XML 47 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value Measurements
9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:
As of September 30, 2016 (In millions)
Total
 
Quoted Prices
in Active
Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
1,736.4

 
$

 
$
1,736.4

 
$

Marketable debt securities:
 
 
 
 
 
 
 
Corporate debt securities
2,632.1

 

 
2,632.1

 

Government securities
2,038.2

 

 
2,038.2

 

Mortgage and other asset backed securities
657.8

 

 
657.8

 

Marketable equity securities
29.0

 
29.0

 

 

Derivative contracts
20.3

 

 
20.3

 

Plan assets for deferred compensation
34.1

 

 
34.1

 

Total
$
7,147.9

 
$
29.0

 
$
7,118.9

 
$

Liabilities:
 
 
 
 
 
 
 
Derivative contracts
$
14.0

 
$

 
$
14.0

 
$

Contingent consideration obligations
521.6

 

 

 
521.6

Total
$
535.6

 
$

 
$
14.0

 
$
521.6


As of December 31, 2015 (In millions)
Total
 
Quoted Prices
in Active
Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
909.5

 
$

 
$
909.5

 
$

Marketable debt securities:
 
 
 
 
 
 
 
Corporate debt securities
1,510.9

 

 
1,510.9

 

Government securities
2,875.9

 

 
2,875.9

 

Mortgage and other asset backed securities
494.1

 

 
494.1

 

Marketable equity securities
37.5

 
37.5

 

 

Derivative contracts
27.2

 

 
27.2

 

Plan assets for deferred compensation
40.1

 

 
40.1

 

Total
$
5,895.2

 
$
37.5

 
$
5,857.7

 
$

Liabilities:
 
 
 
 
 
 
 
Derivative contracts
$
14.7

 
$

 
$
14.7

 
$

Contingent consideration obligations
506.0

 

 

 
506.0

Total
$
520.7

 
$

 
$
14.7

 
$
506.0


There have been no material impairments of our assets measured and carried at fair value during the three and nine months ended September 30, 2016. In addition, there were no changes in valuation techniques or inputs utilized or transfers between fair value measurement levels during the three and nine months ended September 30, 2016. The fair values of Level 2 instruments classified as cash equivalents and marketable debt securities were determined through third party pricing services. For a description of our validation procedures related to prices provided by third party pricing services, refer to Note 1, Summary of Significant Accounting Policies: Fair Value Measurements to our consolidated financial statements included in our 2015 Form 10-K.
Debt Instruments
The fair and carrying values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
 
As of September 30, 2016
 
As of December 31, 2015
(In millions)
Fair
Value
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
Notes payable to Fumedica
$
6.5

 
$
6.3

 
$
9.4

 
$
9.0

6.875% Senior Notes due March 1, 2018
591.9

 
560.2

 
602.6

 
565.3

2.900% Senior Notes due September 15, 2020
1,558.1

 
1,500.6

 
1,497.5

 
1,485.5

3.625% Senior Notes due September 15, 2022
1,070.8

 
993.0

 
1,014.2

 
992.2

4.050% Senior Notes due September 15, 2025
1,908.3

 
1,734.5

 
1,764.6

 
1,733.4

5.200% Senior Notes due September 15, 2045
2,070.5

 
1,721.4

 
1,757.6

 
1,721.1

Total
$
7,206.1

 
$
6,516.0

 
$
6,645.9

 
$
6,506.5


The fair value of our notes payable to Fumedica was estimated using market observable inputs, including current interest and foreign currency exchange rates. The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources. For additional information related to our debt instruments, please read Note 11, Indebtedness to our consolidated financial statements included in our 2015 Form 10-K.
Contingent Consideration Obligations
The following table provides a roll forward of the fair values of our contingent consideration obligations which includes Level 3 measurements:
 
For the Three Months
Ended September 30,
 
For the Nine Months
Ended September 30,
(In millions)
2016
 
2015
 
2016
 
2015
Fair value, beginning of period
$
515.7

 
$
495.7

 
$
506.0

 
$
215.5

Additions

 

 

 
274.5

Changes in fair value
5.9

 
0.2

 
18.8

 
5.9

Payments

 
(14.5
)
 
(3.2
)
 
(14.5
)
Fair value, end of period
$
521.6

 
$
481.4

 
$
521.6

 
$
481.4


As of September 30, 2016 and December 31, 2015, approximately $251.1 million and $301.3 million, respectively, of our contingent consideration obligations valued using Level 3 measurements were reflected as components of other long-term liabilities in our condensed consolidated balance sheets with the remaining balances reflected as a component of accrued expenses and other.