Acquisitions and License Agreements (Tables)

6 Months Ended

Mar. 25, 2016

Schedule of Fair Value of Identifiable Assets Acquired and Liabilities Assumed



	Hemostasis Products			Therakos		Ikaria
Cash and cash equivalents	$	3.3		$	41.3	$	77.3
Inventory	108.3			23.5		26.3
Intangible assets	124.0			1,170.0		1,971.0
Goodwill	0.1			430.4		795.0
Other assets, current and non-current ⁽¹⁾	3.4			42.1		174.3
Total assets acquired	239.1			1,707.3		3,043.9
Current liabilities	5.7			24.7		33.0
Other liabilities (non-current)	10.6			0.6		15.8
Deferred tax liabilities, net (non-current)	(3.3		)	318.1		620.5
Contingent consideration	52.0			—		—
Total debt	—			344.8		1,121.0
Total liabilities assumed	65.0			688.2		1,790.3
Net assets acquired	$	174.1		$	1,019.1	$	1,253.6


(1)	This amount includes $0.0 million, $22.0 million and $73.8 million, of accounts receivable for the Hemostasis Acquisition, Therakos Acquisition and the Ikaria Acquisition, respectively, which is also the gross contractual value.

Schedule of Reconciliation of Total Consideration to Net Assets Acquired

The following is a reconciliation of the total consideration to net assets acquired:



	Hemostasis Products			Therakos		Ikaria
Total consideration, net of cash	$	222.8		$	977.8	$	1,176.3
Plus: cash assumed in acquisition	3.3			41.3		77.3
Total consideration	226.1			1,019.1		1,253.6
Less: contingent consideration	(52.0		)	—		—
Net assets acquired	$	174.1		$	1,019.1	$	1,253.6

Schedule of Intangible Assets Acquired

Intangible assets acquired consist of the following:



Hemostasis Products	Amount		Amortization Period
Raplixa - Completed technology	$	66.0	15 years
Recothrom - Completed technology	42.0		13 years
PreveLeak - Completed technology	16.0		13 years
	$	124.0

The completed technology intangible assets relate to each of the acquired drugs. The fair value of the intangible assets were determined using the income approach, which is a valuation technique that provides an estimate of fair value of the assets based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with each asset or its projected cash flows. The completed technology intangible assets utilized a discount rate of 17.5%, 16.0% and 17.5% for Raplixa, Recothrom and PreveLeak, respectively. All assets acquired are included within the Company's Specialty Brands segment.



Therakos	Amount		Amortization Period
Completed technology	$	1,170.0	15 years

The completed technology intangible asset relates to extracorporeal photopheresis treatment therapies. The fair value of the intangible asset was determined using the income approach. The cash flows were discounted commensurate with the level of risk associated with each asset or its projected cash flows. The completed technology intangible asset utilized a discount rate of 17.0%. Based on the Company's preliminary estimate, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce, future product and device development, anticipated synergies and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. All assets acquired are included within the Company's Specialty Brands segment.



Ikaria	Amount		Amortization Period
Completed technology	$	1,820.0	15 years
Trademark	70.0		22 years
In-process research and development - terlipressin	81.0		Non-Amortizable
	$	1,971.0

The completed technology and trademark intangible assets relate to Inomax. The fair values of the intangible assets were determined using the income approach. The cash flows were discounted at various discount rates commensurate with the level of risk associated with each asset or their projected cash flows. Completed technology, trademark and in-process research and development ("IPR&D") terlipressin intangibles utilized discount rates of 14.5%, 14.5%, and 17.0%, respectively. The IPR&D discount rate, for terlipressin, was developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in the FDA approval process and risks associated with commercialization of a new product. Based on the Company's preliminary estimate, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce, future product and device development, anticipated synergies and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. All assets acquired are included within the Company's Specialty Brands segment.

Schedule of Net Sales and Earnings by Acquiree

The amount of net sales and earnings included in the Company's results for the periods presented were as follows:



	Three Months Ended				Six Months Ended
	March 25, 2016		March 27, 2015		March 25, 2016			March 27, 2015
Net sales
Therakos	$	50.2	$	—	$	100.6		$	—
Ikaria	119.7		—		234.3			—
	$	169.9	$	—	$	334.9		$	—
Operating income
Therakos	$	4.2	$	—	$	(6.9	)	$	—
Ikaria	49.2		—		91.4			—
	$	53.4	$	—	$	84.5		$	—

Schedule of Intangible Asset Amortization by Acquiree

The amount of amortization on acquired intangible assets included within operating income for the periods presented was as follows:



	Three Months Ended				Six Months Ended
	March 25, 2016		March 27, 2015		March 25, 2016		March 27, 2015
Intangible asset amortization
Therakos	$	19.5	$	—	$	39.0	$	—
Ikaria	31.2		—		62.3		—
	$	50.7	$	—	$	101.3	$	—

Schedule of Acquisition-Related Costs by Acquiree

The amount of acquisition-related costs included within operating income for the periods presented was as follows:



	Three Months Ended				Six Months Ended
	March 25, 2016		March 27, 2015		March 25, 2016		March 27, 2015
Acquisition-related costs
Hemostasis products	$	1.6	$	—	$	2.5	$	—
Therakos	0.3		—		0.3		—
Ikaria	—		7.1		0.2		7.1
	$	1.9	$	7.1	$	3.0	$	7.1

Schedule of Unaudited Pro Forma Information



	Three Months Ended				Six Months Ended
	March 25, 2016		March 27, 2015		March 25, 2016		March 27, 2015
Net sales	$	918.0	$	969.2	$	1,832.8	$	1,886.9
Income from continuing operations	120.5		84.6		246.5		179.6

Basic earnings per share from continuing operations	$	1.08	$	0.73	$	2.18	$	1.56
Diluted earnings per share from continuing operations	1.08		0.72		2.16		1.54