2. Significant Accounting Policies

Special Items—We recognize expenses resulting directly from our business combinations, employee termination benefits, certain R&D agreements, certain contract terminations, consulting and professional fees and asset impairment or loss on disposal charges connected with global restructuring, quality and operational excellence initiatives, and other items as “Special items” in our condensed consolidated statement of earnings. “Special items” included (in millions):


	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015		2014
Biomet merger-related
Merger consideration compensation expense	$	164.1	$	—		$	164.1	$	—
Retention plans		73.0		—			73.0		—
Consulting and professional fees		62.4		13.7			86.6		13.7
Employee severance		64.5		—			64.9		—
Dedicated project personnel		8.1		—			9.1		—
Relocated facilities		0.9		—			0.9		—
Contract terminations		15.9		—			15.9		—
Other		1.7		—			1.9		—

Other
Consulting and professional fees		39.6		27.0			79.3		42.0
Employee severance		0.7		—			0.8		0.9
Dedicated project personnel		10.1		10.9			22.5		21.8
Impairment/loss on disposal of assets		—		4.6			2.3		5.9
Certain R&D agreements		—		—			—		4.5
Relocated facilities		—		—			0.5		0.7
Distributor acquisitions		—		0.4			—		0.4
Certain litigation matters		20.3		—			20.3		—
Contract terminations		—		2.2			—		2.2
Contingent consideration adjustments		—		(0.1	)		2.3		0.4
Accelerated software amortization		—		1.5			1.5		3.0
Other		8.1		2.1			10.5		3.4

Special items	$	469.4	$	62.3		$	556.4	$	98.9

Pursuant to the Biomet merger agreement, all outstanding LVB stock options and LVB stock-based awards vested immediately prior to the effective time of the merger, and holders of LVB stock options and LVB stock-based awards received a portion of the aggregate merger consideration. Some LVB stock options and LVB stock-based awards were already vested under the terms of LVB’s equity incentive plans. We accounted for the fair value of the consideration we paid in exchange for previously vested LVB stock options and LVB stock-based awards as consideration to complete the merger. As part of the merger agreement terms, all previously unvested LVB stock options and LVB stock-based awards vested immediately prior to the effective time of the merger. Under LVB’s equity incentive plans, unvested LVB stock options and LVB stock-based awards would have otherwise been forfeited. We have concluded that the discretionary accelerated vesting of unvested LVB stock options and LVB stock-based awards was for the economic benefit of the combined company, and, therefore, we classified the fair value of the merger consideration we paid to holders of such unvested LVB stock options and LVB stock-based awards of $164.1 million as compensation expense.

Pursuant to the LVB merger agreement, retention plans were established for certain Biomet employees and third-party sales agents. Retention payments were earned by employees and third-party sales agents who remained with Biomet through the Closing Date. We recognized $73.0 million of expense resulting from these retention plans.

After the Closing Date, we started to implement our integration plans to drive operational synergies. Part of these integration plans included termination of employees and certain contracts. Expenses attributable to the initial phase of these integration plans that were recognized in the three and six month periods ended June 30, 2015 as part of “Special items” primarily related to termination of redundant management employees. During the remainder of 2015, we expect to recognize additional employee termination severance and contract termination expense related to termination of agreements with independent agents, distributors, suppliers and lessors as we continue to implement our integration plans. Our integration plans are expected to last through 2018. The following table summarizes the liabilities related to these integration plans (in millions):


	Employee Termination Benefits		Contract Terminations		Total
Balance, Closing Date	$	—	$	—	$	—
Additions		64.5		15.9		80.4
Cash Payments		—		—		—

Balance, June 30, 2015	$	64.5	$	15.9	$	80.4

Since the Closing Date occurred just prior to June 30, 2015, no significant cash payments for these items were made during the three month period ended June 30, 2015. However, it is expected that the majority of these employee termination benefits and contract termination liabilities noted above will be paid during the second half of 2015.

Recent Accounting Pronouncements—In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09—Revenue from Contracts with Customers (Topic 606). The ASU provides a five-step model for revenue recognition that all industries will apply to recognize revenue when a customer obtains control of a good or service. The ASU will be effective for us beginning January 1, 2018. We are in the initial phases of our adoption plans and, accordingly, we are unable to estimate any effect this may have on our revenue recognition practices.

In April 2015, the FASB issued ASU 2015-03—Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. This ASU does not affect the measurement and recognition of debt issuance costs in our statement of earnings. As of June 30, 2015, this change would result in a reclassification of $11.9 million of other current assets and $68.6 million of other assets to debt. The ASU will be effective for us beginning January 1, 2016.

There are no other recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our financial position, results of operations or cash flows.