agn-10q_20150930.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Number of shares of Allergan plc’s Ordinary Shares outstanding on October 29, 2015: 394,124,530. There is no trading market for securities of Warner Chilcott Limited, all of which are indirectly wholly-owned by Allergan plc.

This Quarterly Report on Form 10-Q is a combined report being filed separately by two different registrants: Allergan plc and Warner Chilcott Limited. Warner Chilcott Limited is an indirect wholly-owned subsidiary of Allergan plc. The information in this Quarterly Report on Form 10-Q is equally applicable to Allergan plc and Warner Chilcott Limited, except where otherwise indicated. Warner Chilcott Limited meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and, to the extent applicable, is therefore filing this form with a reduced disclosure format.

	September 30,			December 31,
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	2,063.9		$	250.0
Marketable securities		7.0			1.0
Accounts receivable, net		2,143.2			1,107.9
Inventories		1,285.4			976.7
Prepaid expenses and other current assets		748.6			478.8
Current assets held for sale		3,802.1			3,819.2
Deferred tax assets		6,608.5			477.0
Total current assets		16,658.7			7,110.6
Property, plant and equipment, net		1,569.9			283.4
Investments and other assets		498.3			153.3
Non current assets held for sale		10,573.7			8,213.8
Deferred tax assets		67.2			34.7
Product rights and other intangibles		67,133.4			16,096.6
Goodwill		46,315.1			20,865.6
Total assets	$	142,816.3		$	52,758.0
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	4,513.5		$	2,995.7
Income taxes payable		84.7			33.9
Current portion of long-term debt and capital leases		2,035.4			693.4
Deferred revenue		32.9			17.8
Current liabilities held for sale		1,449.5			1,465.7
Deferred tax liabilities		17.0			41.0
Total current liabilities		8,133.0			5,247.5

Long-term debt and capital leases		40,648.1			14,837.7
Deferred revenue		26.8			26.3
Other long-term liabilities		1,135.1			227.0
Long-term liabilities held for sale		639.9			540.7
Other taxes payable		760.8			789.5
Deferred tax liabilities		13,992.5			2,753.8
Total liabilities		65,336.2			24,422.5
Commitments and contingencies
Equity:
Preferred shares, $0.0001 par value per share, 5.1 million shares authorized,
5.1 million and zero shares issued and outstanding, respectively		4,929.7			-
Ordinary shares; $0.0001 par value per share; 1,000.0 million shares authorized, 394.0 million and 265.9 million shares issued and outstanding, respectively		-			-
Additional paid-in capital		68,241.4			28,994.7
Retained Earnings / (accumulated deficit)		4,347.9			(198.2	)
Accumulated other comprehensive (loss)		(45.3	)		(465.4	)
Total shareholders’ equity		77,473.7			28,331.1
Noncontrolling interest		6.4			4.4
Total equity		77,480.1			28,335.5
Total liabilities and equity	$	142,816.3		$	52,758.0

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net revenues	$	4,088.9		$	2,150.8		$	10,873.5		$	4,323.3
Operating expenses:
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)		1,242.9			1,183.1			3,699.9			2,371.4
Research and development		1,260.5			276.6			1,927.9			368.6
Selling and marketing		721.8			540.2			2,130.4			799.3
General and administrative		351.4			422.9			1,222.7			740.4
Amortization		1,560.2			705.0			3,866.1			1,192.2
In-process research and development impairments		300.0			305.0			497.6			320.0
Asset sales and impairments, net		(4.4	)		-			3.1			(5.3	)
Total operating expenses		5,432.4			3,432.8			13,347.7			5,786.6
Operating (loss)		(1,343.5	)		(1,282.0	)		(2,474.2	)		(1,463.3	)

Interest income		3.8			1.6			8.2			3.8
Interest expense		(340.2	)		(132.1	)		(852.0	)		(284.0	)
Other (expense) income, net		0.2			29.4			(238.1	)		15.3
Total other income (expense), net		(336.2	)		(101.1	)		(1,081.9	)		(264.9	)
(Loss) before income taxes and noncontrolling interest		(1,679.7	)		(1,383.1	)		(3,556.1	)		(1,728.2	)
(Benefit) for income taxes		(824.9	)		(221.0	)		(1,456.9	)		(306.6	)
Net (loss) from continuing operations, net of tax		(854.8	)		(1,162.1	)		(2,099.2	)		(1,421.6	)
Income from discontinued operations, net of tax		6,157.4			119.3			6,647.9			524.3
Net income / (loss)		5,302.6			(1,042.8	)		4,548.7			(897.3	)
(Income) attributable to noncontrolling interest		(1.4	)		-			(2.6	)		(0.3	)
Net income / (loss) attributable to shareholders		5,301.2			(1,042.8	)		4,546.1			(897.6	)
Dividends on preferred shares		69.6			-			162.4			-
Net income / (loss) attributable to ordinary shareholders	$	5,231.6		$	(1,042.8	)	$	4,383.7		$	(897.6	)

Income / (loss) per share attributable to ordinary shareholders - basic:
Continuing operations	$	(2.35	)	$	(4.40	)	$	(6.31	)	$	(6.96	)
Discontinued operations		15.64			0.45			18.52			2.57
Net income / (loss) per share - basic	$	13.29		$	(3.95	)	$	12.21		$	(4.39	)
Income / (loss) per share attributable to ordinary shareholders - diluted:
Continuing operations	$	(2.35	)	$	(4.40	)	$	(6.31	)	$	(6.96	)
Discontinued operations		15.64			0.45			18.52			2.57
Net income / (loss) per share - diluted	$	13.29		$	(3.95	)	$	12.21		$	(4.39	)

Weighted average shares outstanding:
Basic		393.6			264.3			358.9			204.4
Diluted		393.6			264.3			358.9			204.4

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014

Net income / (loss)	$	5,302.6		$	(1,042.8	)	$	4,548.7		$	(897.3	)
Other comprehensive (loss) / income
Foreign currency translation (losses) / gains		(42.4	)		(308.3	)		409.0			(309.2	)
Unrealized gains / (losses), net of tax		7.5			(2.3	)		11.1			(1.6	)
Reclassification for gains included in net income, net of tax		-			-			-			-
Total other comprehensive (loss) / income, net of tax		(34.9	)		(310.6	)		420.1			(310.8	)
Comprehensive income / (loss)		5,267.7			(1,353.4	)		4,968.8			(1,208.1	)
Comprehensive (income) attributable to noncontrolling interest		(1.4	)		-			(2.6	)		(0.3	)
Comprehensive income / (loss) attributable to ordinary shareholders	$	5,266.3		$	(1,353.4	)	$	4,966.2		$	(1,208.4	)

	Nine Months Ended September 30,
	2015			2014
Cash Flows From Operating Activities:
Net income / (loss)	$	4,548.7		$	(897.3	)
Reconciliation to net cash provided by operating activities:
Depreciation		183.9			169.7
Amortization		4,192.8			1,720.7
Provision for inventory reserve		108.6			110.2
Share-based compensation		510.5			259.4
Deferred income tax benefit		(7,470.9	)		(412.5	)
In-process research and development impairments		497.6			321.3
Loss / (gain) on asset sales and impairments, net		57.2			34.2
Amortization of inventory step-up		1,019.8			703.3
Amortization of deferred financing costs		289.2			34.4
Accretion and contingent consideration		89.2			(24.2	)
Excess tax benefit from stock-based compensation		(54.0	)		(22.7	)
Non-cash impact of debt extinguishment		-			(91.7	)
Other, net		54.9			(19.1	)
Changes in assets and liabilities (net of effects of acquisitions):
Decrease / (increase) in accounts receivable, net		(364.0	)		(365.6	)
Decrease / (increase) in inventories		(270.1	)		(266.7	)
Decrease / (increase) in prepaid expenses and other current assets		(3.3	)		69.3
Increase / (decrease) in accounts payable and accrued expenses		(290.6	)		292.3
Increase / (decrease) in income and other taxes payable		(103.4	)		(152.1	)
Increase / (decrease) in other assets and liabilities		(21.6	)		(31.5	)
Net cash provided by operating activities		2,974.5			1,431.4
Cash Flows From Investing Activities:
Additions to property, plant and equipment		(350.7	)		(174.1	)
Additions to product rights and other intangibles		(91.1	)		(0.1	)
Additions to investments		(27.0	)		-
Proceeds from sale of investments and other assets		855.8			452.7
Proceeds from sales of property, plant and equipment		133.6			12.0
Acquisitions of businesses, net of cash acquired		(35,242.7	)		(4,922.6	)
Net cash (used in) investing activities		(34,722.1	)		(4,632.1	)
Cash Flows From Financing Activities:
Proceeds from borrowings of long-term indebtedness		26,456.4			8,076.2
Proceeds from borrowings on credit facility and other		2,882.0			80.0
Debt issuance and other financing costs		(310.8	)		(58.2	)
Payments on debt, including capital lease obligations		(4,326.7	)		(4,875.5	)
Proceeds from issuance of preferred shares		4,929.7			-
Proceeds from issuance of ordinary shares		4,071.1			-
Proceeds from stock plans		195.8			43.3
Payments of contingent consideration		(138.3	)		(12.6	)
Repurchase of ordinary shares		(108.2	)		(99.7	)
Dividends		(138.4	)		-
Excess tax benefit from stock-based compensation		54.0			22.7
Net cash provided by financing activities		33,566.6			3,176.2
Effect of currency exchange rate changes on cash and cash equivalents		(5.1	)		(2.1	)
Movement in cash held for sale		-			37.0
Net increase in cash and cash equivalents		1,813.9			10.4
Cash and cash equivalents at beginning of period		250.0			329.0
Cash and cash equivalents at end of period	$	2,063.9		$	339.4
Schedule of Non-Cash Investing and Financing Activities:
Non-cash equity issuance for the Acquisition of Allergan net assets	$	34,687.2		$	-
Non-cash equity issuance for the Acquisition of Forest net assets	$	-		$	20,590.5

	September 30,			December 31,
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	2,045.7		$	244.3
Marketable securities		7.0			1.0
Accounts receivable, net		2,143.2			1,107.2
Receivable from Parents		323.9			269.8
Inventories		1,285.4			976.7
Prepaid expenses and other current assets		745.8			475.9
Current assets held for sale		3,802.1			3,819.2
Deferred tax assets		6,608.5			477.0
Total current assets		16,961.6			7,371.1
Property, plant and equipment, net		1,569.9			282.5
Investments and other assets		498.3			153.3
Non current assets held for sale		10,573.7			8,213.8
Deferred tax assets		67.2			34.7
Product rights and other intangibles		67,133.4			16,096.6
Goodwill		46,315.1			20,865.6
Total assets	$	143,119.2		$	53,017.6
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	4,477.3		$	2,992.6
Payables to Parents		1,212.0			521.1
Income taxes payable		84.7			33.9
Current portion of long-term debt and capital leases		2,035.4			693.4
Deferred revenue		32.9			17.8
Current liabilities held for sale		1,449.5			1,465.7
Deferred tax liabilities		17.0			41.0
Total current liabilities		9,308.8			5,765.5
Long-term debt and capital leases		40,648.1			14,837.7
Deferred revenue		26.8			26.3
Other long-term liabilities		1,135.1			227.1
Long-term liabilities held for sale		639.9			540.7
Other taxes payable		760.8			789.5
Deferred tax liabilities		13,992.5			2,753.8
Total liabilities		66,512.0			24,940.6
Commitments and contingencies
Equity:
Member's capital		73,004.8			29,455.9
Retained Earnings / (accumulated deficit)		3,641.3			(917.9	)
Accumulated other comprehensive (loss)		(45.3	)		(465.4	)
Total members’ equity		76,600.8			28,072.6
Noncontrolling interest		6.4			4.4
Total equity		76,607.2			28,077.0
Total liabilities and equity	$	143,119.2		$	53,017.6

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net revenues	$	4,088.9		$	2,150.8		$	10,873.5		$	4,323.3
Operating expenses:
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)		1,242.9			1,183.1			3,699.9			2,371.4
Research and development		1,260.5			276.6			1,927.9			368.6
Selling and marketing		721.8			540.2			2,130.4			799.3
General and administrative		346.1			420.4			1,209.6			731.0
Amortization		1,560.2			705.0			3,866.1			1,192.2
In-process research and development impairments		300.0			305.0			497.6			320.0
Asset sales and impairments, net		(4.4	)		-			3.1			(5.3	)
Total operating expenses		5,427.1			3,430.3			13,334.6			5,777.2
Operating (loss)		(1,338.2	)		(1,279.5	)		(2,461.1	)		(1,453.9	)
Non-operating income (expense):
Interest income		3.8			1.6			8.2			3.8
Interest expense		(340.2	)		(132.1	)		(852.0	)		(284.0	)
Other income (expense), net		0.2			29.4			(238.1	)		15.3
Total other income (expense), net		(336.2	)		(101.1	)		(1,081.9	)		(264.9	)
(Loss) before income taxes and noncontrolling interest		(1,674.4	)		(1,380.6	)		(3,543.0	)		(1,718.8	)
(Benefit) for income taxes		(824.9	)		(215.8	)		(1,456.9	)		(308.1	)
Net (loss) from continuing operations, net of tax		(849.5	)		(1,164.8	)		(2,086.1	)		(1,410.7	)
Income from discontinued operations, net of tax		6,157.4			119.3			6,647.9			524.3
Net income / (loss)		5,307.9			(1,045.5	)		4,561.8			(886.4	)
(Income) attributable to noncontrolling interest		(1.4	)		-			(2.6	)		(0.3	)
Net income / (loss) attributable to members	$	5,306.5		$	(1,045.5	)	$	4,559.2		$	(886.7	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014

Net income / (loss)	$	5,307.9		$	(1,045.5	)	$	4,561.8		$	(886.4	)
Other comprehensive (loss) / income
Foreign currency translation (losses) / gains		(42.4	)		(308.3	)		409.0			(309.2	)
Unrealized gains / (losses), net of tax		7.5			(2.3	)		11.1			(1.6	)
Reclassification for gains included in net income, net of tax		-			-			-			-
Total other comprehensive (loss) / income, net of tax		(34.9	)		(310.6	)		420.1			(310.8	)
Comprehensive income / (loss)		5,273.0			(1,356.1	)		4,981.9			(1,197.2	)
Comprehensive (income) attributable to noncontrolling interest		(1.4	)		-			(2.6	)		(0.3	)
Comprehensive income / (loss) attributable to members	$	5,271.6		$	(1,356.1	)	$	4,979.3		$	(1,197.5	)

	Nine Months Ended September 30,
	2015			2014
Cash Flows From Operating Activities:
Net income / (loss)	$	4,561.8		$	(886.4	)
Reconciliation to net cash provided by operating activities:
Depreciation		183.9			169.7
Amortization		4,192.8			1,720.7
Provision for inventory reserve		108.6			110.2
Share-based compensation		510.5			259.4
Deferred income tax benefit		(7,470.9	)		(412.5	)
In-process research and development impairments		497.6			321.3
Loss / (gain) on asset sales and impairments, net		57.2			34.2
Amortization of inventory step-up		1,019.8			703.3
Amortization of deferred financing costs		289.2			34.4
Accretion and contingent consideration		89.2			(24.2	)
Non-cash impact of debt extinguishment		-			(91.7	)
Other, net		54.9			(19.1	)
Changes in assets and liabilities (net of effects of acquisitions):
Decrease / (increase) in accounts receivable, net		(363.3	)		(365.7	)
Decrease / (increase) in inventories		(270.1	)		(266.7	)
Decrease / (increase) in prepaid expenses and other current assets		(3.2	)		69.3
Increase / (decrease) in accounts payable and accrued expenses		(257.5	)		276.1
Increase / (decrease) in income and other taxes payable		(103.4	)		(140.9	)
Increase / (decrease) in other assets and liabilities, including receivable / payable with Parents		6.5			(89.2	)
Net cash provided by operating activities		3,103.6			1,402.2
Cash Flows From Investing Activities:
Additions to property, plant and equipment		(350.7	)		(174.1	)
Additions to product rights and other intangibles		(91.1	)		(0.1	)
Additions to investments		(27.0	)		-
Proceeds from the sale of investments and other assets		855.8			452.7
Proceeds from sales of property, plant and equipment		133.6			12.0
Acquisitions of businesses, net of cash acquired		(35,242.7	)		(4,922.6	)
Net cash (used in) investing activities		(34,722.1	)		(4,632.1	)
Cash Flows From Financing Activities:
Proceeds from borrowings of long-term indebtedness		26,456.4			8,076.2
Proceeds from borrowings on credit facility and other		2,882.0			80.0
Debt issuance and other financing costs		(310.8	)		(58.2	)
Payments on debt, including capital lease obligations		(4,326.7	)		(4,875.5	)
Payments of contingent consideration		(138.3	)		(12.6	)
Dividend to Parent		(138.4	)		-
Contribution from Parent		9,000.8			-
Net cash provided by financing activities		33,425.0			3,209.9
Effect of currency exchange rate changes on cash and cash equivalents		(5.1	)		(2.1	)
Movement in cash held for sale		-			37.0
Net increase in cash and cash equivalents		1,801.4			14.9
Cash and cash equivalents at beginning of period		244.3			323.5
Cash and cash equivalents at end of period	$	2,045.7		$	338.4

Allergan plc is a global specialty pharmaceutical company engaged in the development, manufacturing, marketing, and distribution of brand name (“brand”, “branded” or “specialty brand”), medical aesthetics, generic, branded generic, biosimilar and over-the-counter (“OTC”) pharmaceutical products. The Company has operations in more than 100 countries. Warner Chilcott Limited is a wholly-owned subsidiary of Allergan plc and has the same principal business activities. As a result of the Allergan Acquisition (defined below) which closed on March 17, 2015, the Company expanded its franchises to include ophthalmology, neurosciences and medical aesthetics/dermatology/plastic surgery, which complements the Company’s existing central nervous system, gastroenterology, women’s health and urology franchises. The combined company benefits significantly from Allergan, Inc’s. (“Legacy Allergan”) global brand equity and consumer awareness of key products, including Botox^® and Restasis^®. The Allergan Acquisition also expanded our presence and market and product reach across many international markets, with strengthened commercial positions across Canada, Europe, Southeast Asia and other high-value growth markets, including China, India, the Middle East and Latin America.

On July 26, 2015 we entered into a master purchase agreement (the “Teva Agreement”), under which Teva Pharmaceutical Industries Ltd. (“Teva”) agreed to acquire our global generic pharmaceuticals business and certain other assets for approximately $40.5 billion (the “Teva Transaction”). Under the Teva Agreement, upon the closing of the Teva Transaction, we will receive $33.75 billion in cash and approximately $6.75 billion in Teva stock in exchange for which Teva will acquire our global generics business, including the United States (“U.S.”) and international generic commercial units, our third-party supplier Medis, our global generic manufacturing operations, our global generic R&D unit, our international over-the-counter (OTC) commercial unit (excluding OTC eye care products) and some established international brands. The transaction is subject to customary closing conditions and expected to close in the first quarter of 2016. As a result of the transaction, and in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) number 2014-08 “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, the Company is accounting for the assets and liabilities to be divested as held for sale. Further, the financial results of the business held for sale have been reclassified to discontinued operations for all periods presented in our condensed consolidated financial statements.

The accompanying consolidated financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2014 (“Annual Report”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”) have been condensed or omitted from the accompanying consolidated financial statements. The accompanying year end consolidated balance sheet was derived from the audited financial statements included in the Annual Report. The accompanying interim financial statements are unaudited and reflect all adjustments which are in the opinion of management necessary for a fair statement of the Company’s consolidated financial position, results of operations, comprehensive income/(loss) and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. All intercompany transactions and balances have been eliminated in consolidation. The Company’s results of operations, comprehensive income / (loss) and cash flows for the interim periods are not necessarily indicative of the results of operations, comprehensive income/(loss) and cash flows that it may achieve in future periods.

References throughout to “we,” “our,” “us,” the “Company” or “Allergan” refer to financial information and transactions of Allergan plc. References to “Warner Chilcott Limited” refer to Warner Chilcott Limited, the Company’s indirect wholly-owned subsidiary, and, unless the context otherwise requires, its subsidiaries.

In connection with the Allergan Acquisition, the Company changed its name from Actavis plc to Allergan plc. Actavis plc’s ordinary shares were traded on the NYSE under the symbol “ACT” until the opening of trading on June 15, 2015, at which time Actavis plc changed its corporate name to “Allergan plc” and changed its ticker symbol to “AGN.” Pursuant to Rule 12g-3(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Allergan plc is the successor issuer to Actavis plc’s ordinary shares which are deemed to be registered under Section 12(b) of the Exchange Act, and Allergan plc is subject to the informational requirements of the Exchange Act, and the rules and regulations promulgated thereunder.

NOTE 2 – Reconciliation of Warner Chilcott Limited results to Allergan plc results

Warner Chilcott Limited is an indirect wholly-owned subsidiary of Allergan plc (together with other Warner Chilcott Limited parents, the “Parent”), the ultimate parent of the group. The results of Warner Chilcott Limited are consolidated into the results of

Allergan plc. Due to the deminimis activity between Allergan plc and Warner Chilcott Limited, references throughout this filing relate to both Allergan plc and Warner Chilcott Limited. Warner Chilcott Limited representations relate only to itself and not to any other company.

Except where otherwise indicated, and excluding certain insignificant cash and non-cash transactions at the Allergan plc level, these notes relate to the consolidated financial statements for both separate registrants, Allergan plc and Warner Chilcott Limited. In addition to certain inter-company payable and receivable amounts between the entities, the following is a reconciliation of the results of Warner Chilcott Limited to Allergan plc ($ in millions):

The following are interim updates to certain of the policies described in “Note 4” of the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2014 included in the Annual Report.

Revenue from product sales is recognized when title and risk of loss to the product transfers to the customer, which is based on the transaction shipping terms. Recognition of revenue also requires reasonable assurance of collection of sales proceeds, the seller’s price to the buyer to be fixed or determinable and the completion of all performance obligations. The Company warrants products against defects and for specific quality standards, permitting the return of products under certain circumstances. Product sales are recorded net of all sales-related deductions including, but not limited to: chargebacks, trade discounts, billback adjustments, sales returns and allowances, commercial and government rebates, customer loyalty programs and fee for service arrangements with certain distributors, which we refer to in the aggregate as “SRA” allowances.

Royalty and commission revenue is recognized as a component of net revenues in accordance with the terms of their respective contractual agreements when collectability is reasonably assured and when revenue can be reasonably measured.

As is customary in the pharmaceutical industry, our gross product sales are subject to a variety of deductions in arriving at reported net product sales. When the Company recognizes gross revenue from the sale of products, an estimate of SRA is recorded, which reduces the product revenues. Accounts receivable and/or accrued liabilities are also reduced and/or increased by the SRA amount depending on whether we have the right of offset with the customer. These provisions are estimated based on historical payment experience, historical relationship of the deductions to gross product revenues, government regulations, estimated utilization or redemption rates, estimated customer inventory levels and current contract sales terms. The estimation process used to determine our SRA provision has been applied on a consistent basis and no material revenue adjustments have been necessary to increase or decrease our reserves for SRA as a result of a significant change in underlying estimates. The Company uses a variety of methods to assess the adequacy of the SRA reserves to ensure that our financial statements are fairly stated.

Chargebacks — A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid by our wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at certain contract prices. The Company validates the chargeback accrual quarterly through a review of the inventory reports obtained from our largest wholesale customers. This customer inventory information is used to verify the estimated liability for future chargeback claims based on historical chargeback and contract rates. These large wholesalers represent the vast majority of the recipients of the Company’s chargeback payments. We continually monitor current pricing trends and wholesaler inventory levels to ensure the liability for future chargebacks is fairly stated.

Rebates — Rebates include volume related incentives to direct and indirect customers, third-party managed care and Medicare Part D rebates, Medicaid rebates and other government rebates. Rebates are accrued based on an estimate of claims to be paid for product sold into trade by the Company. Volume rebates are generally offered to customers as an incentive to use the Company’s products and to encourage greater product sales. These rebate programs include contracted rebates based on customers’ purchases made during an applicable monthly, quarterly or annual period. The provision for third-party rebates is estimated based on our customers’ contracted rebate programs and the Company’s historical experience of rebates paid. Any significant changes to our customer rebate programs are considered in establishing the provision for rebates. The provisions for government rebates are based, in part, upon historical experience of claims submitted by the various states / authorities, contractual terms and government regulations. We monitor legislative changes to determine what impact such legislation may have on our provision.

Cash Discounts — Cash discounts are provided to customers that pay within a specific period. The provision for cash discounts is estimated based upon invoice billings and historical customer payment experience. The Company’s experience of payment history is fairly consistent and most customer payments qualify for the cash discount.

Returns and Other Allowances — The Company’s provision for returns and other allowances include returns, pricing adjustments, promotional allowances, loyalty cards and billback adjustments.

Consistent with industry practice, the Company maintains a returns policy that allows customers to return product for a credit. In accordance with the Company’s policy, credits for customer returns of products are applied against outstanding account activity or are settled in cash. Product exchanges are not permitted. Customer returns of product are generally not resalable. The Company’s estimate of the provision for returns is based upon historical experience and current trends of actual customer returns. Additionally, we consider other factors when estimating the current period returns provision, including levels of inventory in the distribution channel, as well as significant market changes which may impact future expected returns.

Pricing adjustments, which includes shelf stock adjustments, (primarily relate to our generics business held for sale) are credits issued to reflect price decreases in selling prices charged to the Company’s direct customers. Shelf stock adjustments are based upon the amount of product our customers have in their inventory at the time of an agreed-upon price reduction. The provision for shelf stock adjustments is based upon specific terms with the Company’s customers and includes estimates of existing customer inventory levels based upon their historical purchasing patterns. We regularly monitor all price changes to evaluate the Company’s reserve balances. The adequacy of these reserves is readily determinable as pricing adjustments and shelf stock adjustments are negotiated and settled on a customer-by-customer basis.

Promotional allowances are credits that are issued in connection with a product launch or as an incentive for customers to carry our product. The Company establishes a reserve for promotional allowances based upon contractual terms.

Billback adjustments, which primarily relate to our generics business held for sale, are credits that are issued to certain customers who purchase directly from us as well as indirectly through a wholesaler. These credits are issued in the event there is a difference between the customer’s direct and indirect contract price. The provision for billbacks is estimated based upon historical

purchasing patterns of qualified customers who purchase product directly from us and supplement their purchases indirectly through our wholesale customers.

Loyalty cards allow the end user patients a discount per prescription and are accrued based on historical experience, contract terms and the volume of product and cards in the distribution channel.

Accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. SRA balances in accounts receivable were $198.5 million and $157.3 million at September 30, 2015 and December 31, 2014, respectively. SRA balances within accounts payable and accrued expenses were $1,604.5 million and $1,155.4 million at September 30, 2015 and December 31, 2014, respectively. The movements in the SRA reserve balances for continuing operations in the nine months ended September 30, 2015 are as follows (in millions):

The provisions recorded to reduce gross product sales to net product sales, excluding discontinued operations, were as follows ($ in millions):

The Company also had SRA reserves relating to discontinued operations of $1,335.6 million and $1,666.2 million as of September 30, 2015 and December 31, 2014, respectively. The reclassification to discontinued operations is reflected in payments and other above.

The movement in the percentage of provisions to gross sales is a result of changes in product mix, competition and channels of distribution.

As a result of the Allergan Acquisition, the Company provides warranty programs for breast implant sales primarily in the United States, Europe and certain other countries. Management estimates the amount of potential future claims from these warranty programs based on actuarial analyses. Expected future obligations are determined based on the history of product shipments and claims and are discounted to a current value. The provision for warranty expense in the nine months ended September 30, 2015 was $2.8 million. The liability is included in both current and long-term liabilities in the Company’s consolidated balance sheets and amounted to $7.6 million and $29.7 million, respectively, as of September 30, 2015. The U.S. programs include the ConfidencePlus^® and ConfidencePlus^® Premier warranty programs. The ConfidencePlus^® program, which is limited to saline breast implants, currently provides lifetime product replacement and contralateral implant replacement. The ConfidencePlus^® Premier program, which is standard for silicone gel implants and requires a low enrollment fee for saline breast implants, generally provides lifetime product replacement, $2,400 of financial assistance for saline breast implants and $3,500 of financial assistance for silicone gel breast implants for surgical procedures within ten years of implantation and contralateral implant replacement. The warranty programs in non-U.S. markets generally have similar terms and conditions to the U.S. programs. The Company does not warrant any level of aesthetic result and, as required by government regulation, makes extensive disclosures concerning the risks of the use of its products and breast implant surgery. Changes to actual warranty claims incurred and interest rates could have a material impact on the actuarial analysis and the Company’s estimated liabilities. A large majority of the product warranty liability arises from the U.S. warranty programs. The Company does not currently offer any similar warranty program on any other product.

The Company tests goodwill and intangible assets with indefinite-lives for impairment annually in the second quarter by comparing the fair value of each of the Company’s reporting units to the respective carrying value of the reporting units. Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount or when the Company has a change to reporting units. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.

Goodwill is considered impaired if the carrying amount of the net assets exceeds the fair value of the reporting unit. Impairment, if any, would be recorded in operating income and this could result in a material impact to net (loss) / income and (loss) / earnings per share.

Acquired in-process research and development (“IPR&D”) intangible assets represent the value assigned to acquired research and development projects that, as of the date acquired, represent the right to develop, use, sell and/or offer for sale a product or other intellectual property that the Company has acquired with respect to products and/or processes that have not been completed or approved. The IPR&D intangible assets are subject to impairment testing until completion or abandonment of each project. Upon abandonment, the assets are impaired. Impairment testing requires the development of significant estimates and assumptions involving the determination of estimated net cash flows for each year for each project or product (including net revenues, cost of sales, research and development (“R&D”) costs, selling and marketing costs and other costs which may be allocated), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, and competitive trends impacting the asset and each cash flow stream as well as other factors. The major risks and uncertainties associated with the timely and successful completion of the IPR&D projects include legal risk, market risk and regulatory risk. Changes in these assumptions could result in future impairment charges. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change or the timely completion of each project to commercial success will occur. For these and other reasons, actual results may vary significantly from estimated results.

Upon successful completion of each project and approval of the product, we will make a separate determination of the useful life of the intangible, transfer the amount to currently marketed products (“CMP”) and amortization expense will be recorded over the estimated useful life.

During 2015, we performed our annual impairment assessment of goodwill. We also assessed IPR&D intangible assets and trade name intangible assets with indefinite lives for impairment. The Company utilized a discount rate for its reporting units of 10.0% and long-term growth rates ranging from 0.0% to 5.0% in its estimation of fair value. The factors used in evaluating goodwill for impairment are subject to change and are tracked against historical results by management. Changes in the key assumptions by management can change the results of testing. The Company determined there was no impairment associated with goodwill or trade name intangible assets.

During the nine months ended September 30, 2015, the Company recorded a $197.6 million impairment related to IPR&D for select projects as the Company revised its sales forecast of certain assets as well as the timing of the launch of certain projects in connection with the Company’s annual review. In addition, during the three and nine months ended September 30, 2015, the Company made the decision to abandon a select IPR&D asset (acquired in connection with the Allergan Acquisition) based on review of research studies, resulting in an impairment of the full asset value of $300.0 million. During the three and nine months ended September 30, 2014, the Company recorded an impairment charge of $165.0 million related to the abandonment of certain R&D projects and an impairment charge of $140.0 million related to acquired IPR&D due to the U.S. Food and Drug Administration’s (“FDA”) Cardiovascular and Renal Drugs Advisory Committee (“CRDAC”) voting to recommend against approval of Actavis’ New Drug Application (‘NDA”) for the fixed-dose combination of nebivolol and valsartan for the treatment of hypertension.

The Company is involved in various legal proceedings in the normal course of its business, including product liability litigation, intellectual property litigation, employment litigation and other litigation. Additionally, the Company, in consultation with its counsel, assesses the need to record a liability for contingencies on a case-by-case basis in accordance with FASB Accounting Standards Codification (“ASC”) Topic 450 “Contingencies” (“ASC 450”). Accruals are recorded when the Company determines that a loss related to a matter is both probable and reasonably estimable. These accruals are adjusted periodically as assessment efforts progress or as additional information becomes available. Acquired contingencies in business combinations are recorded at fair value to the extent determinable, otherwise in accordance ASC 450. Refer to “NOTE 20 — Commitments and Contingencies” for more information.

The Company computes EPS in accordance with ASC Topic 260, “Earnings Per Share” (“ASC 260”) and related guidance, which requires two calculations of EPS to be disclosed: basic and diluted. Basic EPS is computed by dividing net (loss) / income by the weighted average ordinary shares outstanding during a period. Diluted EPS is based on the treasury stock method and includes the effect from potential issuance of ordinary shares, such as shares issuable pursuant to the exercise of stock options and restricted stock units. Diluted EPS also includes the impact of ordinary share equivalents to be issued upon the mandatory conversion of the Company’s preferred shares. Ordinary share equivalents have been excluded where their inclusion would be anti-dilutive.

A reconciliation of the numerators and denominators of basic and diluted EPS consisted of the following (in millions, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net income:
Net (loss) from continuing operations, net, (income) attributable to noncontrolling interest, and dividends on preferred shares	$	(925.8	)	$	(1,162.1	)	$	(2,264.2	)	$	(1,421.9	)
Income from discontinued operations, net of tax		6,157.4			119.3			6,647.9			524.3
Net income / (loss) attributable to ordinary shareholders	$	5,231.6		$	(1,042.8	)	$	4,383.7		$	(897.6	)

Basic weighted average ordinary shares outstanding		393.6			264.3			358.9			204.4

Basic EPS:
Continuing operations	$	(2.35	)	$	(4.40	)	$	(6.31	)	$	(6.96	)
Discontinued operations	$	15.64		$	0.45		$	18.52		$	2.57
Net income / (loss) per share	$	13.29		$	(3.95	)	$	12.21		$	(4.39	)

Diluted weighted average ordinary shares outstanding		393.6			264.3			358.9			204.4

Diluted EPS:
Continuing operations	$	(2.35	)	$	(4.40	)	$	(6.31	)	$	(6.96	)
Discontinued operations	$	15.64		$	0.45		$	18.52		$	2.57
Net income / (loss) per share	$	13.29		$	(3.95	)	$	12.21		$	(4.39	)

Stock awards to purchase 5.1 million and 5.2 million ordinary shares for the three and nine months ended September 30, 2015, respectively, were outstanding, but not included in the computation of diluted EPS, because the awards were anti-dilutive for continuing operations and as such the treatment for discontinued operations is also anti-dilutive. The weighted average impact of ordinary share equivalents of 17.6 million and 13.6 million for the three and nine months ended September 30, 2015, respectively, which are anticipated to result from the mandatory conversion of the Company’s preferred shares were not included in the calculation of diluted EPS as their impact would be anti-dilutive.

Stock awards to purchase 3.1 million and 2.2 million ordinary shares for the three and nine months September 30, 2014, respectively, were outstanding, but not included in the computation of diluted EPS, because the awards were anti-dilutive for continuing operations and as such the treatment for discontinued operations is also anti-dilutive.

The Company records liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred. In accordance with existing benefit arrangements, employee severance costs are accrued when the restructuring actions are probable and estimable. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits are recognized ratably over the future service period. The Company also incurs costs with contract terminations and costs of transferring products as part of restructuring activities. Refer to “NOTE 19 — Business Restructuring Charges” for more information.

On September 25, 2015, the FASB issued Accounting Standards Update 2015-16 (ASU 2015-16), which changes the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that measurement period adjustments be recognized in the reporting period in which the adjustment amount is determined. This includes the cumulative impact of measurement period adjustments on current and prior periods. The cumulative adjustment would be reflected within the respective financial statement line items affected. The guidance is effective for fiscal years beginning after December 15, 2015. The Company does not expect the pronouncement to have a material impact on our financial statements

In April 2015, the FASB issued guidance which changes the classification of debt issuance costs from being an asset on the balance sheet to netting the costs against the carrying value of the debt. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Management believes that the adoption of this guidance will not have a material impact on our financial statements.

During the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company acquired material assets and businesses. The pro forma results of the businesses acquired that materially impacted the reported results of the Company are as follows (unaudited; $ in millions except per share information):

Pro forma net (loss) per share includes the impact of share issuances as part of the respective acquisitions.

The following are the material transactions that were entered into / completed in the nine months ended September 30, 2015.

On October 16, 2015, the Company acquired AqueSys, Inc. (“AqueSys”), a private clinical stage medical device company focused on developing ocular implants that reduce intraocular pressure (IOP) associated with glaucoma, in an all-cash transaction. Under the terms of the agreement, the Company acquired AqueSys for a $300.0 million upfront payment and regulatory approval and commercialization milestone payments related to AqueSys' lead development programs, including XEN45, a soft shunt that is implanted in the subconjunctival space in the eye through a minimally invasive procedure with a single use, pre-loaded proprietary injector. The Company will include the financial impact of the transaction in the fourth quarter of 2015.

On October 1, 2015, the Company acquired Kythera Biopharmaceuticals (“Kythera”), for $75 per share, or approximately $2.1 billion (the “Kythera Acquisition”). Kythera is focused on the discovery, development and commercialization of novel prescription aesthetic products. Kythera’s lead product is Kybella^® injection, the first and only Federal Drug Administration (“FDA”) approved, non-surgical treatment for moderate to severe submental fullness, commonly referred to as double chin. The Company will include the financial impact of the transaction in the fourth quarter of 2015.

On August 10, 2015, the Company acquired Oculeve, Inc. (“Oculeve”), a development-stage medical device company focused on developing novel treatments for dry eye disease. Under the terms of the agreement, Allergan acquired Oculeve for an acquisition accounting purchase price of $134.5 million (the “Oculeve Acquisition”), including $1.6 million in cash plus $90.0 million for the estimated fair value of contingent consideration of which the Company may owe up to $300.0 million in future payments. The Company acquired Oculeve and its lead product candidate OD-01, an intranasal neurostimulation device, as well as other dry eye products in development.

The transaction has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. As of September 30, 2015, certain amounts relating to the valuation of tax related matters, contingent consideration and intangible assets have not been finalized. The finalization of these matters may result in changes to goodwill.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date ($ in millions):

IPR&D intangible assets represent the value assigned to acquired R&D projects that, as of the acquisition date, had not established technological feasibility and had no alternative future use. The IPR&D intangible assets are capitalized and accounted for as indefinite-lived intangible assets and will be subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project and launch of the product, the Company will make a separate determination of the estimated useful life of the IPR&D intangible asset and the related amortization will be recorded as an expense over the estimated useful life (“IPR&D Acquisition Accounting”).

The estimated fair value of the IPR&D and identifiable intangible assets was determined using the “income approach,” which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each asset or product (including net revenues, cost of sales, R&D costs, selling and marketing costs and working capital/asset contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, competitive trends impacting the asset and each cash flow stream as well as other factors (the “IPR&D and Intangible Asset Valuation Technique”).

The fair value of the IPR&D intangible assets was determined using the IPR&D and Intangible Asset Valuation Technique. The discount rate used to arrive at the present value for IPR&D intangible assets was 9.9% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results.

Among the primary reasons the Company acquired Oculeve and factors that contributed to the preliminary recognition of goodwill were to expand the Company’s pipeline of eye care products. Goodwill from the Oculeve Acquisition of $36.3 million was assigned to the US Brands segment.

As part of the acquisition, the Company is required to pay the former shareholders of Oculeve amounts based on the launch, labeling, and sales of the product. The Company estimated the acquisition accounting fair value of the contingent consideration to be $90.0 million using a probability weighted approach that considered the possible outcomes of the scenarios relating to the specified product.

Long-term deferred tax liabilities and other tax liabilities result from identifiable intangible assets fair value adjustments. These adjustments create excess book basis over the tax basis which is multiplied by the statutory tax rate for the jurisdiction in which the deferred taxes exist.

On May 29, 2015 the Company acquired Auden Mckenzie Holdings Limited (“Auden”), a company specializing in the development, licensing and marketing of niche generic medicines and proprietary brands in the United Kingdom (“UK”) and across Europe for approximately 323.7 million British Pounds, or $495.9 million (the “Auden Acquisition”). The assets and liabilities acquired, as well as the results of operations for the acquired Auden business are part of the assets being divested in the Teva Transaction and are included as a component of income from discontinued operations. In addition the acquired financial position is included in assets and liabilities held for sale.

Recognition and Measurement of Assets Acquired and Liabilities Assumed at Fair Value

The Auden Acquisition has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. As of September 30, 2015, certain amounts relating to the valuation of tax-related matters, intangible assets and inventory have not been finalized. The following table summarizes the preliminary fair values of the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date and reflecting purchase accounting adjustments identified during the quarter ($ in millions):

The fair value of the IPR&D and CMP intangible assets was determined using the IPR&D and Intangible Asset Valuation Technique. The discount rate used to arrive at the present value of CMPs was 15.0% and for IPR&D intangible assets was 16.0% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results.

The acquired intangible assets represent generic products with multiple useful lives across multiple therapeutic areas.

On March 17, 2015, the Company acquired Allergan, Inc. for approximately $77.0 billion including outstanding indebtedness assumed of $2.2 billion, cash consideration of $40.1 billion and equity consideration of $34.7 billion, which includes outstanding equity awards (the “Allergan Acquisition”). Under the terms of the agreement, Legacy Allergan shareholders received 111.2 million of the Company’s ordinary shares, 7.0 million of the Company’s non-qualified stock options and 0.5 million of the Company’s share units. The addition of Allergan Inc.’s therapeutic franchises in ophthalmology, neurosciences and medical aesthetics/dermatology/plastic surgery complements the Company’s existing central nervous system, gastroenterology, women’s health and urology franchises. The combined company will also benefit significantly from Legacy Allergan’s global brand equity and consumer awareness of key products, including Botox^® and Restasis^®. The transaction also expands our presence and market and product reach across many international markets, with strengthened commercial positions across Canada, Europe, Southeast Asia and other high-value growth markets, including China, India, the Middle East and Latin America.

The transaction has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. As of September 30, 2015, certain amounts relating to the valuation of tax related matters, SRAs, inventories and intangible assets have not been finalized. The finalization of these matters may result in changes to goodwill. The Company expects to finalize such matters by the end of 2015.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date and reflects purchase accounting adjustments identified during the quarter ($ in millions):

	Preliminary Values as of March 31, 2015			Measurement Period Adjustments			Preliminary Values as of September 30, 2015
Cash and cash equivalents	$	5,424.5		$	-		$	5,424.5
Accounts receivable		962.7			(14.0	)		948.7
Inventories		1,223.2			(4.6	)		1,218.6
Other current assets		318.8			-			318.8
Property, plant and equipment, net		1,202.5			12.0			1,214.5
Other long-term assets		189.3			-			189.3
IPR&D intangible assets		11,010.0			(1,100.0	)		9,910.0
Intangible assets		45,050.5			-			45,050.5
Goodwill		26,368.5			757.0			27,125.5
Current liabilities		(1,212.2	)		(9.9	)		(1,222.1	)
Contingent consideration		(379.1	)		(4.6	)		(383.7	)
Deferred tax liabilities, net		(12,512.9	)		364.1			(12,148.8	)
Other taxes payable		(82.4	)		-			(82.4	)
Other long-term liabilities		(622.0	)		-			(622.0	)
Outstanding indebtedness		(2,183.5	)		-			(2,183.5	)
Net assets acquired	$	74,757.9		$	-		$	74,757.9

The measurement period adjustments for IPR&D intangible assets relate to the Company’s review of patent lives and revised cash flow assumptions.

The total consideration for the Allergan Acquisition of $74.8 billion is comprised of the equity value of shares that were outstanding and vested prior to March 17, 2015 of $33.9 billion, the portion of outstanding equity awards deemed to have been earned as of March 17, 2015 of $0.8 billion and cash of $40.1 billion. The portion of outstanding equity awards deemed not to have been earned of $843.1 million as of March 17, 2015 will be expensed over the remaining future vesting period, including $61.8 million and $456.7 million in three and nine months ended September 30, 2015, respectively.

The fair value of inventories acquired included an acquisition accounting fair market value step-up of $923.9 million. In the three and nine months ended September 30, 2015, the Company recognized $274.5 million and $778.9 million, respectively, as a component of cost of sales as the inventory acquired was sold to the Company’s customers. Included in finished goods inventory as of September 30, 2015, was $145.0 million, relating to the remaining fair value step-up associated with the Allergan Acquisition.

The fair value of the intangible assets was determined using the IPR&D and Intangible Asset Valuation Technique. The discount rate used to arrive at the present value at the acquisition date of CMPs was 10.0% and for IPR&D intangibles ranged from 10.0% to 11.0% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results.

The following table identifies the summarized amounts recognized and the weighted average useful lives using the economic benefit of intangible assets:

Among the primary reasons the Company acquired Allergan and factors that contributed to the preliminary recognition of goodwill were to expand the Company’s product portfolio, and to acquire certain benefits from the Legacy Allergan pipeline and the expectation of certain synergies. The goodwill recognized from the Allergan Acquisition, which includes the increase in the purchase price resulting from the movement in Allergan plc’s share price from the date of announcing the deal, until the date of acquisition, is not deductible for tax purposes. Goodwill from the Allergan Acquisition of $15,389.2 million, $3,798.0 million, and $7,938.3 million was assigned to the US Brands, US Medical Aesthetics, and International Brands segments, respectively.

The Company acquired certain contingent obligations classified as contingent consideration related to historical business combinations. Additional consideration is conditionally due upon the achievement of certain milestones in respect to the development and commercialization of the products as well as reaching certain sales targets. The Company estimated the fair value of the contingent consideration acquired to be $383.7 million using a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product launch date, discount rates matched to the timing of first payment, and probability of success rates and discount adjustments on the related cash flows.

The Company acquired post-retirement plans as part of the Allergan Acquisition including defined benefit pension plans in the United States and Europe which had a net liability balance of $302.6 million. As of March 17, 2015, the Allergan Inc. defined benefit pension plans had assets with a fair value of $1,042.0 million, which included cash and cash equivalents of $13.6 million, equity securities of $480.1 million, and fixed income securities of $548.3 million. In addition, the Company acquired other benefit obligations which had an acquisition date fair value of assets of $117.1 million and an acquisition date fair value of liabilities of $120.0 million. Prior to the Allergan Acquisition, Legacy Allergan froze most of their defined benefit plans. As a result, the company anticipates deminimis service costs in its statement of operations.

Deferred tax liabilities, net, include the impact resulting from identifiable intangible assets and inventory fair value adjustments. These adjustments create excess book basis over the tax basis which is multiplied by the statutory tax rate for the jurisdiction in which the deferred taxes exist.

As a result of the acquisition, the Company incurred the following transaction and integration costs in the three and nine months ended September 30, 2015 ($ in millions):

On August 28, 2015, the Company acquired certain products in early stage development of Naurex, Inc. (“Naurex”) in an all-cash transaction of $571.7 million (the “Naurex Transaction”) plus future contingent payments of up to $1.15 billion, which was accounted for as an asset acquisition with cash consideration recognized as a component of R&D expenses in the three and nine months ended September 30, 2015. The Company concluded based on the stage of development of the assets, the lack of acquired employees and manufacturing as well as certain other inputs and processes that the transaction did not qualify as a business. The Naurex Transaction expands our pipeline with Naurex’s two leading product candidates GLYX-13 and NRX-1074, two compounds that utilize NMDA modulation as a potential new approach to the treatment of Major Depressive Disorder (“MDD”), a disease that can lead to suicidality among the most severe patients.

On August 6, 2015, the Company entered into an agreement with Merck & Co. (“Merck”) under which the Company acquired the exclusive worldwide rights to Merck’s early development stage investigational small molecule oral calcitonin gene-related peptide receptor antagonists, which are being developed for the treatment and prevention of migraines. This transaction is being accounted for as an asset acquisition. The Company acquired these rights for an upfront charge of $250.0 million which was recognized as a component of R&D expenses in the three and nine months ended September 30, 2015. The Company concluded based on the stage of development of the assets, the lack of acquired employees and manufacturing as well as certain other inputs and processes that the transaction did not qualify as a business. The Company paid $125.0 million in the three and nine months ended September 30, 2015 and the remaining $125.0 million is payable on April 1, 2016. Additionally, Merck will be owed contingent payments based on commercial and development milestones of up to $965.0 million as well as royalties.

On July 26, 2015, we entered into the Teva Agreement, which is further described in Note 1 - General.

On May 1, 2015, the Company divested its Australian generics business to Amneal Pharmaceuticals LLC for upfront consideration of $5.0 million plus future royalties, (the “Australia Transaction”). As a result of holding the assets for sale as of March 31, 2015, the Company, as a component of income from discontinued operations, impaired intangible assets of $36.1 million and miscellaneous assets and goodwill allocated to the business of $2.5 million in the nine months ended September 30, 2015. In addition, the Company recognized a loss on the sale of the business of $13.6 million in discontinued operations in the nine months ended September 30, 2015 included in discontinued operations.

As part of the Forest Acquisition (defined below), we acquired certain assets that comprised Legacy Forest’s branded respiratory business in the U.S. and Canada (the “Respiratory Business”). During the year ended December 31, 2014, we held for sale the respiratory assets of $734.0 million, including allocated goodwill to this unit of $309.1 million. On March 2, 2015, the Company sold the Respiratory Business to AstraZeneca plc (“AstraZeneca”) for consideration of $600.0 million upon closing, additional funds to be received for the sale of certain of our inventory to AstraZeneca and low single-digit royalties above a certain revenue threshold. AstraZeneca also paid Allergan an additional $100.0 million and Allergan has agreed to a number of contractual consents and approvals, including certain amendments to the ongoing collaboration agreements between AstraZeneca and Allergan. As a result of the final terms of the agreement, in the nine months ended September 30, 2015, the Company recognized an incremental charge in cost of sales (including the acquisition accounting fair value mark-up of inventory) relating to inventory that will not be sold to AstraZeneca of $35.3 million. The Company recognized a loss in other (expense) income, net for the sale of the business of $5.3 million in the nine months ended September 30, 2015.

As part of the Forest Acquisition, the Company acquired certain manufacturing plants and contract manufacturing agreements within the business known as Aptalis Pharmaceutical Technologies (“Pharmatech”). In accordance with acquisition accounting, the assets were fair valued on July 1, 2014 as assets held in use, including market participant synergies anticipated under the concept of “highest and best use.” During the fourth quarter of 2014, the decision was made to hold these assets for sale as one complete unit, without integrating the unit and realizing anticipated synergies. During the year ended December 31, 2014, the Company recognized an impairment on assets held for sale of $189.9 million (the “Pharmatech Transaction”) which included a portion of goodwill allocated to this business unit. In the second quarter of 2015, the Company completed the divestiture of the Pharmatech business.

The following are the material transactions that were completed in the year ended December 31, 2014.

On November 17, 2014, the Company completed its tender offer to purchase all of the outstanding shares of Durata Therapeutics, Inc. (“Durata”), an innovative pharmaceutical company focused on the development and commercialization of novel therapeutics for patients with infectious diseases and acute illnesses (the “Durata Acquisition”). Allergan purchased all outstanding shares of Durata, which were valued at approximately $724.5 million, including the assumption of debt. Additionally, there is one contingent value right (“CVR”) per share, entitling the holder to receive additional cash payments of up to $5.00 per CVR if certain regulatory or commercial milestones related to Durata’s lead product Dalvance™ are achieved. The CVR had an acquisition date fair value of $49.0 million.

Recognition and Measurement of Assets Acquired and Liabilities Assumed at Fair Value

The Durata Acquisition has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The following table summarizes the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date ($ in millions):

The fair value of the IPR&D and CMP intangible assets was determined using the IPR&D and Intangible Asset Valuation Technique. The discount rate used to arrive at the present value of CMPs was 9.5% and for IPR&D intangible assets was 10.5% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results.

At the time of the acquisition, additional consideration was conditionally due to the seller based upon the approval of Dalvance^TM in Europe, the approval of a single dose indication or the product reaching certain sales milestones. The Company estimated the acquisition accounting fair value of the contingent consideration to be $49.0 million using a probability weighted approach that considered the possible outcomes based on assumptions related to the timing and probability of the product launch date, discount rates matched to the timing of the payment, and probability of success rates and discount adjustments on the related cash flows. On March 2, 2015, the Company announced that the European Commission has granted Allergan’s subsidiary Durata Therapeutics International B.V., marketing authorization for Xydalba™ (dalbavancin) for the treatment of acute bacterial skin and skin structure infections (ABSSSI) in adults. The approval triggered the first CVR payment. The difference between the fair value of the CVR on the date of acquisition of $24.5 million and the payment made of $30.9 million, or $6.4 million, was recorded as an operating expense in the nine months ended September 30, 2015.

On July 2, 2014, the Company acquired Furiex Pharmaceuticals, Inc. (“Furiex”) in an all-cash transaction (the “Furiex Acquisition”) valued at $1,156.2 million (including the assumption of debt) and up to approximately $360.0 million in a CVR that may be payable based on which controlled substance schedule designation (if any) that eluxadoline, Furiex’s lead product, receives following approval (if any), which had an acquisition accounting fair value of $88.0 million on the date of acquisition (included in the value of $1,156.2 million). In the second quarter of 2015, the Company received approval from the FDA of the eluxadoline product, Viberzi^®.

Viberzi^® is a first-in-class, locally-acting mu opioid receptor agonist and delta opioid receptor antagonist for treating symptoms of diarrhea-predominant irritable bowel syndrome (IBS-d), a condition that affects approximately 28 million patients in the United States and Europe.

In connection with the close of the Furiex Acquisition, the Company further announced that it closed the transaction related to the sale of Furiex’s royalties on Alogliptin and Priligy^® to Royalty Pharma for $408.6 million in cash consideration.

Additional consideration was conditionally due to the seller based upon the status of eluxadoline as a controlled drug, if any. The Company estimated the acquisition accounting fair value of the contingent consideration to be $88.0 million using a probability weighted approach that considered the possible outcomes based on assumptions related to the timing and probability of the product launch date, discount rates matched to the timing of the payment, and probability of success rates and discount adjustments on the related cash flows.

As of September 30, 2015, Company anticipated scheduling as a C-IV product from the Drug Enforcement Agency (“DEA”) for Viberzi^® and recognized an expense of $59.3 million and $29.8 million as a component of R&D expense in the three and nine months ended September 30, 2015, respectively, based on the estimated payment to CVR shareholders versus the prior probability weighted outcomes. The final CVR is based on the status of Viberzi^®, as a schedule C-IV controlled substance, for $10 in cash for each CVR totaling $118.5 million which is recorded in accrued expenses.

On July 1, 2014, the Company acquired Forest Laboratories, Inc. (“Legacy Forest”) for $30.9 billion including outstanding indebtedness assumed of $3.3 billion, equity consideration of $20.6 billion, which includes outstanding equity awards, and cash consideration of $7.1 billion (the “Forest Acquisition”). Under the terms of the transaction, Legacy Forest shareholders received 89.8 million Allergan plc (formerly Actavis plc) ordinary shares, 6.1 million Allergan plc non-qualified stock options and 1.1 million Allergan plc share units. Legacy Forest was a leading, fully integrated, specialty pharmaceutical company largely focused on the United States market. Legacy Forest marketed a portfolio of branded drug products and developed new medicines to treat patients suffering from diseases principally in the following therapeutic areas: central nervous system, cardiovascular, gastrointestinal, respiratory, anti-infective, and cystic fibrosis. A portion of the assets acquired are being divested as part of the Teva Transaction.

The transaction has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date ($ in millions):

In the quarter ended September 30, 2015, the Company noted an out-of-period adjustment in the final valuation of Forest stated in the table above relating to the valuation of an acquired currently marketed product. The Company over valued the asset and undervalued goodwill based on information available as of the acquisition date. The Company corrected this error as of September 30, 2015 by decreasing the value of intangible assets and increasing the value of goodwill by $135.0 million. There was no impact to the statement of operations and the Company did not consider the amount material to prior periods.

The total consideration for the Forest Acquisition of $27.7 billion is comprised of the equity value of shares that were outstanding and vested prior to July 1, 2014 of $20.0 billion, the portion of outstanding equity awards deemed to have been earned as

of July 1, 2014 of $568.1 million and cash of $7.1 billion. The portion of outstanding equity awards deemed not to have been earned of $570.4 million as of July 1, 2014 will be expensed over the remaining future vesting period, including $26.6 million and $114.4 million in the three and nine months ended September 30, 2015, respectively and $206.7 million in the three and nine months ended September 30, 2014.

The fair value of inventories acquired included an acquisition accounting fair market value step-up of $1,036.3 million. In the three and nine months ended September 30, 2015, the Company recognized $15.4 million and $202.0 million, respectively, as a component of cost of sales as the inventory acquired on July 1, 2014 was sold to the Company’s customers in addition to a write-off associated with the Respiratory Sale. Included in cost of sales for the three and nine months ended September 30, 2014, was $479.5 million as the inventory acquired on July 1, 2014 was sold to the Company’s customers. These amounts include $14.3 million and $26.7 million related to discontinued operations in the nine months ended September 30, 2015 and 2014, respectively.

Included in finished goods inventory as of September 30, 2015 was $42.6 million, relating to the remaining fair value step-up associated with the Forest Acquisition.

As a result of the Forest Acquisition, the Company incurred the following transaction and integration costs in the three and nine months ended September 30, 2015 ($ in millions):

As a result of the transaction, the Company incurred the following transaction and integration costs in the three and nine months ended September 30, 2014 ($ in millions):

During the year ended December 31, 2013, the Company held for sale its then current commercial infrastructure in France, Italy, Spain, Portugal, Belgium, Germany and the Netherlands, including products, marketing authorizations and dossier license rights. On April 1, 2014, the Company divested the assets in Western Europe to Aurobindo Pharma Limited for a loss of $20.9 million which is included as a component of income from discontinued operations.

The following are the material transactions that were completed in the year ended December 31, 2013.

On October 1, 2013, the Company acquired Warner Chilcott plc (“Warner Chilcott”) in a stock for stock transaction for a value, including the assumption of debt, of $9.2 billion (the “Warner Chilcott Acquisition”). Warner Chilcott was a leading specialty pharmaceutical company focused on the women’s healthcare, gastroenterology, urology and dermatology segments of the branded pharmaceuticals market, primarily in North America.

In the nine months ended September 30, 2015, the Company recognized $1.9 million of fair value step-up as a component of cost of sales as the inventory acquired on October 1, 2013 was sold to the Company’s customers. In the three and nine months ended September 30, 2014, the Company recognized $13.8 million and $223.3 million as a component of cost of sales, respectively, as the inventory acquired on October 1, 2013 was sold to the Company’s third party customers. These amounts include zero and $11.4 million relating to the discontinued operations in the nine months ended September 30, 2015 and 2014, respectively.

On July 27, 2015, the Company announced that it entered into the Teva Transaction. Under the Teva Agreement, Teva will acquire Allergan's global generics business, including the U.S. and international generic commercial units, our third-party supplier Medis, our global generic manufacturing operations, our global generic R&D unit, our international over-the-counter (OTC) commercial unit (excluding OTC eye care products) and some established international brands.

Allergan will retain its global branded pharmaceutical and medical aesthetics businesses, as well as its biosimilars development programs, certain over the counter products, and the Anda Distribution business. The Company will also have continuing involvement with Teva after the close of the transaction. As a result of the Teva Transaction, the Company will hold equity in Teva, continue to distribute Teva products through our Anda Distribution segment as well as purchase product manufactured by Teva for sale in our US Brands segment as part of ongoing transitional service and contract manufacturing agreements.

Financial results of the global generics business are presented as "Income from discontinued operations" on the Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014; and assets and liabilities of the global generics business to be disposed of are presented as "Current assets held for sale", "Non current assets held for sale", “Current liabilities held for sale” and “Long term liabilities held for sale” on the Consolidated Balance Sheet as of September 30, 2015 and December 31, 2014.

The following table presents key financial results of the global generics business included in "Income from discontinued operations" for the three and nine months ended September 30, 2015 and 2014 ($ in millions):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014		2015			2014
Third party revenues	$	1,365.4		$	1,532.3	$	4,570.0		$	4,682.1
Related party sales		65.1			57.8		198.9			179.7
Net revenues		1,430.5			1,590.1		4,768.9			4,861.8
Operating expenses:
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)		775.8			757.7		2,296.1			2,280.8
Research and development		98.9			115.2		317.4			352.7
Selling and marketing		121.1			167.0		429.0			482.5
General and administrative		191.7			144.4		493.6			372.8
Amortization		33.7			168.6		326.7			528.5
In-process research and development impairments		-			-		-			1.3
Asset sales and impairments, net		3.2			7.3		54.1			18.0
Total operating expenses		1,224.4			1,360.2		3,916.9			4,036.6
Operating income		206.1			229.9		852.0			825.2
Other (expense) income, net		-			2.5		(8.4	)		(14.2	)
(Benefit) / provision for income taxes		(5,951.3	)		113.1		(5,804.3	)		286.7
Net income from discontinued operations	$	6,157.4		$	119.3	$	6,647.9		$	524.3

Related party revenues represent the sale of products to the Company’s Anda Distribution segment.

For the period ended September 30, 2015, the company recorded a deferred tax benefit of $5,985.4 million related to investments in certain subsidiaries as our intention is not to hold these subsidiaries indefinitely. The recognition of this benefit has been reflected in income from discontinued operations, net of tax with the deferred tax asset reflected in current deferred tax assets on the balance sheet.

The following table presents the aggregate carrying amounts of the major classes of assets and liabilities related to the global generics business to be disposed of ($ in millions):

	September 30, 2015		December 31, 2014
Assets:
Accounts receivable, net	$	1,955.8	$	1,493.3
Inventories		1,163.1		1,098.8
Prepaid expenses and other current assets		314.9		254.6
Current deferred tax assets		354.7		23.3
Property, plant and equipment, net		1,333.7		1,347.5
Investments and other assets		35.0		82.1
Non-current deferred tax assets		124.2		72.7
Product rights and other intangibles		2,992.1		3,091.8
Goodwill		6,093.3		3,655.9
Total assets	$	14,366.8	$	11,120.0

Liabilities:
Accounts payable and accrued expenses	$	1,357.9	$	1,403.8
Income taxes payable		38.7		16.5
Current deferred tax liabilities		39.4		6.3
Debt and capital leases		6.6		12.6
Deferred revenue		16.5		21.7
Other long-term liabilities		87.2		108.8
Other taxes payable		70.0		102.7
Long-term deferred tax liabilities		473.1		308.1
Total liabilities	$	2,089.4	$	1,980.5

Depreciation and amortization was ceased upon the determination that the held for sale criteria were met, which was the announcement date of the Teva Transaction. The depreciation, amortization and significant operating and investing non-cash items of the discontinued operations were as follows ($ in millions):

As of December 31, 2014, the Company included the following assets held for sale:

The Company recognizes compensation expense for all share-based compensation awards made to employees and directors based on the fair value of the awards on the date of grant. A summary of the Company’s share-based compensation plans is presented below.

The Company has adopted several equity award plans which authorize the granting of options, restricted shares, restricted stock units and other forms of equity awards of the Company’s ordinary shares, subject to certain conditions.

Option award plans require options to be granted at the fair value of the shares underlying the options at the date of the grant and generally become exercisable over periods ranging from three to five years. Each option granted expires ten years from the date of the grant. Restricted stock awards are grants that entitle the holder to ordinary shares, subject to certain terms. Restricted stock unit awards are grants that entitle the holder the right to receive an ordinary share, subject to certain terms. Restricted stock and restricted stock unit awards (both time-based vesting and performance-based vesting) generally have restrictions eliminated over a one to four year vesting period. Restrictions generally lapse for non-employee directors after one year. Certain restricted stock units are performance-based awards issued at a target number with the actual number of restricted shares issued ranging based on achievement of the performance criteria. The Company’s equity award plans include the acquired awards from the Allergan Acquisition (“2015 Acquired Awards”) and the acquired awards from the Forest Acquisition (“2014 Acquired Awards”). During the fourth quarter, the Company acquired awards as part of the Kythera Acquisition.

All restricted stock and restricted stock units (whether time-based vesting or performance-based vesting), are granted and expensed, using the fair value per share on the applicable grant date, over the applicable vesting period. Non-qualified options to purchase ordinary shares are granted to employees at exercise prices per share equal to the closing market price per share on the date of grant. The fair value of non-qualified options is determined on the applicable grant dates using the Black-Scholes method of valuation and that amount is recognized as an expense over the vesting period. Using the Black-Scholes valuation model, the fair value of options is based on the following assumptions:

Share-based compensation expense recognized in the Company’s results of operations for the three months ended September 30, 2015 and 2014 were as follows ($ in millions):

Share-based compensation expense recognized in the Company’s results of operations for the nine months ended September 30, 2015 and 2014 was as follows ($ in millions):

Included in the equity-based compensation awards for the three months ended September 30, 2015 is the impact of accelerations and step-ups relating to the acquisition accounting treatment of outstanding awards acquired in the Allergan and Forest Acquisitions of $44.6 million and $18.2 million, respectively. Included in the equity-based compensation awards for the nine months ended September 30, 2015 is the impact of accelerations and step-ups relating to the acquisition accounting treatment of outstanding awards acquired in the Allergan and Forest Acquisitions of $269.8 million and $89.1 million, respectively. Included in the three and nine months ended September 30, 2014, was $206.7 million of stock-based compensation inclusive of a $194.1 million of a step-up relating to the acquisition accounting treatment of outstanding awards acquired in the Forest Acquisition.

Unrecognized future stock-based compensation expense was $775.1 million as of September 30, 2015, including $376.0 million from the Allergan Acquisition and $147.1 million from the Forest Acquisition. This amount will be recognized as an expense over a remaining weighted average period of 1.9 years. Stock-based compensation is being amortized and charged to operations over the same period as the restrictions are eliminated for the participants, which is generally on a straight-line basis.

The following is a summary of equity award activity for unvested restricted stock and stock units in the period from December 31, 2014 through September 30, 2015:

The following is a summary of equity award activity for non-qualified options to purchase ordinary shares in the period from December 31, 2014 through September 30, 2015:

In the third quarter of 2015, there was a strategic shift in the business as a result of the Teva Transaction. As a result, the continuing operations was realigned to reflect the segments as US Brands, US Medical Aesthetics, International Brands and Anda Distribution. Prior to the realignment, the Company operated and managed its business as five distinct operating segments: US Brands, US Medical Aesthetics, International Brands, Global Generics, and Anda Distribution.

Under the new organizational structure being reported, the Company organized its business into four operating segments: US Brands, US Medical Aesthetics, International Brands and Anda Distribution. In addition, certain revenues and shared costs and the results of corporate initiatives are being managed outside of the four segments. The new operating segments are organized as follows:

The Company evaluates segment performance based on segment contribution. Segment contribution for segments represents net revenues less cost of sales (excluding amortization and impairment of acquired intangibles including product rights), selling and marketing expenses, and select general and administrative expenses. The Company does not evaluate the following items at the segment level:

The Company defines segment net sales as product sales and other revenue derived from branded products or licensing agreements. In March 2015, as a result of the Allergan Acquisition, we began to promote Restasis®, Lumigan^®/Ganfort^®, Alphagan^®/Combigan^®, Botox^®, fillers, other aesthetic products and other eye care products. In July 2014, as a result of the Forest Acquisition, the Company also began recognizing revenues on key US brands, including, but not limited to, Bystolic ^®, Canasa^®, Carafate^®, Fetzima ^®, Linzess ^®, Namenda IR^® (which lost exclusivity in July 2015), Namenda XR^®, Saphris^®, Teflaro^® and Viibryd^®.

Cost of sales within segment contribution includes production and packaging costs for the products we manufacture, third party acquisition costs for products manufactured by others, profit-sharing or royalty payments for products sold pursuant to licensing agreements, inventory reserve charges and excess capacity utilization charges, where applicable. Cost of sales does not include amortization or impairment costs for acquired product rights or other acquired intangibles.

Selling and marketing expenses consist mainly of personnel-related costs, product promotion costs, distribution costs, professional service costs, insurance, depreciation and travel costs.

General and administrative expenses consist mainly of personnel-related costs, facilities costs, transaction costs, insurance, depreciation, litigation and settlement costs and professional services costs which are general in nature and attributable to the segment.

Segment net revenues, segment operating expenses and segment contribution information consisted of the following for the three months ended September 30, 2015 and 2014 ($ in millions):

	Three Months Ended September 30, 2015
	US			US Medical			International			Anda
	Brands			Aesthetics			Brands			Distribution			Total

Net revenues	$	2,391.3		$	457.3		$	660.6		$	576.0		$	4,085.2

Operating expenses:
Cost of sales⁽¹⁾		290.2			27.7			112.5			495.5			925.9
Selling and marketing		409.8			89.2			155.8			36.3			691.1
General and administrative		26.9			7.8			41.0			11.0			86.7
Segment Contribution	$	1,664.4		$	332.6		$	351.3		$	33.2		$	2,381.5
Contribution margin		69.6	%		72.7	%		53.2	%		5.8	%		58.3	%
Corporate														608.7
Research and development														1,260.5
Amortization														1,560.2
In-process research and development impairments														300.0
Asset sales and impairments, net														(4.4	)
Operating (loss)														(1,343.5	)
Operating margin														(32.9	)%

^{(1) Excludes amortization and impairment of acquired intangibles including product rights.}
	Three Months Ended September 30, 2014
	US			US Medical			International			Anda
	Brands			Aesthetics			Brands			Distribution			Total

Net revenues	$	1,592.7		$	-		$	57.8		$	500.3		$	2,150.8

Operating expenses:
Cost of sales⁽¹⁾		253.1			-			24.7			422.6			700.4
Selling and marketing		315.3			-			10.2			34.7			360.2
General and administrative		36.9			-			5.2			9.1			51.2
Segment Contribution	$	987.4		$	-		$	17.7		$	33.9		$	1,039.0
Contribution margin		62.0	%		0.0	%		30.6	%		6.8	%		48.3	%
Corporate														1,034.4
Research and development														276.6
Amortization														705.0
In-process research and development impairments														305.0
Asset sales and impairments, net														-
Operating (loss)														(1,282.0	)
Operating margin														(59.6	)%

^{(1) Excludes amortization and impairment of acquired intangibles including product}^rights.

The following is a reconciliation of net revenues for the operating segments to the Company’s net revenues for the three months ended September 30, 2015 and 2014 ($ in millions):

No other country represents ten percent or more of net revenues outside of the United States. The US Brands, US Medical Aesthetics, and Anda Distribution segments are comprised solely of sales within the United States.

Segment net revenues, segment operating expenses and segment contribution information consisted of the following for nine months ended September 30, 2015 and 2014 ($ in millions):

	Nine Months Ended September 30, 2015
	US			US Medical			International			Anda
	Brands			Aesthetics			Brands			Distribution			Total

Net revenues	$	6,669.4		$	1,023.9		$	1,496.4		$	1,678.4		$	10,868.1

Operating expenses:
Cost of sales⁽¹⁾		831.0			66.8			263.6			1,437.7			2,599.1
Selling and marketing		1,241.2			200.9			394.2			111.4			1,947.7
General and administrative		113.2			21.7			83.4			30.7			249.0
Segment Contribution	$	4,484.0		$	734.5		$	755.2		$	98.6		$	6,072.3
Contribution margin		67.2	%		71.7	%		50.5	%		5.9	%		55.9	%
Corporate														2,251.8
Research and development														1,927.9
Amortization														3,866.1
In-process research and development impairments														497.6
Asset sales and impairments, net														3.1
Operating (loss)														(2,474.2	)
Operating margin														(22.8	)%

^{(1) Excludes amortization and impairment of acquired intangibles including product rights.}
	Nine Months Ended September 30, 2014
	US			US Medical			International			Anda
	Brands			Aesthetics			Brands			Distribution			Total

Net revenues	$	2,719.0		$	-		$	124.3		$	1,480.1		$	4,323.4

Operating expenses:
Cost of sales⁽¹⁾		390.1			-			35.7			1,250.2			1,676.0
Selling and marketing		467.6			-			33.4			100.4			601.4
General and administrative		78.9			-			6.3			25.7			110.9
Segment Contribution	$	1,782.4		$	-		$	48.9		$	103.8		$	1,935.1
Contribution margin		65.6	%		0.0	%		39.3	%		7.0	%		44.8	%
Corporate														1,522.9
Research and Development														368.6
Amortization														1,192.2
In-process research and development impairments														320.0
Asset sales and impairments, net														(5.3	)
Operating (loss)														(1,463.3	)
Operating margin														(33.8	)%

^{(1) Excludes amortization and impairment of acquired intangibles including product rights.}

The following is a reconciliation of net revenues for the operating segments to the Company’s net revenues for the nine months ended September 30, 2015 and 2014 ($ in millions):

The following tables present global net revenues for the top products of the Company for the three and nine months ended September 30, 2015 and 2014 ($ in millions):

	Three Months Ended September 30,
	Global				U.S.				International
	2015		2014		2015		2014		2015		2014
Botox®	$	604.5	$	-	$	435.7	$	-	$	168.8	$	-
Restasis®		328.3		-		312.8		-		15.5		-
Namenda® IR		54.9		307.0		54.9		307.0		-		-
Namenda XR®		214.5		120.6		214.5		120.6		-		-
Fillers		167.6		-		89.7		-		77.9		-
Lumigan®/Ganfort®		157.9		-		71.7		-		86.2		-
Bystolic®		155.7		138.6		155.3		138.1		0.4		0.5
Asacol®/Delzicol®		157.2		153.7		141.9		135.2		15.3		18.5
Alphagan®/Combigan®		120.8		-		81.4		-		39.4		-
Linzess®/Constella®		117.5		80.0		117.5		79.7		-		0.3
Viibryd®/Fetzima®		84.5		66.4		84.5		66.4		-		-
Lo Loestrin®		90.8		71.6		89.8		70.8		1.0		0.8
Breast Implants		64.4		-		32.5				31.9		-
Estrace® Cream		87.4		66.7		87.4		66.7		-		-
Aczone®		48.0		-		48.0		-		-		-
Minastrin® 24		74.4		54.0		74.4		54.0		-		-
Other Products Revenues		984.5		591.9		756.6		554.2		227.9		37.7
Total Products Revenues		3,512.9		1,650.5		2,848.6		1,592.7		664.3		57.8
ANDA Revenues		576.0		500.3		576.0		500.3		-		-
Total Net Revenues	$	4,088.9	$	2,150.8	$	3,424.6	$	2,093.0	$	664.3	$	57.8

	Nine Months Ended September 30,
	Global				U.S.				International
	2015		2014		2015		2014		2015		2014
Botox®	$	1,320.1	$	-	$	926.7	$	-	$	393.4	$	-
Restasis®		683.2		-		651.4		-		31.8		-
Namenda® IR		532.9		307.0		532.9		307.0		-		-
Namenda XR®		569.8		120.6		569.8		120.6		-		-
Fillers		388.1		-		206.6		-		181.5		-
Lumigan®/Ganfort®		355.5		-		165.9		-		189.6		-
Bystolic®		476.9		138.6		476.1		138.1		0.8		0.5
Asacol®/Delzicol®		455.7		455.4		407.8		401.2		47.9		54.2
Alphagan®/Combigan®		272.3		-		184.9		-		87.4		-
Linzess®/Constella®		325.8		80.0		325.8		79.7		-		0.3
Viibryd®/Fetzima®		244.8		66.4		244.8		66.4		-		-
Lo Loestrin®		253.3		202.0		251.7		201.2		1.6		0.8
Breast Implants		145.8		-		66.2		-		79.6		-
Estrace® Cream		229.4		177.9		229.4		177.9		-		-
Aczone®		114.3		-		114.3		-		-		-
Minastrin® 24		195.9		158.4		195.3		158.4		0.6		-
Other Products Revenues		2,631.3		1,136.9		2,143.7		1,068.5		487.6		68.4
Total Products Revenues		9,195.1		2,843.2		7,693.3		2,719.0		1,501.8		124.2
ANDA Revenues		1,678.4		1,480.1		1,678.4		1,480.1		-		-
Total Net Revenues	$	10,873.5	$	4,323.3	$	9,371.7	$	4,199.1	$	1,501.8	$	124.2

The following table presents net revenues for the US Brands segment for the three and nine months ended September 30, 2015 and 2014 ($ in millions):

The following table presents revenues for the US Medical Aesthetics segment for the three and nine months ended September 30, 2015 and 2014 ($ in millions):

The following table presents net revenues for the International Brands segment for the three and nine months ended September 30, 2015 and 2014 ($ in millions):

Inventories consist of finished goods held for sale and distribution, raw materials and work-in-process. Inventories are stated at the lower of cost (first-in, first-out method) or market (net realizable value). The Company writes down inventories to net realizable value based on forecasted demand, market conditions or other factors, which may differ from actual results.

Included in finished goods were the following amounts related to the fair-value step-up of acquired inventory ($ in millions):

Investments in marketable securities, other investments and other assets consisted of the following ($ in millions):

The Company’s marketable securities and other long-term investments are classified as available-for-sale and are recorded at fair value based on quoted market prices using the specific identification method. These investments are classified as either current or non-current, as appropriate, in the Company’s consolidated balance sheets.

Accounts payable and accrued expenses consisted of the following ($ in millions):

	September 30, 2015		December 31, 2014
Accrued expenses:
Accrued third-party rebates	$	1,302.5	$	905.1
Accrued payroll and related benefits		414.2		201.2
Litigation-related reserves and legal fees		271.1		300.9
Accrued R&D expenditures		245.7		169.9
Accrued non-provision taxes		120.1		3.3
Interest payable		197.0		82.7
Current portion of contingent consideration obligations		194.5		233.9
Royalties payable		131.6		128.9
Accrued returns		302.0		250.3
Accrued selling and marketing expenditures		111.6		9.6
Accrued merger-related costs		109.5		—
Accrued pharmaceutical fees		120.9		118.7
Accrued severance, retention and other shutdown costs		96.4		107.2
Accrued professional fees		39.1		39.3
Manufacturing related		18.3		11.2
Dividends payable		24.0		—
Accrued warranties		7.6		—
Accrued co-promotion liabilities		5.1		7.5
Other accrued expenses		236.4		102.7
Total accrued expenses	$	3,947.6	$	2,672.4
Accounts payable		565.9		323.3
Total Accounts Payable and Accrued Expenses	$	4,513.5	$	2,995.7

Goodwill for the Company’s segments consisted of the following ($ in millions):

As of September 30, 2015 and December 31, 2014, the gross balance of goodwill, pre-impairments, was $46,334.9 million and $20,882.9 million, respectively.

The following items had a significant impact on goodwill in the nine months ended September 30, 2015:

Product rights and other intangible assets consisted of the following ($ in millions):

Cost Basis	Balance as of December 31, 2014		Acquisitions		Impairments			IPR&D to CMP Transfers			Disposals/ Held for Sale/ Other			Foreign Currency Translation			Balance as of September 30, 2015
Intangibles with definite lives:
Product rights and other related intangibles	$	15,226.5	$	44,738.7	$	-		$	2,104.1		$	(964.9	)	$	316.0		$	61,420.4
Trade name		-		690.0		-			-			-			-			690.0
Total definite-lived intangible assets	$	15,226.5	$	45,428.7	$	-		$	2,104.1		$	(964.9	)	$	316.0		$	62,110.4
Intangibles with indefinite lives:
IPR&D	$	4,116.4	$	10,289.8	$	(497.6	)	$	(2,104.1	)	$	(38.8	)	$	(3.1	)	$	11,762.6
Trade name		76.2		-		-			-			-			-			76.2
Total indefinite-lived intangible assets	$	4,192.6	$	10,289.8	$	(497.6	)	$	(2,104.1	)	$	(38.8	)	$	(3.1	)	$	11,838.8
Total product rights and related intangibles	$	19,419.1	$	55,718.5	$	(497.6	)	$	-		$	(1,003.7	)	$	312.9		$	73,949.2

Accumulated Amortization	Balance as of December 31, 2014			Amortization			Impairments		IPR&D to CMP Transfers		Disposals/ Held for Sale/ Other		Foreign Currency Translation		Balance as of September 30, 2015
Intangibles with definite lives:
Product rights and other related intangibles	$	(3,322.5	)	$	(3,825.4	)	$	-	$	-	$	371.0	$	1.8	$	(6,775.1	)
Trade name		-			(40.7	)		-		-		-		-		(40.7	)
Total definite-lived intangible assets	$	(3,322.5	)	$	(3,866.1	)	$	-	$	-	$	371.0	$	1.8	$	(6,815.8	)
Total product rights and related intangibles	$	(3,322.5	)	$	(3,866.1	)	$	-	$	-	$	371.0	$	1.8	$	(6,815.8	)
Net Product Rights and Other Intangibles	$	16,096.6													$	67,133.4

The following items had a significant impact on net product rights and other intangibles in the nine months ended September 30, 2015:

Assuming no additions, disposals or adjustments are made to the carrying values and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles as of September 30, 2015 over the remainder of 2015 and each of the next five years is estimated to be as follows ($ in millions):

The above amortization expense is an estimate. Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions, finalization of preliminary fair value estimates, potential impairments, accelerated amortization or other events.

	Balance As of						Fair Market Value As of
	September 30, 2015			December 31, 2014			September 30, 2015		December 31, 2014
Senior Notes:
Floating Rate Notes
$500.0 million floating rate notes due September 1, 2016	$	500.0		$	-		$	499.2	$	-
$500.0 million floating rate notes due March 12, 2018		500.0			-			498.0		-
$500.0 million floating rate notes due March 12, 2020		500.0			-			494.8		-
		1,500.0			-			1,492.0		-
Fixed Rate Notes
$800.0 million 5.750% notes due April 1, 2016		800.0			-			817.9		-
$1,000.0 million 1.850% notes due March 1, 2017		1,000.0			-			1,002.0		-
$500.0 million 1.300% notes due June 15, 2017		500.0			500.0			495.4		489.0
$1,200.0 million 1.875% notes due October 1, 2017		1,200.0			1,200.0			1,197.6		1,187.3
$3,000.0 million 2.350% notes due March 12, 2018		3,000.0			-			3,012.0		-
$250.0 million 1.350% notes due March 15, 2018		250.0			-			244.6		-
$1,050.0 million 4.375% notes due February 1, 2019		1,050.0			1,050.0			1,107.2		1,111.4
$500.0 million 2.450% notes due June 15, 2019		500.0			500.0			496.4		498.2
$400.0 million 6.125% notes due August 15, 2019		400.0			400.0			448.4		457.9
$3,500.0 million 3.000% notes due March 12, 2020		3,500.0			-			3,509.0		-
$650.0 million 3.375% notes due September 15, 2020		650.0			-			660.7		-
$750.0 million 4.875% notes due February 15, 2021		750.0			750.0			807.4		808.9
$1,200.0 million 5.000% notes due December 15, 2021		1,200.0			1,200.0			1,299.0		1,301.0
$3,000.0 million 3.450% notes due March 15, 2022		3,000.0			-			2,976.7		-
$1,700.0 million 3.250% notes due October 1, 2022		1,700.0			1,700.0			1,654.5		1,647.5
$350.0 million 2.800% notes due March 15, 2023		350.0			-			327.1		-
$1,200.0 million 3.850% notes due June 15, 2024		1,200.0			1,200.0			1,175.0		1,215.5
$4,000.0 million 3.800% notes due March 15, 2025		4,000.0			-			3,880.1		-
$2,500.0 million 4.550% notes due March 15, 2035		2,500.0			-			2,286.2		-
$1,000.0 million 4.625% notes due October 1, 2042		1,000.0			1,000.0			922.9		980.1
$1,500.0 million 4.850% notes due June 15, 2044		1,500.0			1,500.0			1,374.7		1,539.9
$2,500.0 million 4.750% notes due March 15, 2045		2,500.0			-			2,259.3		-
		32,550.0			11,000.0			31,954.1		11,236.7
Total Senior Notes Gross		34,050.0			11,000.0			33,446.1		11,236.7
Unamortized premium		246.1			239.9			-		-
Unamortized discount		(110.3	)		(52.1	)		-		-
Total Senior Notes Net		34,185.8			11,187.8			33,446.1		11,236.7
Term Loan Indebtedness:
WC Term Loan
WC Three Year Tranche variable rate debt maturing October 1, 2016		191.5			506.9
WC Five Year Tranche variable rate debt maturing October 1, 2018**		514.9			744.7
		706.4			1,251.6
ACT Term Loan
2017 Term Loan variable rate debt maturing October 31, 2017**		592.6			932.6
2019 Term Loan variable rate debt maturing July 1, 2019**		1,750.0			1,900.0
		2,342.6			2,832.6
AGN Term Loan
AGN Three Year Tranche variable rate debt maturing March 17, 2018		2,750.0			-
AGN Five Year Tranche variable rate debt maturing March 17, 2020**		2,612.5			-
		5,362.5			-
Total Term Loan Indebtedness		8,411.5			4,084.2
Other Indebtedness
Revolver Borrowings		-			255.0
Other		83.2			-
Total Other Borrowings		83.2			255.0
Capital Leases		3.0			4.1
Total Indebtedness	$	42,683.5		$	15,531.1

Fair market value in the table above is determined in accordance with ASC Topic 820 “Fair Value Measurement” (“ASC 820”) under Level 2 based upon quoted prices for similar items in active markets. The book value of the outstanding term loan indebtedness approximates fair value as the debt is at variable interest rates and re-prices frequently.

Unless otherwise indicated, the remaining loan balances after the quarterly required payments are due upon maturity.

On March 4, 2015, Actavis Funding SCS, a limited partnership (société en commandite simple) organized under the laws of the Grand Duchy of Luxembourg and an indirect wholly-owned subsidiary of Allergan plc, issued floating rate notes due 2016 (the “2016 Floating Rate Notes”), floating rate notes due 2018 (the “2018 Floating Rate Notes”), floating rate notes due 2020 (the “2020 Floating Rate Notes”), 1.850% notes due 2017 (the “1.850% 2017 Notes”), 2.350% notes due 2018 (the “2.350% 2018 Notes”), 3.000% notes due 2020 (the “3.000% 2020 Notes”), 3.450% notes due 2022 (the “3.450% 2022 Notes”), 3.800% notes due 2025 (the “3.800% 2025 Notes”), 4.550% notes due 2035 (the “4.550% 2035 Notes”) and 4.750% notes due 2045 (the “4.750% 2045 Notes”). The notes are fully and unconditionally guaranteed by Actavis Funding SCS’s indirect parents, Warner Chilcott Limited and Actavis Capital S.a.r.l. (“Actavis Capital”), and by Actavis, Inc., a subsidiary of Actavis Capital, on an unsecured and unsubordinated basis. Allergan plc has not guaranteed the notes.

The 2016 Floating Rate Notes, the 2018 Floating Rate Notes and the 2020 Floating Rate Notes bear interest at a floating rate equal to three-month LIBOR plus 0.875%, 1.080% and 1.255% per annum, respectively. Interest on the 2016 Floating Rate Notes is payable quarterly on March 1, June 1, September 1 and December 1 of each year, and began on June 1, 2015. Interest on the 2018 Floating Rate Notes and the 2020 Floating Rate Notes is payable quarterly on March 12, June 12, September 12 and December 12 of each year, and began on June 12, 2015.

The Company has issued fixed rate notes over multiple issuances for various business needs. Interest on the various notes is generally payable semi-annually with various payment dates.

The following represents the activity to the fixed rate notes during the nine months ended September 30, 2015:

On December 17, 2014, Allergan plc and certain of its subsidiaries entered into a second amendment agreement (the “WC Term Loan Amendment”) among Allergan plc, Warner Chilcott Limited, Warner Chilcott Finance, LLC, Actavis WC 2 S.à r.l. (“Actavis WC 2”), Warner Chilcott Company, LLC (“WCCL”), Warner Chilcott Corporation (“WC Corporation” and together with Actavis WC 2 and WCCL, the “WC Borrowers”), Bank of America, N.A. (“BofA”), as administrative agent, and the lenders party thereto. The WC Term Loan Amendment amends and restates Allergan plc’s existing amended and restated WC term loan credit and guaranty agreement, dated as of June 9, 2014 (such agreement, prior to its amendment and restatement pursuant to the WC Term Loan Amendment, the “2014 WC Term Loan”), among the WC Borrowers, Allergan plc, Warner Chilcott Limited, Warner Chilcott Finance, LLC, the lenders from time to time party thereto and BofA, as administrative agent, which amended and restated Allergan plc’s existing WC term loan credit and guaranty agreement, dated as of August 1, 2013 (such agreement, prior to its amendment and restatement pursuant to the 2014 WC Term Loan Amendment, the “Existing WC Term Loan”) among the WC Borrowers, Warner Chilcott Finance, LLC, Actavis Limited, BofA, as administrative agent and a syndicate of banks participating as lenders.

Pursuant to the Existing WC Term Loan, on October 1, 2013 (the “WC Closing Date”), the lenders party thereto provided term loans in a total aggregate principal amount of $2.0 billion, comprised of (i) a $1.0 billion tranche that will mature on October 1, 2016 (the “WC Three Year Tranche”) and (ii) a $1.0 billion tranche that will mature on October 1, 2018 (the “WC Five Year Tranche”). The proceeds of borrowings under the Existing WC Term Loan Agreement, together with $41.0 million of cash on hand, were used to finance the repayment in full of all amounts outstanding under Warner Chilcott’s then-existing Credit Agreement, dated as of March 17, 2011, as amended by Amendment No. 1 on August 20, 2012, among the WC Borrowers, Warner Chilcott Holdings Company III, Limited, BofA, as administrative agent and a syndicate of banks participating as lenders.

Borrowings under the WC Term Loan Agreement bear interest at the applicable borrower’s choice of a per annum rate equal to either (a) a base rate plus an applicable margin per annum varying from (x) 0.00% per annum to 0.75% per annum under the WC Three Year Tranche and (y) 0.125% per annum to 0.875% per annum under the WC Five Year Tranche, depending on the publicly announced debt ratings for non-credit-enhanced, senior unsecured long-term indebtedness of Allergan plc (such applicable debt rating the “Debt Rating”) or (b) a Eurodollar rate, plus an applicable margin varying from (x) 1.00% per annum to 1.75% per annum under the WC Three Year Tranche and (y) 1.125% per annum to 1.875% per annum under the WC Five Year Tranche, depending on the Debt Rating.

The Company is subject to, and, at September 30, 2015, was in compliance with, all financial and operational covenants under the terms of the WC Term Loan.

On December 17, 2014, Allergan plc and certain of its subsidiaries entered into a third amendment agreement (the “ACT Term Loan Amendment”) among Allergan plc, Warner Chilcott Limited, Actavis Capital, Actavis, Inc., Actavis Funding SCS, BofA, as administrative agent, and the lenders party thereto. The ACT Term Loan Amendment amends and restates Allergan plc’s existing second amended and restated Allergan term loan credit and guaranty agreement, dated as of March 31, 2014 (such agreement, prior to its amendment and restatement pursuant to the ACT Term Loan Amendment, the “2014 ACT Term Loan Agreement” and together with the Existing ACT Term Loan Agreement (defined below), the “ACT Term Loan”) among Actavis Capital, Allergan plc, Warner Chilcott Limited, Actavis, Inc., Actavis Funding SCS, BofA, as administrative agent, and the lenders from time to time party thereto, which amended and restated Allergan plc’s existing amended and restated Allergan term loan credit and guaranty agreement, dated as of October 1, 2013 (such agreement, prior to its amendment and restatement pursuant to the ACT Term Loan Amendment, the “Existing ACT Term Loan Agreement”) among Actavis Capital, Allergan plc, Actavis, Inc., BofA, as administrative agent, and the lenders from time to time party thereto.

The Existing ACT Term Loan Agreement amended and restated Actavis, Inc.’s $1,800.0 million senior unsecured term loan credit facility, dated as of June 22, 2012. At the closing of the Existing ACT Term Loan Agreement, an aggregate principal amount of $1,572.5 million was outstanding (the “2017 Term Loan”). The 2017 Term Loan matures on October 31, 2017.

On March 31, 2014, Allergan plc, Actavis Capital, Actavis, Inc., BofA, as Administrative Agent, and a syndicate of banks participating as lenders entered into the 2014 ACT Term Loan Agreement to amend and restate the Existing ACT Term Loan Agreement. On July 1, 2014, in connection with the Forest Acquisition, the Company borrowed $2.0 billion of term loan indebtedness under tranche A-2 of the 2014 ACT Term Loan Agreement, which is due July 1, 2019 (the “2019 Term Loan”).

The ACT Term Loan provides that loans thereunder will bear interest, at the Company’s choice, of a per annum rate equal to either (a) a base rate, plus an applicable margin per annum varying from (x) 0.00% per annum to 1.00% per annum with respect to the 2017 term-loan and (y) 0.125% per annum to 0.875% per annum with respect to the 2019 term-loan, depending on the Debt Rating or

(b) a Eurodollar rate, plus an applicable margin varying from (x) 1.00% per annum to 2.00% per annum with respect to the 2017 term-loan and (y) 1.125% per annum to 1.875% per annum with respect to the 2019 term-loan, depending on the Debt Rating.

The Company is subject to, and at September 30, 2015 was in compliance with, all financial and operational covenants under the terms of the ACT Term Loan.

On December 17, 2014, Allergan, Inc. and certain of its subsidiaries entered into a senior unsecured term loan credit agreement (the “AGN Term Loan”), among Actavis Capital, as borrower, Allergan plc, Warner Chilcott Limited, Actavis, Inc., Actavis Funding SCS, the lenders from time to time party thereto (the “Term Lenders”), JPMorgan Chase Bank, N.A. (“JPMCB”), as administrative agent and the other financial institutions party thereto. Under the AGN Term Loan, the Term Lenders provided (i) a $2.75 billion tranche maturing on March 17, 2018 (the “AGN Three Year Tranche”) and (ii) a $2.75 billion tranche and maturing on March 17, 2020 (the “AGN Five Year Tranche”). The proceeds of borrowings under the AGN Term Loan were to be used to finance, in part, the cash component of the Allergan Acquisition consideration and certain fees and expenses incurred in connection with the Allergan Acquisition.

Borrowings under the AGN Term Loan bear interest at our choice of a per annum rate equal to either (a) a base rate plus an applicable margin per annum varying from (x) 0.00% per annum to 1.00% per annum under the AGN Three Year Tranche and (y) 0.125% per annum to 1.250%% per annum under the AGN Five Year Tranche, depending on the Debt Rating or (b) a Eurodollar rate, plus an applicable margin varying from (x) 1.00% per annum to 2.00% per annum under the AGN Three Year Tranche and (y) 1.125% per annum to 2.250% per annum under the AGN Five Year Tranche, depending on the Debt Rating. The outstanding principal amount of loans under the AGN Three Year Tranche is not subject to quarterly amortization and shall be payable in full on the maturity date. The outstanding principal amount of loans under the AGN Five Year Tranche is payable in equal quarterly amounts of 2.50% per quarter prior to March 17, 2020, with the remaining balance payable on March 17, 2020.

The obligations of Actavis Capital under the Term Loan Credit Agreement are guaranteed by Warner Chilcott Limited, Actavis, Inc. and Actavis Funding SCS and will be guaranteed by any subsidiary of Allergan plc (other than Actavis Capital or a direct subsidiary of Allergan plc) that becomes a guarantor of third party indebtedness in an aggregate principal amount exceeding $350.0 million (unless, in the case of a foreign subsidiary, such guarantee would give rise to adverse tax consequences as reasonably determined by Allergan plc).

On December 17, 2014, Allergan and certain of its subsidiaries entered into a 364-day senior unsecured bridge credit agreement (the “Bridge Loan Facility”), among Actavis Capital, as borrower, Allergan plc, Warner Chilcott Limited, Actavis, Inc., Actavis Funding SCS, the lenders from time to time party thereto (the “Bridge Lenders”), JPMCB, as administrative agent and the other financial institutions party thereto. Under the Bridge Loan Facility, the Bridge Lenders committed to provide, subject to certain conditions, unsecured bridge financing, of which $2.8 billion was drawn to finance the Allergan Acquisition on March 17, 2015. The outstanding balance of the Bridge Loan Facility was repaid on April 9, 2015.

Borrowings under the Bridge Loan Facility bore interest at our choice of a per annum rate equal to either (a) a base rate plus an applicable margin per annum varying from 0.00% per annum to 2.50% per annum, depending on the Debt Rating and the number of days for which the loans remain outstanding from the date of funding thereunder or (b) a Eurodollar rate, plus an applicable margin varying from 1.00% per annum to 3.50% per annum, depending on the Debt Rating and the number of days for which the loans remain outstanding from the date of funding thereunder.

On December 17, 2014, Allergan plc and certain of its subsidiaries entered into a revolving credit loan and guaranty agreement (the “Revolver Agreement”) among Actavis Capital, as borrower, Allergan plc, Warner Chilcott Limited, Actavis, Inc., Actavis Funding SCS, the lenders from time to time party thereto (the “Revolving Lenders”), JPMCB as administrative agent, J.P. Morgan Europe Limited, as London agent, and the other financial institutions party thereto. Under the Revolver Agreement, the Revolving Lenders have committed to provide an unsecured revolving credit facility in an aggregate principal amount of up to $1.0 billion.

The Revolver Agreement provides that loans thereunder will bear interest, at our choice, of a per annum rate equal to either (a) a base rate, plus an applicable margin per annum varying from 0.00% per annum to 1.00% per annum depending on the Debt Rating or (b) a Eurodollar rate, plus an applicable margin varying from 0.875% per annum to 2.00% per annum depending on the Debt Rating. Additionally, to maintain availability of funds, the Company pays an unused commitment fee, which according to the pricing grid is

set at 0.075% to 0.250% per annum, depending on the Debt Rating, of the unused portion of the revolver. The Revolving Credit Agreement will mature on December 17, 2019.

The obligations under the Revolver Agreement are guaranteed by Allergan plc, Warner Chilcott Limited, Actavis, Inc. and Actavis Funding SCS and will be guaranteed by any subsidiary of Allergan (other than Actavis Capital) that becomes a guarantor of third party indebtedness in an aggregate principal amount exceeding $350.0 million (unless, in the case of a foreign subsidiary, such guarantee would give rise to adverse tax consequences as reasonably determined by Allergan plc).

The Company is subject to, and as September 30, 2015 was in compliance with, all financial and operational covenants under the terms of the Revolving Credit Facility. At September 30, 2015, there was no outstanding borrowings under the Revolving Credit Facility and letters of credit outstanding were $28.8 million. The net availability under the Revolving Credit Facility was $971.2 million. The Company borrowed $800.0 million against the Revolver Agreement on October 1, 2015, to finance in part, the Kythera Acquisition.

As of September 30, 2015, annual debt maturities were as follows ($ in millions):

Amounts represent total anticipated cash payments assuming scheduled repayments.

The Company’s effective tax rate (benefit) for the nine months ended September 30, 2015 was 41.0% compared to 17.7% for nine months ended September 30, 2014. The effective tax rate for the nine months ended September 30, 2015 was impacted by income earned in jurisdictions with tax rates different from the Irish statutory rate and U.S. losses tax benefited at rates greater than the Irish statutory rate. This is partially offset by amortization of intangibles and the step-up in inventory benefited at rates different from the

Irish statutory rate. Additionally, the tax benefit for the nine months ended September 30, 2015 included a benefit of $318.9 million for the reversal of a valuation allowance on a portion of U.S. capital loss carryforwards resulting from restructuring associated with the sale of the global generics business, a benefit of $36.8 million for the recognition of previously unrecognized tax benefits, a benefit of $41.3 million for certain IPR&D impairments and a benefit of $44.0 million for net operating losses acquired as part of the Naurex Transaction. The effective tax rate for the nine months ended September 30, 2014 was primarily impacted by U.S. losses tax benefited at rates greater than the Irish statutory rate. This benefit was partially offset by a one-time non-deductible pre-tax expense for the 2015 Branded Prescription Drug Fee of $101.0 million and certain IPR&D impairments of $305.0 million in low tax jurisdictions.

For the first and second quarter of 2015, our estimated annual effective tax rate was subject to wide variability due to the overall level of forecasted pre-tax book income, the mix of earnings between jurisdictions and significant acquisition related expenses. As a result, we had computed the income tax benefit for the three months ended March 31, 2015 and six months ended June 30, 2015 based on year to date results. For the nine months ended September 30, 2015, this wide variability no longer exists. Specifically, the level of pre-tax book income is such that the impact of permanent differences no longer creates such variability. As a result, the company is computing the tax benefit based on an estimated annual effective tax rate as required by the accounting standard.

The Company conducts business globally and, as a result, it files federal, state and foreign tax returns. The Company strives to resolve open matters with each tax authority at the examination level and could reach agreement with a tax authority at any time. While the Company has accrued for amounts it believes are the likely outcomes, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the condensed consolidated financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal. The uncertain tax positions are reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues and issuance of new legislation, regulations or case law. Management believes that appropriate amounts of tax and related penalty and interest have been provided for any adjustments that may result from these uncertain tax positions.

The Company is generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2007. For the Watson group’s 2008 and 2009 tax years, the Company and the IRS have agreed on all issues except the timing of the deductibility of certain litigation costs. Due to our numerous acquisitions we have several concurrent IRS tax audits for pre-acquisition periods. The table below lists the U.S. entities and taxable years that are currently under audit by the IRS, including certain entities which will be transferred to Teva as part of the sale of certain subsidiaries:

While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company has accrued for amounts it believes are the likely outcomes at this time.

In the first quarter of 2015, as part of acquisition accounting, the Company accrued income taxes, including withholding taxes, of approximately $1.2 billion for certain pre-acquisition earnings related to the Allergan Acquisition. The Company expects that future subsidiary earnings will be indefinitely reinvested. In addition, as part of acquisition accounting, the Company accrued $69.9 million of uncertain tax positions related to the Legacy Allergan pre-acquisition tax years. Substantially all of these unrecognized tax benefits, if recognized, would impact our effective income tax rate.

In the third quarter of 2015, the Company reported its global generics business as a discontinued operation and its assets and liabilities as part of assets held for sale. For the tax provision, the Company appropriately calculated its total provision and its provision for taxes from continuing operations. The difference between these two is recorded as the tax provision or benefit from discontinued operations consistent with the accounting standard. As part of recording assets held for sale, the Company also recorded the tax provision or benefit on certain differences between book and tax on its outside basis of both domestic and foreign subsidiaries. The most significant of these is a $6.0 billion deferred tax asset related to investments in certain domestic subsidiaries. This asset is appropriately recorded in Q3 since the benefit is expected to be realized in the foreseeable future. Specifically, the deferred tax asset will reverse upon the sale of these subsidiaries to Teva. Refer to “NOTE 5 — Discontinued Operations” for more information.

A summary of the changes in shareholders’ equity for the nine months ended September 30, 2015 consisted of the following ($ in millions):

On February 24, 2015, the Company completed an offering of 5,060,000 of our 5.500% mandatorily convertible preferred shares, Series A, par value $0.0001 per share (the “Mandatory Convertible Preferred Shares”). Dividends on the Mandatory Convertible Preferred Shares will be payable on a cumulative basis when, as and if declared by our board of directors, or an authorized committee thereof, at an annual rate of 5.500% on the liquidation preference of $1,000.00 per Mandatory Convertible Preferred Share. The Company may pay declared dividends in cash, by delivery of our ordinary shares or by delivery of any combination of cash and our ordinary shares, as determined by us in our sole discretion, subject to certain limitations, on March 1, June 1, September 1 and December 1 of each year commencing June 1, 2015, to and including March 1, 2018. The net proceeds from the Mandatory Convertible Preferred Share issuance of $4,929.7 million were used to fund the Allergan Acquisition.

Each Mandatory Convertible Preferred Share will automatically convert on March 1, 2018, into between 2.8345 and 3.4722 ordinary shares, subject to anti-dilution adjustments. The number of our ordinary shares issuable on conversion of the Mandatory Convertible Preferred Shares will be determined based on the volume weighted average price per ordinary share over the 20 consecutive trading day period beginning on and including the 22nd scheduled trading day immediately preceding March 1, 2018, the mandatory conversion date. At any time prior to March 1, 2018, other than during a fundamental change conversion period as defined, holders of the Mandatory Convertible Preferred Shares may elect to convert each Mandatory Convertible Preferred Share into our ordinary shares at the minimum conversion rate of 2.8345 ordinary shares per Mandatory Convertible Preferred Share, subject to anti-dilution adjustments. In addition, holders may elect to convert any Mandatory Convertible Preferred Shares during a specified period beginning on the fundamental change effective date, in which case such Mandatory Convertible Preferred Shares will be converted into our ordinary shares at the fundamental change conversion rate and converting holders will also be entitled to receive a fundamental change dividend make-whole amount and accumulated dividend amount.

In the nine months ended September 30, 2015, the Company paid $138.4 million of dividends on preferred shares.

On March 2, 2015, in connection with the Allergan Acquisition, the Company issued 14,513,889 of its ordinary shares for an actual public offering price of $288.00 per share. The net proceeds of $4,071.1 million were used, in part, to finance the Allergan Acquisition.

For most of the Company’s international operations, the local currency has been determined to be the functional currency. The results of its non-U.S. dollar based operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transaction. Translation adjustments are reflected in shareholders’ equity and are included as a component of other comprehensive (loss). The effects of converting non-functional currency assets and liabilities into the functional currency are recorded as transaction gains/losses in general and administrative expenses in the consolidated statements of operations.

The movements in accumulated other comprehensive (loss) for the three and nine months ended September 30, 2015 were as follows (in millions):

The movements in accumulated other comprehensive income / (loss) for the three and nine months ended September 30, 2014 were as follows (in millions):

The Company’s revenue, earnings, cash flows and fair value of its assets and liabilities can be impacted by fluctuations in foreign exchange risks and interest rates, as applicable. The Company manages the impact of foreign exchange risk and interest rate movements through operational means and through the use of various financial instruments, including derivative instruments such as foreign currency derivatives.

Overall, the Company is a net recipient of currencies other than the U.S. dollar and, as such, benefits from a weaker dollar and is adversely affected by a stronger dollar relative to major currencies worldwide. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may negatively affect the Company’s consolidated revenues and favorably impact operating expenses in U.S. dollars.

Primarily as a result of the Allergan Acquisition and from time to time, the Company enters into foreign currency derivatives to reduce current and future earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on its core business issues. Accordingly, the Company enters into various contracts which change in value as foreign exchange rates change to economically offset the effect of changes in the value of foreign currency assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. The Company enters into foreign currency derivatives in amounts between minimum and maximum anticipated foreign exchange exposures. The Company does not designate the current derivative instruments as accounting hedges.

The Company uses foreign currency derivatives, which provide for the sale or purchase or the option for sell or purchase of foreign currencies to economically hedge the currency exchange risks associated with probable but not firmly committed transactions that arise in the normal course of the Company’s business. Probable but not firmly committed transactions are comprised primarily of sales of products and purchases of raw material in currencies other than the U.S. dollar. The foreign currency derivatives are entered into to reduce the volatility of earnings generated in currencies other than the U.S. dollar. While these instruments are subject to fluctuations in value, such fluctuations are anticipated to offset changes in the value of the underlying exposures.

The Company recognized realized and unrealized (gains) / losses on such contracts of $6.4 million and $5.8 million during the three and nine months ended September 30, 2015 respectively.

The fair value of outstanding foreign currency derivatives are recorded in “Prepaid expenses and other current assets” or “Accounts payable and accrued expenses.” At September 30, 2015 and December 31, 2014, foreign currency derivative assets associated with the foreign exchange option contracts of $90.9 million and $2.3 million, respectively, were included in “Prepaid expenses and other current assets.” At September 30, 2015, net foreign currency derivative liabilities associated with the foreign exchange forward contracts of $0.4 million were included in “Accounts payable and accrued expenses.”

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants. Fair values determined based on Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined based on Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices for identical or similar assets in markets that are not very active. Fair values determined based on Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market activity. A financial asset or liability’s classification within the above hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Assets and liabilities measured at fair value or disclosed at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 consisted of the following (in millions):

Commission File Number	Exact name of registrant as specified in its charter, principal office and address and telephone number	State of incorporation or organization	I.R.S. Employer Identification No.
001-36867	Allergan plc Clonshaugh Business and Technology Park Coolock, Dublin, D17 E400, Ireland (862) 261-7000	Ireland	98-1114402

001-36887	Warner Chilcott Limited Cannon’s Court 22	Bermuda	98-0496358
	Victoria Street
	Hamilton HM 12
	Bermuda
	(441) 295-2244

Allergan plc		YES x		NO ¨
Warner Chilcott Limited		YES x		NO ¨

Allergan plc		YES x		NO ¨
Warner Chilcott Limited		YES x		NO ¨

Allergan plc	Large accelerated filer	x	Accelerated filer	¨
	Non-accelerated filer (Do not check if a smaller reporting company)	¨	Smaller reporting company	¨

Warner Chilcott Limited	Large accelerated filer	¨	Accelerated filer	¨
	Non-accelerated filer (Do not check if a smaller reporting company)	x	Smaller reporting company	¨

Allergan plc		YES ¨		NO x
Warner Chilcott Limited		YES ¨		NO x

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited)	3
	Consolidated Balance Sheets of Allergan plc as of September 30, 2015 and December 31, 2014	3
	Consolidated Statements of Operations of Allergan plc for the three and nine months ended September 30, 2015 and September 30, 2014	4
	Consolidated Statements of Comprehensive Income / (Loss) of Allergan plc for the three and nine months ended September 30, 2015 and September 30, 2014	5
	Consolidated Statements of Cash Flows of Allergan plc for the nine months ended September 30, 2015 and 2014	6
	Consolidated Balance Sheets of Warner Chilcott Limited as of September 30, 2015 and December 31, 2014	7
	Consolidated Statements of Operations of Warner Chilcott Limited for the three and nine months ended September 30, 2015 and September 30, 2014	8
	Consolidated Statements of Comprehensive Income / (Loss) of Warner Chilcott Limited for the three and nine months ended September 30, 2015 and September 30, 2014	9
	Consolidated Statements of Cash Flows of Warner Chilcott Limited for the nine months ended September 30, 2015 and 2014	10
	Notes to Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	83
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	114
Item 4.	Controls and Procedures	115
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	117
Item 1A.	Risk Factors	117
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	117
Item 6.	Exhibits	117
	Signatures	118

Balance as of December 31, 2014	$	1,312.7
Acquired reserves in the Allergan Acquisition (defined below)		429.5
Provision to reduce gross product sales to net product sales		3,982.7
Payments and other		(3,921.9	)
Balance as of September 30, 2015	$	1,803.0

	Nine Months Ended September 30, 2015
	As reported		Allergan Acquisition		Pro Forma
Net Revenue	$	10,873.5	$	1,523.0	$	12,396.5
Net income / (loss) attributable to ordinary shareholders	$	4,383.7	$	377.7	$	4,761.4
Net income / (loss) per share
Basic	$	12.21			$	11.58
Diluted	$	12.21			$	11.58

	Preliminary Values as of September 30, 2015
Cash and cash equivalents	$	1.6
IPR&D intangible assets		286.0
Goodwill		36.3
Other assets and liabilities		(1.9	)
Contingent consideration		(90.0	)
Deferred tax liabilities, net		(97.5	)
Net assets acquired	$	134.5

	Preliminary Values as of September 30, 2015
Cash and cash equivalents	$	32.2
Inventory		49.1
IPR&D intangible assets		38.6
Intangible assets		342.4
Goodwill		123.3
Other assets and liabilities		7.2
Contingent consideration		(17.3	)
Deferred tax liabilities, net		(79.6	)
Net assets acquired	$	495.9

	Amount recognized as of the acquisition date		Weighted average useful lives (years)
Definite-lived assets
Restasis ^®	$	3,970.0		4.0
Refresh^® / Optive ^®		2,720.0		7.6
Other Eye Care Products		6,690.0		4.2
Botox ^®		22,600.0		8.0
Aczone ^®		160.0		1.3
Other Skin Products		820.0		5.0
Other Aesthetics		6,350.0		6.0
Total CMP		43,310.0		6.7
Trade name		690.0		4.5
Customer relationships		1,050.5		3.4
Total definite-lived assets		45,050.5		6.6
In-process research and development
Eye Care		5,700.0
Botox ^®		810.0
Aesthetics		2,280.0
Other		1,120.0
Total IPR&D		9,910.0
Total intangible assets	$	54,960.5

	Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
Cost of sales
Stock-based compensation acquired for Legacy Allergan employees	$	4.7	$	18.9
Acquisition, integration and restructuring related charges		0.3		12.4
Research and development
Stock-based compensation acquired for Legacy Allergan employees		16.6		108.2
Acquisition, integration and restructuring related charges		17.5		83.7
Selling and marketing
Stock-based compensation acquired for Legacy Allergan employees		23.6		86.5
Acquisition, integration and restructuring related charges		5.4		65.9
General and administrative
Stock-based compensation acquired for Legacy Allergan employees		16.8		243.0
Acquisition-related expenditures		-		65.5
Acquisition, integration and restructuring related charges		65.7		231.4
Other (expense) income
Bridge loan facilities expense		-		(264.9	)
Interest rate lock		-		30.9
Total transaction and integration costs	$	150.6	$	1,149.5

	Final Values
Cash and cash equivalents	$	17.8
Inventory		21.0
IPR&D intangible assets		249.0
Intangible assets		480.0
Goodwill		75.8
Other assets and liabilities		(30.2	)
Contingent consideration		(49.0	)
Deferred tax liabilities, net		(39.9	)
Outstanding indebtedness		(67.0	)
Net assets acquired	$	657.5

	Final Values
Cash and cash equivalents	$	3,424.2
Accounts receivable		496.2
Inventories		1,455.8
Other current assets		261.2
Current assets held for sale		87.1
Property, plant and equipment, net		221.1
Other long-term assets		84.1
IPR&D intangible assets		1,362.0
Intangible assets		11,515.5
Goodwill		16,403.6
Current liabilities		(1,372.1	)
Deferred tax liabilities, net		(2,277.3	)
Other taxes payable		(618.4	)
Other long-term liabilities		(120.0	)
Outstanding indebtedness		(3,261.9	)
Net assets acquired	$	27,661.1

	2015 Grants			2015 Acquired Awards			2014 Grants			2014 Acquired Awards
Dividend yield		0	%		0	%		0	%		0	%
Expected volatility	26.0 - 29.0%				26.0	%		29.0	%		28.0	%
Risk-free interest rate	1.9-2.1%			0.1-2.1%				1.9 – 2.2	%		0 - 2.1	%
Expected term (years)	7.0 - 7.5			up to 6.9				7.5		up to 6.4

(in millions, except per share data)	Shares			Weighted Average Grant Date Fair Value			Weighted Average Remaining Contractual Term (Years)		Aggregate Grant Date Fair Value
Restricted shares / units outstanding at December 31, 2014		2.1		$	148.79			1.3	$	312.5
Granted		0.4			323.92					129.6
Vested		(0.9	)		(140.77	)				(126.7	)
Assumed as part of the Allergan Acquisition **		0.5			218.47					102.8
Forfeited		(0.1	)		(142.96	)				(12.8	)
Restricted shares / units outstanding at September 30, 2015		2.0		$	202.68			1.9	$	405.4

(in millions, except per share data)	Options			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2014		5.4		$	93.96			7.3	$	858.9
Granted		0.2			300.43
Exercised		(2.0	)		(124.52	)
Assumed as part of the Allergan Acquisition**		7.0			103.63
Cancelled		(0.4	)		(130.86	)
Outstanding, September 30, 2015		10.2		$	125.03			6.9	$	1,498.9
Vested and expected to vest at September 30, 2015		9.6		$	124.28			6.8	$	1,422.4

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Central Nervous System (CNS)	$	657.9	$	554.6	$	2,033.2	$	554.6
Eyecare		539.9		-		1,213.2		-
Gastroenterology (GI)		398.6		327.0		1,138.4		593.0
Women's Health		272.8		238.8		767.1		682.1
Cardiovascular		155.3		138.1		476.1		138.1
Infectious Disease		52.3		22.7		138.3		22.7
Urology		69.3		26.7		170.0		83.2
Other		245.2		284.8		733.1		645.3
Total US Brands Net Revenues	$	2,391.3	$	1,592.7	$	6,669.4	$	2,719.0

	Allergan		Forest		Durata		Warner Chilcott
	Acquisition		Acquisition		Acquisition		Acquisition		Total
September 30, 2015	$	145.0	$	42.6	$	7.4	$	—	$	195.0
December 31, 2014	$	-	$	235.5	$	16.3	$	1.9	$	253.7

	September 30, 2015		December 31, 2014
Marketable securities:
U.S. Treasury and agency securities — maturing within one year	$	7.0	$	1.0
Total marketable securities	$	7.0	$	1.0
Investments and other assets:
Deferred loan costs	$	169.0	$	58.9
Legacy Allergan Deferred executive compensation investments		114.3		—
Cost method and other long-term investments		134.1		54.2
Equity method investments		5.5		0.1
Taxes receivable		18.8		-
Other assets		56.6		40.1
Total investments and other assets	$	498.3	$	153.3

	US Brands		US Medical Aesthetics		International Brands			Anda Distribution		Total
Balance as of December 31, 2014	$	20,571.7	$	-	$	207.6		$	86.3	$	20,865.6
Additions through acquisitions		15,425.4		3,798.0		8,061.7			-		27,285.1
Measurement period adjustments and other		22.5		-		-			-		22.5
Impairments		-		-		(2.5	)		-		(2.5	)
Held for sale		-		-		(2,437.4	)		-		(2,437.4	)
Foreign exchange and other adjustments		93.2		-		488.6			-		581.8
Balance as of September 30, 2015	$	36,112.8	$	3,798.0	$	6,318.0		$	86.3	$	46,315.1

	Amortization Expense
2015 remaining	$	1,498.1
2016	$	6,032.3
2017	$	5,978.7
2018	$	5,502.9
2019	$	5,437.4
2020	$	5,188.6

	Total Payments
2015 remaining	$	155.3
2016		2,175.5
2017		3,999.8
2018		7,095.1
2019		3,325.0
2020		6,093.8
2021 and after		19,617.0
	$	42,461.5
Capital leases		3.0
Other short-term borrowings		83.2
Unamortized premium		246.1
Unamortized discount		(110.3	)
Total Indebtedness	$	42,683.5

IRS Audits		Tax Years
Actavis, Inc.		2009, 2010, 2011 and 2012
Warner Chilcott Corporation		2010, 2011 and 2012
Forest Laboratories, Inc.		2007, 2008 and 2009
Aptalis Holdings, Inc.		2013
Durata Therapeutics Inc.		2012
Allergan, Inc.		2009 and 2010

	Allergan plc
Shareholders’ equity as of December 31, 2014	$	28,331.1
Additional paid-in-capital issued on March 17, 2015 for the Allergan Acquisition		34,685.9
Increase in additional paid in capital for share-based compensation plans		510.5
Net income attributable to ordinary shareholders		4,383.7
Proceeds from stock plans		195.8
Proceeds from the issuance of Mandatory Convertible Preferred Shares (defined below)		4,929.7
Proceeds from the March 2, 2015 issuance of ordinary shares		4,071.1
Excess tax benefit from employee stock plans		54.0
Repurchase of ordinary shares		(108.2	)
Other comprehensive income		420.1
Shareholders’ equity as of September 30, 2015	$	77,473.7

	Warner Chilcott Limited
Member’s equity as of December 31, 2014	$	28,072.6
Contribution from Parent		43,687.3
Dividend to Parent		(138.4	)
Net income attributable to members		4,559.2
Other comprehensive income		420.1
Member’s equity as of September 30, 2015	$	76,600.8

	Foreign Currency Translation Items			Unrealized (losses) net of tax			Total Accumulated Other Comprehensive Income / (Loss)
Balance as of December 31, 2014	$	(434.4	)	$	(31.0	)	$	(465.4	)
Other comprehensive (loss) before reclassifications into general and administrative		451.4			3.6			455.0
Total other comprehensive (loss)		451.4			3.6			455.0
Balance as of June 30, 2015	$	17.0		$	(27.4	)	$	(10.4	)
Other comprehensive income before reclassifications into general and administrative		(42.4	)		7.5			(34.9	)
Total other comprehensive income		(42.4	)		7.5			(34.9	)
Balance as of September 30, 2015	$	(25.4	)	$	(19.9	)	$	(45.3	)

	Foreign Currency Translation Items			Unrealized gains net of tax			Total Accumulated Other Comprehensive Income / (Loss)
Balance as of December 31, 2013	$	85.1		$	5.4		$	90.5
Other comprehensive (loss) / income before reclassifications into general and administrative		(0.9	)		0.7			(0.2	)
Total other comprehensive (loss) / income		(0.9	)		0.7			(0.2	)
Balance as of June 30, 2014	$	84.2		$	6.1		$	90.3
Other comprehensive (loss) before reclassifications into general and administrative		(308.3	)		(2.3	)		(310.6	)
Total other comprehensive (loss)		(308.3	)		(2.3	)		(310.6	)
Balance as of September 30, 2014	$	(224.1	)	$	3.8		$	(220.3	)

	Fair Value Measurements as of September 30, 2015 Using:
	Total		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	7.0	$	7.0	$	-	$	-
Deferred executive compensation investments		114.3		90.7		23.6		-
Foreign currency derivatives		90.9		-		90.9		-
Marketable equity securities		30.2		30.2		-		-
Total assets	$	242.4	$	127.9	$	114.5	$	-
Liabilities:
Foreign currency derivatives		0.4		-		0.4		-
Deferred executive compensation liabilities