Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of cash and cash equivalents

The following table presents current and noncurrent restricted cash and cash equivalent balances at September 30, 2019 and December 31, 2018 (in thousands):

	September 30, 2019		December 31, 2018
Restricted cash and cash equivalents—current portion (1)	$	222,491	$	305,368
Restricted cash and cash equivalents—noncurrent portion (2)	22,357		22,356
Restricted cash and cash equivalents—total (3)	$	244,848	$	327,724

__________

(1) These amounts are reported in our Condensed Consolidated Balance Sheets as Restricted cash and cash equivalents.

(2) These amounts are reported in our Condensed Consolidated Balance Sheets as Other assets.

(3)

Approximately $221.6 million and $299.7 million of our restricted cash and cash equivalents are held in qualified settlement funds (QSFs) for mesh-related matters at September 30, 2019 and December 31, 2018, respectively. The remaining amount of restricted cash and cash equivalents at September 30, 2019 primarily relates to other litigation-related matters. See Note 13. Commitments and Contingencies for further information.

Restrictions on cash and cash equivalents

The following table presents current and noncurrent restricted cash and cash equivalent balances at September 30, 2019 and December 31, 2018 (in thousands):

	September 30, 2019		December 31, 2018
Restricted cash and cash equivalents—current portion (1)	$	222,491	$	305,368
Restricted cash and cash equivalents—noncurrent portion (2)	22,357		22,356
Restricted cash and cash equivalents—total (3)	$	244,848	$	327,724

__________

(1) These amounts are reported in our Condensed Consolidated Balance Sheets as Restricted cash and cash equivalents.

(2) These amounts are reported in our Condensed Consolidated Balance Sheets as Other assets.

(3)

Approximately $221.6 million and $299.7 million of our restricted cash and cash equivalents are held in qualified settlement funds (QSFs) for mesh-related matters at September 30, 2019 and December 31, 2018, respectively. The remaining amount of restricted cash and cash equivalents at September 30, 2019 primarily relates to other litigation-related matters. See Note 13. Commitments and Contingencies for further information.

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 September 30, 2019 and December 31, 2018 were as follows (in thousands):

	Fair Value Measurements at September 30, 2019 using:
	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	$	748,441	$	—	$	—	$	748,441
Liabilities:
Acquisition-related contingent consideration—current	$	—	$	—	$	20,974	$	20,974
Acquisition-related contingent consideration—noncurrent	$	—	$	—	$	38,520	$	38,520

	Fair Value Measurements at December 31, 2018 using:
	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	$	137,215	$	—	$	—	$	137,215
Liabilities:
Acquisition-related contingent consideration—current	$	—	$	—	$	36,514	$	36,514
Acquisition-related contingent consideration—noncurrent	$	—	$	—	$	80,189	$	80,189

Changes to liability for acquisition-related contingent consideration

The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Beginning of period	$	52,930		$	152,098		$	116,703		$	190,442
Amounts settled	(9,376		)	(24,564		)	(30,541		)	(73,298		)
Changes in fair value recorded in earnings	16,025			769			(26,983		)	11,731
Effect of currency translation	(85		)	167			315			(405		)
End of period	$	59,494		$	128,470		$	59,494		$	128,470

The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the nine months ended September 30, 2019 by acquisition (in thousands):

	Balance as of December 31, 2018		Changes in Fair Value Recorded in Earnings			Amounts Settled and Other			Balance as of September 30, 2019
Auxilium acquisition	$	14,157	$	1,086		$	(388	)	$	14,855
Lehigh Valley Technologies, Inc. acquisitions	34,700		10,566			(14,466		)	30,800
VOLTAREN® Gel acquisition (1)	56,240		(37,395		)	(14,601		)	4,244
Other	11,606		(1,240		)	(771		)	9,595
Total	$	116,703	$	(26,983	)	$	(30,226	)	$	59,494

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(1)

The change in fair value recorded in earnings includes the impact of certain competitive events occurring during the nine months ended September 30, 2019.

Summary of nonrecurring fair value measurements

The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2019 were as follows (in thousands):

	Fair Value Measurements during the Nine Months Ended September 30, 2019 (1) using:						Total Expense for the Nine Months Ended September 30, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Intangible assets, excluding goodwill (Note 9)	$	—	$	—	$	41,839	$	(104,660	)
Certain property, plant and equipment	—		—		—		(2,884		)
Total	$	—	$	—	$	41,839	$	(107,544	)

__________

(1)

The fair value amounts are presented as of the date of the fair value measurement as these assets are not measured at fair value on a recurring basis. Such measurements generally occur in connection with our quarter-end financial reporting close procedures.