value as of December 31, 2014	Valuation Technique	Unobservable Input	Range
R&D, Regulatory and Commercialization-based Milestones	$85 million	Probability Weighted Discounted Cash Flow	Discount Rate	1.1%
			Probability of Payment	84% - 95%
			Projected Year of Payment	2015
Revenue-based Payments	$55 million	Discounted Cash Flow	Discount Rate	11.5% - 15%
			Probability of Payment	0% - 100%
			Projected Year of Payment	2015 - 2018
	$134 million	Monte Carlo	Revenue Volatility	11% - 13%
			Risk Free Rate	LIBOR Term Structure
			Projected Year of Payment	2015 - 2018

The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs:



Intangible Asset	Valuation Date	Fair Value	Valuation Technique	Unobservable Input	Rate
In-Process R&D	September 30, 2014	$16 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
In-Process R&D	June 30, 2014	$83 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
Core Technology	June 30, 2014	$8 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	March 31, 2014	$6 million	Income Approach - Excess Earnings Method	Discount Rate	20%
Core Technology	March 31, 2014	$64 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	June 30, 2013	$178 million	Income Approach - Excess Earnings Method	Discount Rate	16.5%
In-Process R&D	September 30, 2012	$26 million	Income Approach - Excess Earnings Method	Discount Rate	20 - 25%
In-Process R&D	June 30, 2012	$184 million	Income Approach - Excess Earnings Method	Discount Rate	20%

Changes in our contingent consideration liability were as follows (in millions):



Balance as of December 31, 2012	$	663
Amounts recorded related to new acquisitions	—
Other amounts recorded related to prior acquisitions	(1		)
Fair value adjustment	4
Contingent payments related to prior period acquisition	(165		)
Balance as of December 31, 2013	$	501
Amounts recorded related to new acquisitions	3
Other amounts recorded related to prior acquisitions	(8		)
Fair value adjustment	(85		)
Contingent payments related to prior period acquisition	(137		)
Balance as of December 31, 2014	$	274

We allocated a portion of the purchase price to specific intangible asset categories as of the respective acquisition dates as follows:



	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	82	10	11.5%
Customer relationships	30		7	11.5%
	$	112

We allocated a portion of the preliminary purchase price to specific intangible asset categories as follows:



	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	233	10 - 14	14 - 18 %
Customer Relationships	29		10	18%
Other intangible assets	1		2	14%
	$	263

We allocated a portion of the final purchase price to specific intangible asset categories as of the respective acquisition dates as follows:



	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	187	8	14 - 28%
Customer relationships	2		5	14%
Indefinite-lived intangible assets:
In-process research and development	132			14 - 28%
	$	321