10-Q 1 agn-10q_20160331.htm 10-Q agn-10q_20160331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

 

 

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

 

 

 

 

 

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:

 

Allergan plc

 

YES    x

 

NO    ¨

Warner Chilcott Limited

 

YES    x

 

NO    ¨

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).

 

Allergan plc

 

YES    x

 

NO    ¨

Warner Chilcott Limited

 

YES    x

 

NO    ¨

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):

 

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

¨

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

 

Allergan plc

 

YES    ¨

 

NO    x

Warner Chilcott Limited

 

YES    ¨

 

NO    x

Number of shares of Allergan plc’s Ordinary Shares outstanding on May 2, 2016: 395,556,908. 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.

 

 

 

 


 

TABLE OF CONTENTS

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2016

 

 

 

 

PAGE

PART I. FINANCIAL INFORMATION

 

Item 1.

 

Consolidated Financial Statements (unaudited)

3

 

 

Consolidated Balance Sheets of Allergan plc as of March 31, 2016 and December 31, 2015

3

 

 

Consolidated Statements of Operations of Allergan plc for the three months ended March 31, 2016 and March 31, 2015

4

 

 

Consolidated Statements of Comprehensive Income / (Loss) of Allergan plc for the three months ended March 31, 2016 and March 31, 2015

5

 

 

Consolidated Statements of Cash Flows of Allergan plc for the three months ended March 31, 2016 and 2015

6

 

 

Consolidated Balance Sheets of Warner Chilcott Limited as of March 31, 2016 and December 31, 2015

7

 

 

Consolidated Statements of Operations of Warner Chilcott Limited for the three months ended March 31, 2016 and March 31, 2015

8

 

 

Consolidated Statements of Comprehensive Income / (Loss) of Warner Chilcott Limited for the three months ended March 31, 2016 and March 31, 2015

9

 

 

Consolidated Statements of Cash Flows of Warner Chilcott Limited for the three months ended March 31, 2016 and 2015

10

 

 

Notes to Consolidated Financial Statements

11

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

72

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

93

Item 4.

 

Controls and Procedures

94

PART II. OTHER INFORMATION

 

Item 1.

 

Legal Proceedings

96

Item 1A.

 

Risk Factors

96

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

96

Item 6.

 

Exhibits

96

 

 

Signatures

97

 

 

2


 

PART I. FINANCIAL INFORMATION

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

ALLERGAN PLC

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except par value)

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

ASSETS

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,260.8

 

 

$

1,096.0

 

Marketable securities

 

 

13.0

 

 

 

9.3

 

Accounts receivable, net

 

 

2,652.8

 

 

 

2,401.6

 

Inventories

 

 

1,022.2

 

 

 

1,009.7

 

Prepaid expenses and other current assets

 

 

634.3

 

 

 

522.2

 

Current assets held for sale

 

 

3,508.4

 

 

 

3,540.3

 

Total current assets

 

 

10,091.5

 

 

 

8,579.1

 

Property, plant and equipment, net

 

 

1,602.4

 

 

 

1,573.9

 

Investments and other assets

 

 

405.5

 

 

 

417.9

 

Non current assets held for sale

 

 

10,636.8

 

 

 

10,541.3

 

Deferred tax assets

 

 

77.7

 

 

 

49.5

 

Product rights and other intangibles

 

 

66,535.8

 

 

 

67,931.7

 

Goodwill

 

 

46,724.0

 

 

 

46,551.5

 

Total assets

 

$

136,073.7

 

 

$

135,644.9

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

4,701.1

 

 

$

4,349.5

 

Income taxes payable

 

 

68.5

 

 

 

54.2

 

Current portion of long-term debt and capital leases

 

 

4,015.7

 

 

 

2,396.5

 

Current liabilities held for sale

 

 

1,410.2

 

 

 

1,491.8

 

Total current liabilities

 

 

10,195.5

 

 

 

8,292.0

 

Long-term debt and capital leases

 

 

38,551.8

 

 

 

40,133.9

 

Other long-term liabilities

 

 

1,024.0

 

 

 

1,262.0

 

Long-term liabilities held for sale

 

 

512.4

 

 

 

580.1

 

Other taxes payable

 

 

777.4

 

 

 

801.9

 

Deferred tax liabilities

 

 

7,563.9

 

 

 

7,985.7

 

Total liabilities

 

 

58,625.0

 

 

 

59,055.6

 

Commitments and contingencies (Refer to Note 20)

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Preferred shares, $0.0001 par value per share, 5.1 million shares authorized,

   5.1 million and 5.1 million shares issued and outstanding, respectively

 

$

4,929.7

 

 

$

4,929.7

 

Ordinary shares; $0.0001 par value per share; 1,000.0 million shares authorized,

   395.4 million and 394.5 million shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

68,658.3

 

 

 

68,508.3

 

Retained earnings

 

 

3,833.6

 

 

 

3,647.5

 

Accumulated other comprehensive income / (loss)

 

 

28.4

 

 

 

(494.1

)

Total shareholders’ equity

 

 

77,450.0

 

 

 

76,591.4

 

Noncontrolling interest

 

 

(1.3

)

 

 

(2.1

)

Total equity

 

 

77,448.7

 

 

 

76,589.3

 

Total liabilities and equity

 

$

136,073.7

 

 

$

135,644.9

 

 

See accompanying Notes to Consolidated Financial Statements.

 

3


 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Net revenues

 

$

3,795.9

 

 

$

2,562.6

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of sales (excludes amortization and impairment of acquired intangibles including

   product rights)

 

 

811.8

 

 

 

1,020.1

 

Research and development

 

 

403.1

 

 

 

317.7

 

Selling and marketing

 

 

795.8

 

 

 

569.6

 

General and administrative

 

 

342.6

 

 

 

540.5

 

Amortization

 

 

1,592.1

 

 

 

787.8

 

In-process research and development impairments

 

 

6.0

 

 

 

-

 

Asset sales and impairments, net

 

 

(1.7

)

 

 

4.6

 

Total operating expenses

 

 

3,949.7

 

 

 

3,240.3

 

Operating (loss)

 

 

(153.8

)

 

 

(677.7

)

 

 

 

 

 

 

 

 

 

Interest income

 

 

3.1

 

 

 

1.8

 

Interest expense

 

 

(332.8

)

 

 

(171.9

)

Other (expense) income, net

 

 

0.5

 

 

 

(197.9

)

Total other income (expense), net

 

 

(329.2

)

 

 

(368.0

)

(Loss) before income taxes and noncontrolling interest

 

 

(483.0

)

 

 

(1,045.7

)

(Benefit) for income taxes

 

 

(402.0

)

 

 

(259.0

)

Net (loss) from continuing operations, net of tax

 

 

(81.0

)

 

 

(786.7

)

Income from discontinued operations, net of tax

 

 

337.4

 

 

 

274.4

 

Net income / (loss)

 

 

256.4

 

 

 

(512.3

)

(Income) /loss attributable to noncontrolling interest

 

 

(0.7

)

 

 

0.3

 

Net income / (loss) attributable to shareholders

 

 

255.7

 

 

 

(512.0

)

Dividends on preferred shares

 

 

69.6

 

 

 

23.2

 

Net income / (loss) attributable to ordinary shareholders

 

$

186.1

 

 

$

(535.2

)

 

 

 

 

 

 

 

 

 

Income / (loss) per share attributable to ordinary shareholders - basic:

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.38

)

 

$

(2.80

)

Discontinued operations

 

 

0.85

 

 

 

0.95

 

Net income / (loss) per share - basic

 

$

0.47

 

 

$

(1.85

)

Income / (loss)  per share attributable to ordinary shareholders - diluted:

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.38

)

 

$

(2.80

)

Discontinued operations

 

 

0.85

 

 

 

0.95

 

Net income / (loss) per share - diluted

 

$

0.47

 

 

$

(1.85

)

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

394.8

 

 

 

289.5

 

Diluted

 

 

394.8

 

 

 

289.5

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

4


 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Net income / (loss)

 

$

256.4

 

 

$

(512.3

)

Other comprehensive income / (loss)

 

 

 

 

 

 

 

 

Foreign currency translation gains / (losses)

 

 

542.8

 

 

 

(313.9

)

Unrealized (losses), net of tax

 

 

(20.3

)

 

 

(4.0

)

Reclassification for gains included in net income, net of tax

 

 

-

 

 

 

-

 

Total other comprehensive income / (loss), net of tax

 

 

522.5

 

 

 

(317.9

)

Comprehensive income / (loss)

 

 

778.9

 

 

 

(830.2

)

Comprehensive (income) / loss attributable to noncontrolling interest

 

 

(0.7

)

 

 

0.3

 

Comprehensive income / (loss) attributable to ordinary shareholders

 

$

778.2

 

 

$

(829.9

)

 

See accompanying Notes to Consolidated Financial Statements.

 

 

5


 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

Net income / (loss)

 

$

256.4

 

 

$

(512.3

)

Reconciliation to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

42.1

 

 

 

57.2

 

Amortization

 

 

1,592.1

 

 

 

925.4

 

Provision for inventory reserve

 

 

59.2

 

 

 

30.3

 

Share-based compensation

 

 

99.0

 

 

 

225.5

 

Deferred income tax benefit

 

 

(519.2

)

 

 

(304.3

)

In-process research and development impairments

 

 

6.0

 

 

 

3.7

 

(Gain) / loss on asset sales and impairments, net

 

 

(1.7

)

 

 

54.1

 

Amortization of inventory step-up

 

 

42.4

 

 

 

212.9

 

Amortization of deferred financing costs

 

 

10.0

 

 

 

268.3

 

Contingent consideration adjustments, including accretion

 

 

33.6

 

 

 

28.8

 

Excess tax benefit from stock-based compensation

 

 

(34.6

)

 

 

(36.1

)

Other, net

 

 

(9.1

)

 

 

(6.5

)

Changes in assets and liabilities (net of effects of acquisitions):

 

 

 

 

 

 

 

 

Decrease / (increase) in accounts receivable, net

 

 

(148.6

)

 

 

(702.1

)

Decrease / (increase) in inventories

 

 

(148.5

)

 

 

(202.7

)

Decrease / (increase) in prepaid expenses and other current assets

 

 

14.4

 

 

 

58.9

 

Increase / (decrease) in accounts payable and accrued expenses

 

 

31.3

 

 

 

356.1

 

Increase / (decrease) in income and other taxes payable

 

 

(52.2

)

 

 

42.4

 

Increase / (decrease) in other assets and liabilities

 

 

(54.1

)

 

 

25.4

 

Net cash provided by operating activities

 

 

1,218.5

 

 

 

525.0

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(84.9

)

 

 

(136.6

)

Additions to product rights and other intangibles

 

 

-

 

 

 

(8.5

)

Additions to investments

 

 

-

 

 

 

(15.0

)

Proceeds from sale of investments and other assets

 

 

19.0

 

 

 

790.5

 

Proceeds from sales of property, plant and equipment

 

 

12.1

 

 

 

74.9

 

Acquisitions of businesses, net of cash acquired

 

 

-

 

 

 

(34,646.2

)

Net cash (used in) investing activities

 

 

(53.8

)

 

 

(33,940.9

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from borrowings of long-term indebtedness

 

 

-

 

 

 

26,455.6

 

Proceeds from borrowings on credit facility and other

 

 

900.0

 

 

 

2,810.0

 

Debt issuance and other financing costs

 

 

-

 

 

 

(310.8

)

Payments on debt, including capital lease obligations

 

 

(854.2

)

 

 

(2,660.0

)

Proceeds from issuance of preferred shares

 

 

-

 

 

 

4,929.7

 

Proceeds from issuance of ordinary shares

 

 

-

 

 

 

4,071.1

 

Proceeds from stock plans

 

 

69.6

 

 

 

42.6

 

Payments of contingent consideration

 

 

(32.3

)

 

 

(24.6

)

Repurchase of ordinary shares

 

 

(53.2

)

 

 

(64.1

)

Dividends

 

 

(69.6

)

 

 

-

 

Excess tax benefit from stock-based compensation

 

 

34.6

 

 

 

36.1

 

Net cash (used in)/ provided by financing activities

 

 

(5.1

)

 

 

35,285.6

 

Effect of currency exchange rate changes on cash and cash equivalents

 

 

5.2

 

 

 

(4.8

)

Net increase in cash and cash equivalents

 

 

1,164.8

 

 

 

1,864.9

 

Cash and cash equivalents at beginning of period

 

 

1,096.0

 

 

 

250.0

 

Cash and cash equivalents at end of period

 

$

2,260.8

 

 

$

2,114.9

 

Schedule of Non-Cash Investing and Financing Activities:

 

 

 

 

 

 

 

 

Dividends accrued

 

$

24.1

 

 

$

23.4

 

Non-cash equity issuance for the Acquisition of Allergan net assets

 

$

-

 

 

$

34,687.2

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

6


 

WARNER CHILCOTT LIMITED

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,247.7

 

 

$

1,036.2

 

Marketable securities

 

 

13.0

 

 

 

9.3

 

Accounts receivable, net

 

 

2,652.8

 

 

 

2,401.6

 

Receivables from Parents

 

 

382.6

 

 

 

457.3

 

Inventories

 

 

1,022.2

 

 

 

1,009.7

 

Prepaid expenses and other current assets

 

 

631.9

 

 

 

519.7

 

Current assets held for sale

 

 

3,508.4

 

 

 

3,540.3

 

Total current assets

 

 

10,458.6

 

 

 

8,974.1

 

Property, plant and equipment, net

 

 

1,602.4

 

 

 

1,573.9

 

Investments and other assets

 

 

405.5

 

 

 

417.9

 

Non current assets held for sale

 

 

10,636.8

 

 

 

10,541.3

 

Deferred tax assets

 

 

77.6

 

 

 

49.5

 

Product rights and other intangibles

 

 

66,535.8

 

 

 

67,931.7

 

Goodwill

 

 

46,724.0

 

 

 

46,551.5

 

Total assets

 

$

136,440.7

 

 

$

136,039.9

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

4,659.5

 

 

$

4,295.4

 

Payables to Parents

 

 

1,561.1

 

 

 

1,466.8

 

Income taxes payable

 

 

68.5

 

 

 

54.2

 

Current portion of long-term debt and capital leases

 

 

4,015.7

 

 

 

2,396.5

 

Current liabilities held for sale

 

 

1,410.2

 

 

 

1,491.8

 

Total current liabilities

 

 

11,715.0

 

 

 

9,704.7

 

Long-term debt and capital leases

 

 

38,551.8

 

 

 

40,133.9

 

Other long-term liabilities

 

 

1,024.0

 

 

 

1,262.0

 

Long-term liabilities held for sale

 

 

512.4

 

 

 

580.1

 

Other taxes payable

 

 

777.4

 

 

 

801.9

 

Deferred tax liabilities

 

 

7,563.9

 

 

 

7,985.7

 

Total liabilities

 

 

60,144.5

 

 

 

60,468.3

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Members' capital

 

 

72,935.1

 

 

 

72,935.1

 

Retained earnings

 

 

3,334.0

 

 

 

3,132.7

 

Accumulated other comprehensive income / (loss)

 

 

28.4

 

 

 

(494.1

)

Total members’ equity

 

 

76,297.5

 

 

 

75,573.7

 

Noncontrolling interest

 

 

(1.3

)

 

 

(2.1

)

Total equity

 

 

76,296.2

 

 

 

75,571.6

 

Total liabilities and equity

 

$

136,440.7

 

 

$

136,039.9

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

7


 

WARNER CHILCOTT LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Net revenues

 

$

3,795.9

 

 

$

2,562.6

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of sales (excludes amortization and impairment of acquired intangibles including

   product rights)

 

 

811.8

 

 

 

1,020.1

 

Research and development

 

 

403.1

 

 

 

317.7

 

Selling and marketing

 

 

795.8

 

 

 

569.6

 

General and administrative

 

 

327.4

 

 

 

536.9

 

Amortization

 

 

1,592.1

 

 

 

787.8

 

In-process research and development impairments

 

 

6.0

 

 

 

-

 

Asset sales and impairments, net

 

 

(1.7

)

 

 

4.6

 

Total operating expenses

 

 

3,934.5

 

 

 

3,236.7

 

Operating (loss)

 

 

(138.6

)

 

 

(674.1

)

Non-operating income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

3.1

 

 

 

1.8

 

Interest expense

 

 

(332.8

)

 

 

(171.9

)

Other income (expense), net

 

 

0.5

 

 

 

(197.9

)

Total other income (expense), net

 

 

(329.2

)

 

 

(368.0

)

(Loss) before income taxes and noncontrolling interest

 

 

(467.8

)

 

 

(1,042.1

)

(Benefit) for income taxes

 

 

(402.0

)

 

 

(259.0

)

Net (loss) from continuing operations, net of tax

 

 

(65.8

)

 

 

(783.1

)

Income from discontinued operations, net of tax

 

 

337.4

 

 

 

274.4

 

Net income / (loss)

 

 

271.6

 

 

 

(508.7

)

(Income) / loss attributable to noncontrolling interest

 

 

(0.7

)

 

 

0.3

 

Net income / (loss) attributable to members

 

$

270.9

 

 

$

(508.4

)

 

See accompanying Notes to Consolidated Financial Statements.

 

 

8


 

WARNER CHILCOTT LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Net income / (loss)

 

$

271.6

 

 

$

(508.7

)

Other comprehensive income / (loss)

 

 

 

 

 

 

 

 

Foreign currency translation (losses) / gains

 

 

542.8

 

 

 

(313.9

)

Unrealized (losses), net of tax

 

 

(20.3

)

 

 

(4.0

)

Reclassification for gains included in net income, net of tax

 

 

-

 

 

 

-

 

Total other comprehensive income / (loss), net of tax

 

 

522.5

 

 

 

(317.9

)

Comprehensive income / (loss)

 

 

794.1

 

 

 

(826.6

)

Comprehensive (income) / loss attributable to noncontrolling interest

 

 

(0.7

)

 

 

0.3

 

Comprehensive income / (loss) attributable to members

 

$

793.4

 

 

$

(826.3

)

 

See accompanying Notes to Consolidated Financial Statements.

 

 

9


 

WARNER CHILCOTT LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

Net income / (loss)

 

$

271.6

 

 

$

(508.7

)

Reconciliation to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

42.1

 

 

 

57.2

 

Amortization

 

 

1,592.1

 

 

 

925.4

 

Provision for inventory reserve

 

 

59.2

 

 

 

30.3

 

Share-based compensation

 

 

99.0

 

 

 

225.5

 

Deferred income tax benefit

 

 

(519.2

)

 

 

(304.3

)

In-process research and development impairments

 

 

6.0

 

 

 

3.7

 

Loss / (gain) on asset sales and impairments, net

 

 

(1.7

)

 

 

54.1

 

Amortization of inventory step-up

 

 

42.4

 

 

 

212.9

 

Amortization of deferred financing costs

 

 

10.0

 

 

 

268.3

 

Contingent consideration adjustments, including accretion

 

 

33.6

 

 

 

28.8

 

Other, net

 

 

(9.1

)

 

 

(6.5

)

Changes in assets and liabilities (net of effects of acquisitions):

 

 

 

 

 

 

 

 

Decrease / (increase) in accounts receivable, net

 

 

(148.6

)

 

 

(701.4

)

Decrease / (increase) in inventories

 

 

(148.5

)

 

 

(202.7

)

Decrease / (increase) in prepaid expenses and other current assets

 

 

14.5

 

 

 

59.0

 

Increase / (decrease) in accounts payable and accrued expenses

 

 

18.8

 

 

 

387.6

 

Increase / (decrease) in income and other taxes payable

 

 

(52.2

)

 

 

42.4

 

Increase / (decrease) in other assets and liabilities, including receivable / payable

   with Parents

 

 

6.2

 

 

 

(44.9

)

Net cash provided by operating activities

 

 

1,316.2

 

 

 

526.7

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(84.9

)

 

 

(136.6

)

Additions to product rights and other intangibles

 

 

-

 

 

 

(8.5

)

Additions to investments

 

 

-

 

 

 

(15.0

)

Proceeds from the sale of investments and other assets

 

 

19.0

 

 

 

790.5

 

Proceeds from sales of property, plant and equipment

 

 

12.1

 

 

 

74.9

 

Acquisitions of businesses, net of cash acquired

 

 

-

 

 

 

(34,646.2

)

Net cash (used in) investing activities

 

 

(53.8

)

 

 

(33,940.9

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from borrowings of long-term indebtedness

 

 

-

 

 

 

26,455.6

 

Proceeds from borrowings on credit facility and other

 

 

900.0

 

 

 

2,810.0

 

Debt issuance and other financing costs

 

 

-

 

 

 

(310.8

)

Payments on debt, including capital lease obligations

 

 

(854.2

)

 

 

(2,660.0

)

Payments of contingent consideration

 

 

(32.3

)

 

 

(24.6

)

Dividend to Parent

 

 

(69.6

)

 

 

-

 

Contribution from Parent

 

 

-

 

 

 

9,000.8

 

Net cash provided by financing activities

 

 

(56.1

)

 

 

35,271.0

 

Effect of currency exchange rate changes on cash and cash equivalents

 

 

5.2

 

 

 

(4.8

)

Net increase in cash and cash equivalents

 

 

1,211.5

 

 

 

1,852.0

 

Cash and cash equivalents at beginning of period

 

 

1,036.2

 

 

 

244.3

 

Cash and cash equivalents at end of period

 

$

2,247.7

 

 

$

2,096.3

 

 

See accompanying Notes to Consolidated Financial Statements

 

 

10


 

ALLERGAN PLC AND WARNER CHILCOTT LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 1 — General

Allergan plc is focused on developing, manufacturing and commercializing innovative branded pharmaceuticals (“brand”, “branded” or “specialty brand”), high-quality generic and over-the-counter (“OTC”) medicines and biologic products for patients around the world.

Allergan markets a portfolio of best-in-class products that provide valuable treatments for the central nervous system, eye care, medical aesthetics, gastroenterology, women's health, urology, cardiovascular and anti-infective therapeutic categories, and operates the world's third-largest global generics business, providing patients around the globe with increased access to affordable, high-quality medicines. Allergan is an industry leader in research and development, with one of the broadest development pipelines in the pharmaceutical industry and a leading position in the submission of generic product applications globally.

With commercial operations in approximately 100 countries, Allergan is committed to working with physicians, healthcare providers and patients to deliver innovative and meaningful treatments that help people around the world live longer, healthier lives.  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.

The results of our discontinued operations include the results of our generic product development, manufacturing and distribution of off-patent pharmaceutical products, established international brands marketed similarly to generic products and out-licensed generic pharmaceutical p