10-Q 1 agn-10q_20170331.htm 10-Q agn-10q_20170331.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

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

For the quarterly period ended March 31, 2017

OR

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    

 

NO    

Warner Chilcott Limited

 

YES    

 

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    

 

NO    

Warner Chilcott Limited

 

YES    

 

NO    

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

 

Allergan plc

Large accelerated filer

Accelerated filer

 

Non-accelerated filer (Do not check if a smaller reporting company)

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

 

Warner Chilcott Limited

Large accelerated filer

Accelerated filer

 

Non-accelerated filer (Do not check if a smaller reporting company)

Smaller reporting company

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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

 

Allergan plc

 

YES    

 

NO    

Warner Chilcott Limited

 

YES    

 

NO    

Number of shares of Allergan plc’s Ordinary Shares outstanding on May 3, 2017: 335,867,027. 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, 2017

 

 

 

 

PAGE

PART I. FINANCIAL INFORMATION

 

Item 1.

 

Consolidated Financial Statements (unaudited)

3

 

 

Consolidated Balance Sheets of Allergan plc as of March 31, 2017 and December 31, 2016

3

 

 

Consolidated Statements of Operations of Allergan plc for the three months ended March 31, 2017 and 2016

4

 

 

Consolidated Statements of Comprehensive (Loss) /Income of Allergan plc for the three months ended March 31, 2017 and 2016

5

 

 

Consolidated Statements of Cash Flows of Allergan plc for the three months ended March 31, 2017 and 2016

6

 

 

Consolidated Balance Sheets of Warner Chilcott Limited as of March 31, 2017 and December 31, 2016

7

 

 

Consolidated Statements of Operations of Warner Chilcott Limited for the three months ended March 31, 2017 and 2016

8

 

 

Consolidated Statements of Comprehensive (Loss) / Income of Warner Chilcott Limited for the three months ended March 31, 2017 and 2016

9

 

 

Consolidated Statements of Cash Flows of Warner Chilcott Limited for the three months ended March 31, 2017 and 2016

10

 

 

Notes to Consolidated Financial Statements

11

Item 2.

 

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

64

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

83

Item 4.

 

Controls and Procedures

84

PART II. OTHER INFORMATION

 

Item 1.

 

Legal Proceedings

86

Item 1A.

 

Risk Factors

86

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

86

Item 6.

 

Exhibits

86

 

 

Signatures

87

 

 

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,

 

 

 

2017

 

 

2016

 

ASSETS

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,092.9

 

 

$

1,724.0

 

Marketable securities

 

 

7,858.2

 

 

 

11,501.5

 

Accounts receivable, net

 

 

2,542.0

 

 

 

2,531.0

 

Inventories

 

 

904.7

 

 

 

718.0

 

Prepaid expenses and other current assets

 

 

1,302.9

 

 

 

1,383.4

 

Total current assets

 

 

13,700.7

 

 

 

17,857.9

 

Property, plant and equipment, net

 

 

1,659.3

 

 

 

1,611.3

 

Investments and other assets

 

 

283.2

 

 

 

282.1

 

Non current assets held for sale

 

 

27.0

 

 

 

27.0

 

Deferred tax assets

 

 

255.4

 

 

 

233.3

 

Product rights and other intangibles

 

 

62,994.2

 

 

 

62,618.6

 

Goodwill

 

 

47,917.1

 

 

 

46,356.1

 

Total assets

 

$

126,836.9

 

 

$

128,986.3

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

4,795.4

 

 

$

5,019.0

 

Income taxes payable

 

 

69.8

 

 

 

57.8

 

Current portion of long-term debt and capital leases

 

 

5,526.4

 

 

 

2,797.9

 

Total current liabilities

 

 

10,391.6

 

 

 

7,874.7

 

Long-term debt and capital leases

 

 

26,223.0

 

 

 

29,970.8

 

Other long-term liabilities

 

 

1,060.5

 

 

 

1,085.0

 

Other taxes payable

 

 

914.5

 

 

 

886.2

 

Deferred tax liabilities

 

 

13,048.5

 

 

 

12,969.1

 

Total liabilities

 

 

51,638.1

 

 

 

52,785.8

 

Commitments and contingencies (Refer to Note 19)

 

 

 

 

 

 

 

 

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,

   335.6 million and 334.9 million shares issued and outstanding, respectively

 

-

 

 

-

 

Additional paid-in capital

 

 

54,107.1

 

 

 

53,958.9

 

Retained earnings

 

 

15,429.9

 

 

 

18,342.5

 

Accumulated other comprehensive income / (loss)

 

 

721.7

 

 

 

(1,038.4

)

Total shareholders’ equity

 

 

75,188.4

 

 

 

76,192.7

 

Noncontrolling interest

 

 

10.4

 

 

 

7.8

 

Total equity

 

 

75,198.8

 

 

 

76,200.5

 

Total liabilities and equity

 

$

126,836.9

 

 

$

128,986.3

 

 

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,

 

 

 

2017

 

 

2016

 

Net revenues

 

$

3,572.9

 

 

$

3,399.3

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of sales (excludes amortization and impairment of acquired intangibles

   including product rights)

 

 

450.4

 

 

 

477.4

 

Research and development

 

 

759.9

 

 

 

403.1

 

Selling and marketing

 

 

869.1

 

 

 

766.8

 

General and administrative

 

 

316.1

 

 

 

329.5

 

Amortization

 

 

1,736.0

 

 

 

1,589.7

 

In-process research and development impairments

 

 

340.0

 

 

 

6.0

 

Asset sales and impairments, net

 

 

7.4

 

 

 

(1.7

)

Total operating expenses

 

 

4,478.9

 

 

 

3,570.8

 

Operating (loss)

 

 

(906.0

)

 

 

(171.5

)

 

 

 

 

 

 

 

 

 

Interest income

 

 

25.3

 

 

 

2.9

 

Interest (expense)

 

 

(289.7

)

 

 

(332.8

)

Other (expense) income, net

 

 

(1,922.8

)

 

 

0.5

 

Total other (expense), net

 

 

(2,187.2

)

 

 

(329.4

)

(Loss) before income taxes and noncontrolling interest

 

 

(3,093.2

)

 

 

(500.9

)

(Benefit) for income taxes

 

 

(532.1

)

 

 

(408.7

)

Net (loss) from continuing operations, net of tax

 

 

(2,561.1

)

 

 

(92.2

)

(Loss) / income from discontinued operations, net of tax

 

 

(3.1

)

 

 

348.6

 

Net (loss) / income

 

 

(2,564.2

)

 

 

256.4

 

(Income) attributable to noncontrolling interest

 

 

(1.0

)

 

 

(0.7

)

Net (loss) / income attributable to shareholders

 

 

(2,565.2

)

 

 

255.7

 

Dividends on preferred shares

 

 

69.6

 

 

 

69.6

 

Net (loss) / income attributable to ordinary shareholders

 

$

(2,634.8

)

 

$

186.1

 

 

 

 

 

 

 

 

 

 

(Loss) / income per share attributable to ordinary shareholders - basic:

 

 

 

 

 

 

 

 

Continuing operations

 

$

(7.85

)

 

$

(0.41

)

Discontinued operations

 

 

(0.01

)

 

 

0.88

 

Net (loss) / income per share - basic

 

$

(7.86

)

 

$

0.47

 

(Loss) / income  per share attributable to ordinary shareholders - diluted:

 

 

 

 

 

 

 

 

Continuing operations

 

$

(7.85

)

 

$

(0.41

)

Discontinued operations

 

 

(0.01

)

 

 

0.88

 

Net (loss) / income per share - diluted

 

$

(7.86

)

 

$

0.47

 

 

 

 

 

 

 

 

 

 

Dividends per ordinary share

 

$

0.70

 

 

$

-

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

335.1

 

 

 

394.8

 

Diluted

 

 

335.1

 

 

 

394.8

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

4


 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

Net (loss) / income

 

$

(2,564.2

)

 

$

256.4

 

Other comprehensive income

 

 

 

 

 

 

 

 

Foreign currency translation gains

 

 

162.6

 

 

 

542.8

 

Net impact of other-than-temporary loss on investment in Teva securities

 

 

1,599.4

 

 

 

-

 

Unrealized (losses), net of tax

 

 

(1.9

)

 

 

(20.3

)

Total other comprehensive income, net of tax

 

 

1,760.1

 

 

 

522.5

 

Comprehensive (loss) / income

 

 

(804.1

)

 

 

778.9

 

Comprehensive (income) attributable to noncontrolling interest

 

 

(1.0

)

 

 

(0.7

)

Comprehensive (loss) / income attributable to ordinary shareholders

 

$

(805.1

)

 

$

778.2

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

5


 

ALLERGAN PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

Net (loss) / income

 

$

(2,564.2

)

 

$

256.4

 

Reconciliation to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

41.6

 

 

 

42.1

 

Amortization

 

 

1,736.0

 

 

 

1,592.1

 

Provision for inventory reserve

 

 

23.9

 

 

 

59.2

 

Share-based compensation

 

 

62.7

 

 

 

99.0

 

Deferred income tax benefit

 

 

(712.8

)

 

 

(519.2

)

In-process research and development impairments

 

 

340.0

 

 

 

6.0

 

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

 

 

7.4

 

 

 

(1.7

)

Net income impact of other-than-temporary loss on investment in Teva securities

 

 

1,978.0

 

 

 

-

 

Amortization of inventory step-up

 

 

27.9

 

 

 

42.4

 

Amortization of deferred financing costs

 

 

6.7

 

 

 

10.0

 

Contingent consideration adjustments, including accretion

 

 

30.7

 

 

 

33.6

 

Other, net

 

 

(18.8

)

 

 

(9.1

)

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

 

 

 

 

 

 

 

 

Decrease / (increase) in accounts receivable, net

 

 

53.2

 

 

 

(148.6

)

Decrease / (increase) in inventories

 

 

(50.5

)

 

 

(148.5

)

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

 

 

2.5

 

 

 

14.4

 

Increase / (decrease) in accounts payable and accrued expenses

 

 

(363.7

)

 

 

31.3

 

Increase / (decrease) in income and other taxes payable

 

 

123.8

 

 

 

(52.2

)

Increase / (decrease) in other assets and liabilities

 

 

(1.1

)

 

 

(54.1

)

Net cash provided by operating activities

 

 

723.3

 

 

 

1,253.1

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(33.2

)

 

 

(84.9

)

Additions to product rights and other intangibles

 

 

(346.3

)

 

 

-

 

Additions to investments

 

 

(6,387.9

)

 

 

-

 

Proceeds from sale of investments and other assets

 

 

9,655.3

 

 

 

19.0

 

Proceeds from sales of property, plant and equipment

 

 

0.7

 

 

 

12.1

 

Acquisitions of businesses, net of cash acquired

 

 

(2,874.4

)

 

 

-

 

Net cash provided by / (used in) investing activities

 

 

14.2

 

 

 

(53.8

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from borrowings on credit facility and other

 

 

-

 

 

 

900.0

 

Payments on debt, including capital lease obligations and credit facility

 

 

(1,015.9

)

 

 

(854.2

)

Proceeds from stock plans

 

 

52.6

 

 

 

69.6

 

Payments of contingent consideration

 

 

(76.3

)

 

 

(32.3

)

Repurchase of ordinary shares

 

 

(29.5

)

 

 

(53.2

)

Dividends

 

 

(305.8

)

 

 

(69.6

)

Net cash (used in) financing activities

 

 

(1,374.9

)

 

 

(39.7

)

Effect of currency exchange rate changes on cash and cash equivalents

 

 

6.3

 

 

 

5.2

 

Net (decrease) / increase in cash and cash equivalents

 

 

(631.1

)

 

 

1,164.8

 

Cash and cash equivalents at beginning of period

 

 

1,724.0

 

 

 

1,096.0

 

Cash and cash equivalents at end of period

 

$

1,092.9

 

 

$

2,260.8

 

Supplemental Disclosures of Cash Flow Information

 

 

 

 

 

 

 

 

Other income taxes paid, net of refunds

 

$

55.0

 

 

$

60.2

 

Cash payments of interest

 

$

420.0

 

 

$

478.9

 

Schedule of Non-Cash Investing and Financing Activities:

 

 

 

 

 

 

 

 

Dividends accrued

 

$

24.6

 

 

$

24.0

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

6


 

WARNER CHILCOTT LIMITED

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

 

 

 

March 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,090.9

 

 

$

1,713.2

 

Marketable securities

 

 

7,858.2

 

 

 

11,501.5

 

Accounts receivable, net

 

 

2,542.0

 

 

 

2,531.0

 

Receivables from Parents

 

 

5,124.8

 

 

 

9,289.2

 

Inventories

 

 

904.7

 

 

 

718.0

 

Prepaid expenses and other current assets

 

 

1,299.7

 

 

 

1,382.1

 

Total current assets

 

 

18,820.3

 

 

 

27,135.0

 

Property, plant and equipment, net

 

 

1,659.3

 

 

 

1,611.3

 

Investments and other assets

 

 

283.2

 

 

 

282.1

 

Non current receivables from Parents

 

 

3,964.0

 

 

 

3,964.0

 

Non current assets held for sale

 

 

27.0

 

 

 

27.0

 

Deferred tax assets

 

 

255.3

 

 

 

233.3

 

Product rights and other intangibles

 

 

62,994.2

 

 

 

62,618.6

 

Goodwill

 

 

47,917.1

 

 

 

46,356.1

 

Total assets

 

$

135,920.4

 

 

$

142,227.4

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

4,766.0

 

 

$

4,993.3

 

Payables to Parents

 

 

1,481.3

 

 

 

1,372.8

 

Income taxes payable

 

 

69.8

 

 

 

57.8

 

Current portion of long-term debt and capital leases

 

 

5,526.4

 

 

 

2,797.9

 

Total current liabilities

 

 

11,843.5

 

 

 

9,221.8

 

Long-term debt and capital leases

 

 

26,223.0

 

 

 

29,970.8

 

Other long-term liabilities

 

 

1,060.9

 

 

 

1,086.0

 

Other taxes payable

 

 

914.5

 

 

 

886.2

 

Deferred tax liabilities

 

 

13,048.5

 

 

 

12,969.1

 

Total liabilities

 

 

53,090.4

 

 

 

54,133.9

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Members' capital

 

 

72,935.1

 

 

 

72,935.1

 

Retained earnings

 

 

9,162.8

 

 

 

16,189.0

 

Accumulated other comprehensive income / (loss)

 

 

721.7

 

 

 

(1,038.4

)

Total members’ equity

 

 

82,819.6

 

 

 

88,085.7

 

Noncontrolling interest

 

 

10.4

 

 

 

7.8

 

Total equity

 

 

82,830.0

 

 

 

88,093.5

 

Total liabilities and equity

 

$

135,920.4

 

 

$

142,227.4

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

7


 

WARNER CHILCOTT LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

Net revenues

 

$

3,572.9

 

 

$

3,399.3

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of sales (excludes amortization and impairment of acquired intangibles

   including product rights)

 

 

450.4

 

 

 

477.4

 

Research and development

 

 

759.9

 

 

 

403.1

 

Selling and marketing

 

 

869.1

 

 

 

766.8

 

General and administrative

 

 

314.3

 

 

 

314.3

 

Amortization

 

 

1,736.0

 

 

 

1,589.7

 

In-process research and development impairments

 

 

340.0

 

 

 

6.0

 

Asset sales and impairments, net

 

 

7.4

 

 

 

(1.7

)

Total operating expenses

 

 

4,477.1

 

 

 

3,555.6

 

Operating (loss)

 

 

(904.2

)

 

 

(156.3

)

Non-operating income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

51.4

 

 

 

2.9

 

Interest (expense)

 

 

(289.7

)

 

 

(332.8

)

Other (expense) / income, net

 

 

(1,922.8

)

 

 

0.5

 

Total other (expense), net

 

 

(2,161.1

)

 

 

(329.4

)

(Loss) before income taxes and noncontrolling interest

 

 

(3,065.3

)

 

 

(485.7

)

(Benefit) for income taxes

 

 

(532.1

)

 

 

(408.7

)

Net (loss) from continuing operations, net of tax

 

 

(2,533.2

)

 

 

(77.0

)

(Loss) / income from discontinued operations, net of tax

 

 

(3.1

)

 

 

348.6

 

Net (loss) / income

 

 

(2,536.3

)

 

 

271.6

 

(Income) attributable to noncontrolling interest

 

 

(1.0

)

 

 

(0.7

)

Net (loss) / income attributable to members

 

$

(2,537.3

)

 

$

270.9

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

8


 

WARNER CHILCOTT LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME

(Unaudited; in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2017

 

 

2016

 

Net (loss) / income

 

$

(2,536.3

)

 

$

271.6

 

Other comprehensive income

 

 

 

 

 

 

 

 

Foreign currency translation gains

 

 

162.6

 

 

 

542.8

 

Net impact of other-than-temporary loss on investment in Teva securities

 

 

1,599.4

 

 

 

-

 

Unrealized (losses), net of tax

 

 

(1.9

)

 

 

(20.3

)

Total other comprehensive income, net of tax

 

 

1,760.1

 

 

 

522.5

 

Comprehensive (loss) / income

 

 

(776.2

)

 

 

794.1

 

Comprehensive (income) attributable to noncontrolling interest

 

 

(1.0

)

 

 

(0.7

)

Comprehensive (loss) / income attributable to members

 

$

(777.2

)

 

$

793.4

 

 

See accompanying Notes to Consolidated Financial Statements.

 

 

9


 

WARNER CHILCOTT LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2017

 

 

2016

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

 

 

Net (loss) / income

 

 

 

$

(2,536.3

)

 

$

271.6

 

Reconciliation to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

 

 

41.6

 

 

 

42.1

 

Amortization

 

 

 

 

1,736.0

 

 

 

1,592.1

 

Provision for inventory reserve

 

 

 

 

23.9

 

 

 

59.2

 

Share-based compensation

 

 

 

 

62.7

 

 

 

99.0

 

Deferred income tax benefit

 

 

 

 

(712.8

)

 

 

(519.2

)

In-process research and development impairments

 

 

 

 

340.0

 

 

 

6.0

 

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

 

 

 

 

7.4

 

 

 

(1.7

)

Net income impact of other-than-temporary loss on investment in Teva securities

 

 

 

 

1,978.0

 

 

-

 

Amortization of inventory step up

 

 

 

 

27.9

 

 

 

42.4

 

Amortization of deferred financing costs

 

 

 

 

6.7

 

 

 

10.0

 

Contingent consideration adjustments, including accretion

 

 

 

 

30.7

 

 

 

33.6

 

Other, net

 

 

 

 

(18.8

)

 

 

(9.1

)

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

 

 

 

 

 

 

 

 

 

 

Decrease / (increase) in accounts receivable, net

 

 

 

 

53.2

 

 

 

(148.6

)

Decrease / (increase) in inventories

 

 

 

 

(50.5

)

 

 

(148.5

)

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

 

 

 

 

5.7

 

 

 

14.5

 

Increase / (decrease) in accounts payable and accrued expenses

 

 

 

 

(334.3

)

 

 

18.8

 

Increase / (decrease) in income and other taxes payable

 

 

 

 

123.8

 

 

 

(52.2

)

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

   with Parents

 

 

 

 

(29.7

)

 

 

6.2

 

Net cash provided by operating activities

 

 

 

 

755.2

 

 

 

1,316.2

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

 

 

(33.2

)

 

 

(84.9

)

Additions to product rights and other intangibles

 

 

 

 

(346.3

)

 

 

-

 

Additions to investments

 

 

 

 

(6,387.9

)

 

 

-

 

Proceeds from the sale of investments and other assets

 

 

 

 

9,655.3

 

 

 

19.0

 

Proceeds from sales of property, plant and equipment

 

 

 

 

0.7

 

 

 

12.1

 

Acquisitions of businesses, net of cash acquired

 

 

 

 

(2,874.4

)

 

 

-

 

Net cash provided by / (used in) investing activities

 

 

 

 

14.2

 

 

 

(53.8

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

 

 

Proceeds from borrowings on credit facility and other

 

 

 

 

-

 

 

 

900.0

 

Payments on debt, including capital lease obligations and credit facility

 

 

 

 

(1,015.9

)

 

 

(854.2

)

Payments of contingent consideration

 

 

 

 

(76.3

)

 

 

(32.3

)

Dividend to Parent

 

 

 

 

(305.8

)

 

 

(69.6

)

Net cash (used in) financing activities

 

 

 

 

(1,398.0

)

 

 

(56.1

)

Effect of currency exchange rate changes on cash and cash equivalents

 

 

 

 

6.3

 

 

 

5.2

 

Net (decrease) / increase in cash and cash equivalents

 

 

 

 

(622.3

)

 

 

1,211.5

 

Cash and cash equivalents at beginning of period

 

 

 

 

1,713.2

 

 

 

1,036.2

 

Cash and cash equivalents at end of period