Acquisitions and Strategic Investments (Tables)

9 Months Ended

Sep. 30, 2015

The components of the aggregate purchase prices are as follows (in millions):



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

The components of the aggregate preliminary purchase prices are as follows (in millions):



Cash, net of cash acquired, including amounts payable as of September 30, 2015	$	1,659
Fair value of contingent consideration	31
	$	1,690

The following summarizes the aggregate purchase price allocation for the 2014 acquisitions as of September 30, 2014 (in millions):



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

The following summarizes the aggregate preliminary purchase price allocation for the 2015 acquisitions as of September 30, 2015 (in millions):



Goodwill	$	568
Amortizable intangible assets	992
Inventory	102
Property, Plant and Equipment	42
Other net assets	39
Deferred income taxes	(53		)
	$	1,690

Changes in the fair value of our contingent consideration liability were as follows (in millions):



Balance as of December 31, 2014	$	274
Amounts recorded related to new acquisitions	31
Other amounts recorded related to prior acquisitions	—
Net fair value adjustments	86
Payments made	(125		)
Balance as of September 30, 2015	$	266

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 September 30, 2015	Valuation Technique	Unobservable Input	Range
Revenue-based Payments	$84 million	Probability Weighted Discounted Cash Flow	Discount Rate	11.5% - 15%
	$84 million	Probability Weighted Discounted Cash Flow	Projected Year of Payment	2015 - 2019
	$182 million	Monte Carlo	Revenue Volatility	11% - 20%
			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
Core Technology	September 30, 2015	$8 million	Income Approach -Excess Earnings Method	Discount Rate	10%
In-Process R&D	June 30, 2015	$6 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
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%

We allocated a portion of the 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 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	$	358	11-12	13.5% - 15%
Customer relationships	616		12	13.5%
Other intangible assets	18		13	13.5%
	$	992