Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Financial assets and liabilities measured at fair value on recurring basis

The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2017 and December 31, 2016 were as follows (in thousands):

	Fair Value Measurements at Reporting Date using:
June 30, 2017	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money market funds	$	96,888	$	—	$	—	$	96,888
Time deposits	—		100,000		—		100,000
Equity securities	2,494		—		—		2,494
Total	$	99,382	$	100,000	$	—	$	199,382
Liabilities:
Acquisition-related contingent consideration—short-term	$	—	$	—	$	94,460	$	94,460
Acquisition-related contingent consideration—long-term	—		—		116,000		116,000
Total	$	—	$	—	$	210,460	$	210,460

At June 30, 2017, money market funds include $21.9 million in QSFs to be disbursed to mesh-related product liability claimants. See Note 11. Commitments and Contingencies for further discussion of our product liability cases.

	Fair Value Measurements at Reporting Date using:
December 31, 2016	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money market funds	$	26,210	$	—	$	—	$	26,210
Time deposits	—		100,000		—		100,000
Equity securities	2,267		—		—		2,267
Total	$	28,477	$	100,000	$	—	$	128,477
Liabilities:
Acquisition-related contingent consideration—short-term	$	—	$	—	$	109,373	$	109,373
Acquisition-related contingent consideration—long-term	—		—		152,740		152,740
Total	$	—	$	—	$	262,113	$	262,113

Changes to liability for acquisition-related contingent consideration

The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2017 and 2016 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Beginning of period	$	234,391		$	124,511		$	262,113		$	143,502
Amounts settled	(26,219		)	(12,646		)	(60,310		)	(22,120		)
Changes in fair value recorded in earnings	1,950			23,892			8,134			13,204
Effect of currency translation	338			39			523			1,210
End of period	$	210,460		$	135,796		$	210,460		$	135,796

The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the six months ended June 30, 2017 by acquisition (in thousands):

	Balance as of December 31, 2016		Acquisitions		Fair Value Adjustments and Accretion			Payments and Other			Balance as of June 30, 2017
Auxilium acquisition	$	21,097	$	—	$	(1,720	)	$	(4,219	)	$	15,158
Lehigh Valley Technologies, Inc. acquisitions	96,000		—		16,755			(36,754		)	76,001
VOLTAREN®Gel acquisition	118,395		—		4,384			(17,909		)	104,870
Other	26,621		—		(11,285		)	(905		)	14,431
Total	$	262,113	$	—	$	8,134		$	(59,787	)	$	210,460

Summary of available-for-sale securities

The following is a summary of available-for-sale securities held by the Company at June 30, 2017 and December 31, 2016 (in thousands):

	Available-for-sale
June 30, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Money market funds	$	96,888	$	—	$	—	$	96,888
Total included in cash and cash equivalents	$	75,000	$	—	$	—	$	75,000
Total included in restricted cash and cash equivalents	$	21,888	$	—	$	—	$	21,888
Equity securities	$	1,766	$	728	$	—	$	2,494
Long-term available-for-sale securities	$	1,766	$	728	$	—	$	2,494

	Available-for-sale
December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Money market funds	$	26,210	$	—	$	—	$	26,210
Total included in cash and cash equivalents	$	—	$	—	$	—	$	—
Total included in restricted cash and cash equivalents	$	26,210	$	—	$	—	$	26,210
Equity securities	$	1,766	$	501	$	—	$	2,267
Long-term available-for-sale securities	$	1,766	$	501	$	—	$	2,267

Summary of nonrecurring fair value measurements

The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2017 were as follows (in thousands):

	Fair Value Measurements at Reporting Date using:						Total Expense for the Six Months Ended June 30, 2017
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Certain U.S. Branded Pharmaceuticals intangible assets (Note 8)	$	—	$	—	$	17,781	$	(52,096	)
Certain U.S. Generic Pharmaceuticals intangible assets (Note 8)	—		—		409,874		(398,423		)
Certain International Pharmaceuticals intangible assets (Note 8)	—		—		21,772		(145,359		)
Branded reporting unit goodwill (Note 8)	—		—		828,818		(180,430		)
Paladin reporting unit goodwill (Note 8)	—		—		84,881		(82,602		)
Somar reporting unit goodwill (Note 8)	—		—		—		(25,712		)
Certain property, plant and equipment (1)	—		—		—		(44,384		)
Total	$	—	$	—	$	1,363,126	$	(929,006	)

__________

(1) Amounts relate primarily to an aggregate charge of $32.0 million recorded in connection with the 2017 U.S. Generics Pharmaceuticals restructuring initiative, which is described further in Note 4. Restructuring, and $9.9 million recorded following the initiation of held-for-sale accounting resulting from the Company’s June 30, 2017 definitive agreement to sell Somar, which is described in Note 3. Discontinued Operations and Assets and Liabilities Held for Sale.