Document And Entity Information (USD $)
12 Months Ended
Dec. 31, 2016
Feb. 24, 2017
Jun. 30, 2016
Document Information [Line Items]
 
 
 
Entity Registrant Name
MYLAN N.V. 
 
 
Entity Central Index Key
0001623613 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2016 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 21,822,318,620 
Entity Common Stock, Shares Outstanding
 
535,496,988 
 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 998.8 
$ 1,236.0 
Accounts receivable, net
3,310.9 
2,689.1 
Inventories
2,456.4 
1,951.0 
Prepaid expenses and other current assets
756.4 
596.6 
Total current assets
7,522.5 
6,472.7 
Property, plant and equipment, net
2,322.2 
1,983.9 
Intangible assets, net
14,447.8 
7,221.9 
Goodwill
9,231.9 
5,380.1 
Deferred income tax benefit
633.2 
457.6 
Other assets
568.6 
751.5 
Total assets
34,726.2 
22,267.7 
Current liabilities:
 
 
Trade accounts payable
1,348.1 
1,109.6 
Short-term borrowings
46.4 
1.3 
Income taxes payable
97.7 
92.4 
Current portion of long-term debt and other long-term obligations
290.0 
1,077.0 
Other current liabilities
3,258.5 
1,841.9 
Total current liabilities
5,040.7 
4,122.2 
Long-term debt
15,202.9 
6,295.6 
Deferred income tax liability
2,006.4 
718.1 
Other long-term obligations
1,358.6 
1,366.0 
Total liabilities
23,608.6 
12,501.9 
Mylan N.V. shareholders’ equity
 
 
Ordinary shares — nominal value €0.01 per share as of December 31, 2016 and December 31, 2015
6.0 
5.5 
Additional paid-in capital
8,499.3 
7,128.6 
Retained earnings
4,942.1 
4,462.1 
Accumulated other comprehensive loss
(2,263.7)
(1,764.3)
Stockholders Equity Parent Before Treasury Stock
11,183.7 
9,831.9 
Noncontrolling interest
1.4 
1.4 
Less: Treasury stock — at cost
67.5 
67.5 
Total equity
11,117.6 
9,765.8 
Total liabilities and equity
$ 34,726.2 
$ 22,267.7 
Consolidated Balance Sheets (Parenthetical) (EUR €)
Dec. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Ordinary shares, par value, in USD per share
€ 0.01 
€ 0.01 
Ordinary shares, number of shares authorized
1,200,000,000 
1,200,000,000 
Ordinary shares, number of shares issued
536,639,291 
491,928,095 
Treasury stock, number of shares
1,311,193 
1,311,193 
Consolidated Statements of Operations (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenues:
 
 
 
Net sales
$ 10,967.1 
$ 9,362.6 
$ 7,646.5 
Other revenues
109.8 
66.7 
73.1 
Total revenues
11,076.9 
9,429.3 
7,719.6 
Cost of sales
6,379.9 
5,213.2 
4,191.6 
Gross profit
4,697.0 
4,216.1 
3,528.0 
Operating expenses:
 
 
 
Research and development
826.8 
671.9 
581.8 
Selling, general and administrative
2,496.1 
2,180.7 
1,625.7 
Litigation settlements and other contingencies, net
672.5 
(97.4)
(32.1)
Total operating expenses
3,995.4 
2,755.2 
2,175.4 
Earnings from operations
701.6 
1,460.9 
1,352.6 
Interest expense
454.8 
339.4 
333.2 
Other expense, net
125.1 
206.1 
44.9 
Earnings before income taxes and noncontrolling interest
121.7 
915.4 
974.5 
Income tax provision
(358.3)
67.7 
41.4 
Net earnings
480.0 
847.7 
933.1 
Net earnings attributable to the noncontrolling interest
(0.1)
(3.7)
Net earnings attributable to Mylan N.V. ordinary shareholders
$ 480.0 
$ 847.6 1
$ 929.4 
Earnings per ordinary share attributable to Mylan N.V. ordinary shareholders:
 
 
 
Basic (in USD per share)
$ 0.94 
$ 1.80 1
$ 2.49 
Diluted (in USD per share)
$ 0.92 
$ 1.70 1
$ 2.34 
Weighted average ordinary shares outstanding:
 
 
 
Basic
513.0 
472.2 1
373.7 
Diluted
520.5 
497.4 1
398.0 
Consolidated Statements of Comprehensive Earnings (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Net earnings
$ 480.0 
Other comprehensive (loss) earnings, before tax:
 
Foreign currency translation adjustment
(507.4)
Change in unrecognized gain (loss) and prior service cost related to defined benefit plans
21.4 
Net unrealized gain (loss) on marketable securities
24.6 
Other comprehensive loss, before tax
(494.4)
Income tax provision (benefit)
5.0 
Other comprehensive loss, net of tax
(499.4)
Comprehensive earnings
(19.4)
Comprehensive earnings attributable to the noncontrolling interest
Comprehensive earnings attributable to Mylan N.V. ordinary shareholders
(19.4)
Cash flow hedging relationships
 
Other comprehensive (loss) earnings, before tax:
 
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships
(31.2)
Net Investment Hedging
 
Other comprehensive (loss) earnings, before tax:
 
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships
(1.8)
Mylan N.V.
 
Net earnings
480.0 
Other comprehensive (loss) earnings, before tax:
 
Foreign currency translation adjustment
(507.4)
Change in unrecognized gain (loss) and prior service cost related to defined benefit plans
21.4 
Net unrealized gain (loss) on marketable securities
24.6 
Other comprehensive loss, before tax
(494.4)
Income tax provision (benefit)
5.0 
Other comprehensive loss, net of tax
(499.4)
Comprehensive earnings
(19.4)
Comprehensive earnings attributable to the noncontrolling interest
Comprehensive earnings attributable to Mylan N.V. ordinary shareholders
(19.4)
Mylan N.V. |
Cash flow hedging relationships
 
Other comprehensive (loss) earnings, before tax:
 
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships
(31.2)
Mylan N.V. |
Net Investment Hedging
 
Other comprehensive (loss) earnings, before tax:
 
Net unrecognized gain (loss) on derivatives in cash flow hedging relationships
$ (1.8)
Consolidated Statements of Equity (USD $)
In Millions, except Share data
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Treasury Stock
Accumulated Other Comprehensive Earnings (Loss)
Noncontrolling Interest
Balance at Dec. 31, 2013
$ 2,959.9 
$ 272.0 
$ 4,103.6 
$ 2,685.1 
$ (3,878.8)
$ (240.1)
$ 18.1 
Balance (in shares) at Dec. 31, 2013
 
543,978,030 
 
 
(172,373,899)
 
 
Net earnings
933.1 
 
 
929.4 
 
 
3.7 
Other comprehensive (loss) earnings, net of tax
(746.9)
 
 
 
 
(746.9)
 
Common stock share repurchase
(1,000.0)
 
 
 
 
 
 
Common stock share repurchase (in shares)
(28,500,000)
 
 
 
 
 
 
Stock options exercised, net of shares tendered for payment
53.8 
1.3 
52.5 
 
 
 
 
Stock options exercised, net of shares tendered for payment (in shares)
 
2,680,477 
 
 
 
 
 
Stock compensation expense
66.0 
 
66.0 
 
 
 
 
Issuance of restricted stock, net of shares withheld
(19.1)
 
(40.2)
 
21.1 
 
 
Issuance of restricted stock, net of shares withheld (in shares)
 
 
 
 
938,699 
 
 
Tax benefit of stock option plans
30.9 
 
30.9 
 
 
 
 
Stock Issued During Period, Value, Acquisitions
 
 
 
 
 
 
Other
(1.7)
 
 
 
 
(1.7)
Balance at Dec. 31, 2014
3,276.0 
273.3 
4,212.8 
3,614.5 
(3,857.7)
(987.0)
20.1 
Balance (in shares) at Dec. 31, 2014
 
546,658,507 
 
 
(171,435,200)
 
 
Common Stock, Value, Issued
5.5 
 
 
 
 
 
 
Net earnings
847.7 
 
 
847.6 
 
 
0.1 
Other comprehensive (loss) earnings, net of tax
(777.3)
 
 
 
 
(777.3)
 
Common stock share repurchase
(67.5)
 
 
 
67.5 
 
 
Common stock share repurchase (in shares)
(1,300,000)
 
 
 
1,311,193 
 
 
Stock options exercised, net of shares tendered for payment
98.0 
1.3 
96.7 
 
 
 
 
Stock options exercised, net of shares tendered for payment (in shares)
 
6,086,450 
 
 
 
 
 
Stock compensation expense
92.8 
 
92.8 
 
 
 
 
Issuance of restricted stock, net of shares withheld
(41.7)
 
(56.2)
 
14.5 
 
 
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests
(18.7)
 
 
 
 
 
(18.7)
Issuance of restricted stock, net of shares withheld (in shares)
 
 
 
 
618,338 
 
 
Tax benefit of stock option plans
52.5 
 
52.5 
 
 
 
 
Exchange of Mylan Inc. Common Stock into Mylan N.V. Ordinary Shares
 
(378,388,431)
 
 
 
 
 
Exchange of Mylan Inc. Common Shares into Mylan N.V. Ordinary Shares, Cost
 
(185.0)
185.0 
 
 
 
 
Issuance of Ordinary Shares to Mylan N.V.
 
378,388,431 
 
 
 
 
 
Stock Issued During Period, Shares, Acquisitions
 
110,000,000 
 
 
 
 
 
Stock Issued During Period, Value, Acquisitions
6,305.8 
1.3 
6,304.5 
 
 
 
 
Treasury Stock, Shares, Retired
 
(170,816,862)
 
 
170,816,862 
 
 
Treasury Stock, Retired, Cost Method, Amount
 
(85.4)
(3,757.7)
 
3,843.1 
 
 
Other
(1.8)
 
(1.8)
 
(0.1)
 
(0.1)
Additional Paid in Capital
7,128.6 
 
 
 
 
 
 
Balance at Dec. 31, 2015
9,765.8 
 
 
4,462.1 
(67.5)
(1,764.3)
1.4 
Balance (in shares) at Dec. 31, 2015
 
491,928,095 
 
 
1,311,193 
 
 
Common Stock, Value, Issued
6.0 
 
 
 
 
 
 
Net earnings
480.0 
 
 
480.0 
 
 
Other comprehensive (loss) earnings, net of tax
(499.4)
 
 
 
 
(499.4)
 
Stock options exercised, net of shares tendered for payment
13.6 
13.6 
 
 
 
 
Stock options exercised, net of shares tendered for payment (in shares)
 
1,283,580 
 
 
 
 
 
Stock compensation expense
88.9 
 
88.9 
 
 
 
 
Issuance of restricted stock, net of shares withheld
14.2 
 
(14.2)
 
 
 
Shares issued in warrant settlement
 
16,979,984 
 
 
 
 
 
Stock Issued During Period, Value, Other
 
0.2 
(0.2)
 
 
 
 
Issuance of restricted stock, net of shares withheld (in shares)
 
 
 
 
 
 
Tax benefit of stock option plans
1.2 
 
1.2 
 
 
 
 
Stock Issued During Period, Shares, Acquisitions
 
26,447,632 
 
 
 
 
 
Stock Issued During Period, Value, Acquisitions
1,281.7 
0.3 
1,281.4 
 
 
 
 
Additional Paid in Capital
8,499.3 
 
 
 
 
 
 
Balance at Dec. 31, 2016
$ 11,117.6 
 
 
$ 4,942.1 
$ (67.5)
$ (2,263.7)
$ 1.4 
Balance (in shares) at Dec. 31, 2016
 
536,639,291 
 
 
1,311,193 
 
 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Cash flows from operating activities:
 
 
 
Net earnings
$ 480.0 
$ 847.7 
$ 933.1 
Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
1,523.0 
1,032.1 
566.6 
Deferred income tax benefit
(609.5)
(115.9)
(315.2)
Litigation settlements and other contingencies, net
597.7 
15.1 
7.4 
Losses on acquisition-related foreign currency derivatives
128.6 
Loss from equity method investments
112.8 
105.1 
91.4 
Stock-based compensation expense
88.9 
92.8 
66.0 
Write off of financing fees
35.8 
99.6 
Other non-cash items
499.4 
263.2 
139.1 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(131.8)
65.8 
(231.2)
Inventories
(279.3)
(320.4)
(147.5)
Trade accounts payable
87.7 
131.8 
(0.3)
Income taxes
37.5 
(164.2)
78.5 
Other operating assets and liabilities, net
(523.6)
(44.2)
(173.1)
Net cash provided by operating activities
2,047.2 
2,008.5 
1,014.8 
Cash flows from investing activities:
 
 
 
Cash paid for acquisitions, net
(6,481.9)
(693.1)
(50.0)
Capital expenditures
(390.4)
(362.9)
(325.3)
Payments for product rights and other, net
(360.2)
(506.5)
(420.2)
Cash paid for Meda's unconditional deferred payment
(308.0)
Settlement of acquisition-related foreign currency derivatives
(128.6)
Purchase of marketable securities
(30.2)
(62.1)
(19.9)
Change in restricted cash
57.1 
21.8 
(5.1)
Proceeds from sale of marketable securities
21.5 
33.1 
20.2 
Net cash used in investing activities
(7,620.7)
(1,569.7)
(800.3)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of long-term debt
11,752.2 
3,539.2 
2,235.0 
Payment of long-term debt
(6,296.3)
(4,484.1)
(2,295.8)
Payment of financing fees
(112.6)
(130.4)
(5.8)
Proceeds from convertible note hedge
1,970.8 
Change in short-term borrowings, net
40.8 
(329.2)
(107.8)
Purchase of common stock
(67.5)
Proceeds from exercise of stock options
13.8 
97.7 
53.8 
Taxes paid related to net share settlement of equity awards
(17.5)
(31.8)
(27.7)
Contingent consideration payments
(35.5)
(150.0)
Acquisition of noncontrolling interest
(1.1)
(11.7)
Other items, net
0.8 
51.8 
30.9 
Net cash provided by (used in) financing activities
5,344.6 
604.8 
(267.4)
Effect on cash of changes in exchange rates
(8.3)
(33.1)
(12.9)
Net (decrease) increase in cash and cash equivalents
(237.2)
1,010.5 
(65.8)
Cash and cash equivalents — beginning of period
1,236.0 
225.5 
291.3 
Cash and cash equivalents — end of period
998.8 
1,236.0 
225.5 
Non-cash transactions:
 
 
 
Non-cash transactions
 
18.0 
 
Ordinary shares issued for acquisition
1,281.7 
6,305.8 
Cash paid during the period for:
 
 
 
Income taxes
285.6 
302.9 
210.5 
Interest
$ 357.2 
$ 254.7 
$ 273.8 
Nature of Operations
Nature of Operations
Nature of Operations
Mylan N.V. and its subsidiaries (collectively, the “Company,” “Mylan,” “our” or “we”) are engaged in the global development, licensing, manufacture, marketing and distribution of generic, brand and branded generic pharmaceutical products for resale by others and active pharmaceutical ingredients (“API”) through three reportable segments on a geographic basis, North America, Europe and Rest of World. Our North America segment is primarily made up of our operations in the United States (“U.S.”) and Canada and includes the operations of our previously reported Specialty segment. Our Europe segment is made up our of operations in 35 countries within the region. Our Rest of World segment is primarily made up of our operations in India, Australia, Japan and New Zealand. Also included in our Rest of World segment are our operations in emerging markets, which includes countries in Africa (including South Africa) as well as Brazil and other countries throughout Asia and the Middle East. Our API business is conducted through Mylan Laboratories Limited (“Mylan India”), which is included within our Rest of World segment. Effective October 1, 2016, the Company expanded its reporting segments as identified above; refer to Note 13 Segment Information for further information regarding the Company’s change in reporting segments.
Summary of Significant Accounting Policies
Summary Of Significant Accounting Policies
Summary of Significant Accounting Policies
Principles of Consolidation. The Consolidated Financial Statements include the accounts of Mylan and those of its wholly owned and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Investments in equity method affiliates are recorded at cost and adjusted for the Company’s share of the affiliates’ cumulative results of operations, capital contributions and distributions. Noncontrolling interests in the Company’s subsidiaries are generally recorded net of tax as net earnings attributable to noncontrolling interests. Certain prior period amounts have been reclassified to conform to the presentation for the current year. The reclassifications had no impact on the previously reported net earnings attributable to Mylan N.V. ordinary shareholders.
Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the uncertainty inherent in such estimates, actual results could differ from those estimates.
Foreign Currencies. The Consolidated Financial Statements are presented in U.S. Dollars, the reporting currency of Mylan. Statements of Operations and Cash Flows of all of the Company’s subsidiaries that have functional currencies other than U.S. Dollars are translated at a weighted average exchange rate for the period for inclusion in the Consolidated Statements of Operations and Cash Flows, whereas assets and liabilities are translated at the end of the period exchange rates for inclusion in the Consolidated Balance Sheets. Translation differences are recorded directly in shareholders’ equity as foreign currency translation adjustments. Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency, which arise as a result of changes in foreign currency exchange rates, are recorded in the Consolidated Statements of Operations.
Cash and Cash Equivalents. Cash and cash equivalents are comprised of highly liquid investments with an original maturity of three months or less at the date of purchase.
Marketable Securities. Marketable equity and debt securities classified as available-for-sale are recorded at fair value, with net unrealized gains and losses, net of income taxes, reflected in accumulated other comprehensive loss as a component of shareholders’ equity. Net realized gains and losses on sales of available-for-sale securities are computed on a specific security basis and are included in other expense, net, in the Consolidated Statements of Operations. Marketable equity and debt securities classified as trading securities are valued at the quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date, and realized and unrealized gains and losses are included in other expense, net, in the Consolidated Statements of Operations.
Concentrations of Credit Risk. Financial instruments that potentially subject the Company to credit risk consist principally of interest-bearing investments, derivatives and accounts receivable.
Mylan invests its excess cash in high-quality, liquid money market instruments, principally overnight deposits and highly rated money market funds. The Company maintains deposit balances at certain financial institutions in excess of federally insured amounts. Periodically, the Company reviews the creditworthiness of its counterparties to derivative transactions, and it does not expect to incur a loss from failure of any counterparties to perform under agreements it has with such counterparties.
Inventories. Inventories are stated at the lower of cost or market, with cost principally determined by the first-in, first-out method. Provisions for potentially obsolete or slow-moving inventory, including pre-launch inventory, are made based on our analysis of inventory levels, historical obsolescence and future sales forecasts. Included as a component of cost of sales is expense related to the net realizable value of inventories.
Property, Plant and Equipment. Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed and recorded on a straight-line basis over the assets’ estimated service lives (three to 18 years for machinery and equipment and other fixed assets and 15 to 39 years for buildings and improvements). Capitalized software is included in property, plant and equipment and is amortized over estimated useful lives ranging from three to seven years.
Intangible Assets and Goodwill. Intangible assets are stated at cost less accumulated amortization. Amortization is generally recorded on a straight-line basis over estimated useful lives ranging from three to 20 years. The Company periodically reviews the original estimated useful lives of intangible assets and makes adjustments when events indicate that a shorter life is appropriate.
The Company accounts for acquired businesses using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. The cost to acquire a business is allocated to the underlying net assets of the acquired business in proportion to their respective fair values. Amounts allocated to acquired in-process research and development (“IPR&D”) are capitalized at the date of an acquisition and are not amortized. As products in development are approved for sale, amounts are allocated to product rights and licenses and amortized over their estimated useful lives. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.
Purchases of developed products and licenses that are accounted for as an asset acquisition are capitalized as intangible assets and amortized over an estimated useful life. IPR&D assets acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses.
The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable based on management's assessment of the fair value of the Company's reporting units as compared to their related carrying value. Under the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test is performed. The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value then there is no impairment recognized. If the carrying value recorded exceeds the fair value calculated, an impairment charge is recorded for the difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations.
Contingent Consideration. Mylan records contingent consideration resulting from business acquisitions at fair value on the acquisition date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as a charge (credit) to litigation settlements and other contingencies, net within the Consolidated Statements of Operations. Changes in the fair value of the contingent consideration obligations can result from adjustments to the discount rates, payment periods and adjustments in the probability of achieving future development steps, regulatory approvals, market launches, sales targets and profitability. These fair value measurements represent Level 3 measurements, as they are based on significant inputs not observable in the market. Refer to Note 7 Financial Instruments and Risk Management for further information regarding changes recorded to contingent consideration.
Significant judgment is employed in determining the assumptions utilized as of the acquisition date and for each subsequent measurement period. Accordingly, changes in the assumptions described above could have a material impact on the Company’s consolidated financial condition and results of operations.
Impairment of Long-Lived Assets. The carrying values of long-lived assets, which include property, plant and equipment and intangible assets with finite lives, are evaluated periodically in relation to the expected future undiscounted cash flows of the underlying assets and monitored for other potential triggering events. Adjustments are made in the event that estimated undiscounted net cash flows are less than the carrying value.
Indefinite-lived intangibles, principally IPR&D, are tested at least annually for impairment or upon the occurrence of a triggering event. The impairment test for IPR&D consists of a comparison of the asset’s fair value with its carrying value. Impairment is determined to exist when the fair value is less than the carrying value of the assets being tested.
Revenue Recognition. Mylan recognizes net revenue for product sales when title and risk of loss pass to its customers and when provisions for estimates, including discounts, sales allowances, rebates, Medicaid and other government rebates, price adjustments, returns, chargebacks and other promotional programs, are reasonably determinable. Accruals for these provisions are presented in the Consolidated Financial Statements as reductions in determining net revenues and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash). No significant revisions were made to the methodology used in determining these provisions during the years ended December 31, 2016 and 2015. The following briefly describes the nature of our significant provisions and how such provisions are estimated.
Chargebacks: the Company has agreements with certain indirect customers, such as independent pharmacies, managed care organizations, hospitals, nursing homes, governmental agencies and pharmacy benefit managers, which establish contract prices for certain products. The indirect customers then independently select a wholesaler from which to actually purchase the products at these contracted prices. Alternatively, certain wholesalers may enter into agreements with indirect customers that establish contract pricing for certain products, which the wholesalers provide. Under either arrangement, Mylan will provide credit to the wholesaler for any difference between the contracted price with the indirect party and the wholesaler’s invoice price. Such credits are called chargebacks. The provision for chargebacks is based on expected sell-through levels by our wholesaler customers to indirect customers, as well as estimated wholesaler inventory levels.
Provision for returns: consistent with industry practice, Mylan maintains a return policy that allows customers to return a product generally within a specified period prior (six months) and subsequent to the expiration date (twelve months). The Company’s estimate of the provision for returns is generally based upon historical experience with actual returns.
Incentives offered to customers: these are offered to key customers to promote customer loyalty and encourage greater product sales. These programs generally provide that upon the attainment of pre-established volumes or the attainment of revenue milestones for a specified period, the customer receives credit against purchases.
The following briefly describes the nature of our other sales reserves and allowances and how such provisions are estimated:
Discounts: these are reductions to invoiced amounts offered to customers for payment within a specified period and are estimated upon sale utilizing historical customer payment experience.
Price adjustments: these are credits issued to reflect decreases in the selling prices of products and based upon the amount of product which the customer has remaining in its inventory at the time of the price reduction. In addition, there are decreases in selling prices that are discretionary decisions made by the Company to reflect market conditions. Amounts recorded for estimated price adjustments are based upon specified terms with customers, estimated launch dates of competing products and estimated declines in market price.
Governmental rebate programs: government reimbursement programs include Medicare, Medicaid, and State Pharmacy Assistance Programs established according to statute, regulations and policy. Manufacturers of pharmaceutical products that are covered by the Medicaid program are required to rebate to each state a percentage of their average manufacturer’s price for the products dispensed. Medicare beneficiaries are eligible to obtain discounted prescription drug coverage from private sector providers. In addition, certain states have also implemented supplemental rebate programs that obligate manufacturers to pay rebates in excess of those required under federal law. Our estimate of these rebates is based on the historical trends of rebates paid as well as on changes in wholesaler inventory levels and increases or decreases in the level of sales.
Other promotional programs: these are incentive programs periodically offered to our customers. The Company is able to estimate provisions for volume-based sales allowances and other promotional programs based on the specific terms in each agreement at the time of sale.
Royalty or profit share revenue from licensees, which are based on third-party sales of licensed products and technology, is recorded in accordance with the contract terms, when third-party sales can be reliably measured and collection of the funds is reasonably assured. Royalty revenue is included in other revenue in the Consolidated Statements of Operations.
The Company recognizes contract manufacturing and other service revenue when the service is performed or when the Company’s partners take ownership and title has passed, collectability is reasonably assured, the sales price is fixed or determinable, and there is persuasive evidence of an arrangement.
Research and Development. Research and development (“R&D”) expenses are charged to operations as incurred.
Income Taxes. Income taxes have been provided for using an asset and liability approach in which deferred income taxes reflect the tax consequences on future years of events that the Company has already recognized in the financial statements or tax returns. Changes in enacted tax rates or laws may result in adjustments to the recorded tax assets or liabilities in the period that the new tax law is enacted.
Earnings per Ordinary Share. Basic earnings per ordinary share is computed by dividing net earnings attributable to Mylan N.V. ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per ordinary share is computed by dividing net earnings attributable to Mylan N.V. ordinary shareholders by the weighted average number of ordinary shares outstanding during the period increased by the number of additional shares that would have been outstanding related to potentially dilutive securities or instruments, if the impact is dilutive.
On August 5, 2016, in conjunction with its acquisition of Meda AB (publ.) (“Meda”), the Company issued approximately 26.4 million Mylan N.V. ordinary shares to Meda shareholders. The impact of the issuance of these ordinary shares is included in the calculation of basic earnings per share. The weighted average impact for the year ended December 31, 2016, was approximately 10.8 million ordinary shares.
On September 15, 2008, concurrent with the sale of $575 million aggregate principal amount of Cash Convertible Notes due 2015 (the “Cash Convertible Notes”), Mylan Inc. entered into convertible note hedge and warrant transactions with certain counterparties. In connection with the consummation of the EPD Transaction (as defined below in Note 3 Acquisitions and Other Transactions), the terms of the convertible note hedge were adjusted so that the cash settlement value would be based on Mylan N.V. ordinary shares. The terms of the warrant transactions were also adjusted so that, from and after the consummation of the EPD Transaction, the Company could settle the obligations under the warrant transactions by delivering Mylan N.V. ordinary shares. Pursuant to the warrant transactions, and a subsequent amendment in 2011, there were approximately 43.2 million warrants outstanding, with approximately 41.0 million of those warrants having an exercise price of $30.00. The remaining warrants had an exercise price of $20.00. The warrants met the definition of derivatives under the guidance in the FASB Accounting Standards Codification (“ASC”) 815 Derivatives and Hedging (“ASC 815”); however, because these instruments had been determined to be indexed to the Company’s own ordinary shares and met the criteria for equity classification under ASC 815-40 Contracts in Entity’s Own Equity (“ASC 815-40”), the warrants were recorded in shareholders’ equity in the Consolidated Balance Sheets.
On April 15, 2016, in connection with the expiration and settlement of the warrants, the Company issued approximately 17.0 million Mylan N.V. ordinary shares. The impact of the issuance of these ordinary shares is included in the calculation of basic earnings per share from the date of issuance. For the year ended December 31, 2016, 12.1 million ordinary shares is the weighted average impact included in the calculation of basic earnings per ordinary share. The dilutive impact of the warrants, prior to settlement, is included in the calculation of diluted earnings per ordinary share based upon the average market value of the Company’s ordinary shares during the period as compared to the exercise price. For the years ended December 31, 2016, 2015 and 2014, warrants included in the calculation of diluted earnings per ordinary share were 4.9 million, 20.7 million and 17.7 million, respectively.

The Board of Directors periodically authorizes the Company to repurchase ordinary shares in the open market or through other methods. The Company may repurchase up to $1 billion of the Company’s ordinary shares under its current repurchase program that was announced on November 16, 2015 (the “Share Repurchase Program”), but is not obligated to acquire any particular amount of ordinary shares. During 2016, the Company did not repurchase any common shares under the Share Repurchase Program. In 2015, the Company repurchased approximately 1.3 million common shares at a cost of approximately $67.5 million and approximately 28.5 million common shares at a cost of approximately $1.0 billion in 2014. These amounts reflect transactions executed through December 31st of each year.

Basic and diluted earnings per ordinary share attributable to Mylan N.V. are calculated as follows:
 
Year Ended December 31,
(In millions, except per share amounts)
2016
 
2015 (1)
 
2014
Basic earnings attributable to Mylan N.V. ordinary shareholders (numerator):
 
 
 
 
 
Net earnings attributable to Mylan N.V. ordinary shareholders
$
480.0

 
$
847.6

 
$
929.4

Shares (denominator):
 
 
 
 
 
Weighted average ordinary shares outstanding
513.0

 
472.2

 
373.7

Basic earnings per ordinary share attributable to Mylan N.V. ordinary shareholders
$
0.94

 
$
1.80

 
$
2.49

 
 
 
 
 
 
Diluted earnings attributable to Mylan N.V. ordinary shareholders (numerator):
 
 
 
 
 
Net earnings attributable to Mylan N.V. ordinary shareholders
$
480.0

 
$
847.6

 
$
929.4

Shares (denominator):
 
 
 
 
 
Weighted average ordinary shares outstanding
513.0

 
472.2

 
373.7

Share-based awards and warrants
7.5

 
25.2

 
24.3

Total dilutive shares outstanding
520.5

 
497.4

 
398.0

Diluted earnings per ordinary share attributable to Mylan N.V. ordinary shareholders
$
0.92

 
$
1.70

 
$
2.34

____________
(1) 
As Mylan N.V. is the successor to Mylan Inc., the information set forth above refers to Mylan Inc. for periods prior to February 27, 2015, and to Mylan N.V. on and after February 27, 2015.
Additional stock awards and restricted ordinary shares were outstanding during the years ended December 31, 2016, 2015 and 2014 but were not included in the computation of diluted earnings per ordinary share for each respective period because the effect would be anti-dilutive. Excluded shares at December 31, 2016 also include certain share-based compensation awards and restricted ordinary shares whose performance conditions had not been fully met. Such excluded shares and anti-dilutive awards represented 7.8 million, 5.9 million and 6.1 million shares for the years ended December 31, 2016, 2015 and 2014, respectively.
Share-Based Compensation. The fair value of share-based compensation is recognized as expense in the Consolidated Statements of Operations over the vesting period.
Derivatives. From time to time the Company may enter into derivative financial instruments (mainly foreign currency exchange forward contracts, interest rate swaps and purchased equity call options) designed to: 1) hedge the cash flows resulting from existing assets and liabilities and transactions expected to be entered into over the next 24 months in currencies other than the functional currency, 2) hedge the variability in interest expense on floating rate debt, 3) hedge the fair value of fixed-rate notes, 4) hedge against changes in interest rates that could impact future debt issuances, 5) hedge cash or share payments required on conversion of issued convertible notes, or 6) economically hedge the foreign currency exposure associated with the purchase price of non-U.S. acquisitions. Derivatives are recognized as assets or liabilities in the Consolidated Balance Sheets at their fair value. When the derivative instrument qualifies as a cash flow hedge, changes in the fair value are included in earnings or deferred through other comprehensive earnings depending on the nature and effectiveness of the offset. If a derivative instrument qualifies as a fair value hedge, the changes in the fair value, as well as the offsetting changes in the fair value of the hedged items, are generally included in interest expense. When such instruments do not qualify for hedge accounting the changes in fair value are recorded in the Consolidated Statements of Operations within other expense, net.
Financial Instruments. The Company’s financial instruments consist primarily of short-term and long-term debt, interest rate swaps, forward contracts and option contracts. The Company’s financial instruments also include cash and cash equivalents as well as accounts and other receivables and accounts payable, the fair values of which approximate their carrying values. As a policy, the Company does not engage in speculative or leveraged transactions.
The Company uses derivative financial instruments for the purpose of hedging foreign currency and interest rate exposures, which exist as part of ongoing business operations or to hedge cash or share payments required on conversion of issued convertible notes. The Company carries derivative instruments on the Consolidated Balance Sheets at fair value, determined by reference to market data such as forward rates for currencies, implied volatilities, and interest rate swap yield curves. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.
Recent Accounting Pronouncements. In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test which previously required measurement of any goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; without exceeding the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company has elected to early adopt this guidance as of January 1, 2017 and will apply it on a prospective basis. The Company does not believe that the adoption will have a material impact on its consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (“ASU 2017-01”), which narrows the definition of a business and requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, which would not constitute the acquisition of a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company has elected to early adopt this guidance as of January 1, 2017 and will apply it on a prospective basis. The Company does not believe that the adoption will have a material impact on its consolidated financial statements.
In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash (“ASU 2016-18”), which requires that the reconciliation of the beginning of period and end of period amounts shown in the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, companies will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this guidance on its consolidated statements of cash flows and disclosures.
In October 2016, the FASB issued Accounting Standards Update 2016-16, Income Taxes (Topic 740) (“ASU 2016-16”), which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted using a modified retrospective transition approach. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.
In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230) (“ASU 2016-15”), which clarifies how certain cash receipts and cash payments should be presented in the Statement of Cash Flows. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted using a retrospective transition approach. The Company is currently assessing the impact of the adoption of this guidance on its consolidated statements of cash flows.
In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”), which simplifies the accounting for share-based compensation payments. The new standard requires all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized as income tax expense or benefit on the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with early adoption permitted. The Company will adopt this guidance at January 1, 2017 and does not believe the adoption of this guidance will have a material impact on its consolidated financial statements and disclosures.
In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 840) (“ASU 2016-02”), which provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. This guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.
In January 2016, the FASB issued Accounting Standards Update 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income (other than those accounted for under equity method of accounting). The amendments in this update also require an entity to present separately in other comprehensive earnings the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ASU 2016-01 also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.
In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09” updated with “ASU 2015-14”, “ASU 2016-08”, “ASU 2016-10”, “ASU 2016-12” and “ASU 2016-20”), which revises accounting guidance on revenue recognition that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of this guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. This guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This guidance is effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years, and can be applied using a full retrospective or modified retrospective approach. The Company is in the process of reviewing specific revenue arrangements and expects to complete the review in the third quarter of 2017. The Company is still evaluating the adoption method it will elect upon implementation.
Acquisitions and Other Transactions
Acquisitions and Other Transactions
Acquisitions and Other Transactions
Meda AB
On February 10, 2016, the Company issued an offer announcement under the Nasdaq Stockholm’s Takeover Rules and the Swedish Takeover Act (collectively, the “Swedish Takeover Rules”) setting forth a public offer to the shareholders of Meda to acquire all of the outstanding shares of Meda (the “Offer”), with an enterprise value, including the net debt of Meda, of approximately Swedish kronor (“SEK” or “kr”) 83.6 billion (based on a SEK/USD exchange rate of 8.4158) or $9.9 billion at announcement. On August 2, 2016, the Company announced that the Offer was accepted by Meda shareholders holding an aggregate of approximately 343 million shares, representing approximately 94% of the total number of outstanding Meda shares, as of July 29, 2016, and the Company declared the Offer unconditional. On August 5, 2016, settlement occurred with respect to the Meda shares duly tendered by July 29, 2016 and, as a result, Meda became a controlled subsidiary of the Company. Pursuant to the terms of the Offer, each Meda shareholder that duly tendered Meda shares into the Offer received at settlement (1) in respect of 80% of the number of Meda shares tendered by such shareholder, 165kr in cash per Meda share, and (2) in respect of the remaining 20% of the number of Meda shares tendered by such shareholder, 0.386 of the Company’s ordinary shares per Meda share (subject to treatment of fractional shares as described in the offer document published on June 16, 2016). The non-tendered shares are required to be acquired for cash through a compulsory acquisition proceeding, in accordance with the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)). The compulsory acquisition proceeding price accrues interest as required by the Swedish Companies Act. Meda’s shares were delisted from the Nasdaq Stockholm exchange on August 23, 2016.
On November 1, 2016, the Company made an offer to the remaining Meda shareholders to tender all their Meda shares for cash consideration of 161.31kr per Meda share (the “November Offer”) to provide such remaining shareholders with an opportunity to sell their shares in Meda to the Company in advance of the automatic acquisition of their shares for cash in connection with the compulsory acquisition proceeding. At the end of November 2016, Mylan completed the acquisition of approximately 19 million Meda shares duly tendered for aggregate cash consideration of approximately $330.3 million. As of March 1, 2017, Mylan obtained full legal ownership to the remaining Meda shares pursuant to the compulsory acquisition proceeding, and now owns 100% of the total number of outstanding Meda shares. During the year ended December 31, 2016, the Company recognized a foreign currency gain of approximately $30.5 million included in other expense, net on the Consolidated Statements of Operations, related to the settlement of the November Offer and the remaining obligation. At December 31, 2016, the Company’s current liability associated with the compulsory acquisition proceeding was approximately $70.2 million. As of December 31, 2016, the Company has not hedged the foreign currency risk associated with the remaining liability for the compulsory acquisition proceeding. The Meda shareholders whose shares are subject to the compulsory acquisition proceeding, representing approximately 1% of the total number of outstanding Meda shares, will automatically receive cash consideration plus statutory interest for their Meda shares as determined in the compulsory acquisition proceeding.
On August 5, 2016, the total purchase price was approximately $6.92 billion, net of cash acquired, which includes cash consideration paid of approximately $5.3 billion, the issuance of approximately 26.4 million Mylan N.V. ordinary shares at a fair value of approximately $1.3 billion based on the closing price of the Company’s ordinary shares on August 5, 2016, as reported by the NASDAQ Global Select Stock Market (“NASDAQ”), and an assumed liability of approximately $431.0 million related to the compulsory acquisition proceeding of the non-tendered Meda shares. In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction have been recorded at their respective estimated fair values at the acquisition date. Acquisition related costs of approximately $182 million were incurred during the year ended December 31, 2016, which were recorded as components of R&D expense, selling, general and administrative expense (“SG&A”), interest expense and other expense, net in the Consolidated Statements of Operations. These costs included approximately $128.6 million of losses on non-designated foreign currency forward and option contracts entered into in order to economically hedge the SEK purchase price of the Offer (explained further in Note 7 Financial Instruments and Risk Management) and approximately $45.2 million of financing fees related to the terminated 2016 Bridge Credit Agreement (explained further in Note 8 Debt).
During the year ended December 31, 2016, adjustments were made to the preliminary purchase price recorded at August 5, 2016, and are reflected as “Measurement Period Adjustments” in the table below. The preliminary allocation of the $6.92 billion purchase price to the assets acquired and liabilities assumed for Meda is as follows:
(In millions)
Preliminary Purchase Price Allocation as of August 5, 2016 (a)
 
Measurement Period Adjustments (b)
 
Preliminary Purchase Price Allocation as of December 31, 2016 (as adjusted)
Current assets (excluding inventories and net of cash acquired)
$
470.2

 
$
12.3

 
$
482.5

Inventories
465.7

 
(2.6
)
 
463.1

Property, plant and equipment
177.5

 

 
177.5

Identified intangible assets
8,060.7

 

 
8,060.7

Goodwill
3,677.6

 
(0.7
)
 
3,676.9

Other assets
9.3

 
0.2

 
9.5

Total assets acquired
12,861.0

 
9.2

 
12,870.2

Current liabilities
(1,088.4
)
 
(17.5
)
 
(1,105.9
)
Long-term debt, including current portion
(2,864.6
)
 

 
(2,864.6
)
Deferred tax liabilities
(1,628.1
)
 
14.2

 
(1,613.9
)
Pension and other postretirement benefits
(322.3
)
 

 
(322.3
)
Other noncurrent liabilities
(36.5
)
 
(5.9
)
 
(42.4
)
Net assets acquired
$
6,921.1

 
$

 
$
6,921.1

____________
(a) 
As previously reported in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2016.
(b) 
The measurement period adjustments were recorded in the fourth quarter of 2016 and are primarily related to certain working capital adjustments to reflect facts and circumstances that existed as of the acquisition date, and adjustments to deferred tax liabilities.
The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, valuations and assumptions that are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date). The primary areas subject to change relate to the finalization of the working capital components and income taxes.
The acquisition of Meda creates a more diversified and expansive portfolio of branded and generic medicines along with a strong and growing portfolio of over-the-counter (“OTC”) products. Meda has a balanced global footprint with significant scale in key geographic markets, particularly the U.S. and Europe. The acquisition of Meda expanded our presence in emerging markets, which includes countries in Africa, as well as countries throughout Asia and the Middle East, and is complemented by Mylan’s presence in India, Brazil and Africa (including South Africa). The Company recorded a step-up in the fair value of inventory of approximately $107 million at the acquisition date which was fully amortized as of December 31, 2016. The amortization of the inventory step-up was included in cost of sales in the Consolidated Statements of Operations.
The identified intangible assets of $8.06 billion are comprised of product rights and licenses that have a weighted average useful life of 20 years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. Refer to Note 7 “Financial Instruments and Risk Management” for more information on the U.S. GAAP fair value hierarchy. The goodwill of $3.68 billion arising from the acquisition consisted largely of the value of the employee workforce, and the expected value of products to be developed in the future. The final allocation of goodwill to Mylan’s reportable segments has not been completed; however, the majority of goodwill is expected to be allocated to the Europe segment. None of the goodwill recognized in this transaction is currently expected to be deductible for income tax purposes.
The settlement of the Offer constituted an Acceleration Event (as defined in the Rottapharm Agreement referred to below) under the Sale and Purchase Agreement, dated as of July 30, 2014 (the “Rottapharm Agreement”), among Fidim S.r.l., Meda Pharma S.p.A and Meda, the occurrence of which accelerated an unconditional deferred purchase price payment of approximately $308 million (€275 million) relating to Meda’s acquisition of Rottapharm S.p.A. which otherwise would have been payable in January 2017. The amount was paid during the year ended December 31, 2016.
The operating results of Meda have been included in the Company’s Consolidated Statements of Operations since the acquisition date. The total revenues of Meda for the period from the acquisition date to December 31, 2016 were $833.9 million and the net loss, net of tax, was $208.7 million, which includes the effects of the purchase accounting adjustments and acquisition related costs.
Renaissance Topicals Business
On June 15, 2016, the Company completed the acquisition of the non-sterile, topicals-focused business (the “Topicals Business”) of Renaissance Acquisition Holdings, LLC (“Renaissance”) for approximately $1.0 billion in cash at closing, including amounts deposited into escrow for potential contingent payments, subject to customary adjustments. The Topicals Business provides the Company with a complementary portfolio of approximately 25 products, an active pipeline of approximately 25 products, and an established U.S. sales and marketing infrastructure targeting dermatologists. The Topicals Business also provides an integrated manufacturing and development platform. In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fair values at the acquisition date. The U.S. GAAP purchase price was $972.7 million, which includes estimated contingent consideration of approximately $16 million at the date of acquisition related to the potential $50 million payment contingent on the achievement of certain 2016 financial targets. The $50 million contingent payment remains in escrow and is classified as restricted cash included in prepaid expenses and other current assets on the Consolidated Balance Sheets at December 31, 2016.
During the year ended December 31, 2016, adjustments were made to the preliminary purchase price recorded at June 15, 2016 and are reflected as “Measurement Period Adjustments” in the table below. The preliminary allocation of the $972.7 million purchase price to the assets acquired and liabilities assumed for the Topicals Business is as follows:
(In millions)
Preliminary Purchase Price Allocation as of June 15, 2016 (a)
 
Measurement Period Adjustments (b)
 
Preliminary Purchase Price Allocation as of December 31, 2016 (as adjusted)
Current assets (excluding inventories)
$
68.8

 
$
(11.1
)
 
$
57.7

Inventories
74.2

 

 
74.2

Property, plant and equipment
54.8

 

 
54.8

Identified intangible assets
467.0

 

 
467.0

In-process research and development
275.0

 

 
275.0

Goodwill
307.3

 
11.3

 
318.6

Other assets
0.9

 
(0.8
)
 
0.1

Total assets acquired
1,248.0

 
(0.6
)
 
1,247.4

Current liabilities
(65.0
)
 
(9.2
)
 
(74.2
)
Deferred tax liabilities
(203.6
)
 
9.0

 
(194.6
)
Other noncurrent liabilities
(6.7
)
 
0.8

 
(5.9
)
Net assets acquired
$
972.7

 
$

 
$
972.7

____________ 
(a) 
As previously reported in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2016.
(b) 
The measurement period adjustments were recorded in the fourth quarter of 2016 and are primarily related to certain working capital adjustments to reflect facts and circumstances that existed as of the acquisition date, and adjustments to deferred tax liabilities and goodwill.
The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, valuations and assumptions that are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date). The primary areas subject to change relate to the finalization of the working capital components and income taxes.
The acquisition of the Topicals Business broadened the Company’s dermatological portfolio. The amount allocated to IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that, as of the closing date of the acquisition, had not reached technological feasibility and had no alternative future use. The fair value of IPR&D of $275.0 million was based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory charges. A discount rate of 12.5% was utilized to discount net cash inflows to present values. IPR&D is accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until completion or abandonment of the projects. Upon successful completion and launch of each product, the Company will make a determination of the estimated useful life of the individual IPR&D asset and amounts will be allocated to product rights and licenses in intangible assets. The acquired IPR&D projects are in various stages of completion and the estimated costs to complete these projects total approximately $65 million, which is expected to be incurred through 2018. There are risks and uncertainties associated with the timely and successful completion of the projects included in IPR&D, and no assurances can be given that the underlying assumptions used to estimate the fair value of IPR&D will not change or the timely completion of each project to commercial success will occur.
The identified intangible assets of $467.0 million are comprised of $454.0 million of product rights and licenses that have a weighted average useful life 14 years and $13.0 million of contract manufacturing agreements that have a weighted average useful life of five years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. Refer to Note 7 “Financial Instruments and Risk Management” for more information on the U.S. GAAP fair value hierarchy.
The goodwill of $318.6 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of products to be developed in the future. All of the goodwill was assigned to the North America segment. None of the goodwill recognized in this transaction is currently expected to be deductible for income tax purposes. Acquisition related costs of approximately $3.6 million were incurred during the year ended December 31, 2016 related to this transaction, which were recorded as a component of SG&A in the Consolidated Statements of Operations. The acquisition did not have a material impact on the Company’s results of operations since the acquisition date or on a pro forma basis for the twelve months ended December 31, 2016 and 2015.
Jai Pharma Limited
On November 20, 2015, the Company completed the acquisition of certain female healthcare businesses from Famy Care Limited (such businesses, “Jai Pharma Limited”) through its wholly owned subsidiary Mylan Laboratories Limited for a cash payment of $750 million plus additional contingent payments of up to $50 million for the filing for approval with, and receipt of approval from, the U.S. Food and Drug Administration (“FDA”) of a product under development with Jai Pharma Limited.
In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fair values at the acquisition date. The U.S. GAAP purchase price was $711.1 million, which excludes the $50 million paid into escrow at closing that is contingent upon at least one of two former principal shareholders of Jai Pharma Limited continuing to provide consulting services to the acquired business for the two-year post-closing period which is being treated as compensation expense over the service period. The U.S. GAAP purchase price also excludes $7 million of working capital and other adjustments and includes estimated contingent consideration at the date of acquisition of approximately $18 million related to the $50 million contingent payment.
During the year ended December 31, 2016, adjustments were made to the preliminary purchase price recorded at November 20, 2015 and are reflected in the “Measurement Period Adjustments” below. The purchase price was finalized during the fourth quarter of 2016. The allocation of the $711.1 million purchase price to the assets acquired and liabilities assumed for Jai Pharma Limited is as follows:
(In millions)
Preliminary Purchase Price Allocation as of November 20, 2015 (a)
 
Measurement Period Adjustments (b)
 
Purchase Price Allocation as of December 31, 2016 (as adjusted)
Current assets (excluding inventories)
$
25.7

 
$
2.9

 
$
28.6

Inventories
4.9

 

 
4.9

Property, plant and equipment
17.2

 

 
17.2

Identified intangible assets
437.0

 

 
437.0

In-process research and development
98.0

 

 
98.0

Goodwill
317.2

 
6.7

 
323.9

Other assets
0.7

 

 
0.7

Total assets acquired
900.7

 
9.6

 
910.3

Current liabilities
(9.1
)
 
(5.4
)
 
(14.5
)
Deferred tax liabilities
(180.5
)
 
(4.2
)
 
(184.7
)
Net assets acquired
$
711.1

 
$

 
$
711.1

____________ 
(a) 
As previously reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as amended.
(b) 
The measurement period adjustments were recorded in the first and fourth quarters of 2016 and are related to the recognition of goodwill, deferred tax liabilities, current liabilities and adjustments to working capital components to reflect facts and circumstances that existed as of the acquisition date.
The acquisition of Jai Pharma Limited significantly broadened the Company’s women’s healthcare portfolio and strengthened its technical and manufacturing capabilities. The amount allocated to IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that, as of the closing date of the acquisition, had not reached technological feasibility and had no alternative future use. The fair value of IPR&D was based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory charges. Discount rates of 10% and 11% were utilized to discount net cash inflows to present values. IPR&D is accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until completion or abandonment of the projects. Upon successful completion and launch of each product, the Company will make a determination of the estimated useful life of the individual IPR&D asset and amounts will be allocated to product rights and licenses in intangible assets. The acquired IPR&D projects are in various stages of completion and the estimated costs to complete these products will total approximately $5 million and are expected to be incurred through 2019. There are risks and uncertainties associated with the timely and successful completion of the projects included in IPR&D, and no assurances can be given that the underlying assumptions used to estimate the fair value of IPR&D will not change or the timely completion of each project to commercial success will occur.
The identified intangible assets of $437.0 million are comprised of product rights and licenses that have weighted average useful lives of nine years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. Refer to Note 7 “Financial Instruments and Risk Management” for more information on the U.S. GAAP fair value hierarchy. The goodwill of $323.9 million arising from the acquisition consisted largely of the value of the employee workforce and the value of products to be developed in the future. A majority of the goodwill was assigned to Mylan’s Rest of World segment. During the year ended December 31, 2016, the Company received approvals from the relevant Indian regulatory authorities to legally merge its wholly owned subsidiary, Jai Pharma Limited, into Mylan Laboratories Limited. The merger resulted in the recognition of a deferred tax asset of $150 million for the tax deductible goodwill in excess of the book goodwill with a corresponding benefit to income tax provision for the year ended December 31, 2016. Acquisition related costs of approximately $8.5 million were incurred during the year ended December 31, 2015, which were recorded as a component of SG&A expense in the Consolidated Statements of Operations. On a pro forma basis, the acquisition did not have a material impact on the Company’s results of operations for the year ended December 31, 2015.
EPD Business
On July 13, 2014, Mylan N.V., Mylan Inc., and Moon of PA Inc. entered into a definitive agreement with Abbott Laboratories (“Abbott”) to acquire the EPD Business in an all-stock transaction (the “EPD Transaction”). On November 4, 2014, Mylan N.V., Mylan Inc., Moon of PA Inc. and Abbott entered into an amended and restated definitive agreement implementing the transaction. The EPD Transaction closed on February 27, 2015 (the “EPD Transaction Closing Date”), after receiving approval from Mylan Inc.’s shareholders on January 29, 2015. At closing, Abbott transferred the EPD Business to Mylan N.V., in exchange for 110 million ordinary shares of Mylan N.V. Immediately after the transfer of the EPD Business, Mylan Inc. merged with Moon of PA Inc., an indirect wholly owned subsidiary of Mylan N.V., with Mylan Inc. becoming an indirect wholly owned subsidiary of Mylan N.V. In addition, Mylan Inc.’s outstanding common stock was exchanged on a one to one basis for Mylan N.V. ordinary shares. Following the EPD Transaction, Mylan N.V.’s corporate seat is located in Amsterdam, the Netherlands, its principal executive offices are located in Hatfield, Hertfordshire, England and Mylan N.V. group’s global headquarters are located in Canonsburg, Pennsylvania.

The acquired EPD Business included more than 100 specialty and branded generic pharmaceutical products in five major therapeutic areas and included several patent protected, novel and/or hard-to-manufacture products. As a result of the acquisition, Mylan has significantly expanded and strengthened its product portfolio in Europe, Japan, Canada, Australia and New Zealand.

The purchase price for Mylan N.V. of the acquired EPD Business, which was on a debt-free basis, was $6.31 billion based on the closing price of Mylan Inc.’s stock as of the EPD Transaction Closing Date, as reported by NASDAQ. At the closing of the EPD Transaction, former shareholders of Mylan Inc. owned approximately 78% of Mylan N.V.’s ordinary shares and certain affiliates of Abbott (the “Abbott Shareholders”) owned approximately 22% of Mylan N.V.’s ordinary shares. On the EPD Transaction Closing Date, Mylan N.V., Abbott and the Abbott Shareholders entered into a shareholder agreement. Following an underwritten public offering of the Abbott Shareholders of a portion of the Mylan N.V. ordinary shares held by them, which offering closed on April 6, 2015, the Abbott Shareholders collectively owned approximately 13% of Mylan N.V.’s outstanding ordinary shares. The Company and Abbott engage in commercial transactions for the supply of products. In addition, Abbott provides certain transitional services to Mylan. The Company believes that these transactions are conducted on commercially reasonable terms.

In accordance with U.S. GAAP, Mylan N.V. used the acquisition method of accounting to account for the EPD Transaction with Mylan Inc. being treated as the accounting acquirer. Under the purchase method of accounting, the assets acquired and liabilities assumed in the EPD Transaction were recorded at their respective estimated fair values at the EPD Transaction Closing Date. The purchase price was finalized during the fourth quarter of 2015. The allocation of the $6.31 billion purchase price (as valued on the EPD Transaction Closing Date) to the assets acquired and liabilities assumed for the acquired EPD Business is as follows:
(In millions)
 
Accounts receivable
$
443.8

Inventories
198.5

Other current assets
43.0

Property, plant and equipment
140.8

Identified intangible assets
4,843.0

Goodwill
1,341.0

Other assets
41.0

Total assets acquired
7,051.1

Current liabilities
(268.9
)
Deferred tax liabilities
(421.9
)
Other non-current liabilities
(54.5
)
Net assets acquired
$
6,305.8


The identified intangible assets of $4.84 billion are comprised of $4.52 billion of product rights and licenses that have weighted average useful lives of 13 years and $320 million of contractual rights that have weighted average useful lives ranging from two to five years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. The goodwill of $1.34 billion arising from the acquisition primarily relates to the expected synergies of the combined company and the value of the employee workforce. A majority of the goodwill was assigned to the North America segment. Goodwill of $486.4 million is currently expected to be deductible for income tax purposes. Acquisition related costs of approximately $86.1 million were incurred during the year ended December 31, 2015, which were recorded as a component of SG&A in the Consolidated Statements of Operations.
The operating results of the acquired EPD Business have been included in the Company’s Consolidated Statements of Operations since February 27, 2015. The revenues of the acquired EPD Business for the period from the acquisition date to December 31, 2015 were $1.47 billion and the net loss, net of tax, was $62.4 million. The net loss, net of tax, includes the effects of the purchase accounting adjustments and acquisition related costs.
Unaudited Pro Forma Financial Results
The following table presents supplemental unaudited pro forma information for the acquisitions of Meda, as if it had occurred on January 1, 2015 and the EPD Business, as if it had occurred on January 1, 2014. The unaudited pro forma results reflect certain adjustments related to past operating performance and acquisition accounting adjustments, such as increased amortization expense based on the fair value of assets acquired, the impact of transaction costs and the related income tax effects. The unaudited pro forma results do not include any anticipated synergies which may be achievable subsequent to acquisition of Meda or the EPD Business. Accordingly, the unaudited pro forma results are not necessarily indicative of the results that actually would have occurred, nor are they indicative of the future operating results of Mylan N.V.
 
Year Ended December 31,
(Unaudited, in millions, except per share amounts)
2016
 
2015
 
2014
Total revenues
$
12,376.0

 
$
11,930.0

 
$
9,704.6

Net earnings attributable to Mylan N.V. ordinary shareholders
$
560.6

 
$
604.1

 
$
694.0

Earnings per ordinary share attributable to Mylan N.V. ordinary shareholders:
 
 
 
 
 
Basic
$
1.06

 
$
1.17

 
$
1.37

Diluted
$
1.05

 
$
1.11

 
$
1.37

Weighted average ordinary shares outstanding:
 
 
 
 
 
Basic
528.7

 
516.9

 
483.7

Diluted
536.2

 
542.1

 
508.0


Other Transactions
On January 9, 2017, the Company announced that it has agreed to acquire the global rights to Cold-EEZE® brand cold remedy line from ProPhase Labs, Inc. for approximately $50 million in cash. The closing of the transaction is subject to the approval of the shareholders of ProPhase Labs, Inc and other customary closing conditions. On February 14, 2017, the Company entered into a joint development and marketing agreement for a respiratory product that will result in approximately $50 million in expense in the first quarter of 2017.
During the year ended December 31, 2016, the Company entered into an agreement to acquire a marketed pharmaceutical product for an upfront payment of approximately $57.9 million, which is included in investing activities in the Consolidated Statements of Cash Flows. The Company accounted for this transaction as an asset acquisition and is amortizing the product over a weighted useful life of five years.
In December 2015, the Company entered into an agreement to acquire certain European intellectual property rights and marketing authorizations. The purchase price was $202.5 million including approximately $2.5 million of transaction costs. The Company accounted for this transaction as an asset acquisition. The Company paid $10 million at the closing of the transaction, which is included in investing in the Consolidated Statements of Cash Flows. The Company paid approximately $165 million during 2016, which is also included in investing in the Consolidated Statements of Cash Flows, and the remaining $25 million is expected to be paid during the first quarter of 2017, subject to certain timing conditions. The asset is being amortized over a useful life of five years.
On April 3, 2015, the Company and Stichting Preferred Shares Mylan (the “Foundation”) entered into a call option agreement (the “Call Option Agreement”). Pursuant to the terms of the Call Option Agreement, Mylan N.V. granted the Foundation a call option (the “Option”), permitting the Foundation to acquire from time-to-time Mylan N.V. preferred shares up to a maximum number equal to the total number of Mylan N.V. ordinary shares issued at such time to the extent such shares are not held by the Foundation. The exercise price of the Option is €0.01 per preferred share. On April 21, 2015, the Company received a letter from the President and Chief Executive Officer of Teva Pharmaceutical Industries Ltd. (“Teva”), containing a non-binding expression of interest from Teva to acquire Mylan for $82 per Mylan ordinary share. On July 23, 2015, in response to Teva's unsolicited expression of interest in acquiring Mylan, the Foundation exercised the Option and acquired 488,388,431 Mylan preferred shares pursuant to the terms of the Call Option Agreement. In compliance with the current statutory arrangement, 25% of the nominal value of the preferred shares, approximately $1.3 million, was paid to Mylan in cash upon issuance. Each Mylan ordinary share and preferred share is entitled to one vote on each matter properly brought before a general meeting of shareholders. On July 27, 2015, Teva announced its entry into an agreement to acquire the Generic Drug Unit of Allergan plc and the withdrawal of its unsolicited, non-binding expression of interest to acquire Mylan. On September 19, 2015, the Foundation requested the redemption of the Mylan preferred shares issued on July 23, 2015, informing Mylan that it was reasonably convinced that the influences that might adversely affect or threaten the strategy, mission, independence, continuity and/or identity of Mylan and its business in a manner that is contrary to the interest of Mylan, its business, and its stakeholders had been sufficiently addressed. Mylan ordinary shareholders approved the redemption of the preferred shares on January 7, 2016 at an extraordinary general meeting of shareholders, and on March 17, 2016 the redemption of the Mylan preferred shares became effective. The Foundation will continue to have the right to exercise the Option in the future in response to a new threat to the interests of Mylan, its businesses and its stakeholders from time to time.
During 2015, the Company entered into agreements with multiple counterparties to acquire certain marketed pharmaceutical products for upfront payments totaling approximately $360.8 million, which were paid during the year ended December 31, 2015 and are included in investing activities in the Consolidated Statements of Cash Flows. The Company will be subject to potential future sales and other contingent milestone payments under the terms of one of the agreements.
Balance Sheet Components
Balance Sheet Components
Balance Sheet Components
Selected balance sheet components consist of the following:

Accounts receivable, net
(In millions)
December 31, 2016
 
December 31, 2015
Trade receivables, net
$
3,015.4

 
$
2,434.0

Other receivables
295.5

 
255.1

Accounts receivable, net
$
3,310.9

 
$
2,689.1


Trade receivables, net includes certain sales allowances totaling $2.05 billion and $1.84 billion at December 31, 2016 and 2015, respectively. See Note 2 Summary of Significant Accounting Policies for further discussion of such allowances. Total allowances for doubtful accounts were $59.0 million and $33.6 million at December 31, 2016 and 2015, respectively. Mylan performs ongoing credit evaluations of its customers and generally does not require collateral. Approximately 45% and 42% of the accounts receivable balances represent amounts due from three customers at December 31, 2016 and 2015, respectively.
Inventories
(In millions)
December 31, 2016
 
December 31, 2015
Raw materials
$
783.4

 
$
592.4

Work in process
436.0

 
387.0

Finished goods
1,237.0

 
971.6

Inventories
$
2,456.4

 
$
1,951.0



Inventory reserves totaled $174.6 million and $157.3 million at December 31, 2016 and 2015, respectively. Included as a component of cost of sales is expense related to the net realizable value of inventories of $195.7 million, $221.4 million and $182.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Prepaid and other current assets
(In millions)
December 31, 2016
 
December 31, 2015
Prepaid expenses
$
138.3

 
$
137.3

Restricted cash
148.1

 
106.6

Available-for-sale securities
83.7

 
54.0

Fair value of financial instruments
62.2

 
64.7

Momenta collaboration prepaid expenses
30.8

 

Trading securities
29.6

 
22.8

Other current assets
263.7

 
211.2

Prepaid expenses and other current assets
$
756.4

 
$
596.6



Prepaid expenses consists primarily of prepaid rent, insurance and other individually insignificant items. At December 31, 2016, restricted cash includes $50 million paid into escrow for contingent consideration related to the acquisition of the Topicals Business.

Property, plant and equipment, net
(In millions)
December 31, 2016
 
December 31, 2015
Machinery and equipment
$
2,227.9

 
$
1,928.4

Buildings and improvements
1,106.5

 
950.6

Construction in progress
328.8

 
290.5

Land and improvements
144.7

 
124.5

Gross property, plant and equipment
3,807.9

 
3,294.0

Accumulated depreciation
1,485.7

 
1,310.1

Property, plant and equipment, net
$
2,322.2

 
$
1,983.9


Capitalized software costs included on our Consolidated Balance Sheets were $145.4 million and $130.0 million, net of accumulated depreciation, at December 31, 2016 and 2015, respectively. The Company periodically reviews the original estimated useful lives of assets and makes adjustments when appropriate. Depreciation expense was approximately $259.4 million, $186.1 million and $172.8 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Other assets
(In millions)
December 31, 2016
 
December 31, 2015
Equity method investments, clean energy investments
$
320.6

 
$
379.3

Equity method investments, Sagent Agila
75.8

 
96.2

Restricted cash

 
100.0

Other long-term assets
172.2

 
176.0

Other assets
$
568.6

 
$
751.5


During the year ended December 31, 2016, restricted cash of $100 million principally related to amounts deposited in escrow for potential contingent consideration payments related to the Company’s acquisition of Agila Specialties (“Agila”) was reclassified to prepaid expenses and other current assets or released from restrictions, in conjunction with the Strides Settlement, as discussed in Note 14 Commitments.
Trade accounts payable
(In millions)
December 31, 2016
 
December 31, 2015
Trade accounts payable
$
939.5

 
$
717.5

Other payables
408.6

 
392.1

Trade accounts payable
$
1,348.1

 
$
1,109.6


Other current liabilities
(In millions)
December 31, 2016
 
December 31, 2015
Accrued sales allowances
$
809.0

 
$
681.8

Payroll and employee benefit plan accruals
409.8

 
367.9

Legal and professional accruals, including litigation accruals
720.4

 
122.6

Contingent consideration
256.9

 
35.0

Restructuring
138.6

 
14.8

Compulsory acquisition proceeding
70.2

 

Equity method investments, clean energy investments
64.7

 
62.3

Accrued interest
41.0

 
25.1

Fair value of financial instruments
15.3

 
19.8

Other
732.6

 
512.6

Other current liabilities
$
3,258.5

 
$
1,841.9



Included in legal and professional accruals, including litigation accruals at December 31, 2016 was $465 million for a settlement with the U.S. Department of Justice and other government agencies related to the classification of the EpiPen® Auto-Injector and EpiPen Jr® Auto-Injector (collectively, “EpiPen® Auto-Injector”) for purposes of the Medicaid Drug Rebate Program (the “Medicaid Drug Rebate Program Settlement”) and approximately $96.5 million related to the Modafinil antitrust litigation matter, as discussed further in Note 18 Litigation.
At the close of the Meda transaction, the Company recorded a current liability of approximately $431.0 million related to the purchase of the non-tendered shares of Meda pursuant to the compulsory acquisition proceeding. In conjunction with the November Offer, Meda shareholders, holding approximately 19 million of the outstanding non-tendered shares, tendered their shares to the Company and in the fourth quarter of 2016, the Company paid approximately $330.3 million for the tendered Meda shares. At December 31, 2016, the Company’s current liability associated with the compulsory acquisition proceeding was approximately $70.2 million. Included in other current liabilities at December 31, 2016 was approximately $316.9 million of accrued expenses assumed from Meda. Refer to Note 16 Restructuring for further information regarding the $138.6 million recorded related to restructuring costs at December 31, 2016.
Other long-term obligations
(In millions)
December 31, 2016
 
December 31, 2015
Employee benefit liabilities
$
396.7

 
$
118.1

Equity method investments, clean energy investments
302.3

 
357.0

Contingent consideration
307.7

 
491.4

Tax contingencies
239.3

 
247.2

Other
112.6

 
152.3

Other long-term obligations
$
1,358.6

 
$
1,366.0

Equity Method Investments
Equity Method Investments
Equity Method Investments
The Company has five equity method investments in limited liability companies that own refined coal production plants (the “clean energy investments”), whose activities qualify for income tax credits under Section 45 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). In addition, the Company holds a 50% interest in Sagent Agila, which is accounted for using the equity method of accounting. Sagent Agila was established to allow for the development, manufacturing and distribution of certain generic injectable products in the U.S. market. The carrying values and respective balance sheet locations of the Company’s clean energy investments and interest in Sagent Agila was as follows at December 31, 2016 and 2015, respectively:
(In millions)
December 31, 2016
 
December 31, 2015
Clean energy investments:
 
 
 
Other assets
$
320.6

 
$
379.3

Total liabilities
367.0

 
419.3

Included in other current liabilities
64.7

 
62.3

Included in other long-term obligations
302.3

 
357.0

Sagent Agila:
 
 
 
Other assets
$
75.8

 
$
96.2


Summarized financial information, in the aggregate, of the Company’s equity method investments on a 100% basis as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014 are as follows:
(In millions)
December 31, 2016
 
December 31, 2015
Current assets
$
75.6

 
$
97.6

Noncurrent assets
12.3

 
14.6

Total assets
87.9

 
112.2

Current liabilities
50.7

 
74.9

Noncurrent liabilities
2.6

 
2.6

Total liabilities
53.3

 
77.5

Net assets
$
34.6

 
$
34.7

(In millions)
Year Ended December 31,
 
2016
 
2015
 
2014
Total revenues
$
589.4

 
$
774.6

 
$
536.8

Gross (loss) profit
(13.2
)
 
(11.3
)
 
(7.8
)
Operating and non-operating expense
22.2

 
25.6

 
16.9

Net loss
$
(35.4
)
 
$
(36.9
)
 
$
(24.7
)

The Company’s net losses from equity method investments includes amortization expense related to the excess of the cost basis of the Company’s investment to the underlying assets of each individual investee. For the years ended December 31, 2016, 2015 and 2014, the Company’s share of the net loss of the equity method investments was $112.8 million, $105.1 million and $91.4 million, respectively, which was recognized as a component of other expense, net in the Consolidated Statements of Operations. The Company recognizes the income tax credits and benefits from the clean energy investments as part of its provision for income taxes.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 are as follows:
(In millions)
North America
 
Europe
 
Rest of World
 
Total
Balance at December 31, 2014:
 
 
 
 
 
 
 
Goodwill
$
1,815.9

 
$
1,123.5

 
$
1,494.9

 
$
4,434.3

Accumulated impairment losses
(385.0
)
 

 

 
(385.0
)
 
1,430.9

 
1,123.5

 
1,494.9

 
4,049.3

Acquisitions (1)
1,450.3

 
15.7

 
192.2

 
1,658.2

Reclassifications

 
10.1

 
(10.1
)
 

Foreign currency translation
(87.5
)
 
(148.8
)
 
(91.1
)
 
(327.4
)
 
2,793.7

 
1,000.5

 
1,585.9

 
5,380.1

Balance at December 31, 2015:
 
 
 
 
 
 
 
Goodwill
3,178.7

 
1,000.5

 
1,585.9

 
5,765.1

Accumulated impairment losses
(385.0
)
 

 

 
(385.0
)
 
2,793.7

 
1,000.5

 
1,585.9

 
5,380.1

Acquisitions and measurement period adjustments (1)
818.6

 
2,993.0

 
190.6

 
4,002.2

Foreign currency translation
(6.9
)
 
(134.4
)
 
(9.1
)
 
(150.4
)
 
3,605.4

 
3,859.1

 
1,767.4

 
9,231.9

Balance at December 31, 2016:
 
 
 
 
 
 
 
Goodwill
3,990.4

 
3,859.1

 
1,767.4

 
9,616.9

Accumulated impairment losses
(385.0
)
 

 

 
(385.0
)
 
$
3,605.4

 
$
3,859.1

 
$
1,767.4

 
$
9,231.9


____________
(1) 
In 2015, includes goodwill related to the acquisition of the EPD Business and Jai Pharma Limited totaling approximately $1.34 billion and $317.2 million, respectively. In 2016, includes measurement period adjustments related to the acquisition of Jai Pharma Limited and the recognition of goodwill related to the acquisitions of Meda and the Topicals Business totaling approximately $6.7 million, $3.68 billion and $318.6 million, respectively.
Intangible assets consist of the following components at December 31, 2016 and 2015:
(In millions)
Weighted
Average Life
(Years)
 
Original
Cost
 
Accumulated
Amortization
 
Net Book
Value
December 31, 2016
 
 
 
 
 
 
 
Amortized intangible assets:
 
 
 
 
 
 
 
Product rights and licenses
15
 
$
16,968.4

 
$
3,585.7

 
$
13,382.7

Patents and technologies
20
 
116.6

 
108.5

 
8.1

Other(1)
6
 
465.9

 
330.0

 
135.9

 
 
 
17,550.9

 
4,024.2

 
13,526.7

In-process research and development
 
 
921.1

 

 
921.1

 
 
 
$
18,472.0

 
$
4,024.2

 
$
14,447.8

December 31, 2015
 
 
 
 
 
 
 
Amortized intangible assets:
 
 
 
 
 
 
 
Product rights and licenses
11
 
$
8,848.6

 
$
2,652.7

 
$
6,195.9

Patents and technologies
20
 
116.6

 
103.8

 
12.8

Other(1)
6
 
465.3

 
189.8

 
275.5

 
 
 
9,430.5

 
2,946.3

 
6,484.2

In-process research and development
 
 
737.7

 

 
737.7

 
 
 
$
10,168.2

 
$
2,946.3

 
$
7,221.9

____________
(1) 
Other intangibles consist principally of customer lists, contractual rights and other contracts.
During the year ended December 31, 2016, the Company acquired product rights and licenses from Meda and the Topicals Business totaling approximately $8.06 billion and $454.0 million, respectively. The Company also acquired IPR&D totaling approximately $275.0 million from the Topicals Business. During the years ended December 31, 2016 and 2015, approximately $32.6 million and $59.4 million, respectively, was reclassified from acquired IPR&D to product rights and licenses. During the years ended December 31, 2016 and 2015, the Company acquired approximately $341 million and $425 million, respectively, for products rights and licenses related to certain marketed pharmaceutical products with multiple counterparties, as further described in Note 3 Acquisitions and Other Transactions.

Product rights and licenses are primarily comprised of the products marketed at the time of acquisition. During 2016, the Company refined its classifications for therapeutic franchises and prior year amounts have been reclassified to conform to the current year presentation. These product rights and licenses relate to numerous individual products, the net book value of which, by therapeutic franchise, is as follows:
(In millions)
December 31, 2016
 
December 31, 2015
Central Nervous System and Anesthesia
$
2,172.0

 
$
949.8

Dermatology
2,070.2

 
52.9

Gastroenterology
1,906.2

 
1,289.9

Diabetes and Metabolism
1,395.7

 
720.1

Cardiovascular
1,718.0

 
1,105.5

Respiratory and Allergy
1,691.0

 
209.1

Infectious Disease
490.6

 
368.7

Oncology
413.4

 
169.3

Women’s Healthcare
371.4

 
432.4

Immunology
284.9

 
322.7

Other (1)
869.3

 
575.5

 
$
13,382.7

 
$
6,195.9

____________
(1)
Other consists of numerous therapeutic classes, none of which individually exceeds 5% of total product rights and licenses.
Amortization expense and intangible asset impairment charges, which are included as a component of amortization expense, which is classified primarily within cost of sales in the Consolidated Statements of Operations, for the years ended December 31, 2016, 2015 and 2014 was as follows:
 
Year ended December 31,
(In millions)
2016
 
2015
 
2014
Intangible asset amortization expense
$
1,195.3

 
$
814.7

 
$
366.1

Intangible asset impairment charges
68.3

 
31.3

 
27.7

Total intangible asset amortization expense (including impairment charges)
$
1,263.6

 
$
846.0

 
$
393.8


Indefinite-lived intangibles, such as the Company’s IPR&D assets, are tested at least annually for impairment, but they may be tested whenever certain impairment indicators are present. Impairment is determined to exist when the fair value is less than the carrying value of the assets being tested. In addition, the Company monitors long-lived intangible assets for potential triggering events or changes in circumstances that would indicate that the carrying amount of the asset may not be recoverable. During the year ended December 31, 2016, the Company recorded impairment charges on certain product rights and licenses and IPR&D assets of approximately $18.4 million and $49.9 million, respectively, which were recorded as components of amortization expense. During the years ended December 31, 2016 and 2015, the Company revised its estimated useful lives on certain intangible assets. During the year ended December 31, 2014, the Company recorded impairment charges of approximately $10 million related to product rights and licenses, which was recorded as a component of amortization expense.
The Company performed its annual impairment review of certain IPR&D assets during the third and fourth quarters of 2016. This review of IPR&D assets principally related to assets acquired as part of the Jai Pharma Limited acquisition in 2015, the Agila acquisition in December 2013, the respiratory delivery platform acquisition in December 2011 and the Bioniche Pharma acquisition in September 2010. The impairment charges recorded resulted from the Company’s estimate of the fair value of the assets, which was based upon updated forecasts and commercial development plans, compared with the assigned fair values at the acquisition date. The fair value was determined based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note 7 Financial Instruments and Risk Management. The fair value of IPR&D was calculated as the present value of the estimated future net cash flows using a market rate of return. The assumptions inherent in the estimated future cash flows include, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Discount rates ranging between 8.5% and 11.9% were utilized in the valuations performed during the third and fourth quarters of 2016. Discount rates ranging between 9.8% and 11.8% were utilized in valuation during the third and fourth quarters of 2015. Changes to any of the Company’s assumptions may result in a future reduction to the estimated fair value of the IPR&D asset.
Intangible asset amortization expense for the years ended December 31, 2017 through 2021 is estimated to be as follows:
(In millions)
 
2017
$
1,243

2018
1,206

2019
1,106

2020
1,014

2021
923

Financial Instruments and Risk Management
Financial Instruments And Risk Management
Financial Instruments and Risk Management
The Company is exposed to certain financial risks relating to its ongoing business operations. The primary financial risks that are managed by using derivative instruments are foreign currency risk, interest rate risk and equity risk.

Foreign Currency Risk Management
In order to manage foreign currency risk, the Company enters into foreign exchange forward contracts to mitigate risk associated with changes in spot exchange rates of mainly non-functional currency denominated assets or liabilities. The foreign exchange forward contracts are measured at fair value and reported as current assets or current liabilities on the Consolidated Balance Sheets. Any gains or losses on the foreign exchange forward contracts are recognized in earnings in the period incurred in the Consolidated Statements of Operations.

During 2016, in order to economically hedge the foreign currency exposure associated with the expected payment of the Swedish krona-denominated cash portion of the purchase price of the Offer, the Company entered into a series of non-designated foreign exchange forward and option contracts with a total notional amount of 45.2kr billion. During the year ended December 31, 2016, the Company recognized losses of $128.6 million for the changes in fair value related to these contracts which is included in other expense, net in the Consolidated Statements of Operations. These contracts were settled in 2016. As of December 31, 2016, the Company has not hedged the foreign currency risk associated with the remaining liability for the compulsory acquisition proceeding of approximately $70.2 million.
The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international subsidiaries. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities on the Consolidated Balance Sheets. Any changes in fair value are included in earnings or deferred through accumulated other comprehensive earnings (“AOCE”), depending on the nature and effectiveness of the offset.
Following the acquisition of Meda, the Company designated certain Euro borrowings as a hedge of its investment in certain Euro-functional currency subsidiaries in order to manage the foreign currency translation risk. The notional amount of the net investment hedges was €288 million and consisted primarily of Euro denominated debt which had a maturity date in August 2017. Borrowings designated as net investment hedges are marked to market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of AOCE until the sale or substantial liquidation of the underlying net investments. In the fourth quarter of 2016, the Company repaid the related Euro borrowings, and as such, the hedging designation was terminated. The Company recorded no ineffectiveness from its net investment hedges for the year ended December 31, 2016.
During the fourth quarter of 2016, the Company issued approximately €3.0 billion of Euro Notes, as defined in Note 8 Debt. During the year ended December 31, 2016, the Company recognized approximately $32.0 million of mark-to-market gains in other expense, net in the Consolidated Statements of Operations, related to the Euro Notes. During this time, the Company was partially managing the related foreign exchange risk of the Euro Notes through certain Euro denominated financial assets. In the first quarter of 2017, the Euro Notes were designated as a hedge of its investment in certain Euro-functional currency subsidiaries in order to manage the foreign currency translation risk.
Interest Rate Risk Management
The Company enters into interest rate swaps in order to manage interest rate risk associated with the Company’s fixed- and floating-rate debt. These derivative instruments are measured at fair value and reported as current assets or current liabilities on the Consolidated Balance Sheets.

Cash Flow Hedging Relationships

The Company’s interest rate swaps designated as cash flow hedges fix the interest rate on a portion of the Company’s variable-rate debt or hedge part of the Company’s interest rate exposure associated with the variability in the future cash flows attributable to changes in interest rates. Any changes in fair value are included in earnings or deferred through AOCE, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the Consolidated Statements of Operations.

Following the acquisition of Meda, the Company designated certain interest rate swaps with a notional amount of €750 million as cash flow hedges. The maturity date of these swaps was June 2017. In the fourth quarter of 2016, the Company repaid the related debt instrument and terminated these swaps.
In anticipation of issuing fixed-rate debt, the Company may use treasury rate locks or forward starting interest rate swaps that are designated as cash flow hedges. In September 2015, the Company entered into a series of forward starting swaps to hedge against changes in interest rates related to future debt issuances. These swaps were designated as cash flow hedges of expected future issuances of long-term bonds. The Company executed $500 million of notional value swaps with an effective date of June 2016 and an additional $500 million of notional value swaps with an effective date of November 2016. Both sets of swaps had a maturity of ten years. As discussed further in Note 8 Debt, during the second quarter of 2016, the Company issued $2.25 billion in an aggregate principal amount of 3.950% Senior Notes due 2026 and the Company terminated these swaps. As a result of this termination, the Company recorded losses of $64.9 million in AOCE, which are being amortized over the life of the 3.950% Senior Notes due 2026. In addition, during the second quarter of 2016, approximately $2.1 million of hedge ineffectiveness related to these forward starting swaps was recorded in interest expense on the Consolidated Statements of Operations.
In August 2014, the Company entered into a series of forward starting swaps to hedge against changes in interest rates that could impact future debt issuances. These swaps were designed as cash flow hedges of expected future issuances of long-term bonds. The Company executed $575 million of notional value swaps with an effective date of September 2015. These swaps had a maturity of ten years. In September 2015, the Company terminated these swaps, and as a result of this termination, the Company has recognized losses, net of tax, of approximately $22.4 million, which were recorded in AOCE. During the fourth quarter of 2015, the Company issued $500 million aggregate principal amount of 3.000% Senior Notes due December 2018 and $500 million aggregate principal amount of 3.750% Senior Notes due December 2020. The Company recognized approximately $11.8 million of the loss, net of tax, previously recorded to AOCE in other expense, net during the fourth quarter of 2015. The remaining loss, net of tax, of approximately $10.6 million will be amortized over the remaining lives of the 3.000% Senior Notes due December 2018 and 3.750% Senior Notes due December 2020.
In April 2013, the Company entered into a series of forward starting swaps to hedge against changes in interest rates that could impact future debt issuances. These swaps were designated as cash flow hedges of expected future issuances of long-term bonds. The Company executed $1 billion of notional value swaps with an effective date of August 2015. These swaps had a maturity of ten years. In August 2015, the Company terminated these swaps. As a result of this termination, the Company incurred losses, net of tax, of approximately $32.9 million, which were recorded in AOCE in the third quarter of 2015. During the fourth quarter of 2015, the balance in AOCE was recognized in other expense, net as the forecasted transaction was no longer probable of occurring.
In December 2014, the Company terminated certain forward starting swaps designated as cash flow hedges of expected future issuances of long-term bonds. As a result of this termination, the Company has recognized a loss of approximately $14.6 million during the year ended December 31, 2014.

Fair Value Hedging Relationships

The Company's interest rate swaps designated as fair value hedges convert the fixed rate on a portion of the Company's fixed-rate senior notes to a variable rate. Any changes in the fair value of these derivative instruments, as well as the offsetting change in fair value of the portion of the fixed-rate debt being hedged, is included in interest expense. In November 2014, in conjunction with the redemption of the Company’s 6.000% Senior Notes due 2018, the Company’s counterparties exercised their right to terminate certain swaps that had been designated as a fair value hedge on a portion of the Company’s 6.000% Senior Notes due 2018. As a result, during the year ended December 31, 2014, the Company received a payment of approximately $15 million related to the swap termination, which was recognized in other expense, net.

In June 2013, the Company entered into interest rate swaps with a notional value of $500 million that were designated as hedges of the Company’s 1.800% Senior Notes due 2016. In October 2014, the Company terminated these fair value swaps. In December 2013, the Company entered into interest rate swaps with a notional value of $750 million that were designated as hedges of the Company’s 3.125% Senior Notes due 2023. The variable rate was 1.30% at December 31, 2016. The total notional amount of the Company’s interest rate swaps on fixed-rate debt was $750 million as of December 31, 2016 and 2015.
Equity Risk Management
In connection with the consummation of the EPD Transaction, Mylan Inc. and Mylan N.V. executed a supplemental indenture that amended the indenture governing the Cash Convertible Notes so that, among other things, all relevant determinations for purposes of the cash conversion rights to which holders were entitled from time-to-time in accordance with such indenture were made by reference to the Mylan N.V. ordinary shares. As adjusted in connection with the consummation of the EPD Transaction, holders could convert their Cash Convertible Notes subject to certain conversion provisions determined by a) the market price of Mylan N.V.’s ordinary shares, b) specified distributions to common shareholders, c) a fundamental change, as defined in the indenture governing the Cash Convertible Notes, or d) certain time periods specified in the indenture governing the Cash Convertible Notes. The conversion feature could only be settled in cash and, therefore, it was bifurcated from the Cash Convertible Notes and treated as a separate derivative instrument. In order to offset the cash flow risk associated with the cash conversion feature, the Company entered into a convertible note hedge with certain counterparties. In connection with the consummation of the EPD Transaction, the terms of the convertible note hedge were adjusted so that the cash settlement value would be based on Mylan N.V. ordinary shares. Both the cash conversion feature and the purchased convertible note hedge were measured at fair value with gains and losses recorded in the Company’s Consolidated Statements of Operations. The Company’s convertible note hedge on its Cash Convertible Notes, which was entered into in order to offset the cash flow risk associated with the cash conversion feature of the Cash Convertible Notes, was settled in conjunction with the maturity and full redemption of the Cash Convertible Notes on September 15, 2015.

Also, in conjunction with the issuance of the Cash Convertible Notes, Mylan Inc. entered into several warrant transactions with certain counterparties. In connection with the consummation of the EPD Transaction, the terms of the warrants were also adjusted so that the Company was able settle the obligations under the warrant transaction by delivering Mylan N.V. ordinary shares. Settlement of the warrants occurred during the second quarter of 2016. The warrants met the definition of derivatives; however, because these instruments had been determined to be indexed to the Company’s own ordinary shares, and were recorded in shareholders’ equity in the Company’s Consolidated Balance Sheets, the instruments were exempt from the scope of U.S. GAAP guidance regarding accounting for derivative instruments and hedging activities and were not subject to the fair value provisions set forth therein.

The Company regularly reviews the creditworthiness of its financial counterparties and does not expect to incur a significant loss from failure of any counterparties to perform under any agreements. The Company is not subject to any obligations to post collateral under derivative instrument contracts. Certain derivative instrument contracts entered into by the Company are governed by master agreements, which contain credit-risk-related contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an event of default on other specified borrowings. The Company records all derivative instruments on a gross basis in the Consolidated Balance Sheets. Accordingly, there are no offsetting amounts that net assets against liabilities.

Fair Values of Derivative Instruments
Derivatives Designated as Hedging Instruments
 
Asset Derivatives
 
December 31, 2016
 
December 31, 2015
(In millions)
Balance Sheet Location
 
Fair Value
 
Balance Sheet Location
 
Fair Value
Interest rate swaps
Prepaid expenses and other current assets
 
$
26.2

 
Prepaid expenses and other current assets
 
$
36.3

Foreign currency forward contracts
Prepaid expenses and other current assets
 
21.9

 
Prepaid expenses and other current assets
 
8.4

Total
 
$
48.1

 
 
 
$
44.7


 
Liability Derivatives
 
December 31, 2016
 
December 31, 2015
(In millions)
Balance Sheet Location
 
Fair Value
 
Balance Sheet Location
 
Fair Value
Interest rate swaps
Other current liabilities
 
$

 
Other current liabilities
 
$
10.5

Total
 
$

 
 
 
$
10.5



Fair Values of Derivative Instruments
Derivatives Not Designated as Hedging Instruments
 
Asset Derivatives
 
December 31, 2016
 
December 31, 2015
(In millions)
Balance Sheet Location
 
Fair Value
 
Balance Sheet Location
 
Fair Value
Foreign currency forward contracts
Prepaid expenses and other current assets
 
$
14.0

 
Prepaid expenses and other current assets
 
$
20.0

Total
 
$
14.0

 
 
 
$
20.0

 
Liability Derivatives
 
December 31, 2016
 
December 31, 2015
(In millions)
Balance Sheet Location
 
Fair Value
 
Balance Sheet Location
 
Fair Value
Foreign currency forward contracts
Other current liabilities
 
$
15.3

 
Other current liabilities
 
$
9.3

Total
 
$
15.3

 
 
 
$
9.3



The Effect of Derivative Instruments on the Consolidated Statements of Operations
Derivatives in Fair Value Hedging Relationships
 
Location of (Loss) or Gain Recognized in Earnings on Derivatives
Amount of (Loss) or Gain Recognized in Earnings on Derivatives
 
Year Ended December 31,
(In millions)
2016
 
2015
 
2014
Interest rate swaps
Interest expense
$
(10.0
)
 
$
5.9

 
$
35.6

Total
$
(10.0
)
 
$
5.9