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Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

		Carrying	Fair value
		value
			Total	Level 1	Level 2	Level 3
At December 31, 2012		$'M	$'M	$'M	$'M	$'M
		____________	____________	___________	___________	___________
Financial assets:
Available-for-sale securities⁽¹⁾		14.2	14.2	14.2	-	-
Contingent consideration receivable ⁽²⁾		38.3	38.3	-	-	38.3
Foreign exchange contracts		1.3	1.3	-	1.3	-

Financial liabilities:
Foreign exchange contracts		3.0	3.0	-	3.0	-
Contingent consideration payable⁽³⁾		136.4	136.4	-	-	136.4
		____________	____________	___________	___________	___________

			Total	Level 1	Level 2	Level 3
At December 31, 2011		$'M	$'M	$'M	$'M	$'M
		____________	____________	___________	___________	___________
Financial assets:
Available-for-sale securities⁽¹⁾		7.4	7.4	7.4	-	-
Contingent consideration receivable ⁽²⁾		37.8	37.8	-	-	37.8
Foreign exchange contracts		3.4	3.4	-	3.4	-

Financial liabilities:
Foreign exchange contracts		0.4	0.4	-	0.4	-
Contingent consideration payable⁽³⁾	1	-	-	-	-	-
		____________	____________	___________	___________	___________

(1) Available-for-sale securities are included within Investments in the consolidated balance sheet.

(2) Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet.

(3) Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet.

Assets Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3)

Contingent consideration receivable
	2012	2011
	$'M	$'M
	____________	____________

Balance at beginning of period	37.8	61.0
Gain/(loss) recognized in the income statement (within Gain/(loss) on sale of product rights) due to change in fair value during the period	18.1	(6.0)
Reclassification of amounts to Other receivables within Other current assets	(18.7)	(16.5)
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	1.1	(0.7)

Balance at end of period	38.3	37.8

Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3)

Contingent consideration payable
	2012	2011
	$'M	$'M
	____________	____________

Balance at beginning of period ¹	-	-
Initial recognition of contingent consideration payable	127.8	-
Loss recognized in the income statement (within Integration and acquisition costs) due to change in fair value during the period	9.2	-
Reclassification of amounts to Other current liabilities	(8.8)	-
Change in fair value during the period with corresponding adjustment to the associated intangible asset	8.2	-

Balance at end of period	136.4	-

Fair Value Inputs, Assets Quantitative Information Table

Financial assets:	Fair Value at the Measurement Date

At December 31, 2012	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration receivable ("CCR")	38.3	Income approach (probability weighted discounted cash flow)	• Probability weightings applied to different sales scenarios • Future forecast royalties receivable at relevant contractual royalty rates • Assumed market participant discount rate	• 10 to 50% • $19 million to $181 million • 5.4%
	____________	____________	____________	____________

	Fair Value at the Measurement Date

At December 31, 2012	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
RESOLOR Intangibles	167.5	Income approach (discounted cash flow)	• Decline in forecast peak sales following results of an evaluation of alternative selling strategies • Assumed market participant discount rate • Assumed market participant effective tax rate	• 41% • 7.7% to 8.7% • 15%
	____________	____________	____________	____________

Fair Value Inputs, Liabilities Quantitative Information Table

Financial liabilities:	Fair Value at the Measurement Date

At December 31, 2012	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration payable	136.4	Income approach (probability weighted discounted cash flow)	• Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products	• 19 to 45% (Weighted average) • 5.9 to 8.7% (Weighted average) • 2013 to 2028 • $2.9 to $3.4 million
	____________	____________	____________	____________

Schedule of Fair Value, Assets and Liabilities Not Measured at Fair Value on Recurring Basis

	December 31, 2012		December 31, 2011
	Carrying		Carrying
	amount	Fair value	amount	Fair value
	$’M	$’M	$’M	$’M
	____________	____________	____________	___________

Financial liabilities:
Convertible bonds (Level 1)	1,100.0	1,228.2	1,100.0	1,309.7
Building financing obligation (Level 3)	8.0	10.3	8.2	9.7
	____________	____________	____________	___________

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details