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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2015
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:
(In millions) | As of December 31, 2015 |  | 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 |
(In millions) | As of December 31, 2014 |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 716.3 |  |  | $ | — |  |  | $ | 716.3 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |
Corporate debt securities | 1,063.0 |  |  | — |  |  | 1,063.0 |  |  | — |
Government securities | 849.8 |  |  | — |  |  | 849.8 |  |  | — |
Mortgage and other asset backed securities | 198.3 |  |  | — |  |  | 198.3 |  |  | — |
Marketable equity securities | 6.9 |  |  | 6.9 |  |  | — |  |  | — |
Derivative contracts | 72.7 |  |  | — |  |  | 72.7 |  |  | — |
Plan assets for deferred compensation | 36.9 |  |  | — |  |  | 36.9 |  |  | — |
Total | $ | 2,943.9 |  |  | $ | 6.9 |  |  | $ | 2,937.0 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivative contracts | $ | 5.4 |  |  | $ | — |  |  | $ | 5.4 |  |  | $ | — |
Contingent consideration obligations | 215.5 |  |  | — |  |  | — |  |  | 215.5 |
Total | $ | 220.9 |  |  | $ | — |  |  | $ | 5.4 |  |  | $ | 215.5 |
The fair value 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 these consolidated financial statements. Debt Instruments The fair values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
| As of December 31,
(In millions) | 2015 |  | 2014
Notes payable to Fumedica | $ | 9.4 |  |  | $ | 12.6 |
6.875% Senior Notes due March 1, 2018 | 602.6 |  |  | 634.6 |
2.900% Senior Notes due September 15, 2020 | 1,497.5 |  |  | — |
3.625% Senior Notes due September 15, 2022 | 1,014.2 |  |  | — |
4.050% Senior Notes due September 15, 2025 | 1,764.6 |  |  | — |
5.200% Senior Notes due September 15, 2045 | 1,757.6 |  |  | — |
Total | $ | 6,645.9 |  |  | $ | 647.2 |
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 these consolidated financial statements. Contingent Consideration Obligations The following table provides a roll forward of the fair values of our contingent consideration obligations which includes Level 3 measurements:
| As of December 31,
(In millions) | 2015 |  | 2014
Fair value, beginning of year | $ | 215.5 |  |  | $ | 280.9 |
Additions | 274.5 |  |  | — |
Changes in fair value | 30.5 |  |  | (38.9 | )
Payments | (14.5 | ) |  | (26.5 | )
Fair value, end of year | $ | 506.0 |  |  | $ | 215.5 |
As of December 31, 2015 and 2014, approximately $301.3 million and $200.0 million, respectively, of the fair value of our total contingent consideration obligations was reflected as a component of other long-term liabilities in our consolidated balance sheets with the remaining balance reflected as a component of accrued expenses and other. There were no changes in valuation techniques or transfers between fair value measurement levels during the years ended December 31, 2015 and 2014. During the third quarter 2014, we updated the probabilities of success related to the early stage programs acquired through our recent acquisitions. We adjusted the value of our contingent consideration liabilities to reflect these changes. The change in probability of success, combined with a delay in one of the projects, resulted in a net gain of $49.4 million during 2014, which was recorded in (gain) loss on fair value remeasurement of contingent consideration and reduced the fair value of our contingent consideration obligations. The fair values of the intangible assets and contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenues and probabilities of success. For additional information related to the valuation techniques and inputs utilized in valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies to these consolidated financial statements. In connection with our acquisition of Convergence in February 2015, we recorded a liability of $274.5 million, representing the fair value of the contingent consideration. This valuation was based on probability weighted net cash outflow projections of $450.0 million, discounted using a rate of 2%, which was the estimated cost of debt financing for market participants. This liability reflects the revised estimate from the date of acquisition for our initial clinical development plans, resulting probabilities of success and the timing of certain milestone payments. For a more detailed description of this transaction, please read Note 2, Acquisitions to these consolidated financial statements. As of December 31, 2015, the fair value of this contingent consideration obligation was $297.5 million, discounted using a rate of 3%, and approximately $197.2 million is reflected as a component of accrued expenses and other in our consolidated balance sheets as we expect to make the payment within a year. In connection with our acquisition of Stromedix in March 2012, we recorded a contingent consideration obligation of $122.2 million. As of December 31, 2015 and 2014, the fair value of this contingent consideration obligation was $131.5 million and $130.5 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $419.0 million, discounted using a rate of 2%, which is a measure of the credit risk associated with settling the liability. For 2015 compared to 2014, the net increase in the fair value of this obligation was primarily due to changes in the discount rate, partially offset by changes in the expected timing related to the achievement of certain remaining developmental milestones. Upon completion of our purchase of the noncontrolling interest in our joint venture investments in Biogen Dompé SRL and Biogen Dompé Switzerland GmbH in September 2011, we recorded a contingent consideration obligation of $38.8 million. As of December 31, 2015 and 2014, the fair value of this contingent consideration obligation was $0.0 million and $15.5 million, respectively. For 2015 compared to 2014, the net decrease in the fair value of this obligation was primarily due to payments of $14.5 million of sales-based milestones. Our obligations under this agreement were completed as of December 31, 2015. In connection with our acquisition of Biogen Idec International Neuroscience GmbH (BIN), formerly Panima Pharmaceuticals AG (Panima), in December 2010, we recorded a contingent consideration obligation of $81.2 million. As of December 31, 2015 and 2014, the fair value of this contingent consideration obligation was $77.0 million and $69.5 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $365.0 million, discounted using a rate of 3%, which is a measure of the credit risk associated with settling the liability. For 2015 compared to 2014, the net increase in the fair value of this obligation was primarily due to changes in the probability and expected timing related to the achievement of certain remaining developmental milestones and in the discount rate. Acquired IPR&D In connection with our acquisition of Convergence, we also allocated $424.6 million of the total purchase price to acquired IPR&D, which was capitalized as an intangible asset. The amount allocated to acquired IPR&D was based on significant inputs not observable in the market and thus represented a Level 3 fair value measurement. This estimate was also adjusted from our preliminary estimate as of the date of acquisition to reflect revised estimates to our initial clinical development plans, resulting probabilities of success and the timing of certain milestone payments. These assets will be tested for impairment annually until commercialization, after which time the IPR&D will be amortized over its estimated useful life. For a more detailed description of this transaction, please read Note 2, Acquisitions to these consolidated financial statements.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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