agn-10q_20170630.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, 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):

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).

Number of shares of Allergan plc’s Ordinary Shares outstanding on July 28, 2017: 334,306,189. 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.

	June 30,		December 31,
	2017		2016
ASSETS
Current assets:
Cash and cash equivalents	$	886.9	$	1,724.0
Marketable securities		4,939.0		11,501.5
Accounts receivable, net		2,795.9		2,531.0
Inventories		935.9		718.0
Prepaid expenses and other current assets		875.5		1,383.4
Total current assets		10,433.2		17,857.9
Property, plant and equipment, net		1,750.1		1,611.3
Investments and other assets		290.2		282.1
Non current assets held for sale		11.1		27.0
Deferred tax assets		288.3		233.3
Product rights and other intangibles		62,369.7		62,618.6
Goodwill		49,592.2		46,356.1
Total assets	$	124,734.8	$	128,986.3
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	4,684.6	$	5,019.0
Income taxes payable		158.7		57.8
Current portion of long-term debt and capital leases		3,795.0		2,797.9
Total current liabilities		8,638.3		7,874.7
Long-term debt and capital leases		26,443.3		29,970.8
Other long-term liabilities		1,038.3		1,085.0
Other taxes payable		896.1		886.2
Deferred tax liabilities		12,486.0		12,969.1
Total liabilities		49,502.0		52,785.8
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, 334.1 million and 334.9 million shares issued and outstanding, respectively		-	-
Additional paid-in capital		54,267.8		53,958.9
Retained earnings		14,397.9		18,342.5
Accumulated other comprehensive income / (loss)		1,625.0		(1,038.4	)
Total shareholders’ equity		75,220.4		76,192.7
Noncontrolling interest		12.4		7.8
Total equity		75,232.8		76,200.5
Total liabilities and equity	$	124,734.8	$	128,986.3

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net revenues	$	4,007.4		$	3,684.8		$	7,580.3		$	7,084.1
Operating expenses:
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)		550.2			441.5			1,000.6			918.9
Research and development		489.4			636.5			1,249.3			1,039.6
Selling and marketing		935.2			866.8			1,804.3			1,633.6
General and administrative		459.8			343.2			775.9			672.7
Amortization		1,757.9			1,633.1			3,493.9			3,222.8
In-process research and development impairments		703.3			268.9			1,043.3			274.9
Asset sales and impairments, net		14.0			(17.6	)		21.4			(19.3	)
Total operating expenses		4,909.8			4,172.4			9,388.7			7,743.2
Operating (loss)		(902.4	)		(487.6	)		(1,808.4	)		(659.1	)

Interest income		16.6			2.5			41.9			5.4
Interest (expense)		(277.4	)		(345.8	)		(567.1	)		(678.6	)
Other (expense) income, net		(133.5	)		150.1			(2,056.3	)		150.6
Total other (expense), net		(394.3	)		(193.2	)		(2,581.5	)		(522.6	)
(Loss) before income taxes and noncontrolling interest		(1,296.7	)		(680.8	)		(4,389.9	)		(1,181.7	)
(Benefit) for income taxes		(581.2	)		(258.2	)		(1,113.3	)		(666.9	)
Net (loss) from continuing operations, net of tax		(715.5	)		(422.6	)		(3,276.6	)		(514.8	)
(Loss) / income from discontinued operations, net of tax		(8.4	)		(77.3	)		(11.5	)		271.3
Net (loss)		(723.9	)		(499.9	)		(3,288.1	)		(243.5	)
(Income) attributable to noncontrolling interest		(2.0	)		(1.8	)		(3.0	)		(2.5	)
Net (loss) attributable to shareholders		(725.9	)		(501.7	)		(3,291.1	)		(246.0	)
Dividends on preferred shares		69.6			69.6			139.2			139.2
Net (loss) attributable to ordinary shareholders	$	(795.5	)	$	(571.3	)	$	(3,430.3	)	$	(385.2	)

(Loss) / income per share attributable to ordinary shareholders - basic:
Continuing operations	$	(2.35	)	$	(1.25	)	$	(10.20	)	$	(1.66	)
Discontinued operations		(0.02	)		(0.19	)		(0.03	)		0.69
Net (loss) per share - basic	$	(2.37	)	$	(1.44	)	$	(10.23	)	$	(0.97	)
(Loss) / income per share attributable to ordinary shareholders - diluted:
Continuing operations	$	(2.35	)	$	(1.25	)	$	(10.20	)	$	(1.66	)
Discontinued operations		(0.02	)		(0.19	)		(0.03	)		0.69
Net (loss) per share - diluted	$	(2.37	)	$	(1.44	)	$	(10.23	)	$	(0.97	)

Dividends per ordinary share	$	0.70		$	-		$	1.40		$	-

Weighted average shares outstanding:
Basic		335.2			395.6			335.2			395.2
Diluted		335.2			395.6			335.2			395.2

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net (loss)	$	(723.9	)	$	(499.9	)	$	(3,288.1	)	$	(243.5	)
Other comprehensive income
Foreign currency translation gains / (losses)		697.8			(349.9	)		860.4			192.9
Net impact of other-than-temporary loss on investment in Teva securities		-			-			1,599.4			-
Unrealized gains / (losses), net of tax		205.5			4.4			203.6			(15.9	)
Total other comprehensive income / (loss), net of tax		903.3			(345.5	)		2,663.4			177.0
Comprehensive income / (loss)		179.4			(845.4	)		(624.7	)		(66.5	)
Comprehensive (income) attributable to noncontrolling interest		(2.0	)		(1.8	)		(3.0	)		(2.5	)
Comprehensive income / (loss) attributable to ordinary shareholders	$	177.4		$	(847.2	)	$	(627.7	)	$	(69.0	)

	Six Months Ended June 30,
	2017			2016
Cash Flows From Operating Activities:
Net (loss)	$	(3,288.1	)	$	(243.5	)
Reconciliation to net cash provided by operating activities:
Depreciation		81.2			76.9
Amortization		3,493.9			3,227.6
Provision for inventory reserve		48.7			116.9
Share-based compensation		148.5			188.8
Deferred income tax benefit		(1,478.8	)		(327.1	)
In-process research and development impairments		1,043.3			274.9
Loss / (gain) on asset sales and impairments, net		21.4			(19.3	)
Net income impact of other-than-temporary loss on investment in Teva securities		1,978.0			-
Amortization of inventory step-up		87.8			42.4
Non-cash extinguishment of debt		(8.2	)		-
Amortization of deferred financing costs		13.2			21.0
Contingent consideration adjustments, including accretion		15.2			60.8
Other, net		(22.6	)		(26.4	)
Changes in assets and liabilities (net of effects of acquisitions):
Decrease / (increase) in accounts receivable, net		(139.0	)		(501.2	)
Decrease / (increase) in inventories		(95.1	)		(183.2	)
Decrease / (increase) in prepaid expenses and other current assets		10.5			245.4
Increase / (decrease) in accounts payable and accrued expenses		(207.5	)		424.0
Increase / (decrease) in income and other taxes payable		673.7			(477.6	)
Increase / (decrease) in other assets and liabilities		(23.5	)		(267.5	)
Net cash provided by operating activities		2,352.6			2,632.9
Cash Flows From Investing Activities:
Additions to property, plant and equipment		(137.2	)		(182.8	)
Additions to product rights and other intangibles		(586.3	)		-
Additions to investments		(6,787.9	)		-
Proceeds from sale of investments and other assets		13,197.5			25.5
Proceeds from sales of property, plant and equipment		4.3			14.5
Acquisitions of businesses, net of cash acquired		(5,290.4	)		-
Net cash provided by / (used in) investing activities		400.0			(142.8	)
Cash Flows From Financing Activities:
Proceeds from borrowings of long-term indebtedness, including credit facility		3,023.0			900.0
Debt issuance and other financing costs		(17.5	)		-
Payments on debt, including capital lease obligations and credit facility		(5,579.2	)		(3,835.6	)
Proceeds from stock plans		124.7			107.3
Payments of contingent consideration and other financing		(505.1	)		(63.8	)
Repurchase of ordinary shares		(35.2	)		(67.3	)
Dividends paid		(611.9	)		(139.2	)
Net cash (used in) financing activities		(3,601.2	)		(3,098.6	)
Effect of currency exchange rate changes on cash and cash equivalents		11.5			2.0
Net (decrease) in cash and cash equivalents		(837.1	)		(606.5	)
Cash and cash equivalents at beginning of period		1,724.0			1,096.0
Cash and cash equivalents at end of period	$	886.9		$	489.5
Supplemental Disclosures of Cash Flow Information
Other income taxes paid, net of refunds	$	(250.7	)	$	335.5
Cash payments of interest	$	626.9		$	683.0
Schedule of Non-Cash Investing and Financing Activities:
Non-cash equity issuance for the acquisition of Zeltiq net assets	$	8.5		$	-
Deferred consideration for the acquisition of Zeltiq	$	13.5		$	-
Dividends accrued	$	24.6		$	24.2

	June 30,		December 31,
	2017		2016
ASSETS
Current assets:
Cash and cash equivalents	$	858.1	$	1,713.2
Marketable securities		4,939.0		11,501.5
Accounts receivable, net		2,795.9		2,531.0
Receivables from Parents		5,163.6		9,289.2
Inventories		935.9		718.0
Prepaid expenses and other current assets		872.9		1,382.1
Total current assets		15,565.4		27,135.0
Property, plant and equipment, net		1,750.1		1,611.3
Investments and other assets		290.2		282.1
Non current receivables from Parents		3,964.0		3,964.0
Non current assets held for sale		11.1		27.0
Deferred tax assets		288.2		233.3
Product rights and other intangibles		62,369.7		62,618.6
Goodwill		49,592.2		46,356.1
Total assets	$	133,830.9	$	142,227.4
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	4,656.3	$	4,993.3
Payables to Parents		1,621.6		1,372.8
Income taxes payable		158.7		57.8
Current portion of long-term debt and capital leases		3,795.0		2,797.9
Total current liabilities		10,231.6		9,221.8
Long-term debt and capital leases		26,443.3		29,970.8
Other long-term liabilities		1,037.9		1,086.0
Other taxes payable		896.1		886.2
Deferred tax liabilities		12,486.0		12,969.1
Total liabilities		51,094.9		54,133.9
Commitments and contingencies
Equity:
Members' capital		72,935.1		72,935.1
Retained earnings		8,163.5		16,189.0
Accumulated other comprehensive income / (loss)		1,625.0		(1,038.4	)
Total members’ equity		82,723.6		88,085.7
Noncontrolling interest		12.4		7.8
Total equity		82,736.0		88,093.5
Total liabilities and equity	$	133,830.9	$	142,227.4

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net revenues	$	4,007.4		$	3,684.8		$	7,580.3		$	7,084.1
Operating expenses:
Cost of sales (excludes amortization and impairment of acquired intangibles including product rights)		550.2			441.5			1,000.6			918.9
Research and development		489.4			636.5			1,249.3			1,039.6
Selling and marketing		935.2			866.8			1,804.3			1,633.6
General and administrative		447.7			339.7			762.0			654.0
Amortization		1,757.9			1,633.1			3,493.9			3,222.8
In-process research and development impairments		703.3			268.9			1,043.3			274.9
Asset sales and impairments, net		14.0			(17.6	)		21.4			(19.3	)
Total operating expenses		4,897.7			4,168.9			9,374.8			7,724.5
Operating (loss)		(890.3	)		(484.1	)		(1,794.5	)		(640.4	)
Non-operating income (expense):
Interest income		37.2			2.5			88.6			5.4
Interest (expense)		(277.4	)		(345.8	)		(567.1	)		(678.6	)
Other (expense) / income, net		(133.5	)		0.1			(2,056.3	)		0.6
Total other (expense), net		(373.7	)		(343.2	)		(2,534.8	)		(672.6	)
(Loss) before income taxes and noncontrolling interest		(1,264.0	)		(827.3	)		(4,329.3	)		(1,313.0	)
(Benefit) for income taxes		(581.2	)		(258.2	)		(1,113.3	)		(666.9	)
Net (loss) from continuing operations, net of tax		(682.8	)		(569.1	)		(3,216.0	)		(646.1	)
(Loss) / income from discontinued operations, net of tax		(8.4	)		(77.3	)		(11.5	)		271.3
Net (loss)		(691.2	)		(646.4	)		(3,227.5	)		(374.8	)
(Income) attributable to noncontrolling interest		(2.0	)		(1.8	)		(3.0	)		(2.5	)
Net (loss) attributable to members	$	(693.2	)	$	(648.2	)	$	(3,230.5	)	$	(377.3	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net (loss)	$	(691.2	)	$	(646.4	)	$	(3,227.5	)	$	(374.8	)
Other comprehensive income
Foreign currency translation gains / (losses)		697.8			(349.9	)		860.4			192.9
Net impact of other-than-temporary loss on investment in Teva securities		-			-			1,599.4			-
Unrealized gains / (losses), net of tax		205.5			4.4			203.6			(15.9	)
Total other comprehensive income / (loss), net of tax		903.3			(345.5	)		2,663.4			177.0
Comprehensive income / (loss)		212.1			(991.9	)		(564.1	)		(197.8	)
Comprehensive (income) attributable to noncontrolling interest		(2.0	)		(1.8	)		(3.0	)		(2.5	)
Comprehensive income / (loss) attributable to ordinary shareholders	$	210.1		$	(993.7	)	$	(567.1	)	$	(200.3	)

	Six Months Ended June 30,
	2017			2016
Cash Flows From Operating Activities:
Net (loss)	$	(3,227.5	)	$	(374.8	)
Reconciliation to net cash provided by operating activities:
Depreciation		81.2			76.9
Amortization		3,493.9			3,227.6
Provision for inventory reserve		48.7			116.9
Share-based compensation		148.5			188.8
Deferred income tax benefit		(1,478.8	)		(327.1	)
In-process research and development impairments		1,043.3			274.9
Loss / (gain) on asset sales and impairments, net		21.4			(19.3	)
Net income impact of other-than-temporary loss on investment in Teva securities		1,978.0			-
Amortization of inventory step up		87.8			42.4
Non-cash extinguishment of debt		(8.2	)		-
Amortization of deferred financing costs		13.2			21.0
Contingent consideration adjustments, including accretion		15.2			60.8
Other, net		(22.6	)		(26.4	)
Changes in assets and liabilities (net of effects of acquisitions):
Decrease / (increase) in accounts receivable, net		(139.0	)		(501.2	)
Decrease / (increase) in inventories		(95.1	)		(183.2	)
Decrease / (increase) in prepaid expenses and other current assets		13.1			243.2
Increase / (decrease) in accounts payable and accrued expenses		(179.2	)		452.4
Increase / (decrease) in income and other taxes payable		673.7			(477.6	)
Increase / (decrease) in other assets and liabilities, including receivable / payable with Parents		(43.5	)		(64.9	)
Net cash provided by operating activities		2,424.1			2,730.4
Cash Flows From Investing Activities:
Additions to property, plant and equipment		(137.2	)		(182.8	)
Additions to product rights and other intangibles		(586.3	)		-
Additions to investments		(6,787.9	)		-
Proceeds from the sale of investments and other assets		13,197.5			25.5
Proceeds from sales of property, plant and equipment		4.3			14.5
Acquisitions of businesses, net of cash acquired		(5,290.4	)		-
Net cash provided by / (used in) investing activities		400.0			(142.8	)
Cash Flows From Financing Activities:
Proceeds from borrowings of long-term indebtedness, including credit facility		3,023.0			900.0
Debt issuance and other financing costs		(17.5	)		-
Payments on debt, including capital lease obligations and credit facility		(5,579.2	)		(3,835.6	)
Payments of contingent consideration and other financing		(505.1	)		(63.8	)
Dividend to Parent		(611.9	)		(139.2	)
Net cash (used in) financing activities		(3,690.7	)		(3,138.6	)
Effect of currency exchange rate changes on cash and cash equivalents		11.5			2.0
Net (decrease) in cash and cash equivalents		(855.1	)		(549.0	)
Cash and cash equivalents at beginning of period		1,713.2			1,036.2
Cash and cash equivalents at end of period	$	858.1		$	487.2
Schedule of Non-Cash Investing and Financing Activities:
Non-cash dividends to Parent	$	4,203.9		$	-

Allergan plc is a global pharmaceutical company and a leader in a new industry model – Growth Pharma. Allergan is focused on developing, manufacturing and commercializing branded pharmaceutical (“brand,” “branded” or “specialty brand”), device, biologic, surgical and regenerative medicine products for patients around the world. The Company has operations in more than 100 countries. Warner Chilcott Limited is an indirect wholly-owned subsidiary of Allergan plc and has the same principal business activities.

On August 2, 2016 we completed the divestiture of our global generics business and certain other assets to Teva Pharmaceutical Industries Ltd. (“Teva”) (the “Teva Transaction”) in exchange for which we received $33.3 billion in cash, net of cash acquired by Teva, which includes estimated working capital and other contractual adjustments, and 100.3 million unregistered Teva ordinary shares (or American Depository Shares with respect thereto), which approximated $5.0 billion in value using the closing date Teva opening stock price discounted at a rate of 5.9 percent due to the lack of marketability (“Teva Shares”).

As part of the Teva Transaction, Teva acquired 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 research and development (“R&D”) unit, our international over-the-counter (“OTC”) commercial unit (excluding OTC eye care products) and certain established international brands.

On October 3, 2016, the Company completed the divestiture of the Anda Distribution business to Teva for $500.0 million. The Anda Distribution business distributed generic, branded, specialty and OTC pharmaceutical products from more than 300 manufacturers to retail independent and chain pharmacies, nursing homes, mail order pharmacies, hospitals, clinics and physician offices across the U.S.

The Company recognized a combined gain on the sale of the Anda Distribution business and the Teva Transaction of $15,932.2 million in the year ended December 31, 2016, as well as deferred liabilities relating to other elements of our arrangements with Teva of $299.2 million.

As a result of the Teva Transaction and the divestiture of the Company’s Anda Distribution business, 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 financial results of the businesses held for sale have been reclassified to discontinued operations for all periods presented in our consolidated financial statements. The results of our discontinued operations include the results of our generic product development, manufacturing and distribution of off-patent pharmaceutical products, certain established international brands marketed similarly to generic products and out-licensed generic pharmaceutical products primarily in Europe through our Medis third-party business through August 2, 2016, as well as our Anda Distribution business through October 3, 2016.

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, 2016 (“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 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 and cash flows for the interim periods are not necessarily indicative of the results of operations, comprehensive income 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.

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 “Parents”), 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 Warner Chilcott Limited and the Parents (including Allergan plc), content throughout this filing relates 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 financial position and results of operations of Warner Chilcott Limited to Allergan plc ($ in millions):

	Three Months Ended June 30, 2017									Six Months Ended June 30, 2017
	Allergan plc			Warner Chilcott Limited			Difference			Allergan plc			Warner Chilcott Limited			Difference
General and administrative expenses	$	459.8		$	447.7		$	12.1		$	775.9		$	762.0		$	13.9
Operating (loss)		(902.4	)		(890.3	)		(12.1	)		(1,808.4	)		(1,794.5	)		(13.9	)
Total other (expense), net		(394.3	)		(373.7	)		(20.6	)		(2,581.5	)		(2,534.8	)		(46.7	)
(Loss) before income taxes and noncontrolling interest		(1,296.7	)		(1,264.0	)		(32.7	)		(4,389.9	)		(4,329.3	)		(60.6	)
Net (loss) from continuing operations, net of tax		(715.5	)		(682.8	)		(32.7	)		(3,276.6	)		(3,216.0	)		(60.6	)
Net (loss)		(723.9	)		(691.2	)		(32.7	)		(3,288.1	)		(3,227.5	)		(60.6	)
Dividends on preferred shares		69.6			-			69.6			139.2			-			139.2
Net (loss) attributable to ordinary shareholders/members		(795.5	)		(693.2	)		(102.3	)		(3,430.3	)		(3,230.5	)		(199.8	)

	Three Months Ended June 30, 2016									Six Months Ended June 30, 2016
	Allergan plc			Warner Chilcott Limited			Difference			Allergan plc			Warner Chilcott Limited			Difference
General and administrative expenses	$	343.2		$	339.7		$	3.5		$	672.7		$	654.0		$	18.7
Operating (loss)		(487.6	)		(484.1	)		(3.5	)		(659.1	)		(640.4	)		(18.7	)
Total other (expense), net		(193.2	)		(343.2	)		150.0			(522.6	)		(672.6	)		150.0
(Loss) before income taxes and noncontrolling interest		(680.8	)		(827.3	)		146.5			(1,181.7	)		(1,313.0	)		131.3
Net (loss) from continuing operations, net of tax		(422.6	)		(569.1	)		146.5			(514.8	)		(646.1	)		131.3
Net (loss)		(499.9	)		(646.4	)		146.5			(243.5	)		(374.8	)		131.3
Dividends on preferred shares		69.6			-			69.6			139.2			-			139.2
Net (loss) attributable to ordinary shareholders/members		(571.3	)		(648.2	)		76.9			(385.2	)		(377.3	)		(7.9	)

The difference between general and administrative expenses in the three and six months ended June 30, 2017 and 2016 were due to corporate related expenses incurred at Allergan plc as well as transaction costs. The difference in other (expense), net in the three and six months ended June 30, 2016 related to the payment received by the Company relating to the reimbursement of expenses associated with the termination of the merger agreement with Pfizer, Inc. Movements in equity are due to historical differences in the results of operations of the companies and differences in equity awards.

As of June 30, 2017 and December 31, 2016, Warner Chilcott Limited had $5.2 billion and $9.3 billion in Receivables from Parents, respectively. As of June 30, 2017 and December 31, 2016, Warner Chilcott Limited had $4.0 billion and $4.0 billion in Non-

current Receivables from the Parents, respectively. These receivables related to intercompany loans between Allergan plc and Allergan Capital S.à.r.l. (formerly known as Actavis Capital S.à.r.l.) and Forest Finance BV, subsidiaries of Warner Chilcott Limited. These loans are interest-bearing loans with varying term dates. Total interest income recognized during the three and six months ended June 30, 2017 was $20.6 million and $46.7 million, respectively.

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, 2016 included in the Annual Report.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. As a result of implementation of this guidance effective January 1, 2017, the Company reduced previously reported Retained Earnings by $62.4 million and increased previously reported Additional-Paid-In-Capital by $62.4 million. In addition, the Company decreased its net Deferred Tax Liabilities and increased Retained Earnings by $20.8 million for the tax impact of this change. The Company also revised its presentation of previously reported cash flows by eliminating the presentation of “Excess tax benefit from stock-based compensation” which raised operating cash flows and reduced financing cash flows for the six months ended June 30, 2016 by $31.9 million.

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 persuasive evidence of an arrangement, reasonable assurance of collection of sales proceeds, and the seller’s price to the buyer to be fixed or determinable. 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, 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 sales returns and allowances (“SRAs”).

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.

Accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. SRA balances in accounts receivable were $210.1 million and $287.4 million at June 30, 2017 and December 31, 2016, respectively. SRA balances within accounts payable and accrued expenses were $1,864.7 million and $1,891.4 million at June 30, 2017 and December 31, 2016, respectively. The movements in the SRA reserve balances in the six months ended June 30, 2017 are as follows ($ in millions):

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

The increase in provisions to reduce gross product sales to net product sales was attributable primarily to the US business with higher rebates to maintain broad coverage for key brands, an increase in coupon/co-pay program participation and an annual price increase which drove increases in statutory Medicaid and chargeback related discounts.

The Company tests goodwill and intangible assets with indefinite-lives for impairment annually in the second quarter. 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. 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 income / (loss) and income / (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, if there is no future alternative use or ability to sell the asset. 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 and 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.

The Company evaluated goodwill for five reporting units during the second quarter of 2017. The Company performed its annual impairment test utilizing long-term growth rates for its reporting units ranging from 0.0% to 2.0% in its estimation of fair value and discount rates ranging from 7.5% to 8.5%. 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.

The Company performed its annual IPR&D impairment test in the second quarter of 2017. Based on events occurring or decisions made within the quarter ended June 30, 2017, the Company noted IPR&D impairments of $486.0 million related to an anticipated approval delay due to certain product specifications for a CNS project obtained as part of the Allergan Acquisition, a $91.3 million impairment of a women’s healthcare project based on the Company’s intention to divest the non-strategic asset, a $57.0 million impairment due to a delay in anticipated launch of a women’s healthcare project, a $44.0 million impairment resulting from a decrease in projected cash flows due to a decline in market demand assumptions of an eye care project obtained as part of the Allergan Acquisition and a $20.0 million impairment of an eye care project obtained as part of the Allergan acquisition. As part of the Company’s ongoing R&D portfolio reviews, the Company has placed on hold certain non-abandoned IPR&D projects. The Company’s future intentions with the projects may lead to future impairments of the assets.

During the second quarter of 2016, the Company recorded IPR&D impairments related to an international eye care pipeline project of $35.0 million based on a decrease in projected cash flows due to market conditions as well as an impairment of $20.0 million for a specified indication of a Botox therapeutic product based on a decrease in projected cash flows due to a decline in market demand assumptions. In addition, during the three months ended June 30, 2016, the Company impaired IPR&D projects relating to women’s healthcare of $24.0 million and osteoarthritis of approximately $190.0 million based on clinical results.

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”). For more information on litigation and contingencies, refer to “NOTE 20 — Commitments and Contingencies” in this Quarterly Report.

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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net (loss) / income:
Net (loss) attributable to ordinary shareholders excluding income from discontinued operations, net of tax	$	(787.1	)	$	(494.0	)	$	(3,418.8	)	$	(656.5	)
(Loss) / income from discontinued operations, net of tax		(8.4	)		(77.3	)		(11.5	)		271.3
Net (loss) attributable to ordinary shareholders	$	(795.5	)	$	(571.3	)	$	(3,430.3	)	$	(385.2	)

Basic weighted average ordinary shares outstanding		335.2			395.6			335.2			395.2

Basic EPS:
Continuing operations	$	(2.35	)	$	(1.25	)	$	(10.20	)	$	(1.66	)
Discontinued operations	$	(0.02	)	$	(0.19	)	$	(0.03	)	$	0.69
Net (loss) per share	$	(2.37	)	$	(1.44	)	$	(10.23	)	$	(0.97	)

Dividends per ordinary share	$	0.70		$	-		$	1.40		$	-

Diluted weighted average ordinary shares outstanding		335.2			395.6			335.2			395.2

Diluted EPS:
Continuing operations	$	(2.35	)	$	(1.25	)	$	(10.20	)	$	(1.66	)
Discontinued operations	$	(0.02	)	$	(0.19	)	$	(0.03	)	$	0.69
Net (loss) per share	$	(2.37	)	$	(1.44	)	$	(10.23	)	$	(0.97	)

Stock awards to purchase 3.9 and 4.2 million ordinary shares for the three and six months ended June 30, 2017, respectively, were outstanding, but not included in the computation of diluted EPS, because the awards were anti-dilutive. The weighted average impact of ordinary share equivalents of 17.6 million for the three and six months ended June 30, 2017, 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. The impact of the share repurchase on basic EPS was 0.7 million weighted average shares and 0.3 million weighted average shares for the three and six months ended June 30, 2017, respectively. Refer to “NOTE 16 –Shareholder’s Equity” for further discussion on the Company’s Share Repurchase Program. The impact of the Share Repurchase Program was anti-dilutive for the three and six months ended June 30, 2017.

Stock awards to purchase 4.2 million and 4.7 million ordinary shares for the three and six months ended June 30, 2016, 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 for the three and six months ended June 30, 2016, 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.

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 May 28, 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), with an effective date for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The effective date for ASU 2014-09 was deferred by one year through the issuance of ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Subsequent to the issuance of ASU 2014-09, the FASB issued multiple updates which are intended to improve the operability and understandability of the implementation guidance, and to provide clarifying guidance in certain narrow areas and add some practical expedients, which include guidance on principal versus agent considerations; identifying performance obligations; licensing implementation guidance; assessing the specific collectability criterion and accounting for certain contracts; presentation of sales taxes and other similar taxes collected from customers; noncash consideration; contract modifications at transition and completed contracts at transition. The guidance provides clarification that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption, however, an entity is still required to disclose the effect of the changes on any prior periods retrospectively adjusted. The Company is continuing to evaluate the impact of the new revenue guidance. The majority of the Company’s revenue relates to the sale of finished product to various customers and we do not believe that the adoption of the new standard will have a material impact on these transactions. The Company is continuing to evaluate the impact of certain less significant transactions involving collaboration arrangements, warranties, costs of entering into contracts, as well as certain rebates and discounts offered. The Company expects to adopt the standard in 2018 using the modified retrospective approach.

In February 2016, the FASB issued ASU 2016-02, which states that a lessee should recognize the assets and liabilities that arise from leases. This update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is evaluating the impact the pronouncement will have on our financial position and results of operations.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets including trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is evaluating the impact, if any, the pronouncement will have on our financial position and results of operations.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This prohibition on recognition is an exception to the principle of comprehensive recognition of current and deferred income taxes in GAAP. The amendments require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of the amendments are intellectual property and property, plant, and equipment. The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities in the first interim period if an entity issues interim financial statements. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is evaluating the impact the pronouncement will have on our financial position and results of operations.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments are intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. When substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. This introduces an initial required screening that, if met, eliminates the need for further assessment. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. To be a business without outputs, there will need to be an organized workforce. The ASU also narrows the definition of the term “outputs” to be consistent with how it is described in Topic 606, Revenue from Contracts with Customers. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The changes to the definition of a business may result in more acquisitions being accounted for as asset acquisitions.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments eliminate Step 2 from the goodwill impairment test. The goodwill impairment test is performed

by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. The amendments should be applied on a prospective basis. The nature of and reason for the change in accounting principle should be disclosed upon transition. The amendments are effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of the guidance is not anticipated to have a material impact on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. In addition, the amendments also allow only the service cost component to be eligible for capitalization when applicable. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company does not anticipate the standard having an impact on our financial position and results of operations.

In March 2017, The FASB issued Accounting Standards Update (ASU) 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium and requires the premium to be amortized to the earliest call date. However, the amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments are effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The entity is required to provide disclosures about a change in accounting principle in the period of adoption. The Company is evaluating the impact the amendments will have on our financial position and results of operations.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718) — Scope of Modification Accounting. ASU 2017-09 applies to entities that change the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 include guidance on determining changes to the terms and conditions of share-based payment awards and require an entity to apply modification accounting under Topic 718 unless all of the following conditions are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and should be applied prospectively to an award modified on or after the adoption date. The Company is evaluating the impact the amendments will have on our financial position and results of operations.

The following are the significant transactions that were completed in the six months ended June 30, 2017.

On June 23, 2017 the Company acquired Keller Medical, Inc. (“Keller”), a privately held medical device company and developer of the Keller Funnel^® (the “Keller Acquisition”). The acquisition combines the Keller Funnel^®, a surgical device used in conjunction with breast implants, with the Company’s leading breast implants business.

On April 28, 2017 the Company acquired Zeltiq^® Aesthetics, Inc. (“Zeltiq”) for an acquisition accounting purchase price of $2,405.4 million (the “Zeltiq Acquisition”). Zeltiq was focused on developing and commercializing products utilizing its proprietary controlled-cooling technology platform. The acquisition combined Zeltiq’s body contouring business with the Company’s leading portfolio of medical aesthetics.

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 June 30, 2017, certain amounts relating to the valuation of tax related matters 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):

The estimated fair value of the intangible assets, including Customer Relationships, 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, other allocated costs, and working capital/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. This technique is referred to as the “IPR&D and Intangible Asset Valuation Technique.”

The fair value of the intangible assets acquired in the Zeltiq Acquisition was determined using the IPR&D and Intangible Asset Valuation Technique. The discount rate used to arrive at the present value for acquired intangible assets ranged from 10.0% to 11.0% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections. The discount rate of the acquisition was driven by the life-cycle stage of the products and the therapeutic indication. 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 ($ in millions):

Among the reasons the Company acquired Zeltiq and the factors that contributed to the preliminary recognition of goodwill was the expansion of the Company’s leading medical aesthetics portfolio. Goodwill from the Zeltiq Acquisition of $958.7 million was assigned to the US Specialized Therapeutic segment and $245.9 million was assigned to the International segment and is non-deductible for tax purposes.

The fair value of inventories acquired included an acquisition accounting fair market value step-up of $22.9 million. In the three and six months ended June 30, 2017, the Company recognized $11.9 million, as a component of cost of sales as the inventory acquired was sold to the Company’s customers.

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 February 1, 2017, the Company acquired LifeCell Corporation (“LifeCell”), a regenerative medicine company, for an acquisition accounting price of $2,883.1 million (the “LifeCell Acquisition”). The acquisition combined LifeCell's novel, regenerative medicines business, including its high-quality and durable portfolio of dermal matrix products, with Allergan's leading portfolio of medical aesthetic products, breast implants and tissue expanders. The acquisition of LifeCell expanded the Company’s portfolio including the promotion of Alloderm^® and Strattice^®.

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 June 30, 2017, certain amounts relating to the valuation of tax related matters, intangible assets and gross-to-net deductions 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):

The fair value of the acquired intangible assets was determined using the IPR&D and Intangible Asset Valuation Technique. The discount rate used to arrive at the present value for acquired intangible assets was 7.5% to reflect the internal rate of return and incremental commercial uncertainty in the cash flow projections in the LifeCell Acquisition. The discount rate of the acquisition was driven by the life-cycle stage of the products, the advanced nature of IPR&D projects, and IPR&D assets acquired and the therapeutic indication. 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 ($ in millions):

Among the reasons the Company acquired LifeCell and the factors that contributed to the preliminary recognition of goodwill was the expansion of the Company’s leading product portfolio. Goodwill from the LifeCell Acquisition of $1,469.8 million was assigned to the US Specialized Therapeutic segment and is non-deductible for tax purposes.

The fair value of inventories acquired included an acquisition accounting fair market value step-up of $108.4 million. In the three and six months ended June 30, 2017, the Company recognized $48.0 million and $75.9 million, respectively, as a component of cost of sales as the inventory acquired was sold to the Company’s customers.

On March 14, 2017, the Company entered into a strategic alliance and option agreement with Editas Medicine, Inc. (“Editas”) for access to early stage, first-in-class eye care programs. Pursuant to the agreement, Allergan made an upfront payment of $90.0 million for the right to license up to five of Editas’ gene-editing programs in eye care, including its lead program for Leber Congenital Amaurosis (“LCA”) currently in pre-clinical development. Under the terms of the agreement, if an option is exercised, Editas is eligible to receive contingent research and development and commercial milestones plus royalties based on net sales. The Company concluded based on the stage of development of the assets, the lack of acquired employees and manufacturing, as well as the lack of certain other inputs and processes, that the transaction did not qualify as a business. The total upfront payment of $90.0 million was expensed as a component of R&D expense in the six months ended June 30, 2017. The future option exercise payments, if any, and any future success based milestones relating to licensed products will be recorded if the corresponding events become probable.

On January 9, 2017, the Company entered into a licensing agreement with Assembly Biosciences, Inc. (“Assembly”) for the worldwide rights to Assembly’s microbiome gastrointestinal development programs. Under the terms of the agreement, the Company made an upfront payment to Assembly of $50.0 million for the exclusive, worldwide rights to develop and commercialize certain development compounds. Additionally, Assembly will be eligible to receive success-based development and commercial milestone payments plus royalties based on net sales. The Company and Assembly will generally share development costs through proof-of-concept (“POC”) studies, and Allergan will assume all post-POC development costs. The Company concluded based on the stage of development of the assets, the lack of acquired employees and manufacturing as well as the lack of certain other inputs and processes that the transaction did not qualify as a business. The total upfront payment of $50.0 million was expensed as a component of R&D expense in the six months ended June 30, 2017 and the future success based milestone payments of up to $2,771.0 million will be recorded if the corresponding events become probable.

On January 9, 2017, the Company entered into a definitive agreement for the option to acquire Lysosomal Therapeutics, Inc. (“LTI”). LTI is focused on innovative small-molecule research and development in the field of neurodegeneration, yielding new treatment options for patients with severe neurological diseases. Under the agreement, Allergan acquired an option right directly from LTI shareholders to acquire LTI for $150.0 million plus future milestone payments following completion of a Phase 1b trial for LTI-291 as well as an upfront research and development payment. The Company concluded based on the stage of development of the assets, the lack of acquired employees and manufacturing, as well as the lack of certain other inputs and processes, that the transaction did not qualify as a business. The aggregate payment of $145.0 million was recorded as a component of R&D expense in the six months ended June 30, 2017.

The following are the significant transactions that were completed in the year ended December 31, 2016.

On November 1, 2016, the Company acquired Tobira Therapeutics, Inc. (“Tobira”), a clinical-stage biopharmaceutical company focused on developing and commercializing therapies for non-alcoholic steatohepatitis (“NASH”) and other liver diseases for an acquisition accounting purchase price of $570.1 million, plus contingent consideration of up to $49.84 per share in contingent value rights (“CVR”), or up to $1,101.3 million, that may be payable based on the successful completion of certain development, regulatory and commercial milestones (the “Tobira Acquisition”), of which $303.1 million was paid in the three months ended June 30, 2017. The CVR had an acquisition date fair value of $479.0 million. The acquisition adds Cenicriviroc and Evogliptin, two differentiated, complementary development programs for the treatment of the multi-factorial elements of NASH, including inflammation, metabolic syndromes and fibrosis, to Allergan's global gastroenterology R&D pipeline.

The Tobira 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 June 30, 2017, certain amounts relating to the valuation of tax related matters 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):

As part of the Tobira Acquisition, the Company was required to pay the former shareholders of Tobira up to $1,101.3 million based on the timing of certain development, regulatory and commercial milestones, if any. The Company estimated the fair value of the contingent consideration to be $479.0 million using a probability weighted average approach that considered the possible outcomes of scenarios related to the specified product.

On October 25, 2016, the Company acquired Vitae Pharmaceuticals, Inc. (“Vitae”), a clinical-stage biotechnology company for an acquisition accounting purchase price of $621.4 million (the “Vitae Acquisition”). The acquisition strengthens Allergan’s dermatology product pipeline, with the addition of a Phase II, orally active RORyt (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis and other autoimmune disorders. In addition, the Company expanded its pipeline with the acquisition of a Phase II atopic dermatitis drug candidate.

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 June 30, 2017, certain amounts relating to the valuation of tax related matters 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):

The Company held for sale certain intangible assets acquired as part of the Vitae Acquisition for an acquisition accounting value of $22.5 million. In the quarter ended June 30, 2017, the Company sold these assets for $22.5 million.

On September 23, 2016, the Company acquired ForSight VISION5, Inc. (“ForSight’), a privately held, clinical-stage biotechnology company focused on eye care, in an all cash transaction of approximately $95.0 million. Under the terms of the agreement, the Company acquired ForSight for an acquisition accounting purchase price of $74.5 million plus the payment of outstanding indebtedness of $14.8 million and other miscellaneous charges. ForSight shareholders are eligible to receive contingent consideration of up to $125.0 million, which has an initial estimated fair value of $79.8 million, relating to commercialization milestones (the “ForSight Acquisition”). The Company acquired ForSight for its lead development program, a peri-ocular ring designed for extended drug delivery and reducing elevated intraocular pressure (“IOP”) in glaucoma patients.

The ForSight 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 final fair values of the assets acquired and liabilities assumed at the acquisition date ($ in millions):

In the year ended December 31, 2016, none of the following completed transactions qualified as a business. The conclusion for each transaction was determined based on the stage of development of the specific assets acquired, the lack of acquired employees in the individual transactions and the lack of acquired manufacturing processes, as well as the lack of certain other inputs and processes. As a result, the initial consideration in these transactions was included as a component of R&D expenses in the year ended December 31, 2016 as follows ($ in millions):

The following are the significant transactions that were completed in the year ended December 31, 2015.

On March 17, 2015, the Company completed the acquisition of Allergan, Inc. (“Legacy Allergan”). The addition of Legacy Allergan’s therapeutic franchises in ophthalmology, neurosciences and medical aesthetics/dermatology/plastic surgery complemented the Company’s existing central nervous system, gastroenterology, women’s health and urology franchises. The combined company benefited from Legacy Allergan’s global brand equity and consumer awareness of key products, including Botox^® and Restasis^®. The transaction 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 fair value of inventories acquired included an acquisition accounting fair market value step-up of $923.9 million. In the six months ended June 30, 2016, the Company recognized $21.6 million as a component of cost of sales as the inventory acquired was sold to the Company’s customers.

As a result of the Allergan acquisition, the Company incurred the following transaction and integration costs in the three months ended June 30, 2017 and 2016, respectively ($ in millions):

As a result of the Allergan acquisition, the Company incurred the following transaction and integration costs in the six months ended June 30, 2017 and 2016, respectively ($ in millions):

On July 27, 2015, the Company announced that it entered into the Teva Transaction, which closed on August 2, 2016. As a result of the Teva Transaction, the Company holds equity in Teva and purchases product manufactured by Teva for sale in our US General Medicine segment as part of ongoing transitional service and contract manufacturing agreements.

In October 2016, pursuant to our agreement with Teva, Teva provided the Company with its proposed estimated adjustment to the closing date working capital balance. The Company disagrees with Teva’s proposed adjustment, and, pursuant to our agreement with Teva, each of the Company’s and Teva’s proposed adjustments have been submitted to arbitration to determine the working capital amount in accordance with GAAP as applied by the Company consistent with past practice. Teva initially proposed an adjustment of approximately $1.4 billion and subsequently submitted a revised adjustment of approximately $1.5 billion to the arbitrator, and the final amount of any contractual adjustment as determined in accordance with the arbitration could vary materially from the adjustment calculated by the Company and would be reflected in our financial statements for discontinued operations. Any adjustment to the Company’s proceeds from the Teva Transaction could have a material adverse effect on the Company’s results of operations and cash flows. The Company anticipates a decision from the arbitration in the fourth quarter of 2017 in accordance with the timeline agreed by the parties and arbitrator.

The fair value of Teva Shares owned are recorded within “Marketable securities” on the Company’s Consolidated Balance Sheet. The closing Teva Transaction date opening stock price discounted at a rate of 5.9 percent due to the lack of marketability was used to initially value the shares. At March 31, 2017, the Company determined that the decline in value since August 2, 2016 was other-than-temporary. As a result, the Company impaired the value of its investment by $1,978.0 million at March 31, 2017 as a component of other (expense) income. The determination was made based on the amount of time that the stock price had been below acquisition date value, intentions regarding the potential holding period of the shares, and the materiality of the decline in share price.

As of June 30, 2017, the value of the Teva Shares is $3,268.4 million, which includes a discount rate due to the lack of marketability of 1.9 percent. In the quarter ended June 30, 2017, the Company recognized an unrealized gain on the Teva securities of $207.8 million over the March 31, 2017 cost basis, which is recognized as a component of other comprehensive income.

On October 3, 2016, the Company completed the divestiture of the Anda Distribution business for $500.0 million.

Financial results of the global generics business and the Anda Distribution business are presented as "(Loss) / Income from discontinued operations, net of tax” on the Consolidated Statements of Operations for the three and six months ended June 30, 2017 and 2016. The loss from discontinued operations, net of tax of $8.4 million and $11.5 million, respectively, in the three and six months ended June 30, 2017, primarily related to ongoing matters with respect to the Teva Transaction.

The following table presents key financial results of the businesses included in "(Loss) / Income from discontinued operations" for the three and six months ended June 30, 2016 ($ in millions):

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

As described in Note 5, the Company recognized an other-than-temporary impairment on its investment in Teva securities of $1,978.0 million in the six months ended June 30, 2017.

As described in Note 13, the Company repaid $2,843.3 million of senior notes. In the three and six months ended June 30, 2017, as a result of the extinguishment, the Company recognized a loss of $161.5 million, within “Other income/ (expense)” for the early tender payment and non-cash write-off of premiums and debt fees related to the repurchased notes, including $170.5 million of a make-whole premium.

As a result of the Teva Transaction, the Company acquired 100.3 million Teva ordinary shares. During the three and six months ended June 30, 2017, the Company received dividend income of $34.1 million and $68.2 million, respectively.

On August 28, 2015, the Company acquired certain products in early stage development of Naurex, Inc. (“Naurex”) in an all-cash transaction, which was accounted for as an asset acquisition (the “Naurex Transaction”). The Company received a purchase price reduction of $20.0 million in the six months ended June 30, 2017 based on the settlement of an open contract negotiation.

In the three and six months ended June 30, 2016, the Company received a payment of $150.0 million from Pfizer Inc. for reimbursement of expenses associated with the termination of the merger agreement which is reported as other income.

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 market 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 that lapse 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 ordinary shares issued ranging based on achievement of the performance criteria. All restricted stock and restricted stock units which remain active under the Company’s equity award plans are eligible to receive cash dividend equivalent payments upon vesting.

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 June 30, 2017 and 2016 was as follows ($ in millions):

Included in the table above is share-based compensation relating to discontinued operations of $4.6 million for the three months ended June 30, 2016.

Share-based compensation expense recognized in the Company’s results of operations for the six months ended June 30, 2017 and 2016 were as follows ($ in millions):

Included in the table above is share-based compensation relating to discontinued operations of $12.8 million for the six months ended June 30, 2016.

Included in the equity-based compensation awards for the three and six months ended June 30, 2017 and 2016 is the impact of accelerations and step-ups relating to the acquisition accounting treatment of outstanding awards acquired in the Allergan, Forest, and Zeltiq acquisitions as follows ($ in millions):

Unrecognized future share-based compensation expense was $523.6 million as of June 30, 2017, including $64.5 million from the Allergan Acquisition, $33.5 million from the Zeltiq Acquisition, and $8.5 million from the Forest Acquisition. This amount will be recognized as an expense over a remaining weighted average period of 1.8 years. Share-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, 2016 through June 30, 2017:

The following is a summary of equity award activity for non-qualified options to purchase ordinary shares in the period from December 31, 2016 through June 30, 2017:

The Company’s businesses are organized into the following segments: US Specialized Therapeutics, US General Medicine and International. In addition, certain revenues and shared costs, and the results of corporate initiatives, are managed outside of the three segments.

The Company evaluates segment performance based on segment contribution. Segment contribution for our segments represents net revenues less cost of sales (defined below), selling and marketing expenses, and select general and administrative expenses. Included in segment revenues are product sales that were sold through our former Anda Distribution business once the Anda Distribution business had sold the product to a third party customer. These sales are included in segment results and are reclassified into revenues from discontinued operations through a reduction of Corporate revenues which eliminates the sales made by our Anda Distribution business from results of continuing operations prior to October 3, 2016. Cost of sales for these products in discontinued operations is equal to our average third party cost of sales for third party branded products distributed by Anda Distribution. The Company does not evaluate the following items at the segment level:

The Company defines segment net revenues as product sales and other revenue derived from branded products or licensing agreements.

Cost of sales within segment contribution includes standard 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 and finished goods inventory reserve charges. Cost of sales included within segment contribution does not include non-standard production costs, such as non-finished goods inventory obsolescence charges, manufacturing variances 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 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 June 30, 2017 and 2016 ($ in millions):

	Three Months Ended June 30, 2017
	US Specialized			US General
	Therapeutics			Medicine			International			Total
Net revenues	$	1,715.0		$	1,427.7		$	858.5		$	4,001.2

Operating expenses:
Cost of sales⁽¹⁾		128.8			203.2			125.0			457.0
Selling and marketing		356.8			288.1			238.9			883.8
General and administrative		49.8			41.3			28.3			119.4
Segment Contribution	$	1,179.6		$	895.1		$	466.3		$	2,541.0
Contribution margin		68.8	%		62.7	%		54.3	%		63.5	%
Corporate											478.8
Research and development											489.4
Amortization											1,757.9
In-process research and development impairments											703.3
Asset sales and impairments, net											14.0
Operating (loss)										$	(902.4	)
Operating margin											(22.6	)%

	Three Months Ended June 30, 2016
	US Specialized			US General
	Therapeutics			Medicine			International			Total
Net revenues	$	1,488.9		$	1,449.1		$	757.0		$	3,695.0

Operating expenses:
Cost of sales⁽¹⁾		75.1			214.9			115.0			405.0
Selling and marketing		287.8			332.7			207.2			827.7
General and administrative		46.0			43.7			30.9			120.6
Segment Contribution	$	1,080.0		$	857.8		$	403.9		$	2,341.7
Contribution margin		72.5	%		59.2	%		53.4	%		63.4	%
Corporate											308.4
Research and development											636.5
Amortization											1,633.1
In-process research and development impairments											268.9
Asset sales and impairments, net											(17.6	)
Operating (loss)										$	(487.6	)
Operating margin											(13.2	)%

The following is a reconciliation of net revenues for the operating segments to the Company’s net revenues for the three months ended June 30, 2017 and 2016 ($ in millions):

No country outside of the United States represents ten percent or more of net revenues. The US Specialized Therapeutics and US General Medicine 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 the six months ended June 30, 2017 and 2016 ($ in millions):

	Six Months Ended June 30, 2017
	US Specialized			US General
	Therapeutics			Medicine			International			Total
Net revenues	$	3,197.0		$	2,773.5		$	1,595.8		$	7,566.3

Operating expenses:
Cost of sales⁽¹⁾		218.0			397.7			225.3			841.0
Selling and marketing		687.2			590.6			448.4			1,726.2
General and administrative		94.6			82.0			58.2			234.8
Segment Contribution	$	2,197.2		$	1,703.2		$	863.9		$	4,764.3
Contribution margin		68.7	%		61.4	%		54.1	%		63.0	%
Corporate											764.8
Research and development											1,249.3
Amortization											3,493.9
In-process research and development impairments											1,043.3
Asset sales and impairments, net											21.4
Operating (loss)											(1,808.4	)
Operating margin											(23.9	)%

	Six Months Ended June 30, 2016
	US Specialized			US General
	Therapeutics			Medicine			International			Total
Net revenues	$	2,787.6		$	2,902.8		$	1,430.3		$	7,120.7

Operating expenses:
Cost of sales⁽¹⁾		145.8			434.5			214.2			794.5
Selling and marketing		552.4			610.0			394.5			1,556.9
General and administrative		85.2			85.9			58.5			229.6
Segment Contribution	$	2,004.2		$	1,772.4		$	763.1		$	4,539.7
Contribution margin		71.9	%		61.1	%		53.4	%		63.8	%
Corporate											680.8
Research and Development											1,039.6
Amortization											3,222.8
In-process research and development impairments											274.9
Asset sales and impairments, net											(19.3	)
Operating (loss)											(659.1	)
Operating margin											(9.3	)%

The following is a reconciliation of net revenues for the operating segments to the Company’s net revenues for the six months ended June 30, 2017 and 2016 ($ in millions):

The following tables present global net revenues for the top products of the Company for the three and six months ended June 30, 2017 and 2016 ($ in millions):

	Three Months Ended June 30, 2017
	US Specialized Therapeutics		US General Medicine		International		Corporate		Total
Botox®	$	574.0	$	-	$	242.1	$	-	$	816.1
Restasis®		336.4		-		17.3		-		353.7
Juvederm Collection **		126.2		-		137.3		-		263.5
Lumigan®/Ganfort®		79.0		-		94.4		-		173.4
Linzess®/Constella®		-		167.8		5.5		-		173.3
Bystolic® /Byvalson®		-		150.7		0.5		-		151.2
Alphagan®/Combigan®		96.4		-		42.7		-		139.1
Eye Drops		50.7		-		70.7		-		121.4
Namenda XR®		-		118.7		-		-		118.7
Lo Loestrin®		-		113.0		-		-		113.0
Breast Implants		61.3		-		41.1		-		102.4
Estrace® Cream		-		90.1		-		-		90.1
Alloderm®		84.6		-		2.3		-		86.9
Viibryd®/Fetzima®		-		85.2		0.7		-		85.9
Ozurdex ®		24.9		-		51.2		-		76.1
Vraylar™		-		66.3		-		-		66.3
Coolsculpting® Consumables		47.9		-		12.5		-		60.4
Carafate ® /Sulcrate ®		-		59.2		0.7		-		59.9
Asacol®/Delzicol®		-		45.6		12.8		-		58.4
Zenpep®		-		50.5		-		-		50.5
Saphris®		-		43.0		-		-		43.0
Canasa®/Salofalk®		-		38.4		4.3		-		42.7
Viberzi®		-		41.3		0.1		-		41.4
Armour Thyroid		-		42.0		-		-		42.0
Coolsculpting® Systems & Add On Applicators		31.0		-		10.2		-		41.2
Aczone®		41.0		-		0.1		-		41.1
Namzaric®		-		33.4		-		-		33.4
Teflaro®		-		33.0		-		-		33.0
Rapaflo®		25.7		-		1.7		-		27.4
Savella®		-		26.0		-		-		26.0
SkinMedica®		25.4		-		-		-		25.4
Dalvance®		-		15.2		1.2		-		16.4
Kybella® /Belkyra®		12.7		-		2.0		-		14.7
Avycaz®		-		14.5		-		-		14.5
Latisse®		13.3		-		2.4		-		15.7
Lexapro®		-		13.1		-		-		13.1
Tazorac®		12.8		-		0.2		-		13.0
Minastrin® 24		-		11.4		-		-		11.4
Liletta®		-		6.6		-		-		6.6
Enablex®		-		1.0		-		-		1.0
Namenda® IR		-		-		-		-		-
Other Products Revenues		71.7		161.7		104.5		6.2		344.1
Less product sold through our Anda Distribution business	n.a.		n.a.		n.a.			-		-
Total Net Revenues	$	1,715.0	$	1,427.7	$	858.5	$	6.2	$	4,007.4

	Three Months Ended June 30, 2016
	US Specialized Therapeutics		US General Medicine		International		Corporate			Total
Botox®	$	502.2	$	-	$	217.5	$	-		$	719.7
Restasis®		371.3		-		19.3		-			390.6
Juvederm Collection **		117.6		-		107.3		-			224.9
Lumigan®/Ganfort®		80.6		-		94.5		-			175.1
Linzess®/Constella®		-		150.5		4.6		-			155.1
Bystolic® /Byvalson®		-		150.3		0.4		-			150.7
Alphagan®/Combigan®		96.0		-		44.2		-			140.2
Eye Drops		49.1		-		72.0		-			121.1
Namenda XR®		-		166.5		-		-			166.5
Lo Loestrin®		-		101.0		-		-			101.0
Breast Implants		51.7		-		40.2		-			91.9
Estrace® Cream		-		97.2		-		-			97.2
Alloderm®		-		-		-		-			-
Viibryd®/Fetzima®		-		81.7		0.1		-			81.8
Ozurdex ®		21.5		-		45.7		-			67.2
Vraylar™		-		11.1		-		-			11.1
Coolsculpting® Consumables		-		-		-		-			-
Carafate ® /Sulcrate ®		-		50.3		0.6		-			50.9
Asacol®/Delzicol®		-		119.8		11.0		-			130.8
Zenpep®		-		43.0		-		-			43.0
Saphris®		-		41.3		-		-			41.3
Canasa®/Salofalk®		-		46.7		4.6		-			51.3
Armour Thyroid		-		40.6		-		-			40.6
Viberzi®		-		20.4		-		-			20.4
Coolsculpting® Systems & Add On Applicators		-		-		-		-			-
Aczone®		54.1		-		0.1		-			54.2
Namzaric®		-		12.8		-		-			12.8
Teflaro®		-		35.2		-		-			35.2
Rapaflo®		29.4		-		1.5		-			30.9
Savella®		-		22.3		-		-			22.3
SkinMedica®		29.1		-		-		-			29.1
Dalvance®		-		10.2		-		-			10.2
Kybella® /Belkyra®		12.7		-		0.6		-			13.3
Avycaz®		-		13.7		-		-			13.7
Latisse®		17.7		-		2.2		-			19.9
Lexapro®		-		16.5		-		-			16.5
Tazorac®		23.4		-		0.2		-			23.6
Minastrin® 24		-		83.0		0.6		-			83.6
Liletta®		-		5.7		-		-			5.7
Enablex®		-		-		-		-			-
Namenda® IR		-		4.1		-		-			4.1
Other Products Revenues		32.5		125.2		89.8		14.2			261.7
Less product sold through our Anda Distribution business	n.a.		n.a.		n.a.			(24.4	)		(24.4	)
Total Net Revenues	$	1,488.9	$	1,449.1	$	757.0	$	(10.2	)	$	3,684.8

	Six Months Ended June 30, 2017
	US Specialized Therapeutics		US General Medicine		International		Corporate		Total
Botox®	$	1,083.4	$	-	$	446.6	$	-	$	1,530.0
Restasis®		645.2		-		31.2		-		676.4
Juvederm Collection **		246.0		-		259.5		-		505.5
Lumigan®/Ganfort®		153.3		-		180.3		-		333.6
Linzess®/Constella®		-		315.4		10.4		-		325.8
Bystolic® /Byvalson®		-		290.5		1.0		-		291.5
Alphagan®/Combigan®		182.8		-		85.0		-		267.8
Namenda XR®		-		240.7		-		-		240.7
Eye Drops		98.5		-		136.0		-		234.5
Lo Loestrin®		-		212.8		-		-		212.8
Breast Implants		115.6		-		78.7		-		194.3
Estrace® Cream		-		163.5		-		-		163.5
Viibryd®/Fetzima®		-		157.7		1.1		-		158.8
Ozurdex ®		47.4		-		102.3		-		149.7
Alloderm®		138.7		-		3.5		-		142.2
Asacol®/Delzicol®		-		103.2		24.9		-		128.1
Vraylar™		-		119.9		-		-		119.9
Carafate ® /Sulcrate ®		-		117.9		1.4		-		119.3
Zenpep®		-		97.0		-		-		97.0
Canasa®/Salofalk®		-		76.7		8.7		-		85.4
Aczone®		81.6		-		0.1		-		81.7
Saphris®		-		80.3		-		-		80.3
Armour Thyroid		-		79.3		-		-		79.3
Viberzi®		-		72.8		0.1		-		72.9
Teflaro®		-		63.6		-		-		63.6
Coolsculpting® Consumables		47.9		-		12.5		-		60.4
Namzaric®		-		57.0		-		-		57.0
Rapaflo®		51.6		-		3.7		-		55.3
SkinMedica®		53.4		-		-		-		53.4
Minastrin® 24		-		52.5		-		-		52.5
Savella®		-		50.3		-		-		50.3
Coolsculpting® Systems & Add On Applicators		31.0		-		10.2		-		41.2
Tazorac®		36.2		-		0.4		-		36.6
Kybella® /Belkyra®		27.8		-		3.5		-		31.3
Latisse®		26.9		-		4.3		-		31.2
Lexapro®		-		26.5		-		-		26.5
Dalvance®		-		24.8		1.2		-		26.0
Avycaz®		-		25.8		-		-		25.8
Liletta®		-		13.8		-		-		13.8
Enablex®		-		1.9		-		-		1.9
Namenda® IR		-		0.1		-		-		0.1
Other		129.7		329.5		189.2		14.0		662.4
Less product sold through our former Anda Distribution business	n.a.		n.a.		n.a.			-		-
Total Net Revenues	$	3,197.0	$	2,773.5	$	1,595.8	$	14.0	$	7,580.3

	Six Months Ended June 30, 2016
	US Specialized Therapeutics		US General Medicine		International		Corporate			Total
Botox®	$	957.7	$	-	$	399.5	$	-		$	1,357.2
Restasis®		670.0		-		34.3		-			704.3
Juvederm Collection **		220.3		-		207.4		-			427.7
Lumigan®/Ganfort®		162.1		-		182.6		-			344.7
Linzess®/Constella®		-		287.6		8.4		-			296.0
Bystolic® /Byvalson®		-		313.9		0.8		-			314.7
Alphagan®/Combigan®		180.9		-		86.0		-			266.9
Namenda XR®		-		339.6		-		-			339.6
Eye Drops		89.9		-		139.2		-			229.1
Lo Loestrin®		-		190.3		-		-			190.3
Breast Implants		98.1		-		76.9		-			175.0
Estrace® Cream		-		177.8		-		-			177.8
Viibryd®/Fetzima®		-		165.0		0.1		-			165.1
Ozurdex ®		40.9		-		86.8		-			127.7
Alloderm®		-		-		-		-			-
Asacol®/Delzicol®		-		225.7		26.3		-			252.0
Vraylar™		-		18.7		-		-			18.7
Carafate ® /Sulcrate ®		-		111.3		1.1		-			112.4
Zenpep®		-		92.6		-		-			92.6
Canasa®/Salofalk®		-		87.8		8.6		-			96.4
Aczone®		87.1		-		0.1		-			87.2
Saphris®		-		82.8		-		-			82.8
Armour Thyroid		-		82.7		-		-			82.7
Viberzi®		-		24.4		-		-			24.4
Teflaro®		-		68.6		-		-			68.6
Coolsculpting® Consumables		-		-		-		-			-
Namzaric®		-		23.1		-		-			23.1
Rapaflo®		62.4		-		2.7		-			65.1
SkinMedica®		55.7		-		-		-			55.7
Minastrin® 24		-		162.6		1.4		-			164.0
Savella®		-		46.0		-		-			46.0
Coolsculpting® Systems & Add On Applicators		-		-		-		-			-
Tazorac®		40.5		-		0.4		-			40.9
Kybella® /Belkyra®		24.0		-		1.1		-			25.1
Latisse®		37.5		-		4.3		-			41.8
Lexapro®		-		35.2		-		-			35.2
Dalvance®		-		16.4		-		-			16.4
Avycaz®		-		22.1		-		-			22.1
Liletta®		-		10.6		-		-			10.6
Enablex®		-		12.8		-		-			12.8
Namenda® IR		-		9.9		-		-			9.9
Other		60.5		295.3		162.3		19.7			537.8
Less product sold through our former Anda Distribution business	n.a.		n.a.		n.a.			(56.3	)		(56.3	)
Total Net Revenues	$	2,787.6	$	2,902.8	$	1,430.3	$	(36.6	)	$	7,084.1

Unless included above, no product represents ten percent or more of total net revenues.

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.

As of June 30, 2017, finished goods included $32.5 million and $11.0 million, related to the fair-value step-up of acquired inventory as a result of the LifeCell Acquisition and Zeltiq Acquisition, respectively.

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

Investments in securities, including those classified in cash and cash equivalents due to the maturity term of the instrument, as of June 30, 2017 and December 31, 2016 included the following ($ in millions):

	Investments in Securities as of June 30, 2017:
Level 1	Carrying amount		Unrecognized gain		Unrecognized loss			Estimated fair value		Cash & cash equivalents		Marketable securities
Money market funds	$	403.0	$	-	$	-		$	403.0	$	403.0	$	-
Total	$	403.0	$	-	$	-		$	403.0	$	403.0	$	-

Level 2	Carrying amount		Unrecognized gain		Unrecognized loss			Estimated fair value		Cash & cash equivalents		Marketable securities
Commercial paper	$	324.4	$	-	$	(4.2	)	$	320.2	$	-	$	320.2
Investment in Teva ordinary shares		3,060.6		207.8		-			3,268.4		-		3,268.4
Certificates of deposit		1,350.4		-		-			1,350.4		-		1,350.4
Total	$	4,735.4	$	207.8	$	(4.2	)	$	4,939.0	$	-	$	4,939.0

	Investments in Securities as of December 31, 2016:
Level 1	Carrying amount		Unrecognized gain		Unrecognized loss			Estimated fair value		Cash & cash equivalents		Marketable securities
Money market funds	$	1,238.9	$	-	$	-		$	1,238.9	$	1,238.9	$	-
Total	$	1,238.9	$	-	$	-		$	1,238.9	$	1,238.9	$	-

Level 2	Carrying amount		Unrecognized gain		Unrecognized loss			Estimated fair value		Cash & cash equivalents		Marketable securities
Commercial paper	$	3,909.7	$	0.2	$	-		$	3,909.9	$	-	$	3,909.9
Investment in Teva ordinary shares		5,038.6		-		(1,599.4	)		3,439.2		-		3,439.2
Certificates of deposit		4,152.4		-		-			4,152.4		-		4,152.4
Total	$	13,100.7	$	0.2	$	(1,599.4	)	$	11,501.5	$	-	$	11,501.5

Companies are required to use a fair value hierarchy as defined in ASC Topic 820 “Fair Value Measurement,” (“ASC 820”) which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value (“Fair Value Leveling”). There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity. The Level 3 assets are those whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques with significant unobservable inputs, as well as instruments for which the determination of fair value requires significant judgment or estimation.

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 are determined based on Fair Value Leveling.

Marketable securities and investments consist of available-for-sale investments in money market securities and equity securities of publicly traded companies for which market prices are readily available. Unrealized gains or losses on marketable securities and investments are recorded in accumulated other comprehensive (loss) / income. Realized gains or losses on marketable securities and investments are recorded in interest income. 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. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and maturity management.

Excluding the Company’s investment in Teva securities, the Company considers the declines in market value of its marketable securities investment portfolio to be temporary in nature. See Note 5 for further discussion of the Company’s investment in Teva Shares. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The Company’s policy requires investments to be investment grade with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio.

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

	June 30, 2017		December 31, 2016
Accrued expenses:
Accrued third-party rebates	$	1,524.3	$	1,595.5
Accrued payroll and related benefits		523.2		581.1
Accrued returns		340.4		295.9
Accrued pharmaceutical fees		318.3		221.3
Contractual commitments		247.5		264.9
Interest payable		240.7		294.2
Accrued R&D expenditures		154.3		154.0
Royalties payable		121.6		146.6
Accrued severance, retention and other shutdown costs		115.9		86.2
Litigation-related reserves and legal fees		108.6		101.1
Accrued selling and marketing expenditures		91.6		95.9
Accrued non-provision taxes		72.6		55.0
Current portion of contingent consideration obligations		43.4		511.0
Dividends payable		24.6		23.2
Other accrued expenses		453.6		368.2
Total accrued expenses	$	4,380.6	$	4,794.1
Accounts payable		304.0		224.9
Total Accounts Payable and Accrued Expenses	$	4,684.6	$	5,019.0

As of June 30, 2017 and December 31, 2016, the gross balance of goodwill, pre-impairments, was $49,609.5 million and $46,373.4 million, respectively.

The following items had a significant impact on goodwill in the six months ended June 30, 2017:

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

Cost Basis	Balance as of December 31, 2016		Acquisitions		Impairments			IPR&D to CMP Transfers			Held for sale			Foreign Currency Translation		Balance as of June 30, 2017
Intangibles with definite lives:
Product rights and other related intangibles	$	67,801.4	$	3,849.3	$	-		$	1,119.1		$	-		$	501.5	$	73,271.3
Trade name		690.0		-		-			-			-			-		690.0
Total definite-lived intangible assets	$	68,491.4	$	3,849.3	$	-		$	1,119.1		$	-		$	501.5	$	73,961.3
Intangibles with indefinite lives:
IPR&D	$	8,758.3	$	10.0	$	(1,043.3	)	$	(1,119.1	)	$	(6.6	)	$	8.6	$	6,607.9
Total indefinite-lived intangible assets	$	8,758.3	$	10.0	$	(1,043.3	)	$	(1,119.1	)	$	(6.6	)	$	8.6	$	6,607.9
Total product rights and related intangibles	$	77,249.7	$	3,859.3	$	(1,043.3	)	$	-		$	(6.6	)	$	510.1	$	80,569.2

The following items had a significant impact on net product rights and other intangibles in the six months ended June 30, 2017:

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 June 30, 2017 over the remainder of 2017 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. In addition, the Company has certain currently marketed products for which operating contribution performance has been below that which was originally assumed in the products’ initial valuations. The Company, on a quarterly basis, monitors the related intangible assets for these products for potential impairments. It is reasonably possible that impairments may occur in future periods, which may have a material adverse effect on the Company’s results of operations and financial position.

	Balance As of						Fair Market Value As of
	June 30, 2017			December 31, 2016			June 30, 2017		December 31, 2016
Senior Notes:
Floating Rate Notes
$500.0 million floating rate notes due March 12, 2018 *	$	500.0		$	500.0		$	500.4	$	502.5
$500.0 million floating rate notes due March 12, 2020 **		500.0			500.0			510.5		509.4
		1,000.0			1,000.0			1,010.9		1,011.9
Fixed Rate Notes
$1,000.0 million 1.850% notes due March 1, 2017		-			1,000.0			-		1,001.1
$500.0 million 1.300% notes due June 15, 2017		-			500.0			-		499.7
$1,200.0 million 1.875% notes due October 1, 2017		-			1,200.0			-		1,202.5
$3,000.0 million 2.350% notes due March 12, 2018		3,000.0			3,000.0			3,012.8		3,018.0
$250.0 million 1.350% notes due March 15, 2018		250.0			250.0			249.1		248.4
$1,050.0 million 4.375% notes due February 1, 2019		350.0			1,050.0			361.0		1,090.0
$500.0 million 2.450% notes due June 15, 2019		500.0			500.0			503.5		501.2
$400.0 million 6.125% notes due August 14, 2019		400.0			400.0			432.5		437.7
$3,500.0 million 3.000% notes due March 12, 2020		3,500.0			3,500.0			3,570.6		3,541.8
$650.0 million 3.375% notes due September 15, 2020		650.0			650.0			669.5		663.6
$750.0 million 4.875% notes due February 15, 2021		450.0			750.0			483.8		803.3
$1,200.0 million 5.000% notes due December 15, 2021		1,200.0			1,200.0			1,309.7		1,297.7
$3,000.0 million 3.450% notes due March 15, 2022		3,000.0			3,000.0			3,090.5		3,030.7
$1,700.0 million 3.250% notes due October 1, 2022		1,700.0			1,700.0			1,736.4		1,693.1
$350.0 million 2.800% notes due March 15, 2023		350.0			350.0			346.5		335.6
$1,200.0 million 3.850% notes due June 15, 2024		1,200.0			1,200.0			1,255.3		1,211.7
$4,000.0 million 3.800% notes due March 15, 2025		4,000.0			4,000.0			4,143.3		3,995.6
$2,500.0 million 4.550% notes due March 15, 2035		2,500.0			2,500.0			2,664.9		2,458.5
$1,000.0 million 4.625% notes due October 1, 2042		456.7			1,000.0			481.7		967.6
$1,500.0 million 4.850% notes due June 15, 2044		1,500.0			1,500.0			1,640.9		1,496.4
$2,500.0 million 4.750% notes due March 15, 2045		1,200.0			2,500.0			1,303.3		2,466.9
		26,206.7			31,750.0			27,255.3		31,961.1

Euro Denominated Notes
€750.0 million 0.500% notes due June 1, 2021		858.1			-			856.4		-
€700.0 million 1.250% notes due June 1, 2024		800.9			-			797.2		-
€550.0 million 2.125% notes due June 1, 2029		629.3			-			628.8		-
€700.0 million floating rate notes due June 1, 2019 ***		800.9			-			801.4		-
		3,089.2			-			3,083.8		-
Total Senior Notes Gross		30,295.9			32,750.0			31,350.0		32,973.0
Unamortized premium		111.7			171.2			-	-
Unamortized discount		(87.6	)		(95.8	)		-	-
Total Senior Notes Net		30,320.0			32,825.4			31,350.0		32,973.0
Other Indebtedness
Debt Issuance Costs		(133.0	)		(144.6	)
Other		48.7			85.5
Total Other Borrowings		(84.3	)		(59.1	)
Capital Leases		2.6			2.4
Total Indebtedness	$	30,238.3		$	32,768.7

Fair market value in the table above is determined in accordance with Fair Value Leveling under Level 2 based upon quoted prices for similar items in active markets.

The Company has issued fixed rate notes over multiple issuances for various business needs. Interest on the various U.S. dollar denominated fixed rate and floating notes is generally payable semi-annually and quarterly, respectively with various payment dates. Interest on the various Euro denominated fixed rate and floating rate notes is generally payable annually and quarterly, respectively, with various payment dates.

On May 26, 2017, Allergan Funding SCS (formerly known as 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 €700.0 million floating rate notes due 2019 (the “2019 Floating Rate Notes”), €750.0 million 0.500% notes due 2021 (the “0.500% 2021 Notes”), €750.0 million 1.250% notes due 2024 (the “1.250% 2024 Notes”), and €550.0 million 2.125% notes due 2029 (the “2.125% 2029 Notes”), collectively the “Euro Denominated Notes”. The notes are fully and unconditionally guaranteed by Allergan Funding SCS’s indirect parents, Warner Chilcott Limited and Allergan Capital S.a.r.l. (“Allergan Capital” and formerly known as Actavis Capital S.a.r.l.), and by Allergan Finance, LLC, a subsidiary of Allergan Capital, on an unsecured and unsubordinated basis.

Interest on the 2019 Floating Rate Notes is payable quarterly on March 1, June 1, September 1 and December 1 of each year, and will begin on September 1, 2017. Interest on the 0.500% 2021 Notes, the 1.250% 2024 Notes, and the 2.125% 2029 Notes is payable annually on June 1 of each year and will begin on June 1, 2018.

These notes were issued to fund, in part, the payment of the tender offers described below.

On May 30, 2017, the Company’s wholly owned subsidiaries Allergan Funding SCS, Allergan Finance LLC, Forest Laboratories, LLC and Allergan, Inc., each as co-offeror with Warner Chilcott Limited, completed the repurchase of certain debt securities issued by the entities for cash under a previously announced tender offer. As a result of the offering, the Company repurchased $300.0 million of the $750.0 million 4.875% notes due February 15, 2021, $543.3 million of the $1,000.0 million 4.625% notes due October 1, 2042, $700.0 million of the $1,050.0 million 4.375% notes due February 1, 2019, and $1,300.0 million of the $2,500.0 million 4.750% notes due March 15, 2045. The Company paid a total of $3,013.8 million, which included an early tender payment, to repurchase the notes of $170.5 million in cash. The Company recognized a net expense of $161.5 million within “Other income/ (expense)” for the early tender payment and non-cash write-off of premiums and debt fees related to the repurchased notes.

The $800.0 million 5.750% fixed rate notes due April 1, 2016 were paid in full at maturity.

The $500.0 million floating rate notes due September 1, 2016 were paid in full at maturity and bore interest at the three-month LIBOR plus 0.875%.

The $1,000.0 million 1.850% senior notes due March 1, 2017 were paid in full at maturity.

The $500.0 million 1.300% senior notes due June 15, 2017 were redeemed and paid in full on April 21, 2017.

The $1,200.0 million 1.875% senior notes due October 1, 2017 were redeemed and paid in full on June 29, 2017.

On August 2, 2016, the Company repaid the remaining balances of all outstanding term-loan indebtedness and terminated its then existing revolving credit facility with proceeds from the Teva Transaction. The interest expense on the then outstanding indebtedness in the six months ended June 30, 2016 was $90.7 million.

On June 14, 2017, Allergan plc and certain of its subsidiaries entered into a revolving credit and guaranty agreement (the “Revolver Agreement”) among Allergan Capital, as borrower, Allergan plc, as Ultimate Parent, Warner Chilcott Limited, as Intermediate Parent and Subsidiary Guarantor, Allergan Finance LLC., Allergan Funding SCS, as Subsidiary Guarantors, the lenders from time to time party thereto (the “Revolving Lenders”), J.P. Morgan Chase Bank 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 five-year revolving credit facility in an aggregate principal amount of up to $1.5 billion, with the ability to increase the revolving credit facility by $500.0 million to an aggregate principal amount of up to $2.0 billion.

The Revolver Agreement provides that loans thereunder would 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 0.070% to 0.250% per annum, depending on the Debt Rating, of the unused portion of the revolver.

The obligations under the Revolver Agreement were guaranteed by Warner Chilcott Limited, Allergan Finance LLC and Allergan Funding SCS.

The Revolver Agreement contains customary affirmative covenants for facilities of this type, including, among others, covenants pertaining to the delivery of financial statements, notices of default, maintenance of corporate existence and rights and compliance with laws, as well as customary negative covenants for facilities of this type, including, among others, limitations secured indebtedness, non-guarantor subsidiary indebtedness, mergers and certain other fundamental changes and passive holding company status. The Revolver Agreement also contains a financial covenant requiring maintenance of a maximum consolidated leverage ratio.

In addition, the Revolver Agreement also contains customary events of default (with customary grace periods and materiality thresholds) and if and for so long as an event of default has occurred and is continuing, any amounts outstanding under the Revolver Agreement will accrue interest at an increased rate, the Revolving Lenders can terminate their commitments thereunder and payments of any outstanding amounts could be accelerated by the Revolving Lenders.

The Company was subject to, and as of June 30, 2017 was in compliance with all, financial and operational covenants under the terms of the Revolver Agreement. At June 30, 2017, there were no outstanding borrowings or letters of credit outstanding under the Revolver Agreement.

Amounts represent total anticipated cash payments assuming scheduled repayments.

The Company’s effective tax rate for the six months ended June 30, 2017 was 25.4% compared to 56.4% for the six months ended June 30, 2016. The effective tax rate for the six months ended June 30, 2017 was favorably impacted by income earned in jurisdictions with tax rates lower than the Irish statutory rate and U.S. losses tax benefited at rates greater than the Irish statutory rate. This was offset by a pre-tax charge for the impairment of the Company’s investment in Teva Shares of $1,978.0 million and the tax impact of amortization of intangible assets, both at rates less than the Irish statutory rate. Additionally, the tax benefit for the six months ended June 30, 2017 included tax benefits of $288.1 million related to the impairment of certain intangible assets, and $69.4 million related to the integration of an acquired business and debt restructuring. During the three months ended June 30, 2017, the Company determined that a temporary difference related to excess tax over book basis in a U.S. subsidiary will reverse in the foreseeable future and recorded a corresponding tax benefit of $179.6 million.

The effective tax rate for the six months ended June 30, 2016 was favorably impacted by income earned in jurisdictions with tax rates lower than the Irish statutory rate and U.S. losses tax benefited at rates greater than the Irish statutory rate. Additionally, the tax benefit for the six months ended June 30, 2016 included an expense of $195.2 million primarily related to a change in 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 $35.7 million related to certain IPR&D impairments and a benefit of $45.2 million for the recognition of previously unrecognized tax benefits.

The effective tax rate for the period ended June 30, 2017 as compared to the period ended June 30, 2016 was unfavorably impacted by the Teva Shares’ impairment charge for which no tax benefit was recorded. This was partially offset by the favorable impact of additional tax benefits related to an investment in a U.S. subsidiary and the impairment of certain intangible assets.

The Company conducts business globally and, as a result, it files U.S. federal and 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 in accordance with the accounting standard, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the 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 with tax authorities, identification of new issues and issuance of new legislation, regulations or case law.

The Company has several concurrent audits open and pending with the Internal Revenue Service (“IRS”) as set forth below:

A summary of the changes in shareholders’ equity for the six months ended June 30, 2017 consisted of the following ($ in millions):

During the year ended December 31, 2016, the Company’s Board of Directors approved a $5.0 billion share repurchase program which was completed in October 2016. Additionally, the Company’s Board of Directors approved a $10.0 billion accelerated share repurchase program, which was initiated in November 2016. Under the accelerated share repurchase program, the Company received $8.0 billion of repurchased shares during the year ended December 31, 2016. During the year ended December 31, 2016, the Company repurchased a total of 61.6 million ordinary shares under these share repurchase programs.

During the second quarter of 2017, the Company settled the first half of the accelerated share repurchase program, which resulted in the Company receiving an additional 2.2 million ordinary shares. The amount of shares, if any, to be received from the remaining portion of the program, which is anticipated to be settled during the quarter ending September 30, 2017, is subject to the volume weighted average share price over the term of the programs.

During the second quarter of 2017, the Company authorized a quarterly dividend of $0.70 per ordinary share, or $236.5 million in the aggregate, which was paid on June 15, 2017 to shareholders of record at the close of business on May 18, 2017. For the six months ended June 30, 2017, the Company has paid $472.7 million dividends on ordinary shares.

In both the six months ended June 30, 2017 and 2016, the Company paid $139.2 million of dividends on preferred shares.

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 income / (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 income for the three and six months ended June 30, 2017 were as follows ($ in millions):

The movements in accumulated other comprehensive (loss) / income for the three and six months ended June 30, 2016 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. As of June 30, 2017 and December 31, 2016, there were no outstanding foreign currency instruments.

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.

In the normal course of business, we manage certain foreign exchange risks through a variety of strategies, including hedging. Our hedging strategies include the use of derivatives and, in the case of our net investment hedges, debt instruments.

For net investment hedges, the effective portion of the gains and losses on the debt instruments arising from the effects of foreign exchange are recorded in the currency translation adjustment component of accumulated other comprehensive income / (loss), consistent with the underlying hedged item. Hedging transactions are limited to an underlying exposure. As a result, any change in the value of our hedging instruments would be substantially offset by an opposite change in the value of the underlying hedged items. We do not use derivative instruments for trading or speculative purposes.

The Company is exposed to foreign exchange risk in its international operations from foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business, including the Euro Denominated Notes. In the quarter ended June 30, 2017, we used effective net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries. The total notional amount of our debt instruments designated as net investment hedges was $3.1 billion as of June 30, 2017. During the three and six months ended June 30, 2017, the impact of the net investment hedges on other comprehensive income was a loss of $57.2 million.

Assets and liabilities are measured at fair value using Fair Value Leveling or disclosed at fair value on a recurring basis and as of June 30, 2017 and December 31, 2016 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 ☒		NO ☐
Warner Chilcott Limited		YES ☒		NO ☐

Allergan plc		YES ☒		NO ☐
Warner Chilcott Limited		YES ☒		NO ☐

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	☐

Allergan plc		YES ☐		NO ☒
Warner Chilcott Limited		YES ☐		NO ☒

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited)	3
	Consolidated Balance Sheets of Allergan plc as of June 30, 2017 and December 31, 2016	3
	Consolidated Statements of Operations of Allergan plc for the three and six months ended June 30, 2017 and June 30, 2016	4
	Consolidated Statements of Comprehensive Income / (Loss) of Allergan plc for the three and six months ended June 30, 2017 and June 30, 2016	5
	Consolidated Statements of Cash Flows of Allergan plc for the six months ended June 30, 2017 and June 30, 2016	6
	Consolidated Balance Sheets of Warner Chilcott Limited as of June 30, 2017 and December 31, 2016	7
	Consolidated Statements of Operations of Warner Chilcott Limited for the three and six months ended June 30, 2017 and June 30, 2016	8
	Consolidated Statements of Comprehensive Income / (Loss) of Warner Chilcott Limited for the three and six months ended June 30, 2017 and June 30, 2016	9
	Consolidated Statements of Cash Flows of Warner Chilcott Limited for the six months ended June 30, 2017 and June 30, 2016	10
	Notes to Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	76
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	111
Item 4.	Controls and Procedures	112
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	114
Item 1A.	Risk Factors	114
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	114
Item 6.	Exhibits	114
	Signatures	115

	As of June 30, 2017						As of December 31, 2016
	Allergan plc		Warner Chilcott Limited		Difference		Allergan plc		Warner Chilcott Limited		Difference
Cash and cash equivalents	$	886.9	$	858.1	$	28.8	$	1,724.0	$	1,713.2	$	10.8
Prepaid expenses and other current assets		875.5		872.9		2.6		1,383.4		1,382.1		1.3
Accounts payable and accrued liabilities		4,684.6		4,656.3		28.3		5,019.0		4,993.3		25.7
Other long-term liabilities		1,038.3		1,037.9		0.4		1,085.0		1,086.0		(1.0	)

Balance as of December 31, 2016	$	2,178.8
Provision to reduce gross product sales to net product sales		3,869.9
Acquired balances in the LifeCell and Zeltiq acquisitions		41.3
Payments and other		(4,015.2	)
Balance as of June 30, 2017	$	2,074.8

	Amount
Cash and cash equivalents	$	36.7
Accounts receivable		47.0
Inventories		59.3
Property, plant and equipment		12.4
Intangible assets		1,185.0
Goodwill		1,204.6
Other assets		17.1
Accounts payable and accrued expenses		(93.6	)
Deferred revenue		(10.6	)
Deferred taxes, net		(51.2	)
Other liabilities		(1.3	)
Net assets acquired	$	2,405.4

	Amount recognized as of the acquisition date		Weighted average useful lives (years)
Definite-lived assets
Consumables	$	985.0		6.7
System		43.0		3.7
Total CMP		1,028.0
Customer Relationships		157.0		6.6
Total definite-lived assets		1,185.0

	Amount
Cash and cash equivalents	$	21.3
IPR&D intangible asset		1,357.0
Goodwill		112.7
Indebtedness		(15.9	)
Contingent consideration		(479.0	)
Deferred tax liabilities, net		(395.9	)
Other assets and liabilities		(30.1	)
Net assets acquired	$	570.1

	Amount
Cash and cash equivalents	$	44.7
Marketable securities		20.2
Property, plant and equipment, net		5.0
IPR&D assets		686.0
Assets held for sale		22.5
Goodwill		34.4
Other liabilities		(20.7	)
Deferred tax liabilities, net		(170.7	)
Net assets acquired	$	621.4

	Amount
AstraZeneca license agreement in the three months ended December 31, 2016	$	250.0
Motus Therapeutics, Inc. acquisition in the three months ended December 31, 2016		199.5
Chase Pharmaceuticals Corporation acquisition in the three months ended December 31, 2016		122.9
RetroSense Therapeutics, LLC license agreement in the three months ended September 30, 2016		59.7
Akarna Therapeutics, Ltd acquisition in the three months ended September 30, 2016		48.2
Topokine Therapeutics, Inc. acquisition in the three months ended June 30, 2016		85.8
Heptares Therapeutics Ltd. License agreement in the three months ended June 30, 2016		125.0
Anterios, Inc. acquisition in the three months ended March 31, 2016		89.2

	Three Months Ended June 30, 2017		Three Months Ended June 30, 2016
Cost of sales
Stock-based compensation acquired for Legacy Allergan employees	$	1.2	$	2.1
Acquisition, integration and restructuring related charges		0.3		1.9
Research and development
Stock-based compensation acquired for Legacy Allergan employees		6.0		9.4
Acquisition, integration and restructuring related charges		-		1.0
Selling and marketing
Stock-based compensation acquired for Legacy Allergan employees		7.8		16.7
Acquisition, integration and restructuring related charges		0.9		7.9
General and administrative
Stock-based compensation acquired for Legacy Allergan employees		3.0		8.4
Acquisition, integration and restructuring related charges		4.0		53.8
Total transaction and integration costs	$	23.2	$	101.2

	Six Months Ended June 30,
	2016
Depreciation from discontinued operations	$	2.1
Amortization from discontinued operations		4.8
Capital expenditures		75.0
Deferred income tax expense		342.0

	2017 Grants	2016 Grants
Dividend yield	1.2%	0%
Expected volatility	27.0%	27.0%
Risk-free interest rate	2.0 - 2.3%	1.3 - 2.4%
Expected term (years)	7.0	7.0 - 7.5

(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, 2016		1.5		$	251.88		1.6	$	388.0
Granted		1.1			236.16				260.5
Assumed as part of the Zeltiq Acquisition *		0.2			213.15				41.8
Vested		(0.3	)		232.71				(83.5	)
Forfeited		(0.1	)		267.64				(15.0	)
Restricted shares / units outstanding at June 30, 2017		2.4		$	244.14		2.2	$	591.8

(in millions, except per share data)	Options			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2016		9.0		$	113.77			5.9	$	861.7
Granted		0.3			239.33
Exercised		(1.2	)		(92.25	)
Cancelled		(0.1	)		(122.14	)
Outstanding, vested and expected to vest at June 30, 2017		8.0		$	118.58			6.1	$	995.3

	June 30, 2017		December 31, 2016
Marketable securities:
Short-term investments	$	1,670.6	$	8,062.3
Teva Shares		3,268.4		3,439.2
Total marketable securities	$	4,939.0	$	11,501.5
Investments and other assets:
Legacy Allergan deferred executive compensation investments	$	112.8	$	111.7
Equity method investments		13.7		12.8
Cost method investments		11.5		15.0
Other long-term investments		66.8		67.2
Taxes receivable		37.5		36.0
Other assets		47.9		39.4
Total investments and other assets	$	290.2	$	282.1

	US Specialized Therapeutics		US General Medicine		International		Total
Balance as of December 31, 2016	$	18,433.2	$	21,426.6	$	6,496.3	$	46,356.1
Additions through acquisitions		2,454.8		-		245.9		2,700.7
Foreign exchange and other adjustments		-		-		535.4		535.4
Balance as of June 30, 2017	$	20,888.0	$	21,426.6	$	7,277.6	$	49,592.2

Accumulated Amortization	Balance as of December 31, 2016			Amortization			Foreign Currency Translation			Balance as of June 30, 2017
Intangibles with definite lives:
Product rights and other related intangibles	$	(14,493.9	)	$	(3,455.2	)	$	(74.6	)	$	(18,023.7	)
Trade name		(137.2	)		(38.6	)		-			(175.8	)
Total definite-lived intangible assets	$	(14,631.1	)	$	(3,493.8	)	$	(74.6	)	$	(18,199.5	)
Total product rights and related intangibles	$	(14,631.1	)	$	(3,493.8	)	$	(74.6	)	$	(18,199.5	)
Net Product Rights and Other Intangibles	$	62,618.6								$	62,369.7

	Amortization Expense
2017 remaining	$	3,555.9
2018	$	6,758.5
2019	$	6,713.2
2020	$	6,414.8
2021	$	5,476.9
2022	$	5,061.4

	Total Payments
2017 remaining	$	-
2018		3,750.0
2019		2,050.9
2020		4,650.0
2021		2,508.1
2022		4,700.0
2023 and after		12,636.9
	$	30,295.9
Capital leases		2.6
Debt issuance costs		(133.0	)
Other short-term borrowings		48.7
Unamortized premium		111.7
Unamortized discount		(87.6	)
Total Indebtedness	$	30,238.3

IRS Audits		Tax Years
Actavis W.C. Holding Inc.		2013 and 2014
Warner Chilcott Corporation		2010, 2011, 2012 and 2013
Forest Laboratories, Inc.		2010, 2011, 2012, 2013 and 2014
Allergan, Inc.		2009, 2010, 2011, 2012 and 2013
Durata Therapeutics, Inc.		2012 and 2014
LifeCell Corporation		2014

	Allergan plc
Shareholders’ equity as of December 31, 2016	$	76,192.7
Increase in additional paid in capital for share-based compensation plans		148.5
Tax impact of change in accounting for share-based compensation plans		20.8
Net (loss) attributable to shareholders		(3,291.1	)
Proceeds from stock plans		124.7
Dividends on ordinary shares		(472.7	)
Dividends on preferred shares		(139.2	)
Repurchase of ordinary shares		(35.2	)
Non-cash issuance of shares		8.5
Net impact of other-than-temporary loss on investment in Teva securities		1,599.4
Other comprehensive income		1,064.0
Shareholders’ equity as of June 30, 2017	$	75,220.4

	Warner Chilcott Limited
Members' equity as of December 31, 2016	$	88,085.7
Tax impact of change in accounting for share-based compensation plans		20.8
Net (loss) attributable to members		(3,230.5	)
Dividend to Parent		(4,815.8	)
Net impact of other-than-temporary loss on investment in Teva securities		1,599.4
Other comprehensive income		1,064.0
Members' equity as of June 30, 2017	$	82,723.6

	Foreign Currency Translation Items		Unrealized (losses) / gains net of tax			Total Accumulated Other Comprehensive Income / (Loss)
Balance as of December 31, 2016	$	534.7	$	(1,573.1	)	$	(1,038.4	)
Other comprehensive gain / (loss) before reclassifications into general and administrative		162.6		(1.9	)		160.7
Net impact of other-than-temporary loss on investment in Teva securities		-		1,599.4			1,599.4
Total other comprehensive income		162.6		1,597.5			1,760.1
Balance as of March 31, 2017	$	697.3	$	24.4		$	721.7

Other comprehensive gain / (loss) before reclassifications into general and administrative		697.8		205.5			903.3
Total other comprehensive income		697.8		205.5			903.3
Balance as of June 30, 2017	$	1,395.1	$	229.9		$	1,625.0

	Foreign Currency Translation Items			Unrealized gains net of tax			Total Accumulated Other Comprehensive (Loss) / Income
Balance as of December 31, 2015	$	(564.3	)	$	70.2		$	(494.1	)
Other comprehensive gain / (loss) before reclassifications into general and administrative		542.8			(20.3	)		522.5
Total other comprehensive income / (loss)		542.8			(20.3	)		522.5
Balance as of March 31, 2016	$	(21.5	)	$	49.9		$	28.4

Other comprehensive gain / (loss) before reclassifications into general and administrative		(349.9	)		4.4			(345.5	)
Total other comprehensive (loss) / income		(349.9	)		4.4			(345.5	)
Balance as of June 30, 2016	$	(371.4	)	$	54.3		$	(317.1	)

	Fair Value Measurements as of June 30, 2017 Using:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents ^*	$	403.0	$	403.0	$	-	$	-
Short-term investments		1,670.6	-			1,670.6		-
Deferred executive compensation investments		112.8		89.9		22.9