Shareholders' Equity

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE 13. SHAREHOLDERS' EQUITY

Changes in Shareholders’ Equity

The following table displays a reconciliation of our beginning and ending balances in shareholders’ equity for the three months ended March 31, 2017 (in thousands):

	Total Shareholders’ Equity
Shareholders’ equity at January 1, 2017, prior to the adoption of ASU 2016-16	$	2,701,589
Effect of adopting ASU 2016-16 (1)	(372,825		)
Shareholders' equity at January 1, 2017	$	2,328,764
Net loss	(173,828		)
Other comprehensive income	14,788
Compensation related to share-based awards	19,493
Tax withholding for restricted shares	(1,097		)
Other	(67		)
Shareholders’ equity at March 31, 2017	$	2,188,053

__________

(1) Refer to Note 2. Recent Accounting Pronouncements for further description of ASU 2016-16.

The following table displays a reconciliation of our beginning and ending balances in shareholders’ equity for the three months ended March 31, 2016 (in thousands):

	Attributable to:
	Endo International plc			Noncontrolling interests			Total Shareholders’ Equity
Shareholders’ equity at January 1, 2016	$	5,968,030		$	(54	)	$	5,967,976
Net loss	(133,869		)	(2		)	(133,871		)
Other comprehensive income	79,847			56			79,903
Compensation related to share-based awards	14,967			—			14,967
Tax withholding for restricted shares	(10,272		)	—			(10,272		)
Exercise of options	1,952			—			1,952
Issuance of ordinary shares related to the employee stock purchase plan	1,434			—			1,434
Other	2,057			—			2,057
Shareholders’ equity at March 31, 2016	$	5,924,146		$	—		$	5,924,146

Share-Based Compensation

In February 2017, the Compensation Committee of the Company’s Board of Directors approved modifications to the Company’s performance stock unit (PSU) program, effective with the 2017 annual grants. The plan is based upon two discrete measures, relative total shareholder return (TSR) and a free cash flow metric. The addition of the free cash flow performance metric, which accounts for 50% of the PSU award at grant, will be measured annually over the performance cycle, which spans a 3-year period. The remaining 50% of the PSU award is tied exclusively to relative TSR performance, which will be measured against the 3-year TSR of a custom index of companies. In addition to meeting the conditions required by both the TSR and free cash flow portions of the awards, grant recipients are also subject to being employed by the Company following the completion of the 3-year period in order to receive the awards.

The Company recognized share-based compensation expense of $19.5 million and $15.0 million during the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, the total remaining unrecognized compensation cost related to all non-vested share-based compensation awards amounted to $76.6 million. For the PSUs that are based on a free cash flow metric and are measured against annual performance targets, performance targets with respect to future annual performance periods have not yet been established. As a result, no fair value has been ascribed to these future annual performance periods and these performance periods are not reflected in the remaining unrecognized compensation cost.

As of March 31, 2017, the weighted average remaining requisite service period of the non-vested stock options was 3.0 years and for non-vested restricted stock units was 2.6 years.