Ireland | 68-0683755 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland | Not Applicable |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered |
Ordinary shares, nominal value $0.0001 per share | The NASDAQ Global Market |
Large accelerated filer | x | Accelerated filer | o | ||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o | Emerging Growth Company | o |
Ordinary shares, $0.0001 par value | Number of ordinary shares outstanding as of July 31, 2017: | 223,292,068 |
Page | ||
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 616,534 | $ | 517,250 | |||
Restricted cash and cash equivalents | 364,796 | 282,074 | |||||
Accounts receivable | 580,123 | 992,153 | |||||
Inventories, net | 489,752 | 555,671 | |||||
Prepaid expenses and other current assets | 33,325 | 77,523 | |||||
Income taxes receivable | 24,295 | 47,803 | |||||
Assets held for sale | 166,190 | 116,985 | |||||
Total current assets | $ | 2,275,015 | $ | 2,589,459 | |||
MARKETABLE SECURITIES | 2,494 | 2,267 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 637,820 | 669,596 | |||||
GOODWILL | 4,447,314 | 4,729,395 | |||||
OTHER INTANGIBLES, NET | 4,836,087 | 5,859,297 | |||||
DEFERRED INCOME TAXES | 799 | 7,817 | |||||
OTHER ASSETS | 78,561 | 417,278 | |||||
TOTAL ASSETS | $ | 12,278,090 | $ | 14,275,109 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | $ | 1,233,336 | $ | 1,454,084 | |||
Current portion of legal settlement accrual | 909,831 | 1,015,932 | |||||
Current portion of long-term debt | 34,150 | 131,125 | |||||
Income taxes payable | 5,263 | 9,266 | |||||
Liabilities held for sale | 44,367 | 24,338 | |||||
Total current liabilities | $ | 2,226,947 | $ | 2,634,745 | |||
DEFERRED INCOME TAXES | 79,805 | 192,297 | |||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 8,251,289 | 8,141,378 | |||||
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION, NET | 425,756 | — | |||||
OTHER LIABILITIES | 485,187 | 605,100 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 11) | |||||||
SHAREHOLDERS’ EQUITY: | |||||||
Euro deferred shares, $0.01 par value; 4,000,000 shares authorized and issued at both June 30, 2017 and December 31, 2016 | 46 | 42 | |||||
Ordinary shares, $0.0001 par value; 1,000,000,000 shares authorized; 223,284,141 and 222,954,175 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 22 | 22 | |||||
Additional paid-in capital | 8,768,305 | 8,743,240 | |||||
Accumulated deficit | (7,631,452 | ) | (5,688,281 | ) | |||
Accumulated other comprehensive loss | (327,815 | ) | (353,434 | ) | |||
Total shareholders’ equity | $ | 809,106 | $ | 2,701,589 | |||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 12,278,090 | $ | 14,275,109 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
TOTAL REVENUES | $ | 875,731 | $ | 920,887 | $ | 1,913,331 | $ | 1,884,426 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of revenues | 539,401 | 632,218 | 1,208,363 | 1,320,923 | |||||||||||
Selling, general and administrative | 155,555 | 193,070 | 332,795 | 371,425 | |||||||||||
Research and development | 40,869 | 50,589 | 83,878 | 92,281 | |||||||||||
Litigation-related and other contingencies, net | (2,600 | ) | 5,259 | (1,664 | ) | 10,459 | |||||||||
Asset impairment charges | 725,044 | 39,951 | 929,006 | 169,576 | |||||||||||
Acquisition-related and integration items | 4,190 | 48,171 | 15,070 | 60,725 | |||||||||||
OPERATING LOSS FROM CONTINUING OPERATIONS | $ | (586,728 | ) | $ | (48,371 | ) | $ | (654,117 | ) | $ | (140,963 | ) | |||
INTEREST EXPENSE, NET | 121,747 | 111,919 | 233,746 | 228,712 | |||||||||||
LOSS ON EXTINGUISHMENT OF DEBT | 51,734 | — | 51,734 | — | |||||||||||
OTHER (INCOME) EXPENSE, NET | (6,709 | ) | 5,175 | (8,746 | ) | 3,268 | |||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | $ | (753,500 | ) | $ | (165,465 | ) | $ | (930,851 | ) | $ | (372,943 | ) | |||
INCOME TAX BENEFIT | (57,480 | ) | (555,277 | ) | (69,408 | ) | (673,992 | ) | |||||||
(LOSS) INCOME FROM CONTINUING OPERATIONS | $ | (696,020 | ) | $ | 389,812 | $ | (861,443 | ) | $ | 301,049 | |||||
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 3) | (700,498 | ) | (46,216 | ) | (708,903 | ) | (91,324 | ) | |||||||
CONSOLIDATED NET (LOSS) INCOME | $ | (1,396,518 | ) | $ | 343,596 | $ | (1,570,346 | ) | $ | 209,725 | |||||
Less: Net income attributable to noncontrolling interests | — | 18 | — | 16 | |||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL PLC | $ | (1,396,518 | ) | $ | 343,578 | $ | (1,570,346 | ) | $ | 209,709 | |||||
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO ENDO INTERNATIONAL PLC ORDINARY SHAREHOLDERS—BASIC: | |||||||||||||||
Continuing operations | $ | (3.12 | ) | $ | 1.75 | $ | (3.86 | ) | $ | 1.35 | |||||
Discontinued operations | (3.14 | ) | (0.21 | ) | (3.18 | ) | (0.41 | ) | |||||||
Basic | $ | (6.26 | ) | $ | 1.54 | $ | (7.04 | ) | $ | 0.94 | |||||
NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO ENDO INTERNATIONAL PLC ORDINARY SHAREHOLDERS—DILUTED: | |||||||||||||||
Continuing operations | $ | (3.12 | ) | $ | 1.75 | $ | (3.86 | ) | $ | 1.35 | |||||
Discontinued operations | (3.14 | ) | (0.21 | ) | (3.18 | ) | (0.41 | ) | |||||||
Diluted | $ | (6.26 | ) | $ | 1.54 | $ | (7.04 | ) | $ | 0.94 | |||||
WEIGHTED AVERAGE SHARES: | |||||||||||||||
Basic | 223,158 | 222,667 | 223,086 | 222,485 | |||||||||||
Diluted | 223,158 | 222,863 | 223,086 | 223,021 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||
CONSOLIDATED NET (LOSS) INCOME | $ | (1,396,518 | ) | $ | 343,596 | $ | (1,570,346 | ) | $ | 209,725 | |||||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | |||||||||||||||||||||||||||||||
Net unrealized gain (loss) on securities: | |||||||||||||||||||||||||||||||
Unrealized gain (loss) arising during the period | $ | 491 | $ | (147 | ) | $ | 145 | $ | (1,007 | ) | |||||||||||||||||||||
Less: reclassification adjustments for loss realized in net (loss) income | — | 491 | — | (147 | ) | — | 145 | — | (1,007 | ) | |||||||||||||||||||||
Foreign currency translation gain (loss): | |||||||||||||||||||||||||||||||
Foreign currency gain (loss) arising during the period | 10,340 | (21,609 | ) | $ | 25,474 | $ | 59,154 | ||||||||||||||||||||||||
Less: reclassification adjustments for loss realized in net (loss) income | — | 10,340 | — | (21,609 | ) | — | 25,474 | — | 59,154 | ||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | $ | 10,831 | $ | (21,756 | ) | $ | 25,619 | $ | 58,147 | ||||||||||||||||||||||
CONSOLIDATED COMPREHENSIVE (LOSS) INCOME | $ | (1,385,687 | ) | $ | 321,840 | $ | (1,544,727 | ) | $ | 267,872 | |||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | — | 18 | — | 16 | |||||||||||||||||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | — | (18 | ) | — | 38 | ||||||||||||||||||||||||||
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL PLC | $ | (1,385,687 | ) | $ | 321,840 | $ | (1,544,727 | ) | $ | 267,818 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
OPERATING ACTIVITIES: | |||||||
Consolidated net (loss) income | $ | (1,570,346 | ) | $ | 209,725 | ||
Adjustments to reconcile consolidated net (loss) income to Net cash provided by operating activities: | |||||||
Depreciation and amortization | 499,656 | 476,911 | |||||
Inventory step-up | 215 | 87,970 | |||||
Share-based compensation | 27,005 | 29,585 | |||||
Amortization of debt issuance costs and discount | 12,757 | 14,483 | |||||
(Benefit) provision for bad debts | (498 | ) | 8,082 | ||||
Provision for inventory reserve | 85,806 | 84,590 | |||||
Deferred income taxes | (179,775 | ) | (670,615 | ) | |||
Change in fair value of contingent consideration | 8,134 | 13,204 | |||||
Loss on extinguishment of debt | 51,734 | — | |||||
Asset impairment charges | 929,006 | 190,904 | |||||
(Gain) loss on sale of business and other assets | (2,311 | ) | 575 | ||||
Changes in assets and liabilities which (used) provided cash: | |||||||
Accounts receivable | 409,790 | 133,654 | |||||
Inventories | (47,513 | ) | (54,760 | ) | |||
Prepaid and other assets | 16,322 | 21,846 | |||||
Accounts payable and accrued expenses | 110,057 | (282,419 | ) | ||||
Other liabilities | (24,707 | ) | (395,126 | ) | |||
Income taxes payable/receivable | 15,654 | 690,002 | |||||
Net cash provided by operating activities | $ | 340,986 | $ | 558,611 | |||
INVESTING ACTIVITIES: | |||||||
Purchases of property, plant and equipment | (59,729 | ) | (53,705 | ) | |||
Patent acquisition costs and license fees | — | (13,000 | ) | ||||
Proceeds from sale of business and other assets, net | 18,531 | 6,631 | |||||
Increase in restricted cash and cash equivalents | (522,772 | ) | (327,359 | ) | |||
Decrease in restricted cash and cash equivalents | 440,190 | 524,438 | |||||
Net cash (used in) provided by investing activities | $ | (123,780 | ) | $ | 137,005 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
FINANCING ACTIVITIES: | |||||||
Proceeds from issuance of notes | 300,000 | — | |||||
Proceeds from issuance of term loans | 3,415,000 | — | |||||
Principal payments on term loans | (3,713,875 | ) | (48,375 | ) | |||
Repayments of revolving debt | — | (225,000 | ) | ||||
Principal payments on other indebtedness, net | (3,675 | ) | (3,365 | ) | |||
Deferred financing fees | (53,954 | ) | (500 | ) | |||
Payment for contingent consideration | (41,240 | ) | (18,646 | ) | |||
Payments of tax withholding for restricted shares | (1,839 | ) | (10,396 | ) | |||
Exercise of options | — | 1,952 | |||||
Issuance of ordinary shares related to the employee stock purchase plan | — | 2,729 | |||||
Net cash used in financing activities | $ | (99,583 | ) | $ | (301,601 | ) | |
Effect of foreign exchange rate | 2,786 | 1,459 | |||||
Movement in cash held for sale | (21,125 | ) | — | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | $ | 99,284 | $ | 395,474 | |||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 517,250 | 272,348 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 616,534 | $ | 667,822 | |||
SUPPLEMENTAL INFORMATION: | |||||||
Cash received from income taxes, net | $ | 8,931 | $ | 698,584 | |||
Cash paid into Qualified Settlement Funds for mesh legal settlements | $ | 522,770 | $ | 326,795 | |||
Cash paid out of Qualified Settlement Funds for mesh legal settlements | $ | 440,190 | $ | 524,438 | |||
Other cash distributions for mesh legal settlements | $ | 3,794 | $ | 5,438 | |||
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Accrual for purchases of property, plant and equipment | $ | 1,325 | $ | 2,363 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 179 | $ | 863 | $ | 179 | $ | 29,714 | |||||||
Litigation-related and other contingencies, net | $ | 775,474 | $ | — | $ | 775,684 | $ | 2,450 | |||||||
Asset impairment charges | $ | — | $ | 149 | $ | — | $ | 21,328 | |||||||
Loss from discontinued operations before income taxes | $ | (791,588 | ) | $ | (22,492 | ) | $ | (804,485 | ) | $ | (91,324 | ) | |||
Income tax benefit | $ | (91,090 | ) | $ | 23,724 | $ | (95,582 | ) | $ | — | |||||
Discontinued operations, net of tax | $ | (700,498 | ) | $ | (46,216 | ) | $ | (708,903 | ) | $ | (91,324 | ) |
Three Months Ended June 30, 2016 | Six Months Ended June, 2016 | ||||||
Employee separation, retention and other benefit-related costs | $ | 5,317 | $ | 21,466 | |||
Asset impairment charges | 149 | 21,328 | |||||
Contract termination-related items | (424 | ) | 9,800 | ||||
Other wind down costs | 909 | 14,030 | |||||
Total | $ | 5,951 | $ | 66,624 |
Employee Separation and Other Benefit-Related Costs | Contract Termination Charges | Total | |||||||||
Liability balance as of January 1, 2017 | $ | 3,855 | $ | 1,661 | $ | 5,516 | |||||
Cash distributions | (3,175 | ) | (952 | ) | (4,127 | ) | |||||
Liability balance as of June 30, 2017 | $ | 680 | $ | 709 | $ | 1,389 |
June 30, 2017 | December 31, 2016 | ||||||
Current assets | $ | 59,221 | $ | 50,167 | |||
Property, plant and equipment | 3,617 | 3,527 | |||||
Other intangibles, net | 21,893 | 29,950 | |||||
Other assets | 14,877 | 11,343 | |||||
Assets held for sale | $ | 99,608 | $ | 94,987 | |||
Current liabilities | 26,059 | 18,642 | |||||
Other liabilities | 4,375 | 5,696 | |||||
Liabilities held for sale | $ | 30,434 | $ | 24,338 |
June 30, 2017 | |||
Current assets | $ | 63,780 | |
Property, plant and equipment | 2,347 | ||
Other assets | 455 | ||
Assets held for sale | $ | 66,582 | |
Current liabilities | 13,933 | ||
Liabilities held for sale | $ | 13,933 |
Total | |||
Liability balance as of January 1, 2017 | $ | 9,939 | |
Expenses | 1,117 | ||
Cash distributions | (8,621 | ) | |
Liability balance as of June 30, 2017 | $ | 2,435 |
Employee Separation and Other Benefit-Related Costs | Contract Termination Charges | Total | |||||||||
Liability balance as of January 1, 2017 | $ | 16,544 | $ | 5,224 | $ | 21,768 | |||||
Cash distributions | (13,890 | ) | (5,224 | ) | (19,114 | ) | |||||
Liability balance as of June 30, 2017 | $ | 2,654 | $ | — | $ | 2,654 |
Total | |||
Liability balance as of January 1, 2017 | $ | — | |
Expenses | 15,060 | ||
Cash distributions | (5,141 | ) | |
Liability balance as of June 30, 2017 | $ | 9,919 |
Total | |||
Liability balance as of January 1, 2017 | $ | — | |
Expenses | 8,871 | ||
Cash distributions | — | ||
Liability balance as of June 30, 2017 | $ | 8,871 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net revenues to external customers: | |||||||||||||||
U.S. Generic Pharmaceuticals | $ | 563,312 | $ | 565,358 | $ | 1,285,295 | $ | 1,148,748 | |||||||
U.S. Branded Pharmaceuticals | 245,188 | 288,342 | 495,347 | 597,155 | |||||||||||
International Pharmaceuticals (1) | 67,231 | 67,187 | 132,689 | 138,523 | |||||||||||
Total net revenues to external customers | $ | 875,731 | $ | 920,887 | $ | 1,913,331 | $ | 1,884,426 | |||||||
Adjusted income from continuing operations before income tax: | |||||||||||||||
U.S. Generic Pharmaceuticals | $ | 253,866 | $ | 214,968 | $ | 595,465 | $ | 426,736 | |||||||
U.S. Branded Pharmaceuticals | 127,595 | 122,420 | 257,087 | 291,201 | |||||||||||
International Pharmaceuticals | 14,812 | 20,615 | 29,694 | 42,369 | |||||||||||
Total segment adjusted income from continuing operations before income tax | $ | 396,273 | $ | 358,003 | $ | 882,246 | $ | 760,306 |
(1) | Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada, Latin America and South Africa. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total consolidated loss from continuing operations before income tax | $ | (753,500 | ) | $ | (165,465 | ) | $ | (930,851 | ) | $ | (372,943 | ) | |||
Interest expense, net | 121,747 | 111,919 | 233,746 | 228,712 | |||||||||||
Corporate unallocated costs (1) | 34,152 | 49,818 | 81,620 | 86,098 | |||||||||||
Amortization of intangible assets | 190,943 | 212,844 | 454,077 | 424,513 | |||||||||||
Inventory step-up and certain manufacturing costs that will be eliminated pursuant to integration plans | 100 | 29,103 | 215 | 97,579 | |||||||||||
Upfront and milestone payments to partners | 3,082 | 2,688 | 6,177 | 4,105 | |||||||||||
Separation benefits and other cost reduction initiatives (2) | 24,614 | 22,174 | 47,284 | 60,630 | |||||||||||
Impact of VOLTAREN® Gel generic competition | — | — | — | (7,750 | ) | ||||||||||
Certain litigation-related and other contingencies, net (3) | (2,600 | ) | 5,259 | (1,664 | ) | 10,459 | |||||||||
Asset impairment charges (4) | 725,044 | 39,951 | 929,006 | 169,576 | |||||||||||
Acquisition-related and integration items (5) | 4,190 | 48,171 | 15,070 | 60,725 | |||||||||||
Loss on extinguishment of debt | 51,734 | — | 51,734 | — | |||||||||||
Foreign currency impact related to the remeasurement of intercompany debt instruments | (3,233 | ) | 417 | (5,927 | ) | 1,672 | |||||||||
Other, net | — | 1,124 | 1,759 | (3,070 | ) | ||||||||||
Total segment adjusted income from continuing operations before income tax | $ | 396,273 | $ | 358,003 | $ | 882,246 | $ | 760,306 |
(1) | Amounts include certain corporate overhead costs, such as headcount and facility expenses and certain other income and expenses. |
(2) | Amounts primarily relate to employee separation costs of $0.7 million and $21.5 million during the three and six months ended June 30, 2017, respectively, charges to increase excess inventory reserves of $7.9 million during both periods and other charges of $16.0 million and $17.5 million, related primarily to the 2017 U.S. Generics Pharmaceuticals restructuring initiative, during the three and six months ended June 30, 2017, respectively. Amounts during the three and six months ended June 30, 2016 include charges to increase excess inventory reserves of $6.4 million and $33.3 million related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative, employee separation costs of $8.4 million and $15.2 million and other restructuring costs of $7.1 million and $11.8 million, respectively. These amounts were primarily recorded as Cost of revenues and Selling, general and administrative expense in our Condensed Consolidated Statements of Operations. See Note 4. Restructuring for discussion of our material restructuring initiatives. |
(3) | Amounts include adjustments for Litigation-related and other contingencies, net as further described in Note 11. Commitments and Contingencies. |
(4) | Amounts primarily relate to charges to write down goodwill and intangible assets as further described in Note 8. Goodwill and Other Intangibles as well as charges to write down certain property, plant and equipment as further described in Note 6. Fair Value Measurements. |
(5) | Amounts during the three and six months ended June 30, 2017 include costs directly associated with previous acquisitions of $2.2 million and $6.9 million, respectively, and charges due to changes in fair value of contingent consideration of $2.0 million and $8.1 million, respectively. Amounts during the three and six months ended June 30, 2016 include costs directly associated with previous acquisitions of $24.3 million and $47.5 million, respectively, and charges due to changes in fair value of contingent consideration of $23.9 million and $13.2 million, respectively. |
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; 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 and that are significant to the fair value of the assets or liabilities. |
Fair Value Measurements at Reporting Date using: | |||||||||||||||
June 30, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 96,888 | $ | — | $ | — | $ | 96,888 | |||||||
Time deposits | — | 100,000 | — | 100,000 | |||||||||||
Equity securities | 2,494 | — | — | 2,494 | |||||||||||
Total | $ | 99,382 | $ | 100,000 | $ | — | $ | 199,382 | |||||||
Liabilities: | |||||||||||||||
Acquisition-related contingent consideration—short-term | $ | — | $ | — | $ | 94,460 | $ | 94,460 | |||||||
Acquisition-related contingent consideration—long-term | — | — | 116,000 | 116,000 | |||||||||||
Total | $ | — | $ | — | $ | 210,460 | $ | 210,460 |
Fair Value Measurements at Reporting Date using: | |||||||||||||||
December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 26,210 | $ | — | $ | — | $ | 26,210 | |||||||
Time deposits | — | 100,000 | — | 100,000 | |||||||||||
Equity securities | 2,267 | — | — | 2,267 | |||||||||||
Total | $ | 28,477 | $ | 100,000 | $ | — | $ | 128,477 | |||||||
Liabilities: | |||||||||||||||
Acquisition-related contingent consideration—short-term | $ | — | $ | — | $ | 109,373 | $ | 109,373 | |||||||
Acquisition-related contingent consideration—long-term | — | — | 152,740 | 152,740 | |||||||||||
Total | $ | — | $ | — | $ | 262,113 | $ | 262,113 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Beginning of period | $ | 234,391 | $ | 124,511 | $ | 262,113 | $ | 143,502 | |||||||
Amounts settled | (26,219 | ) | (12,646 | ) | (60,310 | ) | (22,120 | ) | |||||||
Changes in fair value recorded in earnings | 1,950 | 23,892 | 8,134 | 13,204 | |||||||||||
Effect of currency translation | 338 | 39 | 523 | 1,210 | |||||||||||
End of period | $ | 210,460 | $ | 135,796 | $ | 210,460 | $ | 135,796 |
Balance as of December 31, 2016 | Acquisitions | Fair Value Adjustments and Accretion | Payments and Other | Balance as of June 30, 2017 | |||||||||||||||
Auxilium acquisition | $ | 21,097 | $ | — | $ | (1,720 | ) | $ | (4,219 | ) | $ | 15,158 | |||||||
Lehigh Valley Technologies, Inc. acquisitions | 96,000 | — | 16,755 | (36,754 | ) | 76,001 | |||||||||||||
VOLTAREN® Gel acquisition | 118,395 | — | 4,384 | (17,909 | ) | 104,870 | |||||||||||||
Other | 26,621 | — | (11,285 | ) | (905 | ) | 14,431 | ||||||||||||
Total | $ | 262,113 | $ | — | $ | 8,134 | $ | (59,787 | ) | $ | 210,460 |
Available-for-sale | |||||||||||||||
June 30, 2017 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | |||||||||||
Money market funds | $ | 96,888 | $ | — | $ | — | $ | 96,888 | |||||||
Total included in cash and cash equivalents | $ | 75,000 | $ | — | $ | — | $ | 75,000 | |||||||
Total included in restricted cash and cash equivalents | $ | 21,888 | $ | — | $ | — | $ | 21,888 | |||||||
Equity securities | $ | 1,766 | $ | 728 | $ | — | $ | 2,494 | |||||||
Long-term available-for-sale securities | $ | 1,766 | $ | 728 | $ | — | $ | 2,494 |
Available-for-sale | |||||||||||||||
December 31, 2016 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | |||||||||||
Money market funds | $ | 26,210 | $ | — | $ | — | $ | 26,210 | |||||||
Total included in cash and cash equivalents | $ | — | $ | — | $ | — | $ | — | |||||||
Total included in restricted cash and cash equivalents | $ | 26,210 | $ | — | $ | — | $ | 26,210 | |||||||
Equity securities | $ | 1,766 | $ | 501 | $ | — | $ | 2,267 | |||||||
Long-term available-for-sale securities | $ | 1,766 | $ | 501 | $ | — | $ | 2,267 |
Fair Value Measurements at Reporting Date using: | Total Expense for the Six Months Ended June 30, 2017 | ||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | |||||||||||||||
Certain U.S. Branded Pharmaceuticals intangible assets (Note 8) | $ | — | $ | — | $ | 17,781 | $ | (52,096 | ) | ||||||
Certain U.S. Generic Pharmaceuticals intangible assets (Note 8) | — | — | 409,874 | (398,423 | ) | ||||||||||
Certain International Pharmaceuticals intangible assets (Note 8) | — | — | 21,772 | (145,359 | ) | ||||||||||
Branded reporting unit goodwill (Note 8) | — | — | 828,818 | (180,430 | ) | ||||||||||
Paladin reporting unit goodwill (Note 8) | — | — | 84,881 | (82,602 | ) | ||||||||||
Somar reporting unit goodwill (Note 8) | — | — | — | (25,712 | ) | ||||||||||
Certain property, plant and equipment (1) | — | — | — | (44,384 | ) | ||||||||||
Total | $ | — | $ | — | $ | 1,363,126 | $ | (929,006 | ) |
(1) | Amounts relate primarily to an aggregate charge of $32.0 million recorded in connection with the 2017 U.S. Generics Pharmaceuticals restructuring initiative, which is described further in Note 4. Restructuring, and $9.9 million recorded following the initiation of held-for-sale accounting resulting from the Company’s June 30, 2017 definitive agreement to sell Somar, which is described in Note 3. Discontinued Operations and Assets and Liabilities Held for Sale. |
June 30, 2017 | December 31, 2016 | ||||||
Raw materials (1) | $ | 138,686 | $ | 175,240 | |||
Work-in-process (1) | 96,618 | 100,494 | |||||
Finished goods (1) | 254,448 | 279,937 | |||||
Total | $ | 489,752 | $ | 555,671 |
Carrying Amount | |||||||||||||||
U.S. Generic Pharmaceuticals | U.S. Branded Pharmaceuticals | International Pharmaceuticals | Total | ||||||||||||
Goodwill as of December 31, 2016 | $ | 3,531,301 | $ | 1,009,248 | $ | 188,846 | $ | 4,729,395 | |||||||
Effect of currency translation on gross balance | — | — | 26,646 | 26,646 | |||||||||||
Effect of currency translation on accumulated impairment | — | — | (19,983 | ) | (19,983 | ) | |||||||||
Goodwill impairment charges | — | (180,430 | ) | (108,314 | ) | (288,744 | ) | ||||||||
Goodwill as of June 30, 2017 | $ | 3,531,301 | $ | 828,818 | $ | 87,195 | $ | 4,447,314 |
Accumulated Impairment | |||||||||||||||
U.S. Generic Pharmaceuticals | U.S. Branded Pharmaceuticals | International Pharmaceuticals | Total | ||||||||||||
Accumulated impairment losses as of December 31, 2016 | $ | 2,342,549 | $ | 675,380 | $ | 408,280 | $ | 3,426,209 | |||||||
Accumulated impairment losses as of June 30, 2017 | $ | 2,342,549 | $ | 855,810 | $ | 536,577 | $ | 3,734,936 |
Cost basis: | Balance as of December 31, 2016 | Acquisitions | Impairments (1) | Other (1) (2) | Effect of Currency Translation (1) | Balance as of June 30, 2017 | |||||||||||||||||
Indefinite-lived intangibles: | |||||||||||||||||||||||
In-process research and development | $ | 1,123,581 | $ | — | $ | (167,889 | ) | $ | (177,200 | ) | $ | 209 | $ | 778,701 | |||||||||
Total indefinite-lived intangibles | $ | 1,123,581 | $ | — | $ | (167,889 | ) | $ | (177,200 | ) | $ | 209 | $ | 778,701 | |||||||||
Finite-lived intangibles: | |||||||||||||||||||||||
Licenses (weighted average life of 12 years) | $ | 465,720 | $ | — | $ | (8,179 | ) | $ | — | $ | — | $ | 457,541 | ||||||||||
Tradenames (weighted average life of 12 years) | 7,345 | — | (808 | ) | (262 | ) | 134 | 6,409 | |||||||||||||||
Developed technology (weighted average life of 11 years) | 6,223,004 | — | (409,356 | ) | 144,158 | 24,617 | 5,982,423 | ||||||||||||||||
Total finite-lived intangibles (weighted average life of 11 years) | $ | 6,696,069 | $ | — | $ | (418,343 | ) | $ | 143,896 | $ | 24,751 | $ | 6,446,373 | ||||||||||
Total other intangibles | $ | 7,819,650 | $ | — | $ | (586,232 | ) | $ | (33,304 | ) | $ | 24,960 | $ | 7,225,074 | |||||||||
Accumulated amortization: | Balance as of December 31, 2016 | Amortization | Impairments | Other (2) | Effect of Currency Translation | Balance as of June 30, 2017 | |||||||||||||||||
Finite-lived intangibles: | |||||||||||||||||||||||
Licenses | $ | (341,600 | ) | $ | (14,586 | ) | $ | — | $ | — | $ | — | $ | (356,186 | ) | ||||||||
Tradenames | (6,599 | ) | (42 | ) | — | 262 | (30 | ) | (6,409 | ) | |||||||||||||
Developed technology | (1,612,154 | ) | (439,449 | ) | — | 33,042 | (7,831 | ) | (2,026,392 | ) | |||||||||||||
Total other intangibles | $ | (1,960,353 | ) | $ | (454,077 | ) | $ | — | $ | 33,304 | $ | (7,861 | ) | $ | (2,388,987 | ) | |||||||
Net other intangibles | $ | 5,859,297 | $ | 4,836,087 |
(1) | Changes in the net carrying amount of our other intangible assets presented in the table above exclude changes related to businesses classified as held for sale, to the extent such changes occurred after the business was classified as held for sale. As such, asset impairment charges of $9.6 million and net increases resulting from currency translation of $1.6 million related to our Litha business are excluded from the table above. |
Gross Carrying Amount | |||
December 31, 2016 | $ | 7,819,650 | |
Impairment of certain U.S. Branded Pharmaceuticals intangible assets | (52,096 | ) | |
Impairment of certain U.S. Generic Pharmaceuticals intangible assets | (398,423 | ) | |
Impairment of certain International Pharmaceuticals intangible assets | (135,713 | ) | |
Transfer of intangible assets to Assets held for sale (NOTE 3) | (33,304 | ) | |
Effect of currency translation | 24,960 | ||
June 30, 2017 | $ | 7,225,074 |
(2) | Includes reclassification adjustments of $177.2 million for certain developed technology intangible assets, previously classified as in-process research and development, that were placed in service during the six months ended June 30, 2017. The remaining amounts in this column relate to the transfer of Somar intangible assets to Assets held for sale. |
2017 | $ | 764,409 | |
2018 | $ | 544,485 | |
2019 | $ | 473,230 | |
2020 | $ | 442,265 | |
2021 | $ | 427,558 |
June 30, 2017 | December 31, 2016 | ||||||
Trade accounts payable | $ | 114,710 | $ | 126,712 | |||
Returns and allowances | 310,852 | 332,455 | |||||
Rebates | 218,166 | 227,706 | |||||
Chargebacks | 18,426 | 33,092 | |||||
Accrued interest | 129,208 | 128,254 | |||||
Accrued payroll and related benefits | 79,942 | 115,224 | |||||
Accrued royalties and other distribution partner payables | 63,807 | 191,433 | |||||
Acquisition-related contingent consideration—short-term | 94,460 | 109,373 | |||||
Other | 203,765 | 189,835 | |||||
Total | $ | 1,233,336 | $ | 1,454,084 |
June 30, 2017 | December 31, 2016 | ||||||||||||||||||||
Effective Interest Rate | Principal Amount | Carrying Amount | Effective Interest Rate | Principal Amount | Carrying Amount | ||||||||||||||||
7.25% Senior Notes due 2022 | 7.91 | % | $ | 400,000 | $ | 390,044 | 7.91 | % | $ | 400,000 | $ | 389,150 | |||||||||
5.75% Senior Notes due 2022 | 6.04 | % | 700,000 | 692,085 | 6.04 | % | 700,000 | 691,339 | |||||||||||||
5.375% Senior Notes due 2023 | 5.62 | % | 750,000 | 741,381 | 5.62 | % | 750,000 | 740,733 | |||||||||||||
6.00% Senior Notes due 2023 | 6.28 | % | 1,635,000 | 1,611,838 | 6.28 | % | 1,635,000 | 1,610,280 | |||||||||||||
5.875% Senior Secured Notes due 2024 | 6.14 | % | 300,000 | 295,251 | — | — | — | ||||||||||||||
6.00% Senior Notes due 2025 | 6.27 | % | 1,200,000 | 1,180,207 | 6.27 | % | 1,200,000 | 1,179,203 | |||||||||||||
Term Loan A Facility Due 2019 | — | — | — | 2.95 | % | 941,875 | 932,824 | ||||||||||||||
Term Loan B Facility Due 2022 | — | — | — | 4.06 | % | 2,772,000 | 2,728,919 | ||||||||||||||
Term Loan B Facility Due 2024 | 5.46 | % | 3,415,000 | 3,374,578 | — | — | — | ||||||||||||||
Other debt | 1.50 | % | 55 | 55 | 1.50 | % | 55 | 55 | |||||||||||||
Total long-term debt, net | $ | 8,400,055 | $ | 8,285,439 | $ | 8,398,930 | $ | 8,272,503 | |||||||||||||
Less current portion, net | 34,150 | 34,150 | 131,125 | 131,125 | |||||||||||||||||
Total long-term debt, less current portion, net | $ | 8,365,905 | $ | 8,251,289 | $ | 8,267,805 | $ | 8,141,378 |
Instrument | Maturity Date | |
7.25% Senior Notes due 2022 | January 15, 2022 | |
5.75% Senior Notes due 2022 | January 15, 2022 | |
5.375% Senior Notes due 2023 | January 15, 2023 | |
6.00% Senior Notes due 2023 | July 15, 2023 |
Year | Percentage | ||
2020 | 102.938 | % | |
2021 | 101.469 | % | |
2022 and thereafter | 100.000 | % |
Maturities (1) | |||
2017 (2) | $ | 44,700 | |
2018 | $ | 34,150 | |
2019 | $ | 34,150 | |
2020 | $ | 34,150 | |
2021 | $ | 34,150 |
(1) | Any outstanding amounts borrowed pursuant to the 2017 Credit Facility will immediately mature if certain of our senior notes (enumerated above under the heading “April 2017 Refinancing”) are not refinanced or repaid in full prior to the date that is 91 days prior to the respective stated maturity dates thereof. Accordingly, we may be required to repay or refinance senior notes with an aggregate principal amount of $1,100.0 million in 2021, despite such notes having stated maturities in 2022. The amounts in this maturities table do not reflect any such early payment; rather, they reflect stated maturity dates. |
(2) | Includes payments related to: (i) our existing credit facilities prior to the April 2017 Refinancing and (ii) our 2017 Term Loan Facility thereafter. |
Qualified Settlement Funds | Mesh Liability Accrual | ||||||
Balance as of January 1, 2017 | $ | 275,987 | $ | 963,117 | |||
Additional charges | — | 775,474 | |||||
Cash contributions to Qualified Settlement Funds | 522,770 | — | |||||
Cash distributions to settle disputes from Qualified Settlement Funds | (440,190 | ) | (440,190 | ) | |||
Cash distributions to settle disputes | — | (3,794 | ) | ||||
Other | 510 | — | |||||
Balance as of June 30, 2017 | $ | 359,077 | $ | 1,294,607 |
Three Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Before-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | Before-Tax Amount | Tax Benefit (Expense) | Net-of-Tax Amount | ||||||||||||||||||
Net unrealized gain (loss) on securities: | |||||||||||||||||||||||
Unrealized gain (loss) arising during the period | $ | 771 | $ | (280 | ) | $ | 491 | $ | (234 | ) | $ | 87 | $ | (147 | ) | ||||||||
Less: reclassification adjustments for (gain) loss realized in net (loss) income | — | — | — | — | — | — | |||||||||||||||||
Net unrealized gains (losses) | $ | 771 | $ | (280 | ) | $ | 491 | $ | (234 | ) | $ | 87 | $ | (147 | ) | ||||||||
Net unrealized gain (loss) on foreign currency: | |||||||||||||||||||||||
Foreign currency translation gain (loss) arising during the period | 10,340 | — | 10,340 | (7,866 | ) | (13,743 | ) | (21,609 | ) | ||||||||||||||
Less: reclassification adjustments for (gain) loss realized in net (loss) income | — | — | — | — | — | — | |||||||||||||||||
Foreign currency translation gain (loss) | $ | 10,340 | $ | — | $ | 10,340 | $ | (7,866 | ) | $ | (13,743 | ) | $ | (21,609 | ) | ||||||||
Other comprehensive income (loss) | $ | 11,111 | $ | (280 | ) | $ | 10,831 | $ | (8,100 | ) | $ | (13,656 | ) | $ | (21,756 | ) |
Six Months Ended June 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Before-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | Before-Tax Amount | Tax Benefit (Expense) | Net-of-Tax Amount | ||||||||||||||||||
Net unrealized gain (loss) on securities: | |||||||||||||||||||||||
Unrealized gain (loss) arising during the period | $ | 227 | $ | (82 | ) | $ | 145 | $ | (1,620 | ) | $ | 613 | $ | (1,007 | ) | ||||||||
Less: reclassification adjustments for (gain) loss realized in net (loss) income | — | — | — | — | — | — | |||||||||||||||||
Net unrealized gains (losses) | $ | 227 | $ | (82 | ) | $ | 145 | $ | (1,620 | ) | $ | 613 | $ | (1,007 | ) | ||||||||
Net unrealized gain (loss) on foreign currency: | |||||||||||||||||||||||
Foreign currency translation gain arising during the period | 25,474 | — | 25,474 | 46,706 | 12,448 | 59,154 | |||||||||||||||||
Less: reclassification adjustments for gain realized in net loss | — | — | — | — | — | — | |||||||||||||||||
Foreign currency translation gain | $ | 25,474 | $ | — | $ | 25,474 | $ | 46,706 | $ | 12,448 | $ | 59,154 | |||||||||||
Other comprehensive income | $ | 25,701 | $ | (82 | ) | $ | 25,619 | $ | 45,086 | $ | 13,061 | $ | 58,147 |
June 30, 2017 | December 31, 2016 | ||||||
Net unrealized gains | $ | 1,040 | $ | 895 | |||
Foreign currency translation loss | (328,855 | ) | (354,329 | ) | |||
Accumulated other comprehensive loss | $ | (327,815 | ) | $ | (353,434 | ) |
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 | (1,570,346 | ) | |
Other comprehensive income | 25,619 | ||
Compensation related to share-based awards | 27,005 | ||
Tax withholding for restricted shares | (1,839 | ) | |
Other | (97 | ) | |
Shareholders’ equity at June 30, 2017 | $ | 809,106 |
(1) | Refer to Note 2. Recent Accounting Pronouncements for further description of ASU 2016-16. |
Attributable to: | |||||||||||
Endo International plc | Noncontrolling interests | Total Shareholders’ Equity | |||||||||
Shareholders’ equity at January 1, 2016 | $ | 5,968,030 | $ | (54 | ) | $ | 5,967,976 | ||||
Net income | 209,709 | 16 | 209,725 | ||||||||
Other comprehensive income | 58,109 | 38 | 58,147 | ||||||||
Compensation related to share-based awards | 29,585 | — | 29,585 | ||||||||
Tax withholding for restricted shares | (10,396 | ) | — | (10,396 | ) | ||||||
Exercise of options | 1,952 | — | 1,952 | ||||||||
Issuance of ordinary shares related to the employee stock purchase plan | 2,729 | — | 2,729 | ||||||||
Other | 1,820 | — | 1,820 | ||||||||
Shareholders’ equity at June 30, 2016 | $ | 6,261,538 | $ | — | $ | 6,261,538 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Foreign currency (gain) loss, net | $ | (3,870 | ) | $ | 1,554 | $ | (6,854 | ) | $ | 2,550 | |||||
Equity (earnings) loss from investments accounted for under the equity method, net | (1,090 | ) | 3,828 | (88 | ) | 1,484 | |||||||||
Other miscellaneous, net | (1,749 | ) | (207 | ) | (1,804 | ) | (766 | ) | |||||||
Other (income) expense, net | $ | (6,709 | ) | $ | 5,175 | $ | (8,746 | ) | $ | 3,268 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator: | |||||||||||||||
(Loss) income from continuing operations | $ | (696,020 | ) | $ | 389,812 | $ | (861,443 | ) | $ | 301,049 | |||||
Less: Net income from continuing operations attributable to noncontrolling interests | — | 18 | — | 16 | |||||||||||
(Loss) income from continuing operations attributable to Endo International plc ordinary shareholders | $ | (696,020 | ) | $ | 389,794 | $ | (861,443 | ) | $ | 301,033 | |||||
Loss from discontinued operations attributable to Endo International plc ordinary shareholders, net of tax | (700,498 | ) | (46,216 | ) | (708,903 | ) | (91,324 | ) | |||||||
Net (loss) income attributable to Endo International plc ordinary shareholders | $ | (1,396,518 | ) | $ | 343,578 | $ | (1,570,346 | ) | $ | 209,709 | |||||
Denominator: | |||||||||||||||
For basic per share data—weighted average shares | 223,158 | 222,667 | 223,086 | 222,485 | |||||||||||
Dilutive effect of ordinary share equivalents | — | 195 | — | 535 | |||||||||||
Dilutive effect of various convertible notes and warrants | — | 1 | — | 1 | |||||||||||
For diluted per share data—weighted average shares | 223,158 | 222,863 | 223,086 | 223,021 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||
$ | % of Revenue | $ | % of Revenue | $ | % of Revenue | $ | % of Revenue | ||||||||||||||||||
Cost of revenues | $ | 539,401 | 62 | $ | 632,218 | 69 | $ | 1,208,363 | 63 | $ | 1,320,923 | 70 | |||||||||||||
Selling, general and administrative | 155,555 | 18 | 193,070 | 21 | 332,795 | 17 | 371,425 | 20 | |||||||||||||||||
Research and development | 40,869 | 5 | 50,589 | 5 | 83,878 | 4 | 92,281 | 5 | |||||||||||||||||
Litigation-related and other contingencies, net | (2,600 | ) | — | 5,259 | 1 | (1,664 | ) | — | 10,459 | 1 | |||||||||||||||
Asset impairment charges | 725,044 | 83 | 39,951 | 4 | 929,006 | 49 | 169,576 | 9 | |||||||||||||||||
Acquisition-related and integration items | 4,190 | — | 48,171 | 5 | 15,070 | 1 | 60,725 | 3 | |||||||||||||||||
Total costs and expenses* | $ | 1,462,459 | 167 | $ | 969,258 | 105 | $ | 2,567,448 | 134 | $ | 2,025,389 | 107 |
* | Percentages may not add due to rounding. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest expense | $ | 123,354 | $ | 113,097 | $ | 236,807 | $ | 230,567 | |||||||
Interest income | (1,607 | ) | (1,178 | ) | (3,061 | ) | (1,855 | ) | |||||||
Interest expense, net | $ | 121,747 | $ | 111,919 | $ | 233,746 | $ | 228,712 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Foreign currency (gain) loss, net | $ | (3,870 | ) | $ | 1,554 | $ | (6,854 | ) | $ | 2,550 | |||||
Equity (earnings) loss from investments accounted for under the equity method, net | (1,090 | ) | 3,828 | (88 | ) | 1,484 | |||||||||
Other miscellaneous, net | (1,749 | ) | (207 | ) | (1,804 | ) | (766 | ) | |||||||
Other (income) expense, net | $ | (6,709 | ) | $ | 5,175 | $ | (8,746 | ) | $ | 3,268 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net revenues to external customers: | |||||||||||||||
U.S. Generic Pharmaceuticals | $ | 563,312 | $ | 565,358 | $ | 1,285,295 | $ | 1,148,748 | |||||||
U.S. Branded Pharmaceuticals | 245,188 | 288,342 | 495,347 | 597,155 | |||||||||||
International Pharmaceuticals (1) | 67,231 | 67,187 | 132,689 | 138,523 | |||||||||||
Total net revenues to external customers | $ | 875,731 | $ | 920,887 | $ | 1,913,331 | $ | 1,884,426 |
(1) | Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada, Latin America and South Africa. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
U.S. Generic Pharmaceuticals: | |||||||||||||||
U.S. Generics Base (1) | $ | 218,935 | $ | 331,095 | $ | 455,082 | $ | 678,524 | |||||||
Sterile Injectables | 160,597 | 126,245 | 311,946 | 249,934 | |||||||||||
New Launches and Alternative Dosages (2) | 183,780 | 108,018 | 518,267 | 220,290 | |||||||||||
Total U.S. Generic Pharmaceuticals | $ | 563,312 | $ | 565,358 | $ | 1,285,295 | $ | 1,148,748 |
(1) | U.S. Generics Base includes solid oral-extended release, solid oral-immediate release and pain/controlled substances products. |
(2) | New Launches and Alternative Dosages includes liquids, semi-solids, patches, powders, ophthalmics, sprays and new product launches. Products are included in New Launches during the calendar year of launch and the subsequent calendar year such that the period of time any product will be considered a New Launch will range from thirteen to twenty-four months. Subsequent to this thirteen to twenty-four month period that revenues are considered New Launches, these product revenues will be reflected as either U.S. Generics Base or Sterile Injectables, or will remain as an Alternative Dosage. New Launches contributed $92.3 million and $333.9 million of revenues for the three and six months ended June 30, 2017, respectively, compared to $32.9 million and $64.0 million of revenues in the comparable 2016 periods. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Specialty Products: | |||||||||||||||
XIAFLEX® | $ | 50,077 | $ | 42,419 | $ | 99,602 | $ | 86,464 | |||||||
SUPPRELIN® LA | 23,649 | 21,211 | 42,830 | 38,463 | |||||||||||
Other Specialty (1) | 36,745 | 31,973 | 72,773 | 64,942 | |||||||||||
Total Specialty Products | $ | 110,471 | $ | 95,603 | $ | 215,205 | $ | 189,869 | |||||||
Established Products: | |||||||||||||||
OPANA® ER | $ | 31,582 | $ | 38,554 | $ | 67,300 | $ | 83,224 | |||||||
PERCOCET® | 30,889 | 35,708 | 61,834 | 69,301 | |||||||||||
VOLTAREN® Gel | 20,270 | 27,290 | 34,544 | 63,037 | |||||||||||
LIDODERM® | 11,678 | 27,039 | 24,854 | 46,751 | |||||||||||
Other Established (2) | 40,298 | 64,148 | 91,610 | 144,973 | |||||||||||
Total Established Products | $ | 134,717 | $ | 192,739 | $ | 280,142 | $ | 407,286 | |||||||
Total U.S. Branded Pharmaceuticals (3) | $ | 245,188 | $ | 288,342 | $ | 495,347 | $ | 597,155 |
(1) | Products included within Other Specialty include TESTOPEL®, NASCOBAL® Nasal Spray, and AVEED®. |
(2) | Products included within Other Established include, but are not limited to, TESTIM® and FORTESTA® Gel, including the authorized generic. |
(3) | Individual products presented above represent the top two performing products in each product category and/or any product having revenues in excess of $25 million during any quarterly period in 2017 or 2016. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Adjusted income from continuing operations before income tax: | |||||||||||||||
U.S. Generic Pharmaceuticals | $ | 253,866 | $ | 214,968 | $ | 595,465 | $ | 426,736 | |||||||
U.S. Branded Pharmaceuticals | 127,595 | 122,420 | 257,087 | 291,201 | |||||||||||
International Pharmaceuticals | 14,812 | 20,615 | 29,694 | 42,369 | |||||||||||
Total segment adjusted income from continuing operations before income tax | $ | 396,273 | $ | 358,003 | $ | 882,246 | $ | 760,306 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total consolidated loss from continuing operations before income tax | $ | (753,500 | ) | $ | (165,465 | ) | $ | (930,851 | ) | $ | (372,943 | ) | |||
Interest expense, net | 121,747 | 111,919 | 233,746 | 228,712 | |||||||||||
Corporate unallocated costs (1) | 34,152 | 49,818 | 81,620 | 86,098 | |||||||||||
Amortization of intangible assets | 190,943 | 212,844 | 454,077 | 424,513 | |||||||||||
Inventory step-up and certain manufacturing costs that will be eliminated pursuant to integration plans | 100 | 29,103 | 215 | 97,579 | |||||||||||
Upfront and milestone payments to partners | 3,082 | 2,688 | 6,177 | 4,105 | |||||||||||
Separation benefits and other cost reduction initiatives (2) | 24,614 | 22,174 | 47,284 | 60,630 | |||||||||||
Impact of VOLTAREN® Gel generic competition | — | — | — | (7,750 | ) | ||||||||||
Certain litigation-related and other contingencies, net (3) | (2,600 | ) | 5,259 | (1,664 | ) | 10,459 | |||||||||
Asset impairment charges (4) | 725,044 | 39,951 | 929,006 | 169,576 | |||||||||||
Acquisition-related and integration items (5) | 4,190 | 48,171 | 15,070 | 60,725 | |||||||||||
Loss on extinguishment of debt | 51,734 | — | 51,734 | — | |||||||||||
Foreign currency impact related to the remeasurement of intercompany debt instruments | (3,233 | ) | 417 | (5,927 | ) | 1,672 | |||||||||
Other, net | — | 1,124 | 1,759 | (3,070 | ) | ||||||||||
Total segment adjusted income from continuing operations before income tax | $ | 396,273 | $ | 358,003 | $ | 882,246 | $ | 760,306 |
(1) | Amounts include certain corporate overhead costs, such as headcount and facility expenses and certain other income and expenses. |
(2) | Amounts primarily relate to employee separation costs of $0.7 million and $21.5 million during the three and six months ended June 30, 2017, respectively, charges to increase excess inventory reserves of $7.9 million during both periods and other charges of $16.0 million and $17.5 million, related primarily to the 2017 U.S. Generics Pharmaceuticals restructuring initiative, during the three and six months ended June 30, 2017, respectively. Amounts during the three and six months ended June 30, 2016 include charges to increase excess inventory reserves of $6.4 million and $33.3 million related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative, employee separation costs of $8.4 million and $15.2 million and other restructuring costs of $7.1 million and $11.8 million, respectively. These amounts were primarily recorded as Cost of revenues and Selling, general and administrative expense in our Condensed Consolidated Statements of Operations. See Note 4. Restructuring of the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion of our material restructuring initiatives. |
(3) | Amounts include adjustments for Litigation-related and other contingencies, net as further described in Note 11. Commitments and Contingencies of the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. |
(4) | Amounts primarily relate to charges to write down goodwill and intangible assets as further described in Note 8. Goodwill and Other Intangibles of the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q as well as charges to write down certain property, plant and equipment as further described in Note 6. Fair Value Measurements of the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. |
(5) | Amounts during the three and six months ended June 30, 2017 include costs directly associated with previous acquisitions of $2.2 million and $6.9 million, respectively, and charges due to changes in fair value of contingent consideration of $2.0 million and $8.1 million, respectively. Amounts during the three and six months ended June 30, 2016 include costs directly associated with previous acquisitions of $24.3 million and $47.5 million, respectively, and charges due to changes in fair value of contingent consideration of $23.9 million and $13.2 million, respectively. |
June 30, 2017 | December 31, 2016 | ||||||
Total current assets | $ | 2,275,015 | $ | 2,589,459 | |||
Less: total current liabilities | (2,226,947 | ) | (2,634,745 | ) | |||
Working capital | $ | 48,068 | $ | (45,286 | ) | ||
Current ratio | 1.0:1 | -1.0:1 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Net cash flow provided by (used in): | |||||||
Operating activities | $ | 340,986 | $ | 558,611 | |||
Investing activities | (123,780 | ) | 137,005 | ||||
Financing activities | (99,583 | ) | (301,601 | ) | |||
Effect of foreign exchange rate | 2,786 | 1,459 | |||||
Movement in cash held for sale | (21,125 | ) | — | ||||
Net increase in cash and cash equivalents | $ | 99,284 | $ | 395,474 |
ENDO INTERNATIONAL PLC | |
(Registrant) | |
/s/ PAUL V. CAMPANELLI | |
Name: | Paul V. Campanelli |
Title: | President and Chief Executive Officer |
(Principal Executive Officer) | |
/s/ BLAISE COLEMAN | |
Name: | Blaise Coleman |
Title: | Executive Vice President, Chief Financial Officer |
(Principal Financial Officer) |
Exhibit No. | Description |
2.1 | |
3.1 | |
10.1 | |
14.1 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101 | The following materials from Endo International plc’s Report on Form 10-Q for the quarter ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Loss, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements |
RECITALS | 1 | |
CLAUSES | 2 | |
ARTICLE I DEFINITIONS | 2 | |
SECTION 1.1. Definitions. | 2 | |
ARTICLE II PURCHASE OF SHARES; CLOSING | 2 | |
SECTION 2.1. Purchase of the Shares. | 2 | |
SECTION 2.2. Shares Purchase Price and Purchased Debt Purchase Price. | 3 | |
SECTION 2.3. Closing. | 3 | |
SECTION 2.4. Transactions to be Effected on the Closing Date; Payment of Shares Closing Payment and Purchased Debt Purchase Price. | 4 | |
SECTION 2.5. Shares Purchase Price Adjustment; Determination of Final Shares Purchase Price. | 5 | |
ARTICLE III REPRESENTATIONS OF THE COMPANY | 8 | |
SECTION 3.1. Organization and Standing. | 8 | |
SECTION 3.2. Authority; Execution. | 8 | |
SECTION 3.3. Representative’s Authority. | 8 | |
SECTION 3.4. Capital Stock of the Target Companies. | 8 | |
SECTION 3.5. No Conflicts. | 9 | |
SECTION 3.6. Consents, Filings and Approvals. | 9 | |
SECTION 3.7. Financial Statements; Books and Records. | 10 | |
SECTION 3.8. No Undisclosed Liabilities. | 10 | |
SECTION 3.9.Absence of Certain Changes. | 10 | |
SECTION 3.10. Title to Personal Property. | 10 | |
SECTION 3.11. Real Property. | 11 | |
SECTION 3.12. Leased Property. | 11 | |
SECTION 3.13. Environmental Matters. | 11 | |
SECTION 3.14.Material Contracts. | 12 | |
SECTION 3.15. Sanitary Licenses. | 14 | |
SECTION 3.16. Intellectual Property. | 15 | |
SECTION 3.17. Suppliers. | 17 | |
SECTION 3.18. Corporate Records. | 17 | |
SECTION 3.19. Permits. | 17 | |
SECTION 3.20. Legal Proceedings. | 17 | |
SECTION 3.21. Tax Matters. | 18 | |
SECTION 3.22. Key Employees. | 19 | |
SECTION 3.23. Employee Benefits. | 19 | |
SECTION 3.24. Unionized Labor. | 19 | |
SECTION 3.25. Insurance Policies. | 20 | |
SECTION 3.26. Related Party Transactions. | 20 | |
SECTION 3.27. No Additional Representations. | 20 | |
SECTION 3.28. Compliance with Applicable Law. | 20 |
SECTION 3.29. Brokers. | 20 | |
SECTION 3.30 Anticorruption and Sanctions. | 21 | |
ARTICLE IV REPRESENTATIONS OF THE SELLERS | 21 | |
SECTION 4.1. Organization and Standing. | 21 | |
SECTION 4.2. Authority; Execution. | 22 | |
SECTION 4.3. Representative’s Authority. | 22 | |
SECTION 4.4. Ownership of Shares and Purchased Debt. | 22 | |
SECTION 4.5. No Conflicts. | 23 | |
SECTION 4.6. Consents, Filings and Approvals. | 23 | |
SECTION 4.7. Legal Proceedings. | 23 | |
SECTION 4.8. Financial Wherewithal. | 24 | |
SECTION 4.8. No Additional Representations. | 24 | |
ARTICLE V REPRESENTATIONS OF THE PCC | 24 | |
SECTION 5.1. Organization. | 24 | |
SECTION 5.2. Authority; Execution. | 24 | |
SECTION 5.3. Representatives’ Authority. | 25 | |
SECTION 5.4. No Conflicts. | 25 | |
SECTION 5.5. Consents, Filings and Approvals. | 25 | |
SECTION 5.6. Legal Proceedings. | 26 | |
SECTION 5.7. Breach of Representations. | 26 | |
SECTION 5.8. Financial Wherewithal. | 26 | |
SECTION 5.9. No Additional Representations. | 26 | |
ARTICLE VI COVENANTS OF THE COMPANY, THE SELLERS AND THE PURCHASERS | 27 | |
SECTION 6.1. Conduct of Business by the Target Companies. | 27 | |
SECTION 6.2. Non-Solicitation of Employees. | 28 | |
SECTION 6.3. Non-Compete. | 29 | |
SECTION 6.4. Access and Information. | 29 | |
SECTION 6.5. Exclusive Dealing. | 30 | |
ARTICLE VII OTHER COVENANTS | 30 | |
SECTION 7.1. Confidentiality. | 30 | |
SECTION 7.2. Publicity. | 33 | |
SECTION 7.3. Approvals. | 33 | |
SECTION 7.4. Further Assurances. | 34 | |
SECTION 7.5. Supplemental Disclosure. | 34 | |
SECTION 7.6. Tax Matters. | 35 | |
SECTION 7.7. Anti-Corruption Laws. | 39 | |
ARTICLE VIII CONDITIONS PRECEDENT | 39 | |
SECTION 8.1. Conditions to Obligations of the Purchasers. | 39 | |
SECTION 8.2. Conditions to Obligations of the Company and the Sellers. | 40 | |
ARTICLE IX TERMINATION | 41 | |
SECTION 9.1. Termination. | 41 |
SECTION 9.2. Effect of Termination. | 42 | |
ARTICLE X INDEMNIFICATION | 43 | |
SECTION 10.1. Indemnification by the Sellers. | 43 | |
SECTION 10.2. Indemnification by the Purchasers. | 43 | |
SECTION 10.3. Excluded Losses. | 44 | |
SECTION 10.4. Termination of Indemnification; Limitations on Liability. | 44 | |
SECTION 10.5. Procedures. | 44 | |
SECTION 10.6. Term for Indemnification. | 46 | |
SECTION 10.7. Calculation; Payment of Losses. | 46 | |
SECTION 10.8. Liability Limitations; Payment of Losses. | 46 | |
SECTION 10.9. Treatment. | 48 | |
SECTION 10.10. Remedies. | 49 | |
ARTICLE XI NON RECOURSE | 49 | |
ARTICLE XII MISCELLANEOUS | 49 | |
SECTION 12.1. Notices. | 49 | |
SECTION 12.2. Governing Law. | 51 | |
SECTION 12.3. Binding Effect. | 52 | |
SECTION 12.4. Entire Agreement. | 52 | |
SECTION 12.5. Further Instruments and Acts. | 52 | |
SECTION 12.6. Waivers. | 52 | |
SECTION 12.7. Headings. | 52 | |
SECTION 12.8. Severability. | 52 | |
SECTION 12.9. Arbitration. | 53 | |
SECTION 12.10. Fees. | 53 | |
SECTION 12.11. Transaction Costs. | 54 | |
SECTION 12.12. Assignment. | 54 | |
SECTION 12.13. Third-Party Beneficiaries. | 54 | |
SECTION 12.14. Counterparts. | 54 | |
SECTION 12.15. Obligations of Sellers. | 55 | |
SECTION 12.16. Usage. | 55 | |
SECTION 12.17. Accounting Terms; Calculations. | 55 | |
SECTION 12.18. Statutory References. | 55 |
(I) | Endo Somar Holdings B.V. (“Endo Holdings”), a company duly organized and validly existing under the laws of the Netherlands; |
(II) | Endo Luxembourg Finance Company I S.A.R.L. (“Endo Lux”), a company duly organized and validly existing under the laws of Luxembourg; |
(III) | Endo Global Finance LLC (“Endo Global”), a limited liability company duly organized and validly existing under the laws of Delaware; |
(IV) | Endo Luxembourg Finance Company II S.A.R.L. (“Endo Lux II”), a company duly organized and validly existing under the laws of Luxembourg (and together with Endo Holdings, Endo Lux and Endo Global, the “Sellers”, and each a “Seller”); |
(V) | AI Global Investments (Netherlands) PCC Limited, a protected cell company limited by shares duly organized and validly existing under the laws of the Island of Guernsey (the “PCC”), acting for and on behalf of the Soar Cell (the “Soar Cell”) (and together with any of its permitted assigns under Section 12.12, the “Purchasers”, and each a “Purchaser”); and |
(VI) | Grupo Farmacéutico Somar, S.A.P.I. de C.V. (the “Company”), a corporation duly organized and validly existing under the laws of Mexico. |
(i) | if the Adjustment Amount is a negative amount, an amount in Dollars equal to the absolute value of such amount shall be paid by Sellers to Purchasers by wire transfer of immediately available funds to an account designated by Purchasers; or |
(ii) | if the Adjustment Amount is a positive amount, an amount in Dollars equal to such amount shall be paid by Purchasers to Sellers by wire transfer of immediately available funds to such account or accounts designated by Sellers. |
(i) | the Sellers shall, and shall cause its respective Representatives to hold confidential all Company Confidential Information; and |
(ii) | the Purchasers shall, and shall cause its respective Representatives to hold confidential all Transaction Confidential Information. |
(i) | the Purchasers shall, and shall cause its respective Representatives to hold confidential all Confidential Information; and |
(ii) | the Sellers shall, and shall cause its respective Representatives to hold confidential all Transaction Confidential Information. |
(i) | grant to the other party (or their designees or Affiliates) access at all reasonable times to all of the books and records relating to the Target Companies within their possession (including without limitation all kind of tax returns, accounting records, tax documents and correspondence with tax authorities), and shall afford the other party or any of their Affiliates or designees, the right (at such other party’s expense) to take extracts therefrom and to make copies thereof, to the extent reasonably necessary to permit the other party or any of their Affiliates or designees, to prepare Tax Returns, to conduct negotiations with Taxing Authorities, to defend against any tax contingency or to implement the provisions of, or to investigate or defend any claims between the parties arising under, this Agreement; and |
(ii) | make available to the other party and to any applicable Taxing Authority, as reasonably requested, all information, records, and documents relating to Taxes of the Target Companies. |
(c) | any Specific Indemnity. |
By: | /s/ Dennis Cornelis Kulk |
Name: | Europe Management Company B.V. |
Title: | Director A |
Represented by: | Dennis Cornelis Kulk |
Title: | Attorney-in-fact A |
By: | /s/ Tu Diep Lam |
Name: | Europe Management Company B.V. |
Title: | Director A |
Represented by: | Tu Diep Lam |
Title | Attorney-in-fact B |
By: | |
Name: | |
Title: | Director B |
By: | /s/ Robert J. Cobuzzi |
Name: | Robert J Cobuzzi, Jr., Ph.D. |
Title: | Managing Director A |
By: | /s/ Robert J. Cobuzzi |
Name: | Robert J. Cobuzzi, Jr., Ph.D. |
Title: | Manager A |
By: | /s/ Robert J. Cobuzzi |
Name: | Robert J. Cobuzzi, Jr., Ph.D. |
Title: | Manager A |
By: | /s/ Laurence S. Smith |
Name: | Laurence S. Smith |
Title: | Board Manager |
Seller | Company |
Endo Luxembourg Finance Company I SARL | - 1 share in Grupo Farmacéutico Somar, S.A.P.I. de C.V. |
Endo Global Finance LLC | - 1 share in Laboratorios Serral S.A. de C.V. - 1 share in Somar Humana, S.A. de C.V. - 1 share in Lakeside Salud Humana, S.A. de C.V. - 1 share in Serral, S.A. de C.V. |
Endo Somar Holdings BV | - 11,648,539 shares in Grupo Farmacéutico Somar, S.A.P.I. de C.V. |
(i) | The Company has MXN$35,000,000.00 (thirty five million Pesos 00/100) of Cash (“Estimated Cash”). |
(ii) | Assuming the sum of the items (a) through (d) in the definition of Indebtedness equals to MXN$5,000,000.00 (five million Pesos 00/100), then total Indebtedness would be MXN$35,000,000.00 (thirty five million Pesos 00/100) (“Estimated Indebtedness”). |
(iii) | The Estimated Net Working Capital (as determined in accordance with Exhibit “L”) is MXN$604,000,000.00 (six hundred and four million Pesos 00/100), which is MXN$76,000,000.00 (seventy six million Pesos 00/100) less than the Reference Net Working Capital. |
(iv) | The Purchased Debt Purchase Price is equal to MXN$300,000,000.00 (three hundred million Pesos 00/100). |
(v) | The exchange rate on the date of the Closing Statement is equal to MXN$18.0000 (eighteen Pesos 00/100) per dollar. |
Base Price | US$124,000,000.00 |
(plus) Estimated Cash | + 1,944,444.44 (=MXN$35,000,000.00 ÷ 18.0000) |
(minus) Estimated Indebtedness | - 1,944,444.44 (=MXN$35,000,000.00 ÷ 18.0000) |
(minus) Amount by which Reference Net Working Capital exceeds Estimated Net Working Capital | - 4,222,222.22 (=MXN$76,000,000.00 ÷ 18.0000) |
(plus) Amount by which Estimated Net Working Capital exceeds Reference Net Working capital | N/A |
(minus) Purchased Debt Purchase Price | - 16,666,666.67 (=MXN$300,000,000.00 ÷ 18.0000) |
Shares Closing Payment | US$103,111,111.11 |
[MXN$/US$] | ||||||||||||
Estimated | Final | Difference | Exchange | |||||||||
$ thousand | MXN$ | MXN$ | MXN$ | Rate [a] | USD$ | |||||||
Cash | 156,905 | 150,000 | (6,905) | 17.9310 | (385) | |||||||
Indebtedness | 35,000 | 30,000 | 5,000 | 17.9310 | 279 | |||||||
Net Working Capital | 686,621 | 675,000 | (11,621) | 17.9310 | (648) | |||||||
Adjustment Amount | (13,526) | (754) | ||||||||||
Threshold | 25 | |||||||||||
Due to (from) Seller | (754) |
[a] | For the avoidance of doubt, the exchange rate applied in this example is only intended for illustrative purposes. The actual exchange rate to be applied for purposes of calculating the Adjustment Amount shall be determined in accordance with Section 2.5(a) of the Stock Purchase Agreement. |
By: | /s/ James Westra |
James Westra | |
Managing Partner, Chief Legal Officer, and General Counsel |
By: | /s/ James Westra |
James Westra | |
Managing Partner, Chief Legal Officer, and General Counsel |
By: | /s/ D.C. Kulk |
Name: | Europe Management Company B.V. |
Title: | Director A |
Represented by: | D.C. Kulk |
Title: | Attorney-in-fact A |
By: | /s/ N.A. Riedstra |
Name: | Europe Management Company B.V. |
Title: | Director A |
Represented by: | N.A. Riedstra |
Title: | Attorney-in-fact B |
By: | /s/ L.A.P. Mulder |
Name: | L.A.P Mulder |
Title: | Director B |
Investor | Equity Commitment Amount (US Dollars) | Equity Commitment Percentage |
Advent Latin American Private Equity Fund VI Limited Partnership | $24,160,408 | 19.4842% |
Advent Latin American Private Equity Fund VI-A Limited Partnership | $1,156,300 | 0.9325% |
Advent Latin American Private Equity Fund VI-B Limited Partnership | $10,678,136 | 8.6114% |
Advent Latin American Private Equity Fund VI-C Limited Partnership | $11,851,796 | 9.5579% |
Advent Latin American Private Equity Fund VI-D Limited Partnership | $12,175,560 | 9.8190% |
Advent Latin American Private Equity Fund VI-E Limited Partnership | $4,914,120 | 3.9630% |
Advent Latin American Private Equity Fund VI-F Limited Partnership | $4,336,032 | 3.4968% |
Advent Latin American Private Equity Fund VI-G Limited Partnership | $27,750,580 | 22.3795% |
Advent Latin American Private Equity Fund VI-H Limited Partnership | $24,385,840 | 19.6660% |
Advent Partners LAPEF VI Limited Partnership | $2,530,468 | 2.0407% |
Advent Partners LAPEF VI-A Limited Partnership | $60,760 | 0.0490% |
Total | $124,000,000 | 100.00% |
I. | Assignor, recites through its legal representative, that: |
a) | The PCC, acting on behalf of the Soar Cell is a protected cell company limited by shares, duly organized and validly existing under the laws of the Island of Guernsey and the Soar Cell is a duly established protected cell of the PCC and the PCC, acting on behalf of the Soar Cell, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and to perform all of its obligations. |
b) | The representative of the PCC, acting on behalf of the Soar Cell, has the necessary power and authority to execute this Agreement on its behalf, which powers and authorities have not been modified, limited or revoked in any manner as of the date hereof. |
c) | It is the sole and legitimate holder of the rights and obligations derived from the purchase agreement entered into on June 30, 2017 by and among, the Assignor, the Sellers and Grupo Farmaceutico Somar, S.A.P.I. de C.V. (the (“Purchase Agreement”). |
d) | Subject to the terms and conditions set forth herein, it desires to assign and convey its rights and obligations in respect of the Purchase Agreement in favor of the Assignee. |
II. | Assignee, recites through its legal representative, that: |
a) | The Assignee is duly organized and validly existing under the laws of [____], and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and to perform all of its obligations. |
b) | The representative of the Assignee has the necessary power and authority to execute this Agreement on its behalf, which powers and authorities have not been modified, limited or revoked in any manner as of the date hereof. |
c) | Subject to the terms and conditions set forth herein, it desires to accept from the Assignor the assignment of the rights and obligations of the Assignor under the Purchase Agreement. |
▪ | Net Working Capital shall be presented in a manner consistent with Exhibit “L” to the Purchase Agreement. |
▪ | All balance sheet amounts shall be calculated on the basis that the Company is a going concern and shall exclude the effect of change of control or ownership of the Company and will not take into account the effects of any post-Closing reorganizations or the post-Closing intentions or obligations of the Purchaser. |
▪ | The provisions of this Exhibit “I” shall be interpreted so as to avoid double counting (whether positive or negative) of any item to be included in the calculation of Cash, Indebtedness or Net Working Capital. |
▪ | For the purposes of the calculation of Cash, Indebtedness and Net Working Capital, the end of business on the Closing Date shall be treated as the end of a financial and tax accounting period. |
▪ | No value shall be attributed to any non-current assets or non-current liabilities for purposes of calculating Net Working Capital. |
▪ | Cash, Indebtedness and Net Working Capital shall be calculated on a consolidated basis including all Target Companies. Adjustments will be made to eliminate the cost of investment in subsidiaries and to reconcile and eliminate any profit on transactions between Target Companies. |
▪ | For the avoidance of doubt, no value shall be attributed to the Purchased Debt for purposes of calculating Cash, Indebtedness or Net Working Capital. |
▪ | All payables due to the Sellers except for the Purchased Debt, and all receivables due from the Sellers, shall be settled as of the close of business on the Closing Date and, therefore, shall not be included in the calculation of Cash, Indebtedness or Net Working Capital. To the extent any such balances remain, they shall, except for the Purchased Debt, be included as current liabilities or current assets, as the case may be, for purposes of calculating Net Working Capital. |
▪ | No value shall be attributed to deferred tax assets or deferred tax liabilities for purposes of calculating Net Working Capital. |
▪ | Current income tax receivables shall be included as current assets and current income tax payables shall be included as current liabilities for purposes of calculating Net Working Capital. |
▪ | Net Working Capital shall include a liability for any Sellers’ transaction costs (including professional adviser fees, special retention and transaction bonuses) to the extent unpaid and payable by the Target Companies as of the close of business on the Closing Date. |
▪ | No value shall be attributed to statutory severance and seniority liabilities for purposes of calculating Cash, Indebtedness or Net Working Capital. |
▪ | No value shall be attributed to the “Lavandería” litigation matter for purposes of calculating Cash, Indebtedness or Net Working Capital. |
I. | On January 20, 2016, Serral, S.A. de C.V. (“Serral”), in its capacity as borrower entered into a Loan Agreement with Endo Ventures Limited (“Endo Ventures”), in its capacity as lender, by means of which Serral borrowed an amount of MXN$514,996,800.00 from Endo Ventures (the “Binotal Loan Agreement”). |
II. | On June 29, 2016, Endo Ventures, in its capacity as assignor, assigned the rights and obligations derived from the Binotal Loan Agreement to Endo Ventures Cyprus Limited (“Endo Cyprus”), in its capacity as assignee. |
III. | On June 29, 2016, Endo Cyprus, in its capacity as assignor, assigned the rights and obligations derived from the Binotal Loan Agreement to Endo Ventures Bermuda Limited (“Endo Bermuda”), in its capacity as assignee. |
IV. | On June 29, 2016, Endo Bermuda, in its capacity as assignor, assigned the rights and obligations derived from the Binotal Loan Agreement to the Assignor, in its capacity of assignee. |
V. | On June 30, 2017, the Assignor and certain of its affiliates, entered into a Stock Purchase Agreement, as sellers, by means of which, among others, the Assignor agreed to assign its rights, title, benefit and interest in respect of the Binotal Loan Agreement to the Purchasers. |
I. | The Assignor represents, through its legal representative, that: |
(a) | It is a company duly incorporated and validly existing under the laws of the Luxembourg. |
(b) | Its legal representative has all necessary powers and authorities to enter into this Agreement on its name and behalf, and which powers and authorities have not been revoked, limited or modified in any way whatsoever. |
(c) | It has all the necessary authorizations and consents to carry out this Agreement. |
(d) | It is its intention to enter into this Agreement. |
II. | The Assignee represents, through its legal representative, that: |
(a) | It is a company duly incorporated and validly existing under the laws of [•]. |
(b) | Its legal representative has all necessary powers and authorities to enter into this Agreement on its name and behalf, and which powers and authorities have not been revoked, limited or modified in any way whatsoever. |
(c) | It is its intention to enter into this Agreement. |
Name | Position |
María Eugenia Ojeda Ortiz | CFO/acting CEO |
Carlos Humberto Juárez del Toro | Legal Manager |
Marco Antonio Zepeda Orozco | Director of Operations |
Roberto Tena Alavez | Director of Development/Regulatory |
Marco Antonio Aguilar Curiel | Comptroller |
José Luis Rosas Martell | HR Manager |
Haydee Neira | Lab. Serral Unit Manager |
Ericka Sánchez-Barrales Zavalza* | Director for Lakeside and Advaita |
Dr. Jose Antonio Vargas Romero | Chief Medical Officer |
Ing. Valentin Ojeda Jaramillo | Manager Del Valle Plant |
Ing. Oscar German Castañeda Silva | Manager Chalco Plant |
Ing. Hugo Carranza Aguirre | Manager Piedras Negras Plant |
Jose Meza Carmona | Tax Manager |
Guadalupe Bautista | Regulatory Affairs Manager |
Miguel Uribe Meneses | Government Sales Unit Manager |
MXN$ million | As of 12/31/2016 | |||||
Account Name | Account # | |||||
Cash | 110-100-000 | 2 | ||||
Bank accounts | 110-200-000 | 155 | ||||
Customer receivables | 110-300-000 | 730 | ||||
Provision for doubtful accounts | 110-310-000 | (31) | ||||
Officers and employees | 110-400-000 | - | ||||
Expenses | 110-401-000 | 0 | ||||
Advances to suppliers | 110-402-000 | 8 | ||||
Interco Cash | 110-403-000 | 0 | ||||
Other accounts receivable | 110-404-000 | - | ||||
Intercompany receivabes | 110-405-000 | 4 | ||||
VAT receivable | 110-500-000 | 33 | ||||
VAT credit | 110-600-000 | 25 | ||||
Inventory | 110-700-000 | 528 | ||||
Inventory in transit | 110-800-000 | 0 | ||||
Inventory in transit | 110-810-000 | - | ||||
Inventory adjustments | 110-900-000 | - | ||||
Prepaid taxes | 111-400-000 | 44 | ||||
Tax assets | 111-500-000 | 54 | ||||
Equity investments | 111-900-000 | 1,049 | ||||
Total current assets, As Reported [A] | 119-000-000 | 2,601 | ||||
Suppliers | 210-100-000 | (443) | ||||
Suppliers pending | 210-101-000 | (5) | ||||
Other creditors | 210-200-000 | 0 | ||||
Intercompany payables | 210-250-000 | (590) | ||||
Debt, current | 210-300-000 | - | ||||
Other accounts payable | 210-400-000 | (65) | ||||
VAT Payable | 210-500-000 | (24) | ||||
VAT transferred | 210-600-000 | (11) | ||||
Taxes payable | 210-700-000 | (76) | ||||
Reserves and provisions | 210-800-000 | (19) | ||||
Dividends payable | 210-900-000 | - | ||||
Total current liabilities, As Reported [B] | 219-000-000 | (1,231) | ||||
MXN$ million | ||||||
Net Working Capital, As Reported [A] + [B] | 1,369 | |||||
Less: Cash | 110-100-000 | (2) | ||||
Less: Bank accounts | 110-200-000 | (155) | ||||
Less: Intercompany receivables | 110-405-000 | (4) | ||||
Less: Profit in inventory | NA | (79) | ||||
Less: Equity Investments | 111-900-000 | (1,049) | ||||
Add: Prepaid expenses | 130-500-000 | 5 | ||||
Add: Intercompany payables | 210-250-000 | 590 | ||||
Add: Seniority bonus | 210-800-001 | 5 | ||||
Add: Compensation | 210-800-002 | 6 | ||||
Net Working Capital, Definitional Adjusted (excl. Sellers’ payables, receivables and transaction costs) | 687 | |||||
Add: Intercompany receivables | 110-405-000 | 4 | ||||
Less: Intercompany payables | 210-250-101 | (50) | ||||
Less: Intercompany general services payable | 210-250-106 | (24) | ||||
Less: Intercompany interests payable | 210-250-191 | - | ||||
Less: Intercompany retentions | 210-250-195 | (1) | ||||
Less: Unaccrued management retention bonus | NA | (12) | ||||
Net Working Capital, Definitional Adjusted | 604 | |||||
Reference Net Working Capital | 680 | |||||
Excess (Shortfall) | (76) |
1. | The name of the Company is: Endo International public limited company. |
2. | The Company is to be a public limited company for the purposes of Part 17 of the Companies Act 2014. |
3. | The objects for which the Company is established are: |
3.1. | To carry on all or any of the businesses of manufacturers, buyers, sellers, and distributing agents of and dealers in all kinds of patent, pharmaceutical, medicinal, and medicated preparations, patent medicines, drugs, herbs, and of and in pharmaceutical, medicinal, proprietary and industrial preparations, compounds, and articles of all kinds; and to manufacture, make up, prepare, buy, sell, and deal in all articles, substances, and things commonly or conveniently used in or for making up, preparing, or packing any of the products in which the Company is authorised to deal, or which may be required by customers of or persons having dealings with the Company. |
3.2. | To invest in pharmaceutical and related assets, including, amongst other items, investments in pharmaceutical companies, products, businesses, divisions, technologies, devices, sales force and other marketing capabilities, development projects and related activities, licences, intellectual and similar property rights, premises and equipment, royalty rights and all other assets needed to operate a pharmaceuticals business. |
3.3. | To establish, maintain and operate laboratories for the purpose of carrying on chemical, physical and other research in medicine, chemistry, industry or other unrelated or related fields. |
3.4. | To invest (including long-term investments in, and acquisitions of, the shares of pharmaceutical companies) any monies of the Company in such investments and in such manner as may from time to time be determined, and to hold, sell or deal with such investments and generally to purchase, take on lease or in exchange or otherwise acquire any real and personal property and rights or privileges. |
3.5. | To develop and turn to account any land acquired by the Company or in which it is interested and in particular by laying out and preparing the same for building purposes, constructing, altering, pulling down, decorating, maintaining, fitting up and improving buildings and conveniences, and by planting, paving, draining, farming, cultivating, letting on building lease or building agreement and by advancing money to and entering into contracts and arrangements of all kinds with builders, tenants and others. |
3.6. | To acquire and hold shares and stocks of any class or description, debentures, debenture stock, bonds, bills, mortgages, obligations, investments and securities of all descriptions and of any kind issued or guaranteed by any company, corporation or undertaking of whatever nature and wheresoever constituted or carrying on business or issued or guaranteed by any government, state, dominion, colony, sovereign ruler, commissioners, trust, public; municipal, local or other |
3.7. | To remunerate by cash payments or allotment of shares or securities of the Company credited as fully paid up or otherwise any person or company for services rendered or to be rendered to the Company or any parent or subsidiary body corporate whether in the conduct or management of its business, or in placing or assisting to place or guaranteeing the placing of any of the shares of the Company's capital, or any debentures or other securities of the Company or in or about the formation or promotion of the Company. |
3.8. | To purchase for investment only property of any tenure and any interest therein, and to make advances upon the security of land or other similar property or any interest therein. |
3.9. | To acquire by purchase, exchange, lease, fee farm grant or otherwise, either for an estate in fee simple or for any less estate or other estate or interest, whether immediate or reversionary and whether vested or contingent, any lands, tenements or hereditaments of any tenure, whether subject or not to any charges or encumbrances, and to hold, farm, work and manage and to let, sublet, mortgage or charge land and buildings of any kind, reversions, interests, annuities, life policies, and any other property real or personal, movable or immovable, either absolutely or conditionally, and either subject or not to any mortgage, charge, ground rent or other rents or encumbrances. |
3.10. | To erect or secure the erection of buildings of any kind with a view of occupying or letting them and to enter into any contracts or leases and to grant any licences necessary to effect the same. |
3.11. | To maintain and improve any lands, tenements or hereditaments acquired by the Company or in which the Company is interested, in particular by decorating, maintaining, furnishing, fitting up and improving houses, shops, flats, maisonettes and other buildings and to enter into contracts and arrangements of all kinds with tenants and others. |
3.12. | To sell, exchange, mortgage (with or without power of sale), assign, turn to account or otherwise dispose of and generally deal with the whole or any part of the property, shares, stocks, securities, estates, rights or undertakings of the Company, real, chattels real or personal, movable or immovable, either in whole or in part, upon whatever terms and whatever consideration the Company shall think fit. |
3.13. | To take part in the management, supervision, or control of the business or operations of any company or undertaking, and for that purpose to appoint and remunerate any directors, accountants, or other experts or agents to act as consultants, supervisors and agents of other companies or undertakings and to provide managerial, advisory, technical, design, purchasing and selling services. |
3.14. | To make, draw, accept, endorse, negotiate, issue, execute, discount and otherwise deal with bills of exchange, promissory notes, letters of credit, circular notes, and other negotiable or transferable instruments. |
3.15. | To redeem, purchase, or otherwise acquire in any manner permitted by law and on such terms and in such manner as the Company may think fit any shares in the Company's capital. |
3.16. | To guarantee, support or secure whether by personal covenant or by mortgaging or charging all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company or by both such methods the performance of the obligations of, and the repayment or payment of the principal amounts of and the premiums, interest and dividends on any security of any person, firm or company including (without prejudice to the generality of the foregoing) any company which is for the time being the Company's holding company (as defined by Section 8 of |
3.17. | To lend the funds of the Company with or without security and at interest or free of interest and on such terms and conditions as the directors shall from time to time determine. |
3.18. | To raise or borrow or secure the payment of money in such manner and on such terms as the directors may deem expedient whether or not by the issue of bonds, debentures or debenture stock, perpetual or redeemable, or by mortgage, charge, lien or pledge upon the whole or any part of the undertaking, property, assets and rights of the Company, present or future, including its uncalled capital and generally in any other manner as the directors shall from time to time determine and to enter into or issue interest and currency hedging and swap agreements, forward rate agreements, interest and currency futures or options and other forms of financial instruments, and to purchase, redeem or pay off any of the foregoing and to guarantee the liabilities of the Company or any other person, and any debentures, debenture stock or other securities may be issued at a discount, premium or otherwise, and with any special privileges as to redemption, surrender, transfer, drawings, allotments of shares; attending and voting at general meetings of the Company, appointment of directors and otherwise. |
3.19. | To accumulate capital for any of the purposes of the Company, and to appropriate any of the Company's assets to specific purposes, either conditionally or unconditionally, and to admit any class or section of those who have any dealings with the Company to any share in the profits thereof or in the profits of any particular branch of the Company's business or to any other special rights, privileges, advantages or benefits. |
3.20. | To reduce the share capital of the Company in any manner permitted by law. |
3.21. | To make gifts or grant bonuses to officers or other persons who are or have been in the employment of the Company and to allow any such persons to have the use and enjoyment of such property, chattels or other assets belonging to the Company upon such terms as the Company shall think fit. |
3.22. | To establish and maintain or procure the establishment and maintenance of any pension or superannuation fund (whether contributory or otherwise) for the benefit of and to give or procure the giving of donations, gratuities, pensions, annuities, allowances, emoluments or charitable aid to any persons who are or were at any time in the employment or service of the Company or any of its predecessors in business, or of any company which is a subsidiary of the Company or who may be or have been directors or officers of the Company, or of any such other company as aforesaid, or any persons in whose welfare the Company or any such other company as aforesaid may be interested and the wives, husbands, widows, widowers, families, relatives or dependants of any such persons and to make payments towards insurance and assurance and to form and contribute to provident and benefit funds for the benefit of such persons and to remunerate any person, firm or company rendering services to the Company, whether by cash payment, gratuities, pensions, annuities, allowances, emoluments or by the allotment of shares or securities of the Company credited as paid up in full or in part or otherwise. |
3.23. | To employ experts to investigate and examine into the conditions, prospects, value, character and circumstances of any business concerns, undertakings, assets, property or rights. |
3.24. | To insure the life of any person who may, in the opinion of the Company, be of value to the Company, as having or holding for the Company interests, goodwill, or influence or otherwise and to pay the premiums on such insurance. |
3.25. | To distribute either upon a distribution of assets or division of profits among the Members of the Company in kind any property of the Company, and in particular any shares, debentures or securities of other companies belonging to the Company or of which the Company may have the power of disposing. |
3.26. | To give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the Company, or, where the Company is a subsidiary company, in its holding company. |
3.27. | To do and carry out all or any of the foregoing objects in any part of the world and either as principals, agents, contractors, trustees or otherwise, and either by or through agents, trustees or otherwise and either alone or in partnership or in conjunction with any other company, firm or person, provided that nothing herein contained shall empower the Company to carry on the businesses of insurance. |
3.28. | To apply for, purchase or otherwise acquire any patents, brevets d'invention, licences, trademarks, industrial designs, know-how, concessions and other forms of intellectual property rights and the like conferring any exclusive or non-exclusive or limited or contingent rights to use, or any secret or other information as to any invention or process of the Company, or the acquisition of which may seem calculated directly or indirectly to benefit the Company, and to use, exercise, develop, or grant licences in respect of, or otherwise turn to account the property, rights or information so acquired. |
3.29. | To enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint venture, reciprocal concession or otherwise with any person or company carrying on or engaged in or about to carry on or engage in any business or transaction which the Company is authorised to carry on or engage in or any business or transaction capable of being conducted so as directly or indirectly to benefit the Company. |
3.30. | To acquire and undertake the whole or any part of the undertaking, business, property and liabilities of any person or company carrying on any business which the Company is authorised to carry on or which is capable of being conducted so as to benefit the Company directly or indirectly or which is possessed of assets suitable for the purposes of the Company. |
3.31. | To adopt such means of making known the Company and its products and services as may seem expedient. |
3.32. | To acquire and carry on any business carried on by a subsidiary or a holding company of the Company or another subsidiary of a holding company of the Company. |
3.33. | To promote any company or companies for the purpose of acquiring all or any of the property and liabilities of this Company or for any other purpose which may seem directly or indirectly calculated to benefit this Company. |
3.34. | To amalgamate with, merge with or otherwise become part of or associated with any other company or association in any manner permitted by law. |
3.35. | To do and carry out all such other things, except the issuing of policies of insurance, as may be deemed by the Company capable of being conveniently carried on in connection with the above objects or any of them or calculated to enhance the value of or render profitable any of the Company's properties or rights. |
4. | The liability of each Member is limited to the amount from time to time unpaid on such Member's Shares. |
5. | The authorised share capital of the Company is €40,000 and US$100,000 divided into 4,000,000 euro deferred shares of €0.01 each and 1,000,000,000 ordinary shares of US$0.0001 each. |
6. | The shares forming the capital, increased or reduced, may be increased or reduced and be divided into such classes and issued with any special rights, privileges and conditions or with such qualifications as regards preference, dividend, capital, voting or other special incidents, and be held upon such terms as may be attached thereto or as may from time to time be provided by the original or any substituted or amended Articles of Association and regulations of the Company for the time being, but so that where shares are issued with any preferential or special rights attached thereto such rights shall not be alterable otherwise than pursuant to the provisions of the Company's Articles of Association for the time being. |
7. | Capitalised terms that are not defined in this Memorandum of Association bear the same meaning as those given in the Articles of Association of the Company. |
1. | Sections 43(2), 43(3), 65 (2)-(7), 77 - 80, 81, 94(1), 95(1), 96, 124, 125, 126, 144(3), 144(4), 148(2), 158-165, 180(5), 181(1), 181(6), 182(2), 182(5), 183(3), 186 (c), 187, 188, 218 (3)-(5), 229, 230, 338(5), 338(6), 618(1)(b), 620(8) 1090, 1092, and 1113 of the Act shall not apply to the Company. The provisions of the Act which are stated therein to apply to a public limited company, save to the extent that its constitution is permitted to provide or state otherwise, will apply to the Company subject to the alterations contained in these Articles, and will, so far as not inconsistent with these Articles bind the Company and its Members. |
2.1. | In these Articles: |
"Act" | means the Companies Act 2014. |
"Address" | includes, without limitation, any number or address used for the purposes of communication by way of electronic mail or other electronic communication. |
"Adoption Date" | means 25 February 2014. |
"Articles" or "Articles of Association" | means these articles of association of the Company, as amended from time to time by Special Resolution. |
"Assistant Secretary" | means any person appointed by the Secretary from time to time to assist the Secretary. |
"Auditors" | means the persons for the time being performing the duties of auditors of the Company. |
"Board" | means the board of Directors for the time being of the Company. |
"CA1990 Regs" | The Companies Act 1990 (Uncertificated Securities) Regulations 1996 (S.I. No. 68 of 1996) as may be amended from time to time. |
"Chairperson" | means the chairperson of the Board from time to time and/or chairperson of a general meeting of the Company as the context may require. |
"clear days" | means, in relation to a period of notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect. |
"Company" | means the above-named company. |
"Court" | means the Irish High Court. |
"Directors" | means the directors for the time being of the Company. |
"dividend" | includes interim dividends and bonus dividends. |
"electronic communication" | shall have the meaning given to those words in the Electronic Commerce Act 2000. |
"electronic signature" | shall have the meaning given to those words in the Electronic Commerce Act 2000. |
"Exchange" | means any securities exchange or other system on which the Shares of the Company may be listed or otherwise authorised for trading from time to time. |
"Exchange Act" | means the Securities Exchange Act of 1934 of the United States of America. |
"Member" | means a person who has agreed to become a Member of the Company and whose name is entered in the Register of Members as a registered holder of Shares. |
"Member Associated Person" | means (in connection to a Member) (A) any person controlling, directly or indirectly, or acting as a "group" (as such term is used in Rule 13d-5(b) under the Exchange Act) with, such Member, (B) any beneficial owner of shares of the Company owned of record or beneficially by such Member and (C) any person controlling, controlled by or under common control with such Member director by whatever name called. |
"Memorandum" | means the memorandum of association of the Company as amended from time to time by Special Resolution. |
"month" | means a calendar month. |
"Ordinary Resolution" | means an ordinary resolution of the Company's Members within the meaning of section 191 of the Act. |
"paid-up" | means paid-up in accordance with the Act as to the nominal value and any premium payable in respect of the issue of any Shares and includes credited as paid-up. |
"Redeemable Shares" | means redeemable shares in accordance with the Act. |
"Register of Members" or "Register" | means the register of Members of the Company maintained by or on behalf of the Company, in accordance with the Act and includes (except where otherwise stated) any duplicate Register of Members. |
"registered office" | means the registered office for the time being of the Company. |
"Seal" | means the seal of the Company, if any, and includes every duplicate seal. |
"Secretary" | means the person appointed by the Board to perform any or all of the duties of secretary of the Company and includes an Assistant Secretary and any person appointed by the Board to perform the duties of secretary of the Company. |
"Share" and "Shares" | means a share or shares in the capital of the Company. |
"Special Resolution" | means a special resolution of the Company's Members within the meaning of section 191 of the Act. |
2.2. | In these Articles: |
2.2.1. | words importing the singular number include the plural number and vice-versa; |
2.2.2. | words importing the feminine gender include the masculine gender; |
2.2.3. | words importing persons include any company, partnership or other body of persons, whether corporate or not, any trust and any government, governmental body or agency or public authority, whether of Ireland or elsewhere; |
2.2.4. | expressions referring to "written" and "in writing" shall be construed, unless the contrary intention appears, as including references to printing, lithography, photography and any other modes of representing or reproducing words in a visible form except as provided in these Articles and/or where it constitutes writing in electronic form sent to the Company, and the Company has agreed to its receipt in written form; |
2.2.5. | expressions referring to execution of any document shall include any mode of execution whether under seal or under hand or any mode of electronic signature as shall be approved by the Directors; |
2.2.6. | expressions referring to receipt of any electronic communications shall, unless the contrary intention appears, be limited to receipt in such manner as the Company has approved; |
2.2.7. | references to a company include any body corporate or other legal entity, whether incorporated or established in Ireland or elsewhere; |
2.2.8. | references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time; |
2.2.9. | any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; |
2.2.10. | reference to "officer" or "officers" in these Articles means any executive that has been designated by the Company as an "officer" and, for the avoidance of doubt, shall not have the meaning given to such term in the Act and any such officers shall not constitute officers of the Company within the meaning of section 2(1) of the Act; |
2.2.11. | headings are inserted for reference only and shall be ignored in construing these Articles; and |
2.2.12. | references to US$, USD, $ or dollars shall mean United States dollars, the lawful currency of the United States of America and references to €, euro, or EUR shall mean the euro, the lawful currency of Ireland. |
3. | The registered office shall be at such place in Ireland as the Board from time to time shall decide. |
4. | The authorised share capital of the Company is €40,000 and US$100,000 divided into 4,000,000 euro deferred shares of €0.01 each and 1,000,000,000 ordinary shares of US$0.0001 each. |
5. | Subject to the provisions of these Articles relating to new Shares, the Shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Act) allot, grant options over or otherwise dispose of them to such persons, on such terms and conditions and at such times as they may consider to be in the best interests of the Company and its Members, but so that no Share shall be issued at a discount save in accordance with sections 71(4) and 1026 of the Act, and so that, in the case of Shares offered to the public for subscription, the amount payable on application on each Share shall not be less than one-quarter of the nominal amount of the Share and the whole of any premium thereon. To the extent permitted by the Act, shares may also be allotted by a committee of the Directors or by any other person where such committee or person is so authorised by the Directors. |
6. | Subject to any requirement to obtain the approval of Members under any laws, regulations or the rules of any Exchange, the Board is authorised, from time to time, in its discretion, to grant such persons, for such periods and upon such terms as the Board deems advisable, options to purchase or subscribe for any number of Shares of any class or classes or of any series of any class as the Board may deem advisable, and to cause warrants or other appropriate instruments evidencing such options to be issued. |
7.1. | The Directors are, for the purposes of section 1021 of the Act, generally and unconditionally authorised to exercise all powers of the Company to allot and issue relevant securities (as defined by the said section 1021) up to the amount of the Company's authorised but unissued share capital as at the date of adoption of these Articles and to allot and issue any Shares acquired by or on behalf of the Company pursuant to the provisions of the Act and held as treasury shares and this authority shall expire five years from the Adoption Date. |
7.2. | The Directors are hereby empowered pursuant to sections 1022 and 1023(3) of the Act to allot equity securities within the meaning of the said section 1023 for cash pursuant to the authority conferred by Article 7.1 as if section 1022 of the said Act did not apply to any such allotment. The Company may before the expiry of such authority make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of such an offer or agreement as if the power conferred by Article 7.1 had not expired. |
7.3. | The Company may issue permissible letters of allotment (as defined by section 1019 of the Act) to the extent permitted by the Act. |
8. | Without prejudice to any special rights previously conferred on the holders of any existing Shares or class of Shares, any Share in the Company may be issued with such preferred or deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by Ordinary Resolution determine. |
9. | The Company may pay commission to any person in consideration of any person subscribing or agreeing to subscribe, whether absolutely or conditionally, for the Shares in the Company or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any Shares in the Company on such terms and, subject to the provisions of the Act and to such conditions as the Board may determine, including, without limitation, by paying cash or allotting and issuing fully or partly paid Shares or any combination of the two. The Company may also on any issue of Shares pay such brokerage as may be lawful. |
10. | The holder of an ordinary share shall be: |
10.1. | entitled to dividends on a pro rata basis in accordance with the relevant provisions of these Articles; |
10.2. | entitled to participate pro rata in the distribution of the total assets of the Company in the event of the Company's winding up; and |
10.3. | entitled, subject to the right of the Company to set record dates for the purpose of determining the identity of Members entitled to notice of and/or vote at a general meeting, to attend general meetings of the Company and shall be entitled to one vote for each Ordinary Share registered in his or her name in the Register of Members, in accordance with the relevant provisions of these Articles. |
11. | An ordinary share shall be deemed to be a Redeemable Share on, and from the time of, the existence or creation of an agreement, transaction or trade ("arrangement") between the Company (including any agent or broker acting on behalf of the Company) and any third party pursuant to which the Company acquires or will acquire ordinary shares, or an interest in ordinary shares, from the relevant third party and the Company is hereby authorised to enter into any such arrangement. In these circumstances, all such shares |
12. | All ordinary shares shall rank pari passu with each other in all respects. |
13. | The holders of the euro deferred shares shall not be entitled to receive any dividend or distribution and shall not be entitled to receive notice of, nor to attend, speak or vote at any general meeting of the Company. On a return of assets, whether on liquidation or otherwise, the euro deferred shares shall entitle the holder thereof only to the repayment of the amounts paid up on such shares after repayment of the capital paid up on the ordinary shares plus the payment of $5,000,000 on each of the ordinary shares and the holders of the euro deferred shares (as such) shall not be entitled to any further participation in the assets or profits of the Company. |
14. | The Special Resolution passed on the Adoption Date shall be deemed to confer irrevocable authority on the Company at any time after the Adoption Date: |
14.1. | to acquire all or any of the fully paid euro deferred shares otherwise than for valuable consideration in accordance with section 102 of the Act and without obtaining the sanction of the holders thereof; |
14.2. | to appoint any person to execute on behalf of the holders of the euro deferred shares remaining in issue (if any) a transfer thereof and/or an agreement to transfer the same otherwise than for valuable consideration to the Company or to such other person as the Company may nominate; |
14.3. | to cancel any acquired euro deferred shares; and |
14.4. | pending such acquisition and/or transfer and/or cancellation to retain the certificate (if any) for such euro deferred shares. |
15. | In accordance with section 1040(3) of the Act the Company shall, not later than three (3) years after any acquisition by it of any euro deferred shares as aforesaid, cancel such shares (except those which, or any interest of the Company in which, it shall have previously disposed of) and reduce the amount of the share capital by the nominal value of the shares so cancelled and the Board may take such steps as are requisite to enable the Company to carry out its obligations under that subsection without complying with sections 84 and 85 of the Act including passing resolutions in accordance with section 1040(5) of the Act. |
16. | Neither the acquisition by the Company otherwise than for valuable consideration of all or any of the euro deferred shares nor the redemption thereof nor the cancellation thereof by the Company in accordance with this Article shall constitute a variation or abrogation of the rights or privileges attached to the euro deferred shares, and accordingly the euro deferred shares or any of them may be so acquired, redeemed and cancelled without any such consent or sanction on the part of the holders thereof. The rights conferred upon the holders of the euro deferred shares shall not be deemed to be varied or abrogated by the creation of further shares ranking in priority thereto or pari passu therewith. |
17. | To the extent permitted by the Act, the Board may issue warrants to subscribe for any class of Shares or other securities of the Company on such terms as it may from time to time determine. |
18. | Any person whose name is entered as a Member in the Register of Members shall be entitled upon request to receive a share certificate for any Shares of any class held by him or her (or on transferring a part of holding, to a certificate for the balance). |
19. | Any share certificate, if issued, shall specify the number of Shares in respect of which it is issued and the amount paid thereon or the fact that they are fully paid, as the case may be, and may otherwise be in such form as shall be determined by the Board. Such certificates may be under Seal. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. The name and address of the person to whom the Shares represented thereby are issued, with the number of Shares and date of issue, shall be entered in the Register of Members of the Company. All certificates surrendered to the Company for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of Shares shall have been surrendered and cancelled. The Board may authorise certificates to be issued with the Seal and authorised signature(s) affixed by some method or system of mechanical process. In respect of a Share or Shares held jointly by several persons, the Company shall not be bound to issue a certificate or certificates to each such person, and the issue and delivery of a certificate or certificates to one of several joint holders shall be sufficient delivery to all such holders. |
20. | If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating such evidence, as the Board may prescribe, and, in the case of defacement or wearing out, upon delivery of the old certificate. |
21. | The Company shall maintain or cause to be maintained a Register of its Members in accordance with the Act. |
22. | If the Board considers it necessary or appropriate, the Company may establish and maintain a duplicate Register of Members at such location or locations within or outside Ireland as the Board thinks fit. The original Register of Members shall be treated as the Register of Members for the purposes of these Articles and the Act. |
23. | The Company, or any agent(s) appointed by it to maintain the duplicate Register of Members in accordance with these Articles, shall as soon as practicable and on a regular basis record or procure the recording of, in the original Register of Members, all transfers of Shares effected on any duplicate Register of Members and shall at all times maintain the original Register of Members in such manner as to show at all times the Members for the time being and the Shares respectively held by them, in all respects in accordance with the Act. |
24. | The Company shall not be bound to register more than four (4) persons as joint holders of any Share. If any Share shall stand in the names of two (2) or more persons, the person first named in the Register of Members shall be deemed the sole holder thereof as regards service of notices and, subject to the provisions of these Articles, all or any other matters connected with the Company. |
25. | Subject to such of the restrictions of these Articles and to such of the conditions of issue or transfer as may be applicable, all transfers of Shares shall be effected by an instrument in writing (an "instrument of transfer") in such form as the Board may approve. All such instruments of transfer must be left at the registered office or at such other place as the Board may specify and all such instruments of transfer shall be retained by the Company. |
26.1. | The instrument of transfer of any Share shall be executed by the transferor or alternatively for and on behalf of the transferor by the Secretary (or such other person as may be nominated by the Secretary for this purpose) on behalf of the Company, and the Company, the Secretary (or relevant nominee) shall be deemed to have been irrevocably appointed agent for the transferor of such Share or Shares with full power to execute, complete and deliver in the name of and on behalf of the transferor of such Share or Shares all such transfers of Shares held by the Members in the share capital of the Company. An instrument of transfer need not be executed by the transferee save that if the share concerned (or one or more of the shares concerned) is not fully paid, the instrument shall be executed by or on behalf of the transferor and transferee.Any document which records the name of the transferor, the name of the transferee, the class and number of Shares agreed to be transferred, details of the total consideration payable and the date of the agreement to transfer the Shares, shall, once executed in accordance with this Article, be deemed to be a proper instrument of transfer for the purposes of section 94 of the Act. |
26.2. | The transferor shall be deemed to remain the holder of the Share until the name of the transferee is entered on the Register in respect thereof, and neither the title of the transferee nor the title of the transferor shall be affected by any irregularity or invalidity in the proceedings in reference to the sale should the Board so determine. |
26.3. | The Company, at its absolute discretion and insofar as the Act or any other applicable law permits, may, or may procure that a subsidiary of the Company shall, pay Irish stamp duty arising on a transfer of Shares on behalf of the transferee of such Shares of the Company. If stamp duty resulting from the transfer of Shares in the Company which would otherwise be payable by the transferee is paid by the Company or any subsidiary of the Company on behalf of the transferee, then in those circumstances, the Company shall, on its behalf or on behalf of its subsidiary (as the case may be), be entitled to (i) seek reimbursement of the stamp duty from the transferee, (ii) set-off the stamp duty against any dividends payable to the transferee of those Shares and (iii) to claim a first and permanent lien on the Shares on which stamp duty has been paid by the Company or its subsidiary for the amount of stamp duty paid. |
26.4. | Notwithstanding the provisions of these Articles and subject to any regulations made under section 1086 of the Act or the CA 1990 Regs, including any modification thereof or any regulations in substitution therefor made under the Act or otherwise, title to any Shares in the Company may also be evidenced and transferred without a written instrument in accordance with section 1086 of the Act or the CA1990 Regs, including any modification thereof or any regulations in substitution therefor made under the Act or otherwise. The Board shall have power to permit any class of Shares to be held in uncertificated form and to implement any arrangements they think fit for such evidencing and transfer which accord with such regulations and in particular shall, where appropriate, be entitled to disapply or modify all or part of the provisions in these Articles with respect to the requirement for written instruments of transfer and share certificates (if any), in order to give effect to such regulations. |
27. | The Board may in its absolute discretion and without assigning any reason for its decision, decline to register any transfer of any Share which is not a fully paid Share. The Board may also, in its absolute discretion, and without assigning any reason, refuse to register a transfer of any Share unless: |
27.1. | the instrument of transfer is fully and properly completed and is lodged with the Company accompanied by the certificate for the Shares (if any) to which it relates (which shall upon registration of the transfer be cancelled) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; |
27.2. | the instrument of transfer is in respect of only one class of Shares; |
27.3. | a registration statement under the Securities Act of 1933 of the United States of America is in effect with respect to such transfer or such transfer is exempt from registration and, if requested by the Board, a written opinion from counsel reasonably acceptable to the Board is, obtained to the effect that such transfer is exempt from registration; |
27.4. | the instrument of transfer is properly stamped (in circumstances where stamping is required); |
27.5. | in the case of a transfer to joint holders, the number of joint holders to which the Share is to be transferred does not exceed four; |
27.6. | it is satisfied, acting reasonably, that all applicable consents, authorisations, permissions or approvals of any governmental body or agency in Ireland or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained; and |
27.7. | it is satisfied, acting reasonably, that the transfer would not violate the terms of any agreement to which the Company (or any of its subsidiaries) and the transferor are party or subject. |
28. | If the Board shall refuse to register a transfer of any Share, it shall, within two (2) months after the date on which the transfer was lodged with the Company, send to each of the transferor and the transferee notice of such refusal. |
29. | The Company shall not be obligated to make any transfer to an individual under 18 years of age or to a person in respect of whom an order has been made by a competent court or official on the grounds that he or she is or may be suffering from mental disorder or is otherwise incapable of managing his or her affairs or under other legal disability. |
30. | Upon every transfer of Shares the certificate (if any) held by the transferor shall be given up to be cancelled, and shall forthwith be cancelled accordingly, and subject to Article 18 a new certificate may be issued without charge to the transferee in respect of the Shares transferred to him or her, and if any of the Shares included in the certificate so given up shall be retained by the transferor, a new certificate in respect thereof may be issued to him or her without charge. |
31. | Subject to the provisions of Chapter 6 of Part 3 and Chapter 5 of Part 17 of the Act and the other provisions of this Article 31, the Company may: |
31.1. | pursuant to section 66(4) of the Act, issue any Shares of the Company which are to be redeemed or are liable to be redeemed at the option of the Company or the Member on such terms and in such manner as may be determined by the Company in general meeting (by Special Resolution) on the recommendation of the Board; |
31.2. | redeem Shares of the Company on such terms as may be contained in, or be determined pursuant to the provisions of, these Articles. Subject as aforesaid, the Company may cancel any Shares so redeemed or may hold them as treasury shares and re-issue such treasury shares as Shares of any class or classes or cancel them; |
31.3. | subject to or in accordance with the provisions of the Act and without prejudice to any relevant special rights attached to any class of Shares, pursuant to section 105 and Chapter 5 of Part 17 of the Act, purchase any of its own Shares (including any Redeemable Shares and without any obligation to purchase on any pro rata basis as between Members or Members of the same class) and may cancel any Shares so purchased or hold them as treasury shares (as defined by section 106 of the Act) and may reissue any such Shares as Shares of any class or classes or cancel them; or |
31.4. | pursuant to section 83(3) of the Act, convert any of its Shares into Redeemable Shares provided that the total number of Shares which shall be redeemable pursuant to this authority shall not exceed the limit in section 1071(1)(b) of the Act. |
32. | The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Act. |
33. | The holder of the Shares being purchased shall be bound to deliver up to the Company at its registered office or such other place as the Board shall specify, the certificate(s) (if any) thereof for cancellation and |
34. | If at any time the share capital of the Company is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may be varied or abrogated with the consent in writing of the holders of three-quarters of all the votes of the issued Shares of that class, or with the sanction of a Special Resolution passed at a general meeting of the holders of the Shares of that class. |
35. | The provisions of these Articles relating to general meetings of the Company shall apply mutatis mutandis to every such general meeting of the holders of one class of Shares except that the necessary quorum shall be one or more persons holding or representing by proxy at least one-half of the issued and outstanding Shares of the class entitled to vote at the meeting in question. |
36. | The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by (i) the creation or issue of further Shares ranking pari passu therewith; (ii) a purchase or redemption by the Company of its own Shares; or (iii) the creation or issue for value (as determined by the Board) of further Shares ranking as regards participation in the profits or assets of the Company or otherwise in priority to them. |
37. | The Company shall have a first and paramount lien on every Share (not being a fully paid Share) for all monies (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Board, at any time, may declare any Share to be wholly or in part exempt from the provisions of this Article 37. The Company's lien on a Share shall extend to all monies payable in respect of it. |
38. | The Company may sell in such manner as the Board determines any Share on which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within fourteen (14) clear days after notice demanding payment, and stating that if the notice is not complied with the Share may be sold, has been given to the holder of the Share or to the person entitled to it by reason of the death, bankruptcy, insolvency of the holder or otherwise by operation of any law or regulation (whether of Ireland or otherwise). |
39. | To give effect to a sale, the Board may authorise some person to execute an instrument of transfer of the Share(s) sold to, or in accordance with, the directions of, the transferee. The transferee shall be entered in the Register as the holder of the Share(s) comprised in any such transfer and he or she shall not be bound to see to the application of the purchase monies nor shall his or her title to the Share be affected by any irregularity in, or invalidity of, the proceedings in reference to the sale, and after the name of the transferee has been entered in the Register, the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively. |
40. | The net proceeds of the sale, after payment of the costs, shall be applied in payment of so much of the sum for which the lien exists as is presently payable and any residue (upon surrender to the Company for cancellation of the certificate for the Shares sold and subject to a like lien for any monies not presently payable as existed upon the Shares before the sale) shall be paid to the person entitled to the Shares at the date of the sale. |
41. | Whenever any law for the time being of any country, state or place imposes or purports to impose any immediate or future or possible liability upon the Company to make any payment or empowers any government or taxing authority or government official to require the Company to make any payment in |
a) | the death of such Member; |
b) | the non-payment of any income tax or other tax by such Member; |
c) | the non-payment of any estate, probate, succession, death, stamp or other duty by the executor or administrator of such Member or by or out of his or her estate; or |
d) | any other act or thing; |
41.1. | the Company shall be fully indemnified by such Member or his or her executor or administrator from all liability; |
41.2. | the Company shall have a lien upon all dividends and other monies payable in respect of the Shares registered in the Register as held either jointly or solely by such Member for all monies paid or payable by the Company as referred to above in respect of such Shares or in respect of any dividends or other monies thereon or for or on account or in respect of such Member under or in consequence of any such law, together with interest at the rate of fifteen percent (15%) per annum (or such other rate as the Board may determine) thereon from the date of payment to date of repayment, and the Company may deduct or set off against such dividends or other monies so payable any monies paid or payable by the Company as referred to above together with interest at the same rate; |
41.3. | the Company may recover as a debt due from such Member or his or her executor or administrator (wherever constituted) any monies paid by the Company under or in consequence of any such law and interest thereon at the rate and for the period referred to above in excess of any dividends or other monies then due or payable by the Company; and |
41.4. | the Company may if any such money is paid or payable by it under any such law as referred to above refuse to register a transfer of any Shares by any such Member or his or her executor or administrator until such money and interest is set off or deducted as referred to above or in the case that it exceeds the amount of any such dividends or other monies then due or payable by the Company, until such excess is paid to the Company. |
42. | Subject to the terms of allotment, the Board may make calls upon the Members in respect of any monies unpaid on their Shares and each Member (subject to receiving at least fourteen (14) clear days' notice specifying when and where payment is to be made) shall pay to the Company as required by the notice the amount called on his or her Shares. A call may be required to be paid by instalments. A call may be revoked before receipt by the Company of a sum due thereunder, in whole or in part and payment of a call may be postponed in whole or in part. |
43. | A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed. |
44. | A person on whom a call is made shall (in addition to a transferee) remain liable notwithstanding the subsequent transfer of the Share in respect of which the call is made. |
45. | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. |
46. | If a call remains unpaid after it has become due and payable, the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due until it is paid at the rate fixed by the terms of allotment of the Share or in the notice of the call or, if no rate is fixed, at the appropriate rate (as defined by the Act) but the Board may waive payment of the interest wholly or in part. |
47. | An amount payable in respect of a Share on allotment or at any fixed date, whether in respect of nominal value by way of premium, shall be deemed to be a call and if it is not paid, the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call. |
48. | Subject to the terms of allotment, the Board may make arrangements on the issue of Shares for a difference between the holders in the amounts and times of payment of calls on their Shares. |
49. | The Directors may, if they think fit, receive from any Member willing to advance the same all or any part of the monies uncalled and unpaid upon any Shares held by him or her, and upon all or any of the monies so advanced may pay (until the same would, but for such advance, become payable) interest at such rate as may be agreed upon between the Directors and the Member paying such sum in advance. |
50. | If a Member fails to pay any call or instalment of a call on the day appointed for payment thereof, the Directors, at any time thereafter during such times as any part of the call or instalment remains unpaid, may serve a notice on him or her requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued. |
51. | The notice shall state a further day (not earlier than the expiration of fourteen (14) clear days from the date of service of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited. |
52. | If the requirements of any such notice as aforesaid are not complied with, then at any time thereafter before the payment required by the notice has been made, any Shares in respect of which the notice has been given may be forfeited by a resolution of the Directors to that effect. The forfeiture shall include all dividends or other monies payable in respect of the forfeited Shares and not paid before forfeiture. The Board may accept a surrender of any Share liable to be forfeited hereunder. |
53. | On the trial or hearing of any action for the recovery of any money due for any call, it shall be sufficient to prove that the name of the Member sued is entered in the Register as the holder, or one of the holders, of the Shares in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book and that notice of such call was duly given to the Member sued, in pursuance of these Articles, and it shall not be necessary to prove the appointment of the Directors who made such call nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt. |
54. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal, such a Share is to be transferred to any person, the Board may authorise some person to execute an instrument of transfer of the Share to that person. The Company may receive the consideration, if any, given for the Share on any sale or disposition thereof |
55. | A person whose Shares have been forfeited shall cease to be a Member in respect of the forfeited Shares, but nevertheless shall remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him or her to the Company in respect of the Shares, without any deduction or allowance for the value of the Shares at the time of forfeiture but his or her liability shall cease if and when the Company shall have received payment in full of all such monies in respect of the Shares. |
56. | A statement in writing that the maker of the statement is a Director or the Secretary of the Company, and that a Share in the Company has been duly forfeited on the date stated in the statement, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the Share. |
57. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the nominal value of the Share or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
58. | The Directors may accept the surrender of any Share which the Directors have resolved to have been forfeited upon such terms and conditions as may be agreed and, subject to any such terms and conditions, a surrendered Share shall be treated as if it has been forfeited. |
59. | The Company shall not be obligated to recognise any person as holding any Share upon any trust (except as is otherwise provided in these Articles or to the extent required by law) and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future, or partial interest in any Share, or any interest in any fractional part of a Share, or (except only as is otherwise provided by these Articles or the Act) any other rights in respect of any Share except an absolute right to the entirety thereof in the registered holder. This shall not preclude the Company from requiring the Members or a transferee of Shares to furnish to the Company with information as to the beneficial ownership of any Share when such information is reasonably required by the Company. |
60. | If a Member dies, the survivor or survivors where the deceased was a joint holder, and the legal personal representatives of the deceased where he or she was a sole holder or the only survivor of joint holders, shall be the only persons recognised by the Company as having any title to his or her interest in the Shares; but nothing herein contained shall release the estate of any deceased holder from any liability in respect of any Share which had been jointly held by him or her solely or jointly with other persons. |
61. | A person becoming entitled to a Share in consequence of the death, bankruptcy, liquidation or insolvency of a Member, or otherwise becoming entitled to a Share by operation of any law, directive or regulation (whether of the State, the European Union, or any other jurisdiction) may elect, upon such evidence of title being produced as the Directors may reasonably require at any time and from time to time, and subject as further provided in this Article, either to become the holder of the Share or to have some person nominated by him or her registered as the transferee. If he or she elects to become the holder of the Share, he or she shall give notice to the Company to that effect and, where the Directors are satisfied with the evidence of title produced to them, they may register such persons as the holder of the Share, subject to the other provisions of these Articles and of the Act. If he or she elects to have another person registered he or she shall execute an instrument of transfer of the Share to that person. All of these Articles relating to the transfer of Shares shall apply to the notice or instrument of transfer as if it were an instrument of transfer executed by the Member and the event giving rise to the entitlement of the relevant person to the Shares had not occurred. |
62. | A person becoming entitled to a Share by transmission shall have the rights to which he or she would be entitled if he or she were the holder of the Share (including, without limitation, the right to receive and give a valid discharge for any dividends, distributions or other moneys payable on or in respect of the Share), except that, before being registered as the holder of the Share he or she shall not be entitled in respect of it to receive notices of, or to attend or vote at any meeting of the Company or at any separate meeting of holders of any class of Shares in the Company, so, however, that the Directors, at any time, may give notice requiring any such person to elect either to be registered himself or herself to transfer the Share and, if the notice is not complied with within ninety (90) days, the Directors thereupon may withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
63. | The Company may by Ordinary Resolution: |
63.1. | divide its share capital into several classes and attach to them respectively any preferential, deferred, qualified or special rights, privileges or conditions; |
63.2. | increase the authorised share capital by such sum to be divided into Shares of such nominal value, as such Ordinary Resolution shall prescribe; |
63.3. | consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares; |
63.4. | by subdivision of its existing Shares or any of them, divide the whole or any part of its share capital into Shares of smaller nominal value than is fixed by the Memorandum subject to section 83(1)(b) of the Act, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in the case of the Share from which the reduced Share is derived; |
63.5. | cancel any Shares that at the date of the passing of the relevant Ordinary Resolution have not been taken or agreed to be taken by any person; and |
63.6. | subject to applicable law, change the currency denomination of its share capital. |
64. | Subject to the provisions of the Act, the Company may: |
64.1. | by Special Resolution change its name, alter or add to the Memorandum with respect to any objects, powers or other matters specified therein or alter or add to these Articles; |
64.2. | by Special Resolution, or as otherwise required or permitted by applicable law, including without limitation section 83 of the Act, reduce its issued share capital and any capital redemption reserve fund or any share premium account or undenominated capital account. In relation to such reductions, the Company may by Special Resolution (or as otherwise required or permitted by applicable law) determine the terms upon which the reduction is to be effected, including in the case of a reduction of part only of any class of Shares, those Shares to be affected; and |
64.3. | by resolution of the Directors, change the location of its registered office. |
65. | Whenever as a result of an alteration or reorganisation of the share capital of the Company any Members would become entitled to fractions of a Share, the Board may, on behalf of those Members, sell the Shares representing the fractions for the best price reasonably obtainable to any person and distribute the proceeds of sale in due proportion among those Members, and the Board may authorise any person to execute an instrument of transfer of the Shares to, or in accordance with the directions of, the purchaser. The transferee |
66. | For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other proper purpose, the Board may provide, subject to the requirements of section 174 of the Act, that the Register of Members shall be closed for transfers at such times and for such periods, not exceeding in the whole thirty (30) days in each year. If the Register of Members shall be so closed for the purpose of determining Members entitled to notice of, or to vote at, a meeting of Members, such Register of Members shall be so closed for at least five (5) days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the Register of Members. |
67. | In lieu of, or apart from, closing the Register of Members, the Board may fix in advance a date as the record date (a) for any such determination of Members entitled to notice of or to vote at a meeting of the Members, which record date shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, and (b) for the purpose of determining the Members entitled to receive payment of any dividend, or in order to make a determination of Members for any other proper purpose, which record date shall not be more than sixty (60) days prior to the date of payment of such dividend or the taking of any action to which such determination of Members is relevant. |
68. | If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members, the date immediately preceding the date on which notice of the meeting is deemed given under these Articles shall be the record date for such determination of Members. Where a determination of Members entitled to vote at any meeting of Members has been made as provided in these Articles, such determination shall apply to any adjournment thereof; provided, however, that the Directors may fix a new record date of the adjourned meeting, if they think fit. |
69. | The Board shall convene and the Company shall hold annual general meetings in accordance with the requirements of the Act. |
70. | The Board may, whenever it thinks fit, and shall, on the requisition in writing of Members holding such number of Shares as is prescribed by, and made in accordance with, the Act, convene a general meeting in the manner required by the Act. All general meetings other than annual general meetings shall be called extraordinary general meetings. |
71. | The Company shall in each year hold a general meeting as its annual general meeting in addition to any other meeting in that year, and shall specify the meeting as such in the notice calling it. Not more than fifteen (15) months shall elapse between the date of one annual general meeting of the Company and that of the next. Each general meeting shall be held at such time and place as designated by the Board and as specified in the notice of meeting. Subject to section 176 of the Act all general meetings may be held outside of Ireland. |
72. | The Board may, in its absolute discretion, authorise the Secretary to postpone any general meeting called in accordance with the provisions of these Articles (other than a meeting requisitioned under Article 70 or the postponement of which would be contrary to the Act, law or a Court order pursuant to the Act) if the Board considers that, for any reason, it is impractical or unreasonable to hold the general meeting, provided that notice of postponement is given to each Member before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Member in accordance with the provisions of these Articles. |
73. | Subject to the provisions of the Act allowing a general meeting to be called by shorter notice, an annual general meeting, and an extraordinary general meeting called for the passing of a Special Resolution, shall be called by at least twenty-one (21) clear days' notice and all other extraordinary general meetings shall be called by at least fourteen (14) clear days' notice. Such notice shall state the date, time, place of the meeting and, the general nature of the business to be considered. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day of the meeting and shall specify such other details as are required by applicable law or the relevant code, rules and regulations applicable to the listing of the Shares on the Exchange. |
74. | A general meeting of the Company shall, whether or not the notice specified in Article 73 has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if applicable law so permits and it is so agreed by the Auditors and by all the Members entitled to attend and vote thereat or by their proxies. |
75. | The notice convening an annual general meeting shall specify the meeting as such, and the notice convening a meeting to pass a Special Resolution shall specify the intention to propose the resolution as a Special Resolution. Notice of every general meeting shall be given in any manner permitted by these Articles to all Members other than such as, under the provisions hereof or the terms of issue of the Shares they hold, those who are not entitled to receive such notice from the Company. |
76. | There shall appear with reasonable prominence in every notice of general meetings of the Company a statement that a Member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him or her and that a proxy need not be a Member of the Company. |
77. | The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by any person entitled to receive notice shall not invalidate the proceedings of that meeting. |
78. | In cases where instruments of proxy are sent out with notices, the accidental omission to send such instrument of proxy to, or the non-receipt of such instrument of proxy by, any person entitled to receive notice shall not invalidate any resolution passed or any proceeding at any such meeting. A Member present, either in person or by proxy, at any general meeting of the Company or of the holders of any class of Shares in the Company, will be deemed to have received notice of that meeting and, where required, of the purpose for which it was called. |
79. | The business of annual general meetings shall include: |
79.1. | the consideration of the Company’s statutory financial statements and the report of the Directors and the report of the Auditors on those statements and that report; |
79.2. | the review by the Members of the Company’s affairs; |
79.3. | the declaration of a final dividend (if any) of an amount not exceeding the amount recommended by the Directors; |
79.4. | the authorisation of the Directors to approve the remuneration of the Auditors (if any); |
79.5. | the election and re-election of Directors; and |
79.6. | the appointment or re-appointment of Auditors. |
80. | No business shall be transacted at any general meeting unless a quorum is present. One or more Members present in person or by proxy holding not less than a majority of the issued and outstanding ordinary shares of the Company entitled to vote at the meeting in question shall be a quorum. |
81. | If within one hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and place or to such other time or such other place as the Board may determine and if at the adjourned meeting a quorum is not present within one hour from the time appointed for the meeting the Members present shall be a quorum. |
82. | If the Board wishes to make this facility available to Members for a specific or all general meetings of the Company, a Member may participate in any general meeting of the Company, by means of a telephone, video, electronic or similar communication equipment by way of which all persons participating in such meeting can communicate with each other simultaneously and instantaneously and such participation shall be deemed to constitute presence in person at the meeting. |
83. | Each Director and the Auditors shall be entitled to attend and speak at any general meeting of the Company. |
84. | The Chairperson, or in his absence some other Director nominated by the Directors, shall preside at every general meeting of the Company, but if at any meeting neither the Chairperson, nor such other Director is present within fifteen minutes after the time appointed for the holding of the meeting, or if none of them are willing to act as Chairperson, the Directors present shall choose some Director present to be Chairperson, or if no Director is present, or if all the Directors present decline to take the chair, the Members present shall choose some Member present to be Chairperson. |
85. | The Chairperson of the meeting may, with the consent of any general meeting duly constituted hereunder, and shall if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished, or which might have been transacted, at the meeting from which the adjournment took place. When a general meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting; save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned general meeting. |
86. | No business may be transacted at a general meeting of the Company or of any class of Members, other than business that is either proposed by or at the direction of the Board; proposed at the direction of a court of competent jurisdiction; proposed on the requisition in writing of such number of Members as is prescribed by, and is made in accordance with, the relevant provisions of the Act and, in respect of an annual general meeting only, these Articles; or the Chairperson determines in his or her absolute discretion that the business may properly be regarded as within the scope of the meeting. For business or nominations to be properly brought by a Member at any general meeting, the Member proposing such business must be a Member at the time of giving the notice provided for in Articles 73 to 78 and must be entitled to vote at such meeting and any proposed business must be a proper matter for Member action. |
87.1. | Subject to the Act, a resolution may only be put to a vote at a general meeting of the Company or of any class of Members if: |
a) | it is specified in the notice of meeting; |
b) | it is proposed by or at the direction of the Board; |
c) | it is proposed at the direction of a court of competent jurisdiction; |
d) | it is proposed pursuant to, and in accordance with, the procedures and requirements of Article 147; |
e) | it is proposed on the requisition in writing of such number of Members as is prescribed by, and is made in accordance with, section 178(3) of the Act; or |
f) | the Chairperson of the meeting in his or her absolute discretion decides that the resolution may properly be regarded as within the scope of the meeting. |
87.2. | No amendment may be made to a resolution, at or before the time when it is put to a vote, unless the Chairperson of the meeting in his or her absolute discretion decides that the amendment or the amended resolution may properly be put to a vote at that meeting. |
87.3. | If the Chairperson of the meeting rules a resolution or an amendment to a resolution admissible or out of order (as the case may be), the proceedings of the meeting or on the resolution in question shall not be invalidated by any error in his or her ruling. Any ruling by the Chairperson of the meeting in relation to a resolution or an amendment to a resolution shall be final and conclusive. |
88.1. | For business to be properly requested by a Member to be brought before an annual general meeting, the Member must: |
a) | be a Member of the Company at the time of the giving of the notice for such annual general meeting; |
b) | be entitled to vote at such meeting; and |
c) | have given timely and proper notice in writing to the Secretary in accordance with this Article 88. |
88.2. | To be timely for an annual general meeting, a Member's notice to the Secretary must be delivered to or mailed and received at the registered office of the Company not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual general meeting of Members (save that in the case of the Company's first annual general meeting, references to the preceding year's annual general meeting will be to the annual general meeting of Endo Health Solutions, Inc. held that preceding year); provided, however, that in the event that the annual general meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the Member, in order to be timely, must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual general meeting was mailed or such public disclosure of the date of the annual general meeting was made, whichever first occurs. |
88.3. | To be in proper written form, a Member's notice must set forth as to each matter such Member proposes to bring before the meeting: |
88.3.1. | A brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend the Articles, the text of the proposed amendment) and the reasons for conducting such business at the meeting; |
88.3.2. | As to the Member giving notice: |
(i) | the name and address, as they appear in the Register of Members, of such Member and any Member Associated Person covered by this Article 88.3.2(i) and Article 88.3.2(ii) below; |
(ii) | (A) the class and number of Shares of the Company which are held of record or are beneficially owned by the Member and by any Member Associated Person with respect to the Company's securities; (B) a description of any agreement, arrangement or understanding in connection with the proposal of such business between or among such Member and any Member Associated Person, any of their respective affiliates or associates, and any others (including their names) acting as a "group" (as such |
(iii) | any material interest of the Member or any Member Associated Person in such business. |
89. | Except where a greater majority is required by the Act or these Articles, any question proposed for a decision of the Members at any general meeting of the Company or a decision of any class of Members at a separate meeting of any class of Shares shall be decided by an Ordinary Resolution. |
90. | At any general meeting, a resolution put to the vote of the meeting shall be decided on a poll. The Board or the Chairperson may determine the manner in which the poll is to be taken and the manner in which the votes are to be counted. |
91. | A poll demanded on the election of the Chairperson or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time, not being more than ten days from the date of the meeting or adjourned meeting at which the vote was taken, as the Chairperson of the meeting directs, and any business other than that on which a poll has been demanded may be proceeded with pending the taking of the poll. |
92. | No notice need be given of a poll not taken immediately. The result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded. On a poll, a Member entitled to more than one vote need not use all his or her votes or cast all the votes he or she uses in the same way. |
93. | If authorised by the Board, any vote taken by written ballot may be satisfied by a ballot submitted by electronic or telephonic transmission, provided that any such electronic or telephonic submission must either set forth or be submitted with information from which it can be determined that the electronic submission or telephonic has been authorised by the Member or proxy. |
94. | The Board may, and at any general meeting, the Chairperson of such meeting may make such arrangement and impose any requirement or restriction it or he or she considers appropriate to ensure the security of |
95. | Subject to the provisions of the Act, a resolution in writing signed by all of the Members for the time being entitled to attend and vote on such resolution at a general meeting (or being bodies corporate by their duly authorised representatives) shall be as valid and effective for all purposes as if the resolution had been passed at a general meeting of the Company duly convened and held, and may consist of several documents in like form each signed by one or more persons, and if described as a special resolution shall be deemed to be a special resolution within the meaning of the Act. Any such resolution shall be served on the Company. |
96. | Subject to any rights or restrictions for the time being attached to any class or classes of Shares, every Member of record present in person or by proxy shall have one vote for each Share registered in his or her name in the Register of Members. |
97. | In the case of joint holders of record the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members. |
98. | A Member of unsound mind, a Member who has made an enduring power of attorney, or in respect of whom an order has been made by any court, having jurisdiction in cases of unsound mind, may vote by his or her committee, donee of an enduring power of attorney, receiver, guardian or other person appointed by the foregoing court, and any such committee, donee of an enduring power of attorney, receiver, guardian or other person appointed by the foregoing court may vote by proxy. |
99. | No Member shall be entitled to vote at any general meeting unless he or she is registered as a Member on the record date for such meeting. |
100. | No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at such general meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the Chairperson of the general meeting whose decision shall be final and conclusive. |
101. | Votes may be given either personally or by proxy. A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting and may appoint a proxy to vote both in favour of and against the same resolution in such proportion as specified in the instrument appointing the proxy. |
102.1. | Every Member entitled to attend and vote at a general meeting may appoint a proxy to attend, speak and vote on his or her behalf and may appoint more than one proxy to attend, speak and vote at the same meeting. The appointment of a proxy or corporate representative shall be in such form and may be accepted by the Company at such place and at such time as the Board or the Secretary shall from time to time determine, subject to applicable requirements of the United States Securities and Exchange Commission and the Exchange on which the Shares are listed. No such instrument appointing a proxy or corporate representative shall be voted or acted upon after two (2) years from its date. |
102.2. | Without limiting the foregoing, the Board may from time to time permit appointments of a proxy to be made by means of an electronic or internet communication or facility and may in a similar manner permit supplements to, or amendments or revocations of, any such electronic or internet communication or facility to be made. For the avoidance of doubt, such appointments of proxy made by electronic or internet communications (as permitted by the Board or the Secretary) would be deemed to be deposited at the place specified for such purpose once received by the Company. The Board may in addition prescribe the method of determining the time at which any such electronic or internet communication or facility is to be treated as deposited at the place specified for such purpose. The Board may treat any such electronic or internet communication or facility which purports to be or is expressed to be sent on behalf of a Member as sufficient evidence of the authority of the person sending that instruction to send it on behalf of that Member. |
103. | Any body corporate which is a Member of the Company may authorise such person or persons as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company and the person or persons so authorised shall be entitled to exercise the same powers on behalf of the body corporate which he or she represents as that body corporate could exercise if it were an individual Member of the Company. The Company may require evidence from the body corporate of the due authorisation of such person or persons to act as the representative of the relevant body corporate. |
104. | An appointment of proxy relating to more than one meeting (including any adjournment thereof) having once been received by the Company for the purposes of any meeting shall not require to be delivered, deposited or received again by the Company for the purposes of any subsequent meeting to which it relates. |
105. | Receipt by the Company of an appointment of proxy in respect of a meeting shall not preclude a Member from attending and voting at the meeting or at any adjournment thereof which attendance and voting will automatically cancel any proxy previously submitted. |
106. | An appointment of proxy shall be valid, unless the contrary is stated therein, for any adjournment of the meeting as well as for the meeting to which it relates. |
107.1. | A vote given in accordance with the terms of an appointment of proxy or a resolution authorising a representative to act on behalf of a body corporate shall be valid notwithstanding the death or insanity of the principal, or the revocation of the appointment of proxy or of the authority under which the proxy was appointed or of the resolution authorising the representative to act or transfer of the Share in respect of which the proxy was appointed or the authorisation of the representative to act was given, provided that no direction in writing (whether in electronic form or otherwise) of such death, insanity, revocation or transfer shall have been received by the Company at the Office, before the commencement of the meeting or adjourned meeting at which the appointment of proxy is used or at which the representative acts. |
107.2. | The Board may send, at the expense of the Company, by post, electronic mail or otherwise, to the Members, forms for the appointment of a proxy (with or without stamped envelopes for their return) for use at any general meeting or at any class meeting, either in blank or nominating any one or more of the Directors or any other persons in the alternative. |
108. | Unless otherwise determined by the Company by Ordinary Resolution, the number of Directors on the Board shall be not less than five (5) nor more than twelve (12). The exact number of Directors shall be fixed from time to time by resolution of the Board. |
109. | The remuneration to be paid to the Directors shall be such remuneration as the Directors shall determine. The Directors shall also be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the |
110. | The Board may approve additional remuneration to any Director undertaking any special work or services for, or undertaking any special mission on behalf of, the Company other than his or her ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his or her remuneration as a Director. |
111. | Members of special or standing committees may be allowed like compensation for attending committee meetings. |
112. | A Director or an officer of the Company who is in any way, whether directly or indirectly, interested in a contract, transaction or arrangement or proposed contract, transaction or arrangement with the Company shall, in accordance with section 231 of the Act, declare the nature of his or her interest at the first opportunity either (a) at a meeting of the Board at which the question of entering into the contract, transaction or arrangement is first taken into consideration, if the Director or officer of the Company knows this interest then exists, or in any other case, at the first meeting of the Board after learning that he or she is or has become so interested or (b) by providing a general notice to the Directors declaring that he or she is a Director or an officer of, or has an interest in, a person and is to be regarded as interested in any transaction or arrangement made with that person, and after giving such general notice it shall not be necessary to give special notice relating to any particular transaction. |
113. | A Director may hold any other office or place of profit under the Company (other than the office of its Auditors) in conjunction with his or her office of Director for such period and on such terms as to remuneration and otherwise as the Board may determine. Nothing in Section 228(1)(e) of the Act shall restrict a director from entering into any commitment which has been approved by the Board or has been approved pursuant to such authority as may be delegated by the Board in accordance with these Articles. It shall be the duty of each Director to obtain the prior approval of the Board, before entering into any commitment permitted by Sections 228(1)(e)(ii) and 228(2) of the Act. |
114. | A Director is expressly permitted (for the purposes of section 228(1)(d) of the Act) to use the property of the Company pursuant to or in connection with: the exercise or performance of his duties, functions and powers as Director or employee; the terms of any contract of service or employment or letter of appointment; and, or in the alternative, any other usage authorised by the Directors (or a person authorised by the Directors) from time to time; and including in each case for a Director's own benefit or for the benefit of another person. |
115. | A Director may act by himself or herself or by his or her firm in a professional capacity for the Company (other than as its Auditors) and he or she or his or her firm shall be entitled to remuneration for professional services as if he or she were not a Director. |
116. | A Director may be or become a Director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or Member of any other company or otherwise interested in any company promoted by the Company or in which the Company may be interested as Member or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him or her as a Director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or Member of such other company; provided that he or she has declared the nature of his or her position with, or interest in, such company to the Board in accordance with Article 112 and this has been approved by a majority of the disinterested Directors, notwithstanding the fact that the disinterested Directors may represent less than a quorum. |
117. | No person shall be disqualified from the office of Director or from being an officer of the Company or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor |
117.1. | he has declared the nature of his or her interest in such contract or transaction to the Board in accordance with Article 112; and |
117.2. | the contract or transaction is approved by a majority of the disinterested Directors, notwithstanding the fact that the disinterested Directors may represent less than a quorum. |
118. | A Director may be counted in determining the presence of a quorum at a meeting of the Board which authorises or approves the contract, transaction or arrangement in which he or she is interested and he or she shall be at liberty to vote in respect of any contract, transaction or arrangement in which he or she is interested, provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him or her in accordance with Article 112, at or prior to its consideration and any vote thereon. |
119. | For the purposes of Article 112: |
119.1. | a general notice given to the Directors that a Director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the Director has an interest in any such transaction of the nature and extent so specified; |
119.2. | an interest of which a Director has no knowledge and of which it is unreasonable to expect him or her to have knowledge shall not be treated as an interest of his or hers; and |
119.3. | a copy of every declaration made and notice given under Article 112 shall be entered within three (3) days after the making or giving thereof in a book kept for this purpose. Such book shall be open for inspection without charge by any Director, Secretary, the Auditors or Member of the Company at the registered office and shall be produced at every general meeting of the Company and at any meeting of the Directors if any Director so requests in sufficient time to enable the book to be available at the meeting. |
120. | The business of the Company shall be managed by the Directors, who may pay all expenses incurred in promoting and registering the Company and may exercise all such powers of the Company as are not, by the Act or by these Articles, required to be exercised by the Company in general meeting, subject, nevertheless, to any of these Articles and to the provisions of the Act. No resolution made by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been made. |
121. | The Board shall have the power to appoint and remove officers on such terms as the Board sees fit and to give such titles and delegate such responsibilities to those executives as it sees fit. |
122. | The Company may exercise the powers conferred by Section 44 of the Act with regard to having an official seal for use abroad and such powers shall be vested in the Directors. |
123. | Subject as otherwise provided with these Articles, the Directors may exercise the voting powers conferred by shares of any other company held or owned by the Company in such manner in all respects as they think fit and in particular they may exercise their voting powers in favour of any resolution appointing the Directors or any of them as Director or officers of such other company or providing for the payment of remuneration or pensions to the Directors or officers of such other company. |
124. | All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, by such person or persons and in such manner as the Directors shall from time to time by resolution determine. |
125. | The Directors may from time to time authorise such person or persons as they see fit to perform all acts, including without prejudice to the foregoing, to effect a transfer of any Shares, bonds, or other evidences of indebtedness or obligations, subscription rights, warrants, and other securities in another body corporate in which the Company holds an interest and to issue the necessary powers of attorney for the same; and each such person is authorised on behalf of the Company to vote such securities, to appoint proxies with respect thereto, and to execute consents, waivers and releases with respect thereto, or to cause any such action to be taken. |
126. | The Board may exercise all powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds or such other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. |
127. | The Directors may procure the establishment and maintenance of or participate in, or contribute to, any non-contributory or contributory pension or superannuation fund, scheme or arrangement or life assurance scheme or arrangement for the benefit of, and pay, provide for or procure the grant of donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including Directors or other officers) who are or shall have been at any time in the employment or service of the Company or of any company which is or was a subsidiary of the Company or of the predecessor in business of the Company or any such subsidiary or holding Company and the wives, husbands, widows, widowers, families, relatives or dependants of any such persons. The Directors may also procure the establishment and subsidy of or subscription to and support of any institutions, associations, clubs, funds or trusts calculated to be for the benefit of any such persons as aforesaid or otherwise to advance the interests and well-being of the Company or of any such other company as aforesaid or its Members, and payments for or towards the issuance of any such persons as aforesaid and subscriptions or guarantees of money for charitable or benevolent objects or for any exhibition or for any public, general or useful object. Provided that any Director shall be entitled to retain any benefit received by him or her under this Article 127, subject only, where the Act requires, to disclosure to the Members and the approval of the Company in general meeting. |
128. | The Board may from time to time provide for the management of the affairs of the Company in such manner as it shall think fit and the specific delegation provisions contained in the Articles shall not limit the general powers conferred by these Articles. |
129. | The Board shall cause minutes to be made in books kept for the purpose of all appointments of officers made by the Board, all resolutions and proceedings at meetings of the Company or the holders of any class of Shares, of the Directors and of committees of Directors, including the names of the Directors present at each meeting. |
130. | The Board may delegate any of its powers (with power to sub-delegate) to any committee consisting of one or more Directors. The Board may also delegate to any Director, officer or member of the management of the Company or any of its subsidiaries such of its powers as it considers desirable to be exercised by him or her. The Board may also designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. Any such delegation may be made subject to any conditions the Board may impose, and either collaterally with or to the exclusion of its own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee of the Board shall be governed by the Articles regulating the proceedings of |
131. | The Board may, by power of attorney or otherwise, appoint any person to be the agent of the Company on such conditions as the Board may determine, provided that the delegation is not to the exclusion of its own powers and may be revoked by the Board at any time. |
132. | The Board may, by power of attorney or otherwise, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Board may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in him or her. |
133. | The Board may elect any Director as Chairperson of the Board and determine the period for which he or she is to hold office. |
134. | In addition to the Chairperson, the Directors and the Secretary, the Company may have such officers as the Board may from time to time determine and, without limitation to the foregoing, may appoint any person (whether or not a Director) to fill the position of chief executive officer. |
135. | The use of the word "officer" (or similar words) in the title of any executive or other position shall not be deemed to imply that the person holding such executive or other position is an "officer" of the Company within the meaning of the Act. |
136. | Except as otherwise provided by these Articles, the Directors shall meet together for the despatch of business, convening, adjourning and otherwise regulating their meetings and procedures as they think fit. Questions arising at any meeting shall be decided by a majority of votes of the Directors present at a meeting at which there is a quorum. Each Director shall have one vote. |
137. | Regular meetings of the Board may be held at such times and places as may be provided for in resolutions adopted by the Board. No additional notice of a regularly scheduled meeting of the Board shall be required. |
138. | A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors by at least 24 hours' notice in writing to every Director, which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held and provided further if notice is given in person, by telephone, cable, telex, telecopy or email, the same shall be deemed to have been given on the day it is delivered to the Directors or transmitting organisation as the case may be. The accidental omission to give notice of a meeting of the Directors to, or the non-receipt of notice of a meeting by any person entitled to receive notice, shall not invalidate the proceedings of that meeting. |
139. | The quorum necessary for the transaction of the business of the Board may be fixed by the Board from time to time and unless so fixed shall be a majority of the Directors in office. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. |
140. | The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of |
141. | Any casual vacancy shall only be filled by decision of a majority of the Board then in office, provided that a quorum is present. Any Director elected to fill a vacancy not resulting from an increase in the number of Directors shall have the same remaining term as that of his or her predecessor. Any vacancy on the Board, including a vacancy that results from an increase in the number of Directors or from the death, resignation, retirement, disqualification or removal of a Director, shall be deemed a casual vacancy. |
142. | If no Chairperson is elected, or if at any meeting the Chairperson is not present within five (5) minutes after the time appointed for holding the same, the Directors present may choose one of their number to be the Chairperson of the meeting. |
143. | All acts done by any meeting of the Directors or of a committee of Directors shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director. |
144. | Members of the Board or of any committee thereof may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. Unless otherwise determined by the Directors the meeting shall be deemed to be held at the place where the telephone call or similar communication was initiated. |
145. | A resolution in writing (in one or more counterparts), signed by all the Directors for the time being or all the members of a committee of Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors or committee as the case may be duly convened and held. |
146. | The office of a Director shall be vacated ipso facto: |
146.1. | if he or she resigns his or her office, on the date on which notice of his or her resignation is delivered to the registered office or tendered at a meeting of the Board or on such later date as may be specified in such notice; or |
146.2. | on him or her being prohibited by law from being a Director; or |
146.3. | on him or her ceasing to be a Director by virtue of any provision of the Act. |
147.1. | No person shall be appointed a Director, unless nominated in accordance with the provisions of this Article 147. Nominations of persons for election to the Board at a general meeting may be made: |
(a) | by the affirmative vote of the Board; |
(b) | with respect to election at an annual general meeting, by any Member who holds ordinary Shares or other Shares carrying the general right to vote at general meetings of the Company, who is a Member at the time of the giving of the notice provided for in Article 147.2 and at the time of the relevant annual general meeting, and who timely complies with the notice procedures set forth in this Article 147; and |
(c) | with respect to election at an extraordinary general meeting requisitioned in accordance with section 178(3) of the Act, by a Member or Members who hold ordinary Shares or other Shares carrying the general right to vote at general meetings of the Company and who make such nomination in the written requisition of the extraordinary general meeting in accordance with these Articles and the Act relating to nominations of Directors and the proper bringing of special business before an extraordinary general meeting, |
147.2. | For nominations of persons for election as Directors at an annual general meeting to be timely, a Member's notice must comply with the requirements of Article 88.2. |
147.3. | To be in proper written form, a Member's notice for nomination(s) of person(s) for election must in addition to any other applicable requirements set forth: |
(a) | as to each person whom the Member proposes to nominate for election or re−election as a Director: |
(i) | the name, age, business address and residence address of such person; |
(ii) | the principal occupation or employment of such person; |
(iii) | the class and number of Shares of which are beneficially owned by such person in the Company and any other direct or indirect pecuniary or economic interest in any Shares of the Company of such person, including, without limitation, any derivative instrument, swap, option, warrant, short interest, hedge or profit sharing arrangement; and |
(iv) | any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to section 14 of the Exchange Act, and the rules and regulations promulgated thereunder (including, without limitation, such person's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected), |
(b) | as to the Member giving the notice and the beneficial owner, if any, on whose behalf the nomination is made: |
(i) | the name and address, as they appear on the Company's Register of Members, of such Member, and of such beneficial owner; |
(ii) | the class and number of Shares in the Company which are beneficially owned by such Member and such beneficial owner and any other direct or indirect pecuniary or economic interest in any capital Shares of the Company of such Member and such beneficial owner, including, without limitation, any derivative instrument, swap, option, warrant, short interest, hedge or profit sharing arrangement; |
(iii) | a description of any arrangements or understandings between such Member and each proposed nominee and any other person (including their names) pursuant to which the nomination(s) are to be made by such Member and such beneficial owner; |
(iv) | a representation that such Member intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; and |
(v) | any other information relating to such Member and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Directors, or may otherwise be required, in each case pursuant to section 14 of the Exchange Act and the rules and regulations promulgated thereunder. |
147.4. | Notwithstanding the foregoing provisions of this Article 147, unless otherwise required by law, if the Member (or a qualified representative of the Member) does not appear at the meeting of Members of the Company to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Company. |
147.5. | The Chairperson of the meeting shall determine whether a nomination was not made in accordance with the procedures prescribed by these Articles, and if he or she should so determine, he or she shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded. |
147.6. | The Company may require any proposed nominee to furnish such other information as it may reasonably require, including the completion of any questionnaires to determine the eligibility of such proposed nominee to serve as a Director of the Company and the impact that such service would have on the ability of the Company to satisfy the requirements of laws, rules, regulations and listing standards applicable to the Company or its Directors. |
148. | At every annual general meeting of the Company, all of the Directors shall retire from office unless re-elected by Ordinary Resolution at the annual general meeting. A Director retiring at a meeting shall retain office until the close of that meeting (including any adjournment thereof). |
149. | Every Director shall be eligible to stand for re-election at an annual general meeting. |
150. | If a Director offers himself for re-election, he shall be deemed to have been re-elected, unless at such meeting the Ordinary Resolution for the re-election of such Director has been defeated. |
151. | The Company may, by Ordinary Resolution, of which notice has been given in accordance with section 146 of the Act, remove any Director before the expiration of his or her period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director. Such removal shall be without prejudice to any claim such Director may have for damages for breach of any contract of service between him or her and the Company. |
152. | The Company may, by Ordinary Resolution, appoint another person in place of a Director removed from office under Article 151 and without prejudice to the powers of the Directors under Article 108, the Company in general meeting by Ordinary Resolution may appoint any person to be a Director either to fill a casual vacancy or as an additional Director, subject to the maximum number of Directors set out in Article 108. |
153. | Notwithstanding any other provision of these Articles, the Directors may appoint a person who is willing to act to be a Director, either to fill a vacancy or as an additional Director, provided that the appointment does not cause the number of Directors to exceed the number fixed by or in accordance with these Articles as the maximum number of Directors. A Director so appointed shall hold office only until the next following annual general meeting. If not reappointed at such annual general meeting, such Director shall vacate office at the conclusion thereof. |
154.1. | Any Director may appoint by writing under his or her hand one or more persons (including another Director) to be his or her alternate provided always that no such appointment of any person(s) other than a Director as an alternate shall be operative unless and until such appointment(s) shall have been approved by resolution of the Directors. |
154.2. | An alternate Director shall be entitled, subject to him or her giving to the Company an address, to receive notices of all meetings of the Directors and of all meetings of committees of Directors of which his or her appointor is a member, to attend and vote at any such meeting at which the Director appointing him or her is not personally present and in the absence of his or her appointor to exercise all the powers, rights, duties and authorities of his or her appointor as a Director (other than the right to appoint an alternate hereunder). |
154.3. | Save as otherwise provided in these Articles, an alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for his or her own acts and defaults and he or she shall not be deemed to be the agent of the Director appointing him or her. The remuneration of any such alternate Director shall be payable out of the remuneration paid to the Director appointing him or her and shall consist of such portion of the last mentioned remuneration as shall be agreed between the alternate and the Director appointing him or her. |
154.4. | A Director may revoke at any time the appointment of any alternate appointed by him or her. If a Director shall die or cease to hold the office of Director, the appointment of his or her alternate shall thereupon cease and determine but if a Director retires by rotation or otherwise but is reappointed or deemed to have been reappointed at the meeting at which he or she retires, any appointment of an alternate Director made by him or her which was in force immediately prior to his or her retirement shall continue after his or her re-appointment. |
154.5. | Any appointment or revocation pursuant to this Article 154 may be sent by delivery, post, cable, commercial courier, telegram, telex, telefax, electronic mail or any other means of communication approved by the Directors and may bear a printed or facsimile signature of the Director making such appointment or revocation or in any other manner approved by the Directors. |
155. | The Secretary shall be appointed by the Board at such remuneration (if any) and on such terms as the Board sees fit and any Secretary so appointed may be removed by the Board at any time. |
156. | The duties of the Secretary shall be those prescribed by the Act, together with such other duties as shall from time to time be prescribed by the Board, and in any case, shall include the making and keeping of records of the votes, doings and proceedings of all meetings of the Members and the Board of the Company, and committees, and the authentication of records of the Company. |
157. | A provision of the Act or these Articles requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary. |
158. | The Company may, if the Board so determines, have a Seal (including any official seals kept pursuant to the Act) which shall only be used by the authority of the Board or of a committee of the Board authorised by the Board in that regard and every instrument to which the Seal has been affixed shall be signed by any person who shall be either a Director or the Secretary or some other person authorised by the Board, either generally or specifically, for the purpose. |
159. | The Company may have for use in any place or places outside Ireland, a duplicate Seal or Seals each of which shall be a duplicate of the Seal of the Company except, in the case of a seal for use in sealing documents creating or evidencing securities issued by the Company, for the addition on its face of the word "Securities" and if the Board so determines, with the addition on its face of the name of every place where it is to be used. |
160. | The Company in general meeting may declare dividends, but no dividends shall exceed the amount recommended by the Board. Any general meeting declaring a dividend and any resolution of the Directors declaring an interim dividend may direct payment of such dividend or interim dividend wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures or debenture stocks of any other company or in any one or more of such ways, and the Board shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Board may settle the same as they think expedient, and in particular may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed, in order to adjust the rights of all the parties, and may vest any such specific assets in trustees as may seem expedient to the Board. |
161. | Subject to the Act, the Board may from time to time declare dividends (including interim dividends) and distributions on Shares outstanding and authorise payment of the same out of the funds of the Company lawfully available therefore and in any currency chosen at its discretion. |
162. | The Board may, before declaring any dividends or distributions, set aside such sums as it thinks proper as a reserve or reserves which shall at the discretion of the Board, be applicable for any purpose of the Company and pending such application may, at the like discretion, be employed in the business of the Company. The Directors may also, without placing the same to reserve, carry forward any profits which they may think it prudent not to dividend. |
163. | No dividend, interim dividend or distribution shall be paid otherwise than in accordance with the provisions of section 117 of the Act. |
164. | Subject to the rights of persons, if any, entitled to Shares with special rights as to dividends or distributions, if dividends or distributions are to be declared on a class of Shares, they shall be declared and paid according to the amounts paid or credited as paid on the Shares of such class outstanding on the record date for such dividend or distribution as determined in accordance with these Articles. |
165. | The Directors may deduct from any dividend payable to any Member all sums of money (if any) immediately payable by him or her to the Company in relation to his or her Shares. |
166. | The Board or any general meeting declaring a dividend (upon the recommendation of the Board), may direct that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures, or debenture stock or similar instrument of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Board may settle the same as it thinks expedient and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Board. |
167. | Any dividend, distribution, interest or other monies payable in cash in respect of Shares may be paid by cheque or warrant sent through the post, or sent by any electronic or other means of payment, directed to the registered address of the holder or, in the case of joint holders, to the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant, electronic or other payment shall be made payable to the order of the person to whom it is sent and payment of the cheque or warrant shall be a good discharge to the Company. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses, or other monies payable in respect of the Share held by them as joint holders. Any such dividend or other distribution may also be paid by any other method (including payment in a currency other than US$, electronic funds transfer, direct debit, bank transfer or by means of a relevant system) which the Directors consider appropriate and any Member who elects for such method of payment shall be deemed to have accepted all of the risks inherent therein. The debiting of the Company's account in respect of the relevant amount shall be evidence of good discharge of the Company's obligations in respect of any payment made by any such methods. |
168. | No dividend or distribution shall bear interest against the Company. |
169. | If the Directors so resolve, any dividend which has remained unclaimed for six (6) years from the date of its declaration shall be forfeited and cease to remain owing by the Company. The payment by the Directors of any unclaimed dividend or other monies payable in respect of a Share into a separate account shall not constitute the Company a trustee in respect thereof. |
170. | Without prejudice to any powers conferred on the Directors as aforesaid, and subject to the Board's authority to issue and allot Shares under Articles 7 and 8, the Board may: |
170.1. | resolve to capitalise an amount standing to the credit of reserves (including a share premium account, undenominated capital account, capital redemption reserve and profit and loss account), whether or not available for distribution; |
170.2. | appropriate the sum resolved to be capitalised to the Members in proportion to the nominal amount of Shares held by them respectively and apply that sum on their behalf in or towards paying up in full unissued Shares or debentures of a nominal amount equal to that sum, and allot the Shares or debentures, credited as fully paid, to the Members (or as the Board may direct) in those proportions, or partly in one way and partly in the other, but the share premium account, undenominated capital account, the capital redemption reserve and profits that are not available for distribution may, for the purposes of this Article 170, only be applied in paying up unissued Shares to be allotted to Members credited as fully paid; |
170.3. | make any arrangements it thinks fit to resolve a difficulty arising in the distribution of a capitalised reserve and in particular, without limitation, where Shares or debentures become distributable in fractions, the Board may deal with the fractions as it thinks fit; |
170.4. | authorise a person to enter (on behalf of all the Members concerned) into an agreement with the Company providing for the allotment to the Members respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalisation and any such agreement made under this authority being effective and binding on all those Members; and |
170.5. | generally do all acts and things required to give effect to the resolution. |
171. | The Board shall cause to be kept accounting records, whether in the form of documents, electronic form or otherwise, that: |
171.1. | correctly record and explain the transactions of the Company; |
171.2. | will at any time enable the financial position of the Company to be determined with reasonable accuracy; |
171.3. | will enable the Board to ensure that any balance sheet, profit and loss account or income and expenditure account of the Company complies with the requirements of the Act; |
171.4. | will record all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company; and |
171.5. | will enable the accounts of the Company to be readily and properly audited. |
172. | Accounting records shall be kept on a continuous and consistent basis and entries therein shall be made in a timely manner and be consistent from year to year. The Company may send by post, electronic mail or any other means of electronic communication a summary financial statement to its Members or persons |
173. | The accounting records shall be kept at the registered office of the Company or, subject to the provisions of the Act, at such other place as the Directors think fit and shall be open at all reasonable times to the inspection of the Directors. |
174. | Accounting records shall not be deemed to be kept as required by Articles 171 to 173, if there are not kept such accounting records as are necessary to give a true and fair view of the state of the Company's affairs and to explain its transactions. |
175. | In accordance with the provisions of the Act, the Board may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
176. | A copy of every balance sheet (including every document required by law to be annexed thereto) which is to be laid before the annual general meeting of the Company together with a copy of the Directors' report and Auditors' report shall be sent by post, electronic mail or any other means of communication (electronic or otherwise), not less than twenty-one (21) clear days before the date of the annual general meeting, to every person entitled under the provisions of the Act to receive them; provided that in the case of those documents sent by electronic mail or any other means of electronic communication, such documents shall be sent with the consent of the recipient, to the Address of the recipient notified to the Company by the recipient for such purposes. |
177. | Auditors shall be appointed and their duties regulated in accordance with Chapter 18 of the Act or any statutory amendment thereof, any other applicable law and such requirements not inconsistent with the Act as the Board may from time to time determine. |
178. | Any notice to be given, served, sent or delivered pursuant to these Articles shall be in writing (whether in electronic form or otherwise). |
178.1. | A notice or document to be given, served, sent or delivered in pursuance of these Articles, and the annual report of the Company, may be given to, served on or delivered to any Director, Member or committee member by the Company: |
(a) | by handing same to their authorised agent; |
(b) | by delivering same to their registered address; |
(c) | by sending same by the post in a pre-paid cover addressed to their registered address; or |
(d) | by sending, with the consent of the Director, Member or committee member to the extent required by law, same by means of electronic mail or other means of electronic communication approved by the Directors, to the Address of the Director, Member or committee member notified to the Company by the Director, Member or committee member for such purpose (or if not so notified, then to the Address of the Director, Member or committee member last known to the Company). |
178.2. | For the purposes of these Articles and the Act, a document shall be deemed to have been sent to a Director, Member or committee member if a notice is given, served, sent or delivered to the Director, Member or committee member and the notice specifies the website or hotlink or other electronic link at or through which the Director, Member or committee member may obtain a copy of the relevant document. |
178.3. | Where a notice or document is given, served or delivered pursuant to sub-paragraph 178.1(a) or 178.1(b) of this Article, the giving, service or delivery thereof shall be deemed to have been effected at the time the same was handed to the Director, Member or committee member or his or her authorised agent, or left at his or her registered Address (as the case may be). |
178.4. | Where a notice or document is given, served or delivered pursuant to sub-paragraph 178.1(c) of this Article, the giving, service or delivery thereof shall be deemed to have been effected at the expiration of twenty-four (24) hours after the cover containing it was posted. In proving service or delivery it shall be sufficient to prove that such cover was properly addressed, stamped and posted. |
178.5. | Where a notice or document is given, served or delivered pursuant to sub-paragraph 178.1(d) of this Article, the giving, service or delivery thereof shall be deemed to have been effected at the expiration of forty-eight (48) hours after despatch. |
178.6. | Every legal personal representative, committee, receiver, curator bonis or other legal curator, assignee in bankruptcy, examiner or liquidator of a Member shall be bound by a notice given as aforesaid if sent to the last registered Address of such Member, or, in the event of notice given or delivered pursuant to sub-paragraph 178.1(d), if sent to the Address notified by the Company by the Member for such purpose notwithstanding that the Company may have notice of the death, lunacy, bankruptcy, liquidation or disability of such Member. |
178.7. | Notwithstanding anything contained in this Article, the Company shall not be obliged to take account of or make any investigations as to the existence of any suspension or curtailment of postal services within or in relation to all or any part of any jurisdiction. |
178.8. | Any requirement in these Articles for the consent of a Member in regard to the receipt by such Member of electronic mail or other means of electronic communications approved by the Directors, including the receipt of the Company's annual report, statutory financial statements and the Directors' and auditor's reports thereon, shall be deemed to have been satisfied where the Company has written to the Member informing him or her of its intention to use electronic communications for such purposes and the Member has not, within four (4) weeks of the issue of such notice, served an objection in writing on the Company to such proposal. Where a Member has given, or is deemed to have given, his/her consent to the receipt by such Member of electronic mail or other means of electronic communications approved by the Directors, she/he may revoke such consent at any time by requesting the Company to communicate with him or her in documented form; provided, however, that such revocation shall not take effect until five (5) days after written notice of the revocation is received by the Company. |
178.9. | Without prejudice to the provisions of sub-paragraphs 178.1(a) and 178.1(b) of this Article, if at any time by reason of the suspension or curtailment of postal services in any territory, the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a public announcement (as defined below) and such notice shall be deemed to have been duly served on all Members entitled thereto at noon (New York time) on the day on which the said public announcement is made. In any such case the Company shall put a full copy of the notice of the general meeting on its website. A "public announcement" shall mean disclosure in a press release reported by a financial news service or in a document publicly filed by the Company with the U.S. Securities and Exchange Commission pursuant to sections 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder. |
179. | Notice may be given by the Company to the joint holders of a Share by giving the notice to the joint holder whose name stands first in the Register in respect of the Share and notice so given shall be sufficient notice to all the joint holders. |
180.1. | Every person who becomes entitled to a Share shall before his or her name is entered in the Register in respect of the Share, be bound by any notice in respect of that Share which has been duly given to a person from whom he or she derives his or her title. |
180.2. | A notice may be given by the Company to the persons entitled to a Share in consequence of the death or bankruptcy of a Member by sending or delivering it, in any manner authorised by these Articles for the giving of notice to a Member, addressed to them at the address, if any, supplied by them for that purpose. Until such an address has been supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy had not occurred. |
181. | The signature (whether electronic signature, an advanced electronic signature or otherwise) to any notice to be given by the Company may be written (in electronic form or otherwise) or printed. |
182. | A Member present, either in person or by proxy, at any meeting of the Company or the holders of any class of Shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called. |
183.1. | The Company shall be entitled to sell at the best price reasonably obtainable, any Share or stock of a Member or any Share or stock to which a person is entitled by transmission if and provided that: |
(a) | for a period of six (6) years (not less than three (3) dividends having been declared and paid) no cheque or warrant sent by the Company through the post in a prepaid letter addressed to the Member or to the person entitled by transmission to the Share or stock at his or her address on the Register or other than the last known address given by the Member or the person entitled by transmission to which cheques and warrants are to be sent has been cashed and no communication has been received by the Company from the Member or the person entitled by transmission; and |
(b) | at the expiration of the said period of six (6) years the Company has given notice by advertisement in a leading newspaper circulating in the area in which the address referred to in paragraph (a) of this Article is located of its intention to sell such Share or stock; and |
(c) | the Company has not during the further period of three (3) months after the date of the advertisement and prior to the exercise of the power of sale received any communication from the Member or person entitled by transmission. |
183.2. | To give effect to any such sale, the Company may appoint any person to execute as transferor an instrument of transfer of such Share or stock and such instrument of transfer shall be as effective as if it had been executed by the Member or person entitled by transmission to such Share or stock. The Company shall account to the Member or other person entitled to such Share or stock for the net proceeds of such sale by carrying all monies in respect thereof to a separate account which shall be a permanent debt of the Company and the Company shall be deemed to be a debtor and not a trustee in respect thereof for such Member or other person. Monies carried to such separate account may either be employed in the business of the Company or invested in such investments (other than shares of the Company or its holding company if any) as the Directors may from time to time think fit. |
184. | Former shareholders of Paladin Labs Inc. ("Paladin") who do not deliver their Paladin share certificates and all other required documentation to Paladin's exchange agent on or before the second anniversary of the completion of the Company's indirect acquisition of Paladin (the "Paladin Acquisition") may in the absolute discretion of the Board, have their relevant Shares repurchased by the Company for nil |
185. | The Company may destroy: |
185.1. | any dividend mandate or any variation or cancellation thereof or any notification of change of name or address, at any time after the expiry of two (2) years from the date such mandate variation, cancellation or notification was recorded by the Company; |
185.2. | any instrument of transfer of Shares which has been registered, at any time after the expiry of six (6) years from the date of registration; and |
185.3. | any other document on the basis of which any entry in the Register was made, at any time after the expiry of six (6) years from the date an entry in the Register was first made in respect of it; |
185.4. | and it shall be presumed conclusively in favour of the Company that every share certificate (if any) so destroyed was a valid certificate duly and properly sealed and that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered and that every other document destroyed hereunder was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company provided always that: |
(a) | the foregoing provisions of this Article shall apply only to the destruction of a document in good faith and without express notice to the Company that the preservation of such document was relevant to a claim; |
(b) | nothing contained in this Article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any case where the conditions of proviso (a) above are not fulfilled; and |
(c) | references in this Article to the destruction of any document include references to its disposal in any manner. |
186. | If the Company shall be wound up and the assets available for distribution among the Members as such shall be insufficient to repay the whole of the paid up or credited as paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up or credited as paid up at the commencement of the winding up on the Shares held by them respectively. And if in a winding up the assets available for distribution among the Members shall be more than sufficient to repay the whole of the share capital paid up or credited as paid up at the commencement of the winding up, the excess shall be distributed among the Members in proportion to the capital at the commencement of the winding up paid up or credited as paid up on the said Shares held by them respectively. Provided that this Article shall not affect the rights of the Members holding Shares issued upon special terms and conditions. |
186.1. | In case of a sale by the liquidator under section 601 of the Act, the liquidator may by the contract of sale agree so as to bind all the Members, for the allotment to the Members directly, of the proceeds of sale in proportion to their respective interests in the Company and may further, by the contract, limit a time at the expiration of which obligations or Shares not accepted or required to be sold shall be deemed to have been irrevocably refused and be at the disposal of the Company, but so that nothing herein contained shall be taken to diminish, prejudice or affect the rights of dissenting Members conferred by the said section. |
186.2. | The power of sale of the liquidator shall include a power to sell wholly or partially for debentures, debenture stock, or other obligations of another company, either then already constituted or about to be constituted for the purpose of carrying out the sale. |
187. | If the Company is wound up, the liquidator, with the sanction of a Special Resolution and any other sanction required by the Act, may divide amongst the Members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not), and, for such purpose, may value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator, with the like sanction, may vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as, with the like sanction, he or she determines, but so that no Member shall be compelled to accept any assets upon which there is a liability. |
188.1. | Subject to the provisions of, and so far as may be permitted by, the Act, every Director and Secretary shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him or her in the execution and discharge of his or her duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgement is given in his or her favour (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his or her part) or in which he or she is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him by the Court. |
188.2. | As far as permissible under the Act, the Company shall indemnify any current or former executive or officer of the Company (excluding any Directors or Secretary) or any person who is serving or has served at the request of the Company as a Director, executive, officer or trustee of another company, joint venture, trust or other enterprise against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Company, to which he or she was, is, or is threatened to be, made a party by reason of the fact that he or she is or was such a Director, executive, officer or trustee, provided always that the indemnity contained in this Article 188.2 shall not extend to any matter which would render it void pursuant to the Act. |
188.3. | In the case of any threatened, pending or completed action, suit or proceeding by or in the right of the Company, the Company shall indemnify each person indicated in Article 188.2 against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defence or the settlement thereof, except no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for fraud or dishonesty in the performance of his or her duty to the Company unless and only to the extent that the Court or the Court in which such action or suit was brought shall determine upon application that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court shall deem proper. |
188.4. | As far as permissible under the Act, expenses, including attorneys’ fees, incurred in defending any action, suit or proceeding referred to in Articles 188.2 and 188.3 may be paid by the Company in advance of the final disposition of such action, suit or proceeding as authorised by the Board in the specific case upon receipt of an undertaking by or on behalf of the Director, executive, officer or trustee, or other indemnitee |
188.5. | It being the policy of the Company that indemnification of the persons specified in this Article shall be made to the fullest extent permitted by law, the indemnification provided by this Article shall not be deemed exclusive (a) of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Memorandum, Articles, any agreement, any insurance purchased by the Company, any vote of Members or disinterested Directors, or pursuant to the direction (however embodied) of any court of competent jurisdiction, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, or (b) of the power of the Company to indemnify any person who is or was an employee or agent of the Company or of another company, joint venture, trust or other enterprise which he or she is serving or has served at the request of the Company, to the same extent and in the same situations and subject to the same determinations as are hereinabove set forth with respect to a Director, executive, officer or trustee. As used in this Article 188.5, references to the “Company” include all constituent companies in a consolidation or merger in which the Company or a predecessor to the Company by consolidation or merger was involved. The indemnification provided by this Article shall continue as to a person who has ceased to be a Director, executive, officer or trustee and shall inure to the benefit of the heirs, executors, and administrators of such a person. |
188.6. | The Directors shall have power to purchase and maintain for any Director, the Secretary or other officers or employees of the Company insurance against any such liability as referred to in section 235 of the Act. |
188.7. | The Company may additionally indemnify any employee or agent of the Company or any Director, executive, officer, employee or agent of any of its subsidiaries to the fullest extent permitted by law. |
189. | The financial year of the Company shall be as prescribed by the Board from time to time. |
190. | The Board is hereby expressly authorised to adopt any shareholder rights plan, upon such terms and conditions as the Board deems expedient and in the best interests of the Company, subject to applicable law. |
Name, Address and Description | Number of shares |
of the Subscriber | taken by the |
Subscriber |
/S/ PAUL V. CAMPANELLI | |
Paul V. Campanelli | |
President and Chief Executive Officer (Principal Executive Officer) | |
Date: | August 8, 2017 |
/S/ BLAISE COLEMAN | |
Blaise Coleman | |
Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |
Date: | August 8, 2017 |
/S/ PAUL V. CAMPANELLI | |||
Name: | Paul V. Campanelli | ||
Title: | President and Chief Executive Officer (Principal Executive Officer) |
/S/ BLAISE COLEMAN | |||
Name: | Blaise Coleman | ||
Title: | Executive Vice President, Chief Financial Officer (Principal Financial Officer) |
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Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jul. 31, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ENDP | |
Entity Registrant Name | Endo International plc | |
Entity Central Index Key | 0001593034 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Ordinary Shares Outstanding | 223,292,068 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Euro deferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Euro deferred shares, shares authorized | 4,000,000 | 4,000,000 |
Euro deferred shares, shares issued | 4,000,000 | 4,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 223,284,141 | 222,954,175 |
Common stock, shares outstanding | 223,284,141 | 222,954,175 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1. BASIS OF PRESENTATION Endo International plc is an Ireland-domiciled, global specialty pharmaceutical company focused on generic and branded pharmaceuticals. We aim to be the premier partner to healthcare professionals and payment providers, delivering an innovative suite of generic and branded drugs to meet patients’ needs. Unless otherwise indicated or required by the context, references throughout to “Endo,” the “Company,” “we,” “our,” or “us” refer to financial information and transactions of Endo International plc and its consolidated subsidiaries. The accompanying unaudited Condensed Consolidated Financial Statements of Endo International plc and its subsidiaries have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements of Endo International plc and its subsidiaries, which are unaudited, include all normal and recurring adjustments necessary for a fair statement of the Company’s financial position as of June 30, 2017 and the results of our operations and our cash flows for the periods presented. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The year-end Condensed Consolidated Balance Sheet data as of December 31, 2016 was derived from audited financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our Consolidated Financial Statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2016. |
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards update (ASU) No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09). ASU 2014-09 represents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled to receive in exchange for those goods or services. This ASU sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which defers the effective date of ASU 2014-09 by one year, but permits companies to adopt one year earlier if they choose (i.e., the original effective date). As such, ASU 2014-09 will be effective for annual and interim reporting periods beginning after December 15, 2017. In March and April 2016, the FASB issued ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consideration (Reporting Revenue Gross versus Net)” and ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” respectively, which clarifies the guidance on reporting revenue as a principal versus agent, identifying performance obligations and accounting for intellectual property licenses. In addition, in May 2016, the FASB issued ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends certain narrow aspects of Topic 606, and in December 2016, the FASB issued ASU No. 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which amends certain narrow aspects of Topic 606. The Company will adopt the new revenue recognition standard on January 1, 2018. The Company is currently evaluating the impact of ASU 2014-09 on its consolidated results of operations and financial position. The Company’s cross-functional implementation team consisting of representatives from across its business segments is progressing towards the completion of the diagnostic assessment of the impact of the standard on its contract portfolio, including review of customer contracts, as well as the Company’s current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to its revenue contracts. The majority of the Company’s revenue is generated from product sales and the Company currently does not anticipate a significant impact to revenue related to these arrangements; however, this analysis is preliminary and remains subject to change. In certain limited situations, under current GAAP, the Company has deferred revenue for certain product sales because the sales price was not deemed to be fixed or determinable. Under the new standard, the Company will be required to estimate the variable consideration associated with these transactions and record revenue at the point of sale. The Company continues to evaluate the impact on certain less significant transactions, including certain licensing arrangements, and expects to substantially complete its diagnostic assessment during the third quarter of 2017. The Company is also continuing to evaluate the internal control implications associated with the adoption of the new standard, including the identification and implementation, if necessary, of changes to its business processes, systems and controls to support recognition and disclosure under the new standard. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company will utilize the modified retrospective method of adoption. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02). ASU 2016-02 establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-02 on the Company’s consolidated results of operations and financial position. In August 2016, the FASB issued ASU No. 2016-15 “Classification of Certain Cash Receipts and Cash Payments” (ASU 2016-15). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period but all of ASU 2016-15 must be adopted in the same period. The Company is currently evaluating the impact of ASU 2016-15 on the Company’s consolidated statement of cash flows. In November 2016, the FASB issued ASU No. 2016-18 “Statement of Cash Flows (Topic 230) - Restricted Cash” (ASU 2016-18). ASU 2016-18 states that a statement of cash flows should explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period, and all updates should be applied using a retrospective transition method. Subsequent to the adoption of ASU 2016-18 the mesh-related qualified settlement funds and other restricted cash accounts will be included in the beginning-of-period and end-of-period Cash and cash equivalents on the Condensed Consolidated Statements of Cash Flows and transfers into and out of the qualified settlement funds will therefore no longer result in separate investing cash flows in the Condensed Consolidated Statements of Cash Flows. In May 2017, the FASB issued ASU No. 2017-09 “Compensation - Stock Compensation” (ASU 2017-09). ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. It is intended to reduce both (1) diversity in practice and (2) cost and complexity when accounting for changes to the terms or conditions of share-based payment awards. ASU 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of ASU 2017-09 on the Company’s consolidated results of operations and financial position. Recently Adopted Accounting Pronouncements In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” (ASU 2015-11). ASU 2015-11 states that an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public entities, ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2015-11 on January 1, 2017 and the adoption did not impact the Company’s consolidated results of operations and financial position. In March 2016, the FASB issued ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting” (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of share-based payments to employees including: (a) requiring all income tax effects of awards to be recognized in the income statement, rather than in additional paid in capital, when the awards vest or are settled, (b) eliminating the requirement that excess tax benefits be realized before companies can recognize them, (c) requiring companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity, (d) increasing the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation, (e) requiring an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on its statement of cash flows and (f) electing whether to account for forfeitures of share-based payments by (1) recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted the new guidance on January 1, 2017 on a prospective basis, except for the provision requiring companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity, which was adopted retrospectively. As a result of the adoption, during the three and six months ended June 30, 2017, the Company recognized tax expense of $0.4 million and $4.8 million, respectively, in its Condensed Consolidated Statement of Operations that would have been recorded as additional paid-in capital prior to adoption. In addition, the Company retrospectively adjusted its statement of cash flows for the six months ended June 30, 2016 to present an inflow of $3.9 million related to excess tax benefits as an operating activity, rather than as a financing activity. The adoption of ASU 2016-09 did not impact beginning retained earnings and the Company will continue to estimate forfeitures to determine the amount of compensation cost to be recognized in each period. None of the other provisions in this amended guidance had a significant impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16 “Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 states that an entity should recognize the income tax consequences when an intra-entity transfer of an asset other than inventory occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted as long as it is adopted in the first interim period of a fiscal year beginning after December 15, 2016. The Company early adopted ASU 2016-16 on January 1, 2017, resulting in the elimination of previously recorded deferred charges that were established in 2016. Specifically, the Company eliminated a $24.1 million current deferred charge and a $348.8 million non-current deferred charge that were reflected in our Condensed Consolidated Balance Sheet at December 31, 2016 as Prepaid expenses and other current assets and Other assets, respectively. The eliminations of these deferred charges were recorded as adjustments to retained earnings as of January 1, 2017. On adoption, the Company also recorded net deferred tax assets, primarily related to certain intangibles and tax deductible goodwill, of $479.7 million, fully offset by a corresponding valuation allowance. In January 2017, the FASB issued ASU No. 2017-01 “Business Combinations (Topic 805) - Clarifying the Definition of a Business” (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update provide a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”), is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments in this update should be applied prospectively on or after the effective date. Early application of the amendments in this update is allowed. The Company adopted this new standard on January 1, 2017. In January 2017, the FASB issued ASU No. 2017-04 “Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment” (ASU 2017-04). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge 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. Additionally, an entity should consider the income tax effects of any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and an entity should apply the amendments of ASU 2017-04 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard on January 1, 2017. Refer to Note 8. Goodwill and Other Intangibles for a description of goodwill impairment charges taken during the six months ended June 30, 2017. |
Discontinued Operations and Assets and Liabilities Held For Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE | NOTE 3. DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE American Medical Systems On February 24, 2015, the Company’s Board of Directors (Board of Directors) approved a plan to sell the Company’s American Medical Systems Holdings, Inc. (AMS) business. The AMS business included the Men’s Health and Prostate Health businesses, which were sold to Boston Scientific Corporation on August 3, 2015, as well as the Women’s Health business (Astora). On February 24, 2016, the Company’s Board of Directors resolved to wind-down the remaining Astora business as it did not align with the Company’s strategic direction and to reduce Astora’s exposure to the mesh-related product liability. Astora ceased business operations on March 31, 2016. The operating results of this business are reported as Discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for all periods presented. The following table provides the operating results of AMS Discontinued operations, net of tax for the three and six months ended June 30, 2017 and 2016 (in thousands):
Amounts reported in the table above as Litigation-related and other contingencies, net primarily relate to charges for vaginal-mesh-related matters, which are further described in Note 11. Commitments and Contingencies. The cash flows from discontinued operating activities related to AMS included the impact of net losses of $708.9 million and $91.3 million for the six months ended June 30, 2017 and 2016, respectively, and the impact of cash activity related to vaginal mesh cases, which is further described in Note 11. Commitments and Contingencies. Net cash used in discontinued investing activities related to AMS consisted of purchases of property, plant and equipment of $0.1 million for the six months ended June 30, 2016, with no comparable amount during the six months ended June 30, 2017. There was no depreciation or amortization during the three and six months ended June 30, 2017 or 2016 related to AMS. Astora Restructuring The Astora wind-down process included a restructuring initiative implemented during the three months ended March 31, 2016, which included a reduction of the Astora workforce consisting of approximately 250 employees. The Company did not incur any pre-tax charges during the three and six months ended June 30, 2017 as a result of the Astora restructuring initiative. The Company incurred expenses of $6.0 million and $66.6 million during the three and six months ended June 30, 2016, consisting of employee separation and other benefit-related costs, asset impairment charges, contract termination charges and other general restructuring costs. The Company anticipates there will be no significant additional pre-tax restructuring expenses related to this initiative. The majority of these actions were completed as of September 30, 2016 and substantially all cash payments were made by June 30, 2017. These restructuring costs are included in Discontinued operations in the Condensed Consolidated Statements of Operations. A summary of expenses related to the Astora restructuring initiative is included below for the three and six months ended June 30, 2016 (in thousands):
The liability related to the Astora restructuring initiative is included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Litha During the fourth quarter of 2016, the Company initiated a process to sell its Litha Healthcare Group Limited and related Sub-Sahara African business assets (Litha) and, on February 27, 2017, the Company entered into a definitive agreement to sell Litha to Acino Pharma AG. The sale closed on July 3, 2017. At closing, the Company received approximately $97 million in cash, after giving effect to initial cash and net working capital purchase price adjustments, and may receive up to an additional $11 million in contingent consideration. The assets and liabilities of Litha are classified as held for sale in the Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016. Litha is part of the Company’s International Pharmaceuticals segment. The following table provides the components of Assets and Liabilities held for sale of Litha as of June 30, 2017 and December 31, 2016 (in thousands):
Litha does not meet the requirements for treatment as a discontinued operation. Somar During the first quarter of 2017, the Company announced that it was assessing strategic alternatives for its Somar business. On June 30, 2017, the Company entered into a definitive agreement to sell Grupo Farmacéutico Somar, S.A.P.I. de C.V., together with its subsidiaries (Somar), to AI Global Investments (Netherlands) PCC Limited (AI Global) acting for and on behalf of the Soar Cell. AI Global will pay an aggregate purchase price of approximately $124 million in cash, subject to certain cash, debt and working capital adjustments. The transaction is expected to close in the second half of 2017, pending customary regulatory approvals and satisfaction of other customary closing conditions. The assets and liabilities of Somar are classified as held for sale in the Condensed Consolidated Balance Sheets as of June 30, 2017. Somar is part of the Company’s International Pharmaceuticals segment. The following table provides the components of Assets and Liabilities held for sale of Somar as of June 30, 2017 (in thousands):
Somar does not meet the requirements for treatment as a discontinued operation. |
Restructuring |
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RESTRUCTURING | NOTE 4. RESTRUCTURING 2016 U.S. Generic Pharmaceuticals Restructuring As part of the ongoing U.S. Generic Pharmaceuticals integration efforts initiated in connection with the acquisition of Par Pharmaceutical Holdings Inc. in September 2015, the Company announced a restructuring initiative in May 2016 to optimize its product portfolio and rationalize its manufacturing sites to expand product margins (the 2016 U.S. Generic Pharmaceuticals restructuring initiative). These measures included certain cost savings initiatives, including a reduction in headcount and the disposal of our Charlotte, North Carolina manufacturing facility (the Charlotte facility). On October 31, 2016, we entered into a definitive agreement to sell the Charlotte facility for cash proceeds of $14 million. The transaction closed in January 2017. The assets of the Charlotte facility were classified as held for sale in the accompanying Condensed Consolidated Balance Sheet as of December 31, 2016. As a result of the 2016 U.S. Generic Pharmaceuticals restructuring initiative, the Company incurred pre-tax charges of $1.1 million during the six months ended June 30, 2017. These charges related primarily to employee separation and other benefit-related costs. The Company did not incur charges related to this restructuring initiative during the three months ended June 30, 2017. The Company incurred pre-tax charges of $18.9 million and $146.2 million during the three and six months ended June 30, 2016, respectively. These charges consisted of certain intangible asset impairment charges of $100.3 million during the six months ended June 30, 2016, which were recorded in the first quarter of 2016, charges to increase excess inventory reserves of $6.4 million and $33.3 million during the three and six months ended June 30, 2016, respectively, charges relating to employee separation, retention and other benefit-related costs of $6.4 million, accelerated depreciation of $3.4 million and other charges of $2.7 million during both the three and six months ended June 30, 2016. These charges are included in the U.S. Generic Pharmaceuticals segment and are included in Asset impairment charges, Cost of revenues and Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company does not expect to incur additional significant expenses related to this restructuring initiative. The Company anticipates substantially all related cash payments will be made by the end of 2017. Under this restructuring initiative, separation costs were expensed ratably over the requisite service period, as applicable. The liability related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative is included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets and is entirely related to employee separation and other benefit-related costs. Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
2016 U.S. Branded Pharmaceutical Restructuring In December 2016, the Company announced that it was terminating its worldwide license and development agreement with BioDelivery Sciences International, Inc. (BDSI) for BELBUCA™ and returning the product to BDSI. This termination was completed on January 6, 2017. As a result of this announcement and a comprehensive assessment of its product portfolio, the Company restructured its U.S. Branded Pharmaceuticals segment sales organization during the fourth quarter of 2016 (the 2016 U.S. Branded restructuring initiative), which included the elimination of an approximate 375-member U.S. Branded Pharmaceuticals pain field sales force and the termination of certain contracts. The Company did not incur any significant pre-tax charges during the three and six months ended June 30, 2017 or 2016 as a result of the 2016 U.S. Branded restructuring initiative. Actions related to this initiative were completed by December 31, 2016 and substantially all of the cash payments are anticipated to be made by the end of 2017. The Company does not expect to incur any additional material pre-tax restructuring expenses related to this initiative. The liability related to the 2016 U.S. Branded Pharmaceutical restructuring initiative is included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
January 2017 Restructuring On January 26, 2017, the Company announced a restructuring initiative implemented as part of its ongoing organizational review (the January 2017 restructuring initiative). This restructuring is intended to further integrate, streamline and optimize the Company’s operations by aligning certain corporate and R&D functions with its recently restructured U.S. Generics Pharmaceutical and U.S. Branded Pharmaceutical business units in order to create efficiencies and cost savings. As part of this restructuring, the Company undertook certain cost reduction initiatives, including a reduction of approximately 90 positions of its workforce, primarily related to corporate and U.S. Branded Pharmaceutical R&D functions in Malvern, PA and Chestnut Ridge, NY, a streamlining of general and administrative expenses, an optimization of commercial spend and a refocusing of research and development efforts. As a result of the January 2017 restructuring initiative, the Company incurred total pre-tax charges of approximately $15.1 million during the six months ended June 30, 2017 related to employee separation and other benefit-related costs. There were no expenses related to this restructuring initiative for the three months ended June 30, 2017. Of the total charges incurred, $6.9 million are included in the U.S. Branded Pharmaceuticals segment, $4.9 million are included in Corporate unallocated costs and $3.3 million are included in the U.S. Generic Pharmaceuticals segment for six months ended June 30, 2017, respectively. These charges are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company does not expect to incur additional material pre-tax restructuring-related expenses. Substantially all cash payments are anticipated to be made by the end of 2017 and substantially all of the actions associated with this restructuring were completed by the end of April 2017. The liability related to the January 2017 restructuring initiative is included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets and is entirely related to employee separation and other benefit-related costs. Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
2017 U.S. Generics Pharmaceuticals Restructuring On July 21, 2017, the Company announced that after completing a comprehensive review of its manufacturing network, the Company will be ceasing operations and closing its manufacturing and distribution facilities in Huntsville, Alabama (the 2017 U.S. Generics Pharmaceuticals restructuring initiative). The closure of the facilities is expected to occur by the end of 2018. As a result of the 2017 U.S. Generics Pharmaceuticals restructuring initiative, the Company’s workforce is expected to be reduced by approximately 875 positions, including approximately 35 open positions, and the Company expects to incur total pre-tax charges of approximately $325 million, including total estimated cash outlays of approximately $60 million, substantially all of which will be paid by the end of 2018. The estimated restructuring charges consist of accelerated depreciation charges of approximately $165 million, asset impairment charges related to identifiable intangible assets and certain property, plant and equipment of approximately $90 million, charges to increase excess inventory reserves of approximately $10 million, employee separation, retention and other benefit-related costs of approximately $40 million and certain other charges of approximately $20 million. Employee separation, retention and certain other employee benefit-related costs will be expensed ratably over the requisite service period. Other costs that will be incurred including, but not limited to, contract termination fees and product technology transfer costs, will be expensed as incurred. As a result of the 2017 U.S. Generics Pharmaceuticals restructuring initiative, the Company incurred pretax charges of $109.3 million during the three and six months ended June 30, 2017, consisting of certain intangible asset and property, plant and equipment impairment charges of $89.5 million, charges to increase excess inventory reserves of $7.9 million and certain other charges of $11.9 million. These charges are included in the U.S. Generic Pharmaceuticals segment and are included in Asset impairment charges, Cost of revenues and both Cost of revenues and Selling, general and administrative, respectively, in the Condensed Consolidated Statements of Operations. The liability related to the 2017 U.S. Generics Pharmaceuticals restructuring initiative, which relates to certain other restructuring charges, is included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
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Segment Results |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT RESULTS | NOTE 5. SEGMENT RESULTS The three reportable business segments in which the Company operates are: (1) U.S. Generic Pharmaceuticals, (2) U.S. Branded Pharmaceuticals and (3) International Pharmaceuticals. These segments reflect the level at which the chief operating decision maker regularly reviews financial information to assess performance and to make decisions about resources to be allocated. Each segment derives revenue from the sales or licensing of its respective products and is discussed in more detail below. We evaluate segment performance based on each segment’s adjusted income from continuing operations before income tax, which we define as loss from continuing operations before income tax and before certain upfront and milestone payments to partners; acquisition-related and integration items, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company’s operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; amortization of intangible assets; inventory step-up recorded as part of our acquisitions; certain non-cash interest expense; litigation-related and other contingent matters; gains or losses from early termination of debt; foreign currency gains or losses on intercompany financing arrangements; and certain other items. Certain of the corporate general and administrative expenses incurred by the Company are not attributable to any specific segment. Accordingly, these costs are not allocated to any of the Company’s segments and are included in the results below as “Corporate unallocated costs.” Interest income and expense are also considered corporate items and not allocated to any of the Company’s segments. The Company’s consolidated adjusted income from continuing operations before income tax is equal to the combined results of each of its segments less these unallocated corporate items. The following represents selected information for the Company’s reportable segments for the three and six months ended June 30, 2017 and 2016 (in thousands):
__________
There were no material revenues from external customers attributed to an individual country outside of the United States during the three and six months ended June 30, 2017 and 2016. There were no material tangible long-lived assets in an individual country other than the United States as of June 30, 2017 or December 31, 2016. The table below provides reconciliations of our consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our total segment adjusted income from continuing operations before income tax for the three and six months ended June 30, 2017 and 2016 (in thousands):
__________
Asset information is not reviewed or included within our internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | NOTE 6. FAIR VALUE MEASUREMENTS Financial Instruments The financial instruments recorded in our Condensed Consolidated Balance Sheets include cash and cash equivalents (including money market funds and time deposits), restricted cash and cash equivalents, accounts receivable, marketable securities, equity and cost method investments, accounts payable and accrued expenses, acquisition-related contingent consideration and debt obligations. Included in cash and cash equivalents and restricted cash and cash equivalents are money market funds representing a type of mutual fund required by law to invest in low-risk securities (for example, U.S. government bonds, U.S. Treasury Bills and commercial paper). Money market funds pay dividends that generally reflect short-term interest rates. Due to their short-term maturity, the carrying amounts of non-restricted and restricted cash and cash equivalents (including money market funds and time deposits), accounts receivable, accounts payable and accrued expenses approximate their fair values. Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Marketable Securities Equity securities consist of investments in the stock of publicly traded companies, the values of which are based on quoted market prices and thus represent Level 1 measurements within the above-defined fair value hierarchy. These securities are not held to support current operations and are therefore classified as non-current assets. Equity securities are included in Marketable securities in our Condensed Consolidated Balance Sheets at June 30, 2017 and December 31, 2016. At the time of purchase, we classify our marketable securities as either available-for-sale securities or trading securities, depending on our intent at that time. Available-for-sale and trading securities are carried at fair value with unrealized holding gains and losses recorded within other comprehensive income or net income, respectively. The Company reviews any unrealized losses associated with available-for-sale securities to determine the classification as a “temporary” or “other-than-temporary” impairment. A temporary impairment results in an unrealized loss being recorded in other comprehensive income. An impairment that is viewed as other-than-temporary is recognized in net income. The Company considers various factors in determining the classification, including the length of time and extent to which the fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer or investee, and the Company’s ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Acquisition-Related Contingent Consideration The fair value of contingent consideration liabilities is determined using unobservable inputs; hence these instruments represent Level 3 measurements within the above-defined fair value hierarchy. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is remeasured at current fair value with changes recorded in earnings. Changes in any of the inputs may result in a significant adjustment to fair value. See Recurring Fair Value Measurements below for additional information on acquisition-related contingent consideration. Recurring Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2017 and December 31, 2016 were as follows (in thousands):
At June 30, 2017, money market funds include $21.9 million in QSFs to be disbursed to mesh-related product liability claimants. See Note 11. Commitments and Contingencies for further discussion of our product liability cases.
At December 31, 2016, money market funds include $26.2 million in QSFs to be disbursed to mesh-related product liability claimants. See Note 11. Commitments and Contingencies for further discussion of our product liability cases. Fair Value Measurements Using Significant Unobservable Inputs The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2017 and 2016 (in thousands):
The fair value measurements of the contingent consideration obligations at June 30, 2017 were determined using risk-adjusted discount rates ranging from 3% to 22%. Changes in fair value recorded in earnings related to acquisition-related contingent consideration are included in our Condensed Consolidated Statements of Operations as Acquisition-related and integration items, and amounts recorded for the short-term and long-term portions of acquisition-related contingent consideration are included in Accounts payable and accrued expenses and Other liabilities, respectively, in our Condensed Consolidated Balance Sheets. The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the six months ended June 30, 2017 by acquisition (in thousands):
The following is a summary of available-for-sale securities held by the Company at June 30, 2017 and December 31, 2016 (in thousands):
Nonrecurring Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2017 were as follows (in thousands):
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INVENTORIES | NOTE 7. INVENTORIES Inventories consist of the following at June 30, 2017 and December 31, 2016 (in thousands):
__________ (1) The components of inventory shown in the table above are net of allowance for obsolescence. Inventory that is in excess of the amount expected to be sold within one year, which relates primarily to XIAFLEX® inventory, is classified as long-term inventory and is not included in the table above. At June 30, 2017 and December 31, 2016, $27.2 million and $22.9 million, respectively, of long-term inventory was included in Other assets in the Condensed Consolidated Balance Sheets. As of June 30, 2017 and December 31, 2016, the Company’s Condensed Consolidated Balance Sheets included approximately $5.3 million and $16.8 million, respectively, of capitalized pre-launch inventories related to generic products that were not yet available to be sold. |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | NOTE 8. GOODWILL AND OTHER INTANGIBLES Goodwill Changes in the carrying amount of our goodwill for the six months ended June 30, 2017 were as follows (in thousands):
The carrying amount of goodwill at June 30, 2017 and December 31, 2016 is net of the following accumulated impairments:
Other Intangible Assets The following is a summary of other intangible assets held by the Company at June 30, 2017 and December 31, 2016 (in thousands):
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Additional information on the changes in the total gross carrying amount of our other intangible assets is presented below (in thousands):
Amortization expense for the three and six months ended June 30, 2017 totaled $191.0 million and $454.1 million, respectively. Amortization expense for the three and six months ended June 30, 2016 totaled $212.8 million and $424.5 million, respectively. Estimated amortization of intangibles for the five fiscal years subsequent to December 31, 2016 is as follows (in thousands):
Impairments As part of the Company’s goodwill and intangible asset impairment assessments, the Company estimates the fair values of its reporting units using an income approach that utilizes a discounted cash flow model, or, where appropriate, a market approach. The discounted cash flow models are dependent upon the Company’s estimates of future cash flows and other factors. These estimates of future cash flows involve assumptions concerning (i) future operating performance, including future sales, long-term growth rates, operating margins, variations in the amount and timing of cash flows and the probability of achieving the estimated cash flows and (ii) future economic conditions. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The discount rates applied to the estimated cash flows are based on the overall risk associated with the particular assets and other market factors. The Company believes the discount rates and other inputs and assumptions are consistent with those that a market participant would use. Any impairment charges resulting from annual or interim goodwill and intangible asset impairment assessments are recorded to Asset impairments charges on the Company’s Condensed Consolidated Statements of Operations. A summary of significant goodwill and other intangible asset impairment charges by reportable segment for the six months ended June 30, 2017 and 2016 is included below. U.S. Generic Pharmaceuticals Segment During the first and second quarters of 2017, the Company identified certain market conditions impacting the recoverability of certain indefinite and finite-lived intangible assets in its U.S. Generic Pharmaceuticals segment. Accordingly, the Company tested these assets for impairment and determined that their carrying amounts were no longer fully recoverable, resulting in pre-tax, non-cash asset impairment charges totaling $72.7 million and $268.2 million during the three months ended March 31, 2017 and June 30, 2017, respectively. In addition, as further described in Note 4. Restructuring, the Company announced the 2017 U.S. Generic Pharmaceuticals restructuring initiative in July 2017, which includes the discontinuation of certain commercial products. As a result, the Company assessed the recoverability of the impacted products, resulting in pre-tax, non-cash intangible asset impairment charges of approximately $57.5 million during the second quarter of 2017. The Company also initiated an interim goodwill impairment analysis of its Generics reporting unit during the second quarter of 2017 as a result of the 2017 U.S. Generic Pharmaceuticals restructuring initiative and determined that the estimated fair value of the Generics reporting unit exceeded its carrying amount. Accordingly, no related goodwill impairment was recorded. The Company estimated the fair value of the Generics reporting unit using an income approach that utilizes a discounted cash flow model. The discount rate applied to the estimated cash flows for our Generics goodwill impairment test was 9.0%. The goodwill balance for the Company’s Generics reporting unit was approximately $3,531 million as of June 30, 2017. During the first and second quarters of 2016, the Company identified certain market and regulatory conditions impacting the recoverability of certain indefinite and finite-lived intangible assets in our U.S. Generic Pharmaceuticals segment. Accordingly, we tested these assets for impairment and determined that the carrying amounts of certain of these assets was no longer fully recoverable, resulting in pre-tax, non-cash asset impairment charges of $29.3 million and $40.0 million during the first and second quarters of 2016, respectively. The Company also recognized pre-tax, non-cash asset impairment charges of $100.3 million during the first quarter of 2016 related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative, which resulted from the discontinuation of certain commercial products and the abandonment of certain IPR&D projects. See Note 4. Restructuring for discussion of our material restructuring initiatives. U.S. Branded Pharmaceuticals Segment In March 2017, we announced that the Food and Drug Administration’s (FDA) Drug Safety and Risk Management and Anesthetic and Analgesic Drug Products Advisory Committees voted that the benefits of reformulated OPANA® ER (oxymorphone hydrochloride extended release) no longer outweigh its risks. In June 2017, we became aware of the FDA’s request that we voluntarily withdraw OPANA® ER from the market, and in July 2017, after careful consideration and consultation with the FDA, we decided to voluntarily remove OPANA® ER from the market. As a result of our decision, the Company determined that the carrying amount of its OPANA® ER intangible asset was no longer recoverable, resulting in a pre-tax, non-cash impairment charge of $20.6 million in the second quarter of 2017, representing the remaining carrying amount. In addition, during the second quarter of 2017, the Company identified certain market conditions impacting the recoverability of certain other finite-lived intangible assets in its U.S. Branded Pharmaceuticals segment. Accordingly, the Company tested these assets for impairment and determined that their carrying amounts were no longer fully recoverable, resulting in pre-tax, non-cash asset impairment charges totaling $31.5 million during the three months ended June 30, 2017. In addition, as a result of the withdrawal of OPANA® ER from the market and the continued erosion of its U.S. Branded Pharmaceuticals segment’s Established Products portfolio, the Company initiated an interim goodwill impairment analysis of its Branded reporting unit during the second quarter of 2017. Based on the provisions of ASU 2017-04, which the Company adopted as of January 1, 2017, the Company recorded a pre-tax, non-cash asset impairment charge of $180.4 million during the three months ended June 30, 2017 for the amount by which the carrying amount exceeded the reporting unit’s fair value. The Company estimated the fair value of the Branded reporting unit using an income approach that utilizes a discounted cash flow model. The discount rate applied to the estimated cash flows for our Branded goodwill impairment test was 9.5%. The remaining goodwill for the Company’s Branded reporting unit was approximately $829 million as of June 30, 2017. International Pharmaceuticals Segment Pursuant to an existing agreement with a wholly owned subsidiary of Novartis AG (Novartis), Paladin licensed the Canadian rights to commercialize serelaxin, an investigational drug for the treatment of acute heart failure (AHF). In March 2017, Novartis announced that a Phase III study of serelaxin in patients with AHF failed to meet its primary endpoints. As a result, Endo has concluded that the full carrying amount of its serelaxin in-process research and development intangible asset is impaired, resulting in a $45.5 million pre-tax non-cash impairment charge for the three months ended March 31, 2017. In addition and as a result of the serelaxin impairment, the Company assessed the recoverability of its Paladin goodwill balance and determined that the estimated fair value of the Paladin reporting unit was below its carrying amount. The Company recorded a pre-tax, non-cash asset impairment charge of $82.6 million during the three months ended March 31, 2017 for the amount by which the carrying amount exceeded the reporting unit’s fair value. The Company estimated the fair value of the Paladin reporting unit using an income approach that utilizes a discounted cash flow model. The discount rate applied to the estimated cash flows for our Paladin goodwill impairment test was 10.0%. The remaining goodwill for the Company’s Paladin reporting unit was approximately $87 million as of June 30, 2017. As further discussed in Note 3. Discontinued Operations and Assets and Liabilities Held for Sale, the Company entered into a definitive agreement to sell Somar on June 30, 2017, which resulted in Somar’s assets and liabilities being classified as held for sale. The initiation of held-for-sale accounting, together with the agreed upon sale price, triggered an impairment review. Accordingly, the Company performed an impairment analysis using a market approach and determined that impairment charges were required. The Company recorded pre-tax non-cash impairment charges of $25.7 million and $89.5 million related to Somar’s goodwill and other intangible assets, respectively, during the second quarter of 2017, each of which represented the remaining carrying amounts of the corresponding assets. |
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Accounts Payable And Accrued Expenses | NOTE 9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses include the following at June 30, 2017 and December 31, 2016 (in thousands):
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | NOTE 10. DEBT The following table presents the carrying amounts of the Company’s total indebtedness at June 30, 2017 and December 31, 2016 (in thousands):
The senior notes are unsecured and subordinated in right of payment to our credit facility. The aggregate estimated fair value of the Company’s long-term debt, which was estimated using the quoted market prices for the same or similar debt issuances, was $7.8 billion at both June 30, 2017 and December 31, 2016. Based on this valuation methodology, we determined these debt instruments represent Level 2 measurements within the fair value hierarchy. Credit Facility We have $995.8 million of remaining credit available through our revolving credit facility as of June 30, 2017. As of June 30, 2017, we were in compliance with all covenants contained in our credit agreement that are described below under the heading “April 2017 Refinancing”. April 2017 Refinancing On April 27, 2017, Endo International plc entered into a new credit agreement (the 2017 Credit Agreement) as parent, together with its subsidiaries Endo Luxembourg Finance Company I S.à r.l., and Endo LLC as co-borrowers, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, issuing bank and swingline lender. The 2017 Credit Agreement provides for (i) a five-year revolving credit facility in a principal amount of $1,000.0 million (the 2017 Revolving Credit Facility) and (ii) a seven-year term loan facility in a principal amount of $3,415.0 million (the 2017 Term Loan Facility and, together with the 2017 Revolving Credit Facility, the 2017 Credit Facility). Any outstanding amounts borrowed pursuant to the 2017 Credit Facility will immediately mature if any of the following of our senior notes are not refinanced or repaid in full prior to the date that is 91 days prior to the stated maturity date thereof:
The obligations under the 2017 Credit Agreement are guaranteed by Endo International plc and its material subsidiaries, as defined in the 2017 Credit Agreement, and certain other subsidiaries of the Company from time to time and secured by a lien on substantially all the assets (with certain exceptions) of the borrowers and the guarantors. The 2017 Credit Agreement contains affirmative and negative covenants that the Company believes to be usual and customary for a senior secured credit facility of this type. The negative covenants include, among other things, limitations on asset sales, mergers and acquisitions, indebtedness, liens, dividends, investments and transactions with the Company’s affiliates. Borrowings under the 2017 Revolving Credit Facility bear interest, at the borrower’s election, at a rate equal to (i) an applicable margin between 1.50% and 3.00% plus the London Interbank Offered Rate (LIBOR) or (ii) an applicable margin between 0.50% and 2.00% plus the Alternate Base Rate (as defined in the 2017 Credit Agreement). In addition, borrowings under our 2017 Term Loan Facility bear interest, at the borrower’s election, at a rate equal to (i) 4.25% plus LIBOR, subject to a LIBOR floor of 0.75%, or (ii) 3.75% plus the Alternate Base Rate, subject to an Alternate Base Rate floor of 1.75%. Also on April 27, 2017, Endo Designated Activity Company (Endo DAC), Endo Finance LLC and Endo Finco Inc. (collectively, the Issuers) issued $300.0 million in aggregate principal amount of 5.875% senior secured notes due 2024 (the 2024 Notes). The 2024 Notes were issued in a private offering for resale to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) and outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act. The 2024 Notes are senior secured obligations of the Issuers and are: (i) guaranteed by Endo International plc and its subsidiaries that also guarantee the 2017 Credit Agreement and certain other material indebtedness and (ii) secured by a lien on the same collateral that secures the 2017 Credit Agreement. Interest on the 2024 Notes is payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2017. The 2024 Notes will mature on October 15, 2024, subject to earlier repurchase or redemption in accordance with the terms of the 2024 Notes indenture. On or after April 15, 2020, the Issuers may on any one or more occasions redeem all or a part of the 2024 Notes, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and additional interest, if any, on the notes redeemed if such notes are redeemed during the twelve-month period beginning on April 15 of the years indicated below:
At any time prior to April 15, 2020, the Issuers may on any one or more occasions redeem all or a part of the 2024 Notes at a redemption price equal to 100% of the principal amount of the notes redeemed, plus the applicable make-whole premium as described in the 2024 Notes indenture, plus accrued and unpaid interest and additional interest, if any. In addition, prior to April 15, 2020, the Issuers may, subject to certain restrictions and limitations, redeem up to 35% of the aggregate principal amount of the 2024 Notes with the net cash proceeds from specified equity offerings at a redemption price equal to 105.875% of the aggregate principal amount of the 2024 Notes redeemed, plus accrued and unpaid interest and additional interest, if any. If the Company experiences certain changes of control events, the Issuers must offer to repurchase the 2024 Notes at 101% of their principal amount, plus accrued and unpaid interest and additional interest, if any. The 2024 Notes indenture contains covenants that, among other things, restrict the Company’s ability and the ability of its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain dividends, distributions, investments and restricted payments, sell certain assets, enter into sale and leaseback transactions, agree to payment restrictions on the ability of restricted subsidiaries to make certain payments to Endo International plc or any of its restricted subsidiaries, create certain liens, merge, consolidate or sell all or substantially all of the Company’s assets, enter into certain transactions with affiliates or designate subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions and qualifications, including the fall away or revision of certain of these covenants and release of the collateral upon the 2024 Notes receiving investment grade credit ratings. The Company used the net proceeds under the 2017 Term Loan Facility, together with the net proceeds of the 2024 Notes and cash on hand, to repay all of its outstanding loans under its prior credit facilities and to pay related fees and expenses. We intend to use the proceeds of the 2017 Revolving Credit Facility from time to time for general corporate purposes. In connection with the April 2017 Refinancing, we incurred new debt issuance costs of approximately $56.7 million, which were allocated among the new debt instruments as follows: (i) $41.3 million to the 2017 Term Loan Facility, (ii) $10.5 million to the 2017 Revolving Credit Facility and (iii) $4.9 million to the 2024 Notes. These costs, together with $10.1 million of the previously deferred debt issuance costs associated with our prior revolving credit facility, have been deferred and will be amortized as interest expense over the terms of the respective instruments. The remaining $51.7 million of deferred debt issuance costs associated with our prior revolving and term loan facilities were charged to expense in the second quarter of 2017. These expenses were included in the Condensed Consolidated Statements of Operations as Loss on extinguishment of debt. Maturities The following table presents, subsequent to the closing of the April 2017 Refinancing, the maturities on our long-term debt for each of the five fiscal years subsequent to December 31, 2016 (in thousands):
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Commitments And Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Legal Proceedings and Investigations We and certain of our subsidiaries are involved in various claims, legal proceedings, internal and governmental investigations (collectively, proceedings) that arise from time to time in the ordinary course of our business, including, among others, those relating to product liability, intellectual property, regulatory compliance and commercial matters. While we cannot predict the outcome of these proceedings and we intend to defend vigorously our position, an adverse outcome in any of these proceedings could have a material adverse effect on our current and future financial position, results of operations and cash flows. Matters that are not being disclosed herein are, in the opinion of our management, immaterial both individually and in the aggregate with respect to our financial position, results of operations and cash flows. If and when such matters, in the opinion of our management, become material either individually or in the aggregate, we will disclose such matters. As of June 30, 2017, our reserve for loss contingencies totaled $1,335.6 million, of which $1,294.6 million relates to our liability accrual for vaginal mesh cases and other mesh-related matters. Although we believe there is a reasonable possibility that a loss in excess of the amount recognized exists, we are unable to estimate the possible loss or range of loss in excess of the amount recognized at this time. Product Liability We and certain of our subsidiaries have been named as defendants in numerous lawsuits in various U.S. federal and state courts, as well as in Canada and other countries, alleging personal injury resulting from the use of certain products of our subsidiaries. These matters are described below in more detail. We believe that certain settlements and judgments, as well as legal defense costs, relating to certain product liability matters are or may be covered in whole or in part under our product liability insurance policies with a number of insurance carriers. In certain circumstances, insurance carriers reserve their rights to contest or deny coverage. We intend to contest vigorously any and all such disputes with our insurance carriers and to enforce our rights under the terms of our insurance policies. Accordingly, we will record receivables with respect to amounts due under these policies only when the resolution of any dispute has been reached and realization of the potential claim for recovery is considered probable. Amounts recovered under our product liability insurance policies will likely be less than the stated coverage limits and may not be adequate to cover damages and/or costs relating to claims. In addition, there is no guarantee that insurers will pay claims or that coverage will otherwise be available. Vaginal Mesh Cases. In October 2008, the FDA issued a Public Health Notification (October 2008 Public Health Notification) regarding potential complications associated with transvaginal placement of surgical mesh to treat pelvic organ prolapse (POP) and stress urinary incontinence (SUI). The notification provided recommendations and encouraged physicians to seek specialized training in mesh procedures, to advise their patients about the risks associated with these procedures and to be diligent in diagnosing and reporting complications. In July 2011, the FDA issued an update to the October 2008 Public Health Notification regarding mesh to further advise the public and the medical community of the potential complications associated with transvaginal placement of surgical mesh to treat POP and SUI. In the July 2011 update, the FDA stated that adverse events are not rare. Furthermore, the FDA questioned the relative effectiveness of transvaginal mesh as a treatment for POP as compared to non-mesh surgical repair. The July 2011 notification continued to encourage physicians to seek specialized training in mesh procedures, to consider and to advise their patients about the risks associated with these procedures and to be diligent in diagnosing and reporting complications. In January 2016, the FDA issued a statement reclassifying surgical mesh for transvaginal POP repair from Class II to Class III. Surgical mesh for SUI repair remains a Class II device. Since 2008, we and certain of our subsidiaries, including AMS and/or Astora, have been named as defendants in multiple lawsuits in the U.S. in various state and federal courts, including a multidistrict litigation (MDL) in the U.S. District Court for the Southern District of West Virginia (MDL No. 2325), and in Canada and other countries, where various class action and individual complaints are pending alleging personal injury resulting from the use of transvaginal surgical mesh products designed to treat POP and SUI. Plaintiffs in these suits allege various personal injuries including chronic pain, incontinence and inability to control bowel function and permanent deformities, and seek compensatory and punitive damages, where available. We and certain plaintiffs’ counsel representing mesh-related product liability claimants have entered into various Master Settlement Agreements (MSAs) and other agreements to resolve up to approximately 71,000 filed and unfiled mesh claims handled or controlled by the participating counsel. These MSAs and other agreements were entered into at various times between June 2013 and August 2017, were solely by way of compromise and settlement and were not in any way an admission of liability or fault by us or any of our subsidiaries. All MSAs are subject to a process that includes guidelines and procedures for administering the settlements and the release of funds. In certain cases, the MSAs provide for the creation of qualified settlement funds (QSFs) into which funds may be deposited pursuant to certain schedules set forth in those agreements. All MSAs have participation requirements regarding the claims represented by each law firm party to the MSA. If certain participation requirements are not met, then we will have the right to terminate the settlement with that law firm. In addition, one agreement gives us a unilateral right of approval regarding which claims may be eligible to participate under that settlement. To the extent fewer claims than are authorized under an agreement participate, the total settlement payment under that agreement will be reduced by an agreed-upon amount for each such non-participating claim. Funds deposited in QSFs are included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. Distribution of funds to any individual claimant is conditioned upon the receipt of documentation substantiating the validity of the claim, a full release and a dismissal of the entire action or claim as to all AMS parties and affiliates. Prior to receiving funds, an individual claimant is required to represent and warrant that liens, assignment rights or other claims identified in the claims administration process have been or will be satisfied by the individual claimant. Confidentiality provisions apply to the amount of settlement awards to participating claimants, the claims evaluation process and procedures used in conjunction with award distributions, and the negotiations leading to the settlements. In June 2017, the Hon. Joseph R. Goodwin, U.S. District Court Judge for the Southern District of West Virginia, entered a case management order in MDL 2325 that includes a provision requiring plaintiffs in newly filed MDL cases to provide expert disclosures on specific causation within one hundred twenty (120) days of filing a claim (the Order). Under the Order, a plaintiff's failure to meet the foregoing deadline may be grounds for the entry of judgment against such plaintiff. In July 2017, a similar order was entered in Minnesota state court. Beginning in the second quarter of 2017, we aggressively pursued a settlement strategy in connection with our mesh litigation. Consequently, the Company increased its mesh liability accrual by $775.5 million in the second quarter of 2017, which is expected to cover approximately 22,000 known U.S. mesh claims, subject to a claims validation process for all resolved claims, as well as all of the international mesh liability claims of which the Company is aware and other mesh-related matters. This increase reflects the Company’s conclusion that a loss was probable with respect to all unsettled mesh-related matters of which we are aware as of the date of this report and our current liability accrual applies to such matters. Although the Company believes it has appropriately estimated the probable total amount of loss associated with all matters as of the date of this report, it is reasonably possible that further claims may be filed or asserted and adjustments to our liability accrual may be required. This could have a material adverse effect on our business, financial condition, results of operations and cash flows. The following table presents the changes in the QSFs and mesh liability accrual balance during the six months ended June 30, 2017 (in thousands):
As of June 30, 2017, $868.9 million of the mesh liability accrual amount shown above is classified in the Current portion of the legal settlement accrual in the Condensed Consolidated Balance Sheets, with the remainder classified as Long-term legal settlement accrual, less current portion. Charges related to vaginal mesh liability and associated legal fees and other expenses for all periods presented are reported in Discontinued operations, net of tax in our Condensed Consolidated Statements of Operations. To date, the Company has made total mesh liability payments of approximately $2.8 billion, $359.1 million of which remains in the QSFs as of June 30, 2017. We expect to fund into the QSFs the remaining payments under all settlement agreements during 2017, 2018 and 2019. As the funds are disbursed out of the QSFs from time to time, the liability accrual will be reduced accordingly with a corresponding reduction to restricted cash and cash equivalents. In addition, we may pay cash distributions to settle disputes separate from the QSFs, which will also decrease the liability accrual and decrease cash and cash equivalents. We were contacted in October 2012 regarding a civil investigation initiated by a number of state attorneys general into mesh products, including transvaginal surgical mesh products designed to treat POP and SUI. In November 2013, we received a subpoena relating to this investigation from the state of California, and we have subsequently received additional subpoenas from California and other states. We are currently cooperating with this investigation. At this time, we cannot predict the ultimate outcome of these matters and we are unable to estimate the possible range of any additional losses that could be incurred, which could be material to the Company’s operating results and cash flows for the period in which they are resolved or become estimable. Testosterone Cases. We and certain of our subsidiaries, including Endo Pharmaceuticals Inc. (EPI) and Auxilium Pharmaceuticals, Inc. (subsequently converted to Auxilium Pharmaceuticals, LLC and hereinafter referred to as Auxilium), along with other pharmaceutical manufacturers, have been named as defendants in lawsuits alleging personal injury resulting from the use of prescription medications containing testosterone, including FORTESTA® Gel, DELATESTRYL®, TESTIM®, TESTOPEL®, AVEED® and STRAINT®. Plaintiffs in these suits allege various personal injuries, including pulmonary embolism, stroke and other vascular and/or cardiac injuries and seek compensatory and/or punitive damages, where available. In June 2014, an MDL was formed to include claims involving all testosterone replacement therapies filed against EPI, Auxilium and other manufacturers of such products, and certain transferable cases pending in federal court were coordinated in the U.S. District Court for the Northern District of Illinois as part of MDL No. 2545. In addition, litigation has also been filed against EPI in the Court of Common Pleas for Philadelphia County and in certain other state courts. Litigation similar to that described above may also be brought by other plaintiffs in various jurisdictions, and we expect cases brought in federal court to be transferred to the U.S. District Court for the Northern District of Illinois as tag-along actions to MDL No. 2545. However, we cannot predict the timing or outcome of any such litigation, or whether any such additional litigation will be brought against us. We intend to contest the litigation vigorously and to explore all options as appropriate in our best interests. As of July 31, 2017, approximately 1,285 cases are currently pending against us; some of which may have been filed on behalf of multiple plaintiffs. The first MDL trial against Auxilium involving TESTIM® is set to begin in November 2017; the first trial against Auxilium in the Court of Common Pleas for Philadelphia County involving TESTIM® is set to begin in January 2018; and the first MDL trial against EPI involving FORTESTA® Gel is set to begin in September 2018. In November 2015, the U.S. District Court for the Northern District of Illinois entered an order granting defendants’ motion to dismiss claims involving certain testosterone products that were approved pursuant to ANDAs, including TESTOPEL®. Plaintiffs filed a motion for reconsideration and clarification of this order. In March 2016, the District Court granted plaintiffs’ motion in part and entered an order permitting certain claims to go forward to the extent they are based on allegations of fraudulent off-label marketing. In November 2014, a civil class action complaint was filed in the U.S. District for the Northern District of Illinois against EPI, Auxilium and various other manufacturers of testosterone products on behalf of a proposed class of health insurance companies and other third party payors that had paid for certain testosterone products, alleging that the marketing efforts of EPI, Auxilium and other defendant manufacturers with respect to certain testosterone products constituted racketeering activity in violation of 18 U.S.C. §1962(c), and other civil Racketeer Influenced and Corrupt Organizations Act claims. Further, the complaint alleged that EPI, Auxilium and other defendant manufacturers violated various state consumer protection laws through their marketing of certain testosterone products and raised other state law claims. In March 2015, defendants filed a motion to dismiss the complaint and plaintiffs responded by filing amended complaints, which defendants also moved to dismiss. In February 2016, the District Court granted in part and denied in part defendants’ motion to dismiss. The District Court declined to dismiss plaintiffs’ claims for conspiracy to commit racketeering activity in violation of 18 U.S.C. §1962(d) and claims for negligent misrepresentation. In April 2016, plaintiffs filed a third amended complaint, which defendants moved to dismiss in June 2016. In August 2016, the court denied the motion to dismiss, and we filed a response to the third amended complaint in September 2016. In October 2015, a similar civil class action complaint was filed against EPI and other defendant manufacturers in the U.S. District for the Northern District of Illinois. Similar litigation may be brought by other plaintiffs. We are unable to predict the outcome of these matters or the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss for these matters, if any, but we intend to contest this litigation vigorously and will explore all options as appropriate in our best interests. Unapproved Drug Litigation In September 2013, the State of Louisiana filed a petition for damages against certain of our subsidiaries, including EPI, and over 50 other pharmaceutical companies alleging the defendants or their subsidiaries marketed products that were not approved by the FDA. See State of Louisiana v. Abbott Laboratories, Inc., et al., C624522 (19th Jud. Dist. La.). The State of Louisiana sought damages, fines, penalties, attorneys’ fees and costs under various causes of action. In October 2015, the District Court ordered judgment for defendants on their exception for no right of action. The State of Louisiana appealed that decision and in October 2016, the Louisiana Court of Appeals, First Circuit, issued a decision affirming the dismissal as to certain counts and reversing the dismissal as to others. The State filed a petition for rehearing, which was denied by the court in December 2016. Both sides applied to Louisiana Supreme Court for a writ of certiorari to review the First Circuit’s decision. Those writs were denied in March 2017. Defendants filed exceptions for no cause of action in May 2017. A hearing on Defendants’ exceptions was held in July 2017. In March 2017, the State of Mississippi filed a complaint against our subsidiary EPI in the Chancery Court for the First Judicial District of Hinds County, Mississippi, alleging that EPI marketed products that were not approved by the FDA. The State of Mississippi seeks damages, penalties, attorneys’ fees, costs and other relief under various causes of action. In April 2017, EPI removed this case to the U.S. District Court for the Southern District of Mississippi. See State of Mississippi v. Endo Pharmaceuticals Inc., No. 3:17-CV-277 (S.D. Miss.). In May 2017, the State of Mississippi filed a motion to remand and the case was consolidated for purposes of the remand motion with five other nearly identical cases brought by the State of Mississippi against other manufacturers. That motion is fully briefed and remains pending. We intend to contest the above cases vigorously and to explore other options as appropriate in our best interests. Litigation similar to that described above may also be brought by other plaintiffs in various jurisdictions. However, we cannot predict the timing or outcome of any such litigation, or whether any such litigation will be brought against us. We are unable to predict the outcome of these matters or the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss for these matters, if any. Opioid-Related Litigations, Subpoenas and Document Requests In June 2014, Corporation Counsel for the City of Chicago filed suit in Illinois state court against multiple defendants, including our subsidiaries Endo Health Solutions Inc. (EHSI) and EPI, for alleged violations of city ordinances and other laws relating to defendants’ alleged opioid sales and marketing practices. In June 2014, the case was removed to the U.S. District Court for the Northern District of Illinois. In December 2014, defendants moved to dismiss the amended complaint and in May 2015, the District Court issued an order granting that motion in part, dismissing the case as to EHSI and EPI. In August 2015, plaintiff filed its second amended complaint against multiple defendants, including EPI and EHSI. In November 2015, defendants moved to dismiss the second amended complaint. In September 2016, the District Court granted in part and denied in part defendants’ motions to dismiss and provided plaintiff an opportunity to amend its complaint. Plaintiff filed the third amended complaint in October 2016. In December 2016, defendants moved to dismiss the re-pled claims in the third amended complaint, and filed their answers as to the claims not previously dismissed by the Court. Defendants are currently awaiting a ruling on their motions to dismiss. In May 2014, a lawsuit was filed in California Superior Court (Orange County) in the name of the People of the State of California, acting by and through County Counsel for Santa Clara County and the Orange County District Attorney, against multiple defendants, including our subsidiaries EHSI and EPI (with EPI being added as part of the first amended complaint in June 2014). The complaint asserted violations of California’s statutory Unfair Competition and False Advertising laws, as well as asserting a claim for public nuisance, based on alleged misrepresentations in connection with sales and marketing of opioids, including OPANA® ER. Plaintiff sought declaratory relief, restitution, civil penalties (including treble damages), abatement, an injunction and attorneys’ fees and costs. Defendants, including our subsidiaries, filed various motions attacking the pleadings, including one requesting that the Superior Court refrain from proceeding under the doctrines of primary jurisdiction and equitable abstention. That motion was granted in August 2015, and the case was stayed pending further proceedings and findings by the FDA. In June 2016, plaintiffs filed a motion to lift the stay and to amend the complaint. Defendants, including EHSI and EPI, opposed that motion. Following a hearing in July 2016, the court provided plaintiffs an opportunity to seek leave to file another amended complaint. In August 2016, plaintiffs filed a renewed motion to lift the stay and amend the complaint. In October 2016, the court granted, in part, plaintiffs’ renewed motion to lift the stay and the plaintiffs filed their third amended complaint. Defendants were not required to respond to this complaint. In July 2017, plaintiffs filed a fourth amended complaint, to which defendants’ response is not yet due. In December 2015, a lawsuit was filed in the Chancery Court of the First Judicial District of Hinds County, Mississippi by the State of Mississippi against multiple defendants, including our subsidiaries EHSI and EPI. The complaint alleges violations of Mississippi’s Consumer Protection Act and various other claims arising out of defendants’ alleged opioid sales and marketing practices. Plaintiff seeks declaratory relief, restitution, civil penalties, abatement, an injunction and attorneys’ fees and costs. In March 2016, defendants moved to dismiss the complaint and to transfer the case from Hinds County to Rankin County. The motion to transfer was denied in February 2017. In March 2017, Defendants petitioned for an interlocutory appeal of that ruling, and in May 2017 the Mississippi Supreme Court agreed to hear the appeal and stayed proceedings in the Hinds County Chancery Court until resolution of the appeal. The motion to dismiss also remains pending. In August 2016, the County of Suffolk, New York filed suit in New York Supreme Court (Suffolk County) against multiple defendants, including our subsidiaries EHSI and EPI, for alleged violations of state false and deceptive advertising and other statutes, public nuisance, common law fraud and unjust enrichment based on opioid sales and marketing practices. The County of Suffolk is seeking compensatory damages, interest, costs, disbursements, punitive damages, treble damages, penalties and attorneys’ fees. Defendants, including our subsidiaries, filed motions to dismiss and to stay in January 2017. The hearing on those motions is scheduled for September 2017. In February 2017, Broome County, New York, and Erie County, New York, filed similar suits in New York Supreme Court (Broome County and Erie County, respectively). Defendants also filed motions to dismiss in Broome and Erie Counties. Between May and June 2017, several other New York counties also filed similar suits in New York Supreme Court within their respective counties. Those counties are: Orange County, Dutchess County, Seneca County, Sullivan County, Nassau County and Schenectady County. In July 2017, the pharmaceutical defendants, including our subsidiaries, moved to coordinate the nine New York county suits within the Supreme Court of the State of New York, County of Suffolk for pre-trial purposes. The State of New York Supreme Court Litigation Coordinating Panel granted the motion in July 2017. In March 2017, the Boone County Commission filed suit in the U.S. District Court for the Southern District of West Virginia against multiple defendants, including our subsidiary Generics Bidco I, LLC, for the alleged violation of federal and state safety laws designed to monitor, detect and prevent the diversion of controlled substances. The complaint generally seeks compensatory and punitive damages for the alleged creation of a public nuisance. That case is currently stayed as to Generics Bidco I, LLC, pending resolution of motions to dismiss filed by certain other pharmaceutical distributor defendants. In May 2017, San Joaquin County, the City of Stockton, California and the Montezuma Fire Protection District filed suit in California Superior Court (San Joaquin County) against multiple defendants, including our subsidiaries EHSI and EPI, asserting various claims arising out of defendants’ alleged misrepresentations in connection with sales and marketing of opioids. The plaintiffs in that case seek compensatory damages, punitive damages and attorneys’ fees and costs. In July 2017, our subsidiaries removed the case to the U.S. District Court for the Eastern District of California. In May 2017, the State of Ohio filed suit in the Ohio state court (Ross County) against multiple defendants, including EPI and EHSI. The complaint asserts that defendants, including our subsidiaries, violated the Ohio Consumer Sales Practices Act, the Ohio Medicaid Fraud Act and the Ohio Corrupt Practices Act. The complaint also asserts other statutory and common law claims against the defendants, including our subsidiaries. The State’s claims arise out of defendants’ alleged misrepresentations in connection with sales and marketing of opioids. The State of Ohio seeks declaratory and injunctive relief, compensatory, punitive and treble damages, restitution, civil penalties and attorneys’ fees and costs. In June 2017, the City of Dayton, Ohio filed suit in Ohio state court (Montgomery County) against our subsidiaries EPI and EHSI and other defendants, asserting claims for violation of Ohio’s consumer sales practice statute, violation of Ohio’s deceptive trade practices statute, public nuisance, unjust enrichment and fraud arising from alleged misrepresentations in connection with sales and marketing of opioids. The complaint also asserts a claim for negligence against pharmaceutical distributors named as defendants, but does not assert that claim as to EPI or EHSI. The City of Dayton seeks compensatory damages, treble damages, penalties, punitive damages, interest, costs and disbursements. In July 2017, our subsidiaries removed the case to the U.S. District Court for the Southern District of Ohio. In August 2017, the City of Dayton filed a motion to remand the case to state court, which remains pending. The City of Lorain, Ohio filed a similar suit in Ohio state court (Lorain County) in June 2017, which also names our subsidiaries, along with other defendants. In August 2017, our subsidiaries removed the case to the U.S. District Court for the Northern District of Ohio. In June 2017, Barry Staubus in his official capacity as the District Attorney General for the Second Judicial District, TN, Tony Clark, in his official capacity as the District Attorney General for the First Judicial District, TN, and Dan Armstrong, in his official capacity as the District Attorney General for the Third Judicial District, TN, along with plaintiff “Baby Doe,” filed suit against EPI, EHSI and other defendants in Tennessee Circuit Court (Sullivan County). The suit asserts claims for violation of the Tennessee Drug Dealer Liability Act and public nuisance and also seeks a declaration that Tennessee’s statutory caps on personal injury and punitive damages violate Tennessee’s state constitution. The plaintiffs also seek compensatory and punitive damages, restitution, injunctive relief and attorneys’ fees and costs. In July 2017, our subsidiaries removed the case to the U.S. District Court for the Eastern District of Tennessee. In August 2017, the plaintiffs filed a motion to remand the case to state court, which remains pending. In June 2017, the State of Missouri filed suit against EPI, EHSI and other defendants in the Circuit Court of St. Louis City, Missouri asserting claims for violations of the Missouri Merchandising Practices Act and other state law claims based on defendants’ alleged misrepresentations in connection with sales and marketing of opioids. The state seeks civil penalties, damages, restitution, attorneys’ fees and costs and punitive damages. In June 2017, a lawsuit was filed in the Illinois Circuit Court of the First Judicial Circuit (Union County) in the name of the People of the State of Illinois, the People of Union County and Union County against EPI, EHSI and other defendants. The complaint asserts state statutory claims based on alleged misrepresentations in connection with sales and marketing of opioids. A similar lawsuit was also filed in the Illinois Circuit Court of the Seventh Judicial Circuit (Jersey County) in the name of the People of the State of Illinois, the People of Jersey County and Jersey County against EPI, EHSI and other defendants. Both complaints seek injunctive relief, restitution, disgorgement, civil penalties, attorneys’ fees and costs. In June 2017, a class action complaint was filed in the United States District Court of the Western District of Arkansas against our subsidiaries EPI and EHSI and other defendants. The complaint alleges that defendants violated Arkansas deceptive trade practices law and have been unjustly enriched by their alleged opioid sales and marketing practices, and seeks an order requiring defendants to fund a medical monitoring program to identify problematic opioid use. The complaint also seeks damages, restitution, disgorgement, other injunctive relief and attorneys’ fees and costs. In August 2017, the County of Multnomah, Oregon filed suit in Oregon state court against our subsidiaries EPI and EHSI and other defendants, asserting claims for public nuisance, abnormally dangerous activity, gross negligence, fraud and deceit, and negligence. The plaintiff seeks damages, interest and costs. We intend to contest the lawsuits identified above vigorously. In addition to the lawsuits described above, the Company and/or its subsidiaries have received subpoenas, civil investigative demands and informal requests for information concerning the sale and marketing of opioids, including the following: In September 2014, our subsidiaries EHSI and EPI received a Request for Information from the State of Tennessee Office of the Attorney General and Reporter seeking documents and information regarding the sales and marketing of opioids, including OPANA® ER. In August 2015, our subsidiaries EHSI and EPI received a subpoena from the State of New Hampshire Office of the Attorney General seeking documents and information regarding the sales and marketing of opioids, including OPANA® ER. We were cooperating with the State of New Hampshire Office of the Attorney General in its investigation until we learned it was being assisted by outside counsel hired on a contingent fee basis. The New Hampshire Attorney General initiated an action in the Superior Court for the State of New Hampshire to enforce the subpoena despite this contingent fee arrangement, and we (along with other companies that had received similar subpoenas) responded by filing a motion for protective order to preclude the use of contingent fee counsel. In addition, we filed a separate motion seeking declaratory relief. In March 2016, the Superior Court granted the motion for protective order on the grounds that the contingent fee agreement was invalid as ultra vires and that the office of the Attorney General had acted outside of its statutory authority in entering into the agreement with the contingent fee counsel. In April 2016, both the New Hampshire Attorney General and the companies that received subpoenas from the New Hampshire Attorney General, including EHSI and EPI, appealed, in part, the March 2016 Superior Court order to the New Hampshire Supreme Court. In June 2017, the New Hampshire Supreme Court issued its decision on the appeals, reversing the Superior Court’s protective order ruling and remanding the case to the Superior Court. In April 2016, EHSI and EPI received a Civil Investigative Demand (CID) from the Department of Justice (DOJ) for the State of Oregon seeking documents and information regarding the sales and marketing of OPANA® ER. In November 2016, Endo International plc and EPI received an Administrative Subpoena from the Office of the Attorney General of Maryland seeking documents and information regarding the sales and marketing of opioid products. In March 2017, EPI received a subpoena from the Office of the Attorney General of New Jersey seeking documents and information regarding the sales and marketing of opioid products. In May 2017, EPI received an Investigative Demand from the State of North Carolina Department of Justice seeking documents and information regarding the sales and marketing of opioid products. We are currently cooperating with each of the investigations described above. Investigations and lawsuits similar to the foregoing matters may be brought by others. We are unable to predict the outcome of these investigations or litigations, which may involve additional requests for information. We are also unable to predict the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss for these investigations or litigations, if any, but will explore all options as appropriate in our best interests. Antitrust Litigation and Investigations Multiple direct and indirect purchasers of LIDODERM® have filed a number of cases against our subsidiary EPI and co-defendants Teikoku Seiyaku Co., Ltd., Teikoku Pharma USA, Inc. (collectively, Teikoku) and Actavis plc and certain of its subsidiaries (collectively, Actavis), which was subsequently acquired by Teva Pharmaceuticals Industries Ltd and its subsidiaries (collectively, Teva) from Allergan plc (Allergan). Certain of these actions have been asserted on behalf of classes of direct and indirect purchasers, while others are individual cases brought by one or more alleged direct or indirect purchasers. The complaints in these cases generally allege that EPI, Teikoku and Actavis entered into an anticompetitive conspiracy to restrain trade through the settlement of patent infringement litigation concerning U.S. Patent No. 5,827,529 (the ‘529 patent) and other patents. Some of the complaints also allege that Teikoku wrongfully listed the ‘529 patent in the Orange Book as related to LIDODERM®, that EPI and Teikoku commenced sham patent litigation against Actavis and that EPI abused the FDA citizen petition process by filing a citizen petition and amendments solely to interfere with generic companies’ efforts to obtain FDA approval of their versions of LIDODERM®. The cases allege violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2) and various state antitrust and consumer protection statutes as well as common law remedies in some states. These cases generally seek damages, treble damages, disgorgement of profits, restitution, injunctive relief and attorneys’ fees. The U.S. Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. § 1407, issued an order in April 2014 transferring these cases as In Re Lidoderm Antitrust Litigation, MDL No. 2521, to the U.S. District Court for the Northern District of California. The court granted plaintiffs’ motions for class certification filed on behalf of classes of direct and indirect purchasers in February 2017. In June 2017, we filed a motion for summary judgment on all claims against all defendants, and plaintiffs filed a motion for partial summary judgment on certain elements of their claims. Trial is currently scheduled to begin in late 2017. We cannot predict whether or not additional cases similar to those described above will be filed by other plaintiffs or the timing or outcome of any such litigation. We expect any such cases brought in federal court to be transferred to the Northern District of California as tag-along actions to In Re Lidoderm Antitrust Litigation. Multiple direct and indirect purchasers of OPANA® ER have filed cases against our subsidiaries EHSI and EPI and other pharmaceutical companies, including Penwest Pharmaceuticals Co., which we subsequently acquired, and Impax Laboratories Inc. (Impax), all of which have been transferred and coordinated for pretrial proceedings in the U.S. District Court for the Northern District of Illinois by the Judicial Panel on Multidistrict Litigation. Some of these cases have been filed on behalf of putative classes of direct and indirect purchasers, while others have been filed on behalf of individual retailers or health care benefit plans. These cases generally allege that the agreement reached by EPI and Impax to settle patent infringement litigation concerning multiple patents pertaining to OPANA® ER and EPI’s introduction of the re-formulation of OPANA® ER violated antitrust laws. The complaints allege violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2), various state antitrust and consumer protection statutes, as well as state common law. These cases generally seek damages, treble damages, disgorgement of profits, restitution, injunctive relief and attorneys’ fees. In February 2016, the District Court issued orders (i) denying defendants’ motion to dismiss the claims of the direct purchasers, (ii) denying in part and granting in part defendants’ motion to dismiss the claims of the indirect purchasers, but giving them permission to file amended complaints and (iii) granting defendants’ motion to dismiss the complaints filed by certain retailers, but giving them permission to file amended complaints. In response to the District Court’s orders, the indirect purchasers filed an amended complaint to which the defendants filed a renewed motion to dismiss certain claims, and certain retailers also filed amended complaints. The defendants successfully moved to dismiss the indirect purchaser unjust enrichment claims arising under the laws of the states of California, Rhode Island and Illinois. Beginning in February 2009, certain private plaintiffs, including distributors and retailers, filed a lawsuit against our subsidiary, Par Pharmaceutical Companies, Inc. (Par), in the U.S. District Court for the Central District of California, which was subsequently transferred to the U.S. District Court for the Northern District of Georgia, and which alleged violations of antitrust law arising out of Par’s settlement of certain patent litigation concerning the generic version of AndroGel®. Generally, the complaints in the remaining private plaintiff suits seek equitable relief, unspecified damages and costs. In September 2012, the District Court granted a motion for summary judgment against the private plaintiffs’ claims of sham litigation. In May 2016, those private plaintiffs representing the putative class of indirect purchasers voluntarily dismissed their case against Par with prejudice. Claims by the direct purchasers are still pending. In July 2016, Fresenius Kabi USA, LLC (Fresenius) filed a complaint against Par and its affiliate Par Sterile Products, LLC in the U.S. District Court for the District of New Jersey alleging that Par and its affiliate engaged in an anticompetitive scheme to exclude competition from the market for vasopressin solution for intravenous injection in view of Par’s VASOSTRICT® (vasopressin) product. The complaint alleges violations of Sections 1 and 2 of The Sherman Antitrust Act, 15 U.S.C. §§ 1, 2, as well as the antitrust law and common law of the state of New Jersey, alleging that Par and its affiliate entered into exclusive supply agreements with one or more active pharmaceutical ingredient (API) manufacturers and that Fresenius has been unable to obtain vasopressin API in order to file an ANDA to obtain FDA approval for its own vasopressin product. Fresenius seeks actual, treble and punitive damages in an unspecified amount, attorneys’ fees and costs and injunctive relief. In September 2016, Par and its affiliate filed a motion to dismiss the case for Fresenius’ failure to properly state a claim under the antitrust laws. In February 2017, the District Court denied the motion to dismiss. We intend to contest the lawsuits identified above vigorously. In addition to the lawsuits described above, the Company and/or its subsidiaries have received subpoenas, civil investigative demands and informal requests for information concerning antitrust matters, including the following: In November 2014, EPI received a CID from the State of Florida Office of the Attorney General issued pursuant to the Florida Antitrust Act of 1980, Section 542.28 seeking documents and other information concerning EPI’s settlement agreement with Actavis settling the LIDODERM® patent litigation, as well as information concerning the marketing and sales of LIDODERM®. In February 2015, EHSI and EPI received CIDs for Production of Documents and Information from the State of Alaska Office of Attorney General issued pursuant to Alaska’s Antitrust and Unfair Trade Practices and Consumer Protection law seeking documents and other information concerning settlement agreements with Actavis and Impax settling the OPANA® ER patent litigation as well as information concerning EPI’s settlement agreement with Actavis settling the LIDODERM® patent litigation, as well as information concerning the marketing and sales of LIDODERM®. In February 2016, EPI received a CID from the State of South Carolina Office of the Attorney General seeking documents and other information concerning EPI’s settlement agreement with Actavis settling the LIDODERM® patent litigation, as well as information concerning the marketing and sales of LIDODERM®. In February 2015, Par and affiliates received a CID from the Office of the Attorney General for the State of Alaska seeking production of certain documents and information regarding Par’s settlement of the AndroGel® patent litigation as well as documents produced in the aforementioned litigation filed by the FTC. We are currently cooperating with the State of Florida Office of the Attorney General, the State of Alaska Office of the Attorney General and the State of South Carolina Office of the Attorney General in their respective investigations. Investigations and lawsuits similar to these antitrust matters described above may be brought by others. In certain of these matters, the Company believes that a loss is probable and we have incorporated our best estimate of this loss into our reserve for loss contingencies. However, we are unable to predict the outcome of certain of these investigations or litigations. Except for the amount included in our reserve for loss contingencies, the ultimate legal and financial liability and the possible loss or range of loss for these investigations or litigations cannot be reasonably estimated at this time. It is reasonably possible that additional losses could be incurred and those losses could be material. Investigations and lawsuits similar to the foregoing matters may be brought by others. The Company will explore all options as appropriate in our best interests. False Claims Act Litigation The Attorneys General of Florida, Indiana and Virginia and the U.S. Office of Personnel Management (the USOPM) have issued subpoenas, and the Attorneys General of Michigan, Tennessee, Texas and Utah have issued CIDs, to our subsidiary Par, among other companies. The demands generally request documents and information pertaining to allegations that certain of Par’s sales and marketing practices caused pharmacies to substitute ranitidine capsules for ranitidine tablets, fluoxetine tablets for fluoxetine capsules and two 7.5 mg buspirone tablets for one 15 mg buspirone tablet, under circumstances in which some state Medicaid programs at various times reimbursed the new dosage form at a higher rate than the dosage form being substituted. Par has provided documents in response to these subpoenas to the respective Attorneys General and the USOPM. The aforementioned subpoenas and CIDs culminated in the federal and state law qui tam action brought on behalf of the U.S. and several states by Bernard Lisitza. The complaint was unsealed in August 2011. Lisitza’s corrected second amended complaint generally seeks (i) a finding that defendants violated and be enjoined from future violations of the federal False Claims Act and state false claims acts; (ii) treble damages and maximum civil penalties for each violation of the federal False Claims Act and state false claims acts; (iii) an applicable percentage share of the proceeds; and (iv) expenses, fees and costs. The U.S. intervened in this action and filed a separate complaint in September 2011, alleging claims for violations of the Federal False Claims Act and common law fraud. The U.S.’s second corrected complaint generally seeks (i) treble damages and civil penalties for violations under the federal False Claims Act and (ii) compensatory and punitive damages for common law fraud. The states of Michigan and Indiana have also intervened as to claims arising under their respective state false claim acts, common law fraud and unjust enrichment. Michigan’s complaint generally seeks (i) treble damages and civil penalties and (ii) common law compensatory and punitive damages. Indiana’s amended complaint generally seeks treble damages, costs and attorney’s fees. A motion for summary judgment is pending. Similar litigation may be brought by other plaintiffs. We intend to vigorously defend this lawsuit. At this time, we are unable to predict the outcome of this matter or the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss for this matter, if any. Pricing Matters In December 2014, our subsidiary Par received a Subpoena to testify before Grand Jury from the Antitrust Division of the DOJ and issued by the U.S. District Court for the Eastern District of Pennsylvania. The subpoena requested documents and information focused primarily on product and pricing information relating to Par’s authorized generic version of Lanoxin (digoxin) oral tablets and Par’s generic doxycycline products, and on communications with competitors and others regarding those products. Par is currently cooperating with the investigation. In December 2015, EPI received Interrogatories and Subpoena Duces Tecum from the State of Connecticut Office of Attorney General requesting information regarding pricing of certain of its generic products, including doxycycline hyclate, amitriptyline hydrochloride, doxazosin mesylate, methotrexate sodium and oxybutynin chloride. We are currently cooperating with this investigation. In March 2016, EPI received a CID from the U.S. Attorney’s Office for the Southern District of New York. The CID requested documents and information regarding contracts with Pharmacy Benefit Managers regarding FROVA®. We are currently cooperating with this investigation. We are unable to predict the outcome of the foregoing investigations, which may involve additional requests for information. In addition, investigations similar to these matters described above may be brought by others. We are also unable to predict the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss, if any, for these matters but will explore all options as appropriate in our best interests. Beginning in December 2015, two complaints, including a class action complaint, were filed in the Philadelphia Court of Common Pleas against us and certain of our subsidiaries, including Par, along with other manufacturers of generic pharmaceutical products, seeking compensatory and punitive or treble damages, as well as injunctive relief, and alleging that certain marketing and pricing practices by the defendant companies violated state law, including consumer protection law. The class action complaint was subsequently removed to the U.S. District Court for the Eastern District of Pennsylvania, and the plaintiff filed an amended complaint. In January 2017, defendants moved to dismiss the amended class action complaint, and that motion remains pending. The case in the Philadelphia Court of Common Pleas is stayed pending resolution of the class action. Beginning in March 2016, several class action complaints were filed in the U.S. District Courts for the Eastern District of Pennsylvania and the District of Rhode Island against us and certain of our subsidiaries, including Par and Par Pharmaceutical, Inc. (PPI), and other manufacturers seeking compensatory and punitive or treble damages, as well as injunctive relief, and alleging that certain marketing and pricing practices regarding digoxin and doxycycline violated federal and/or state antitrust laws and/or gave rise to state consumer protection and/or unjust enrichment claims. The U.S. Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. §1407, issued an order in August 2016 establishing coordinated or consolidated pretrial proceedings for these cases in the U.S. District Court for the Eastern District of Pennsylvania under the caption In Re Generic Digoxin and Doxycycline Antitrust Litigation, MDL No. 2724. The direct purchaser plaintiffs and indirect purchaser plaintiffs filed consolidated amended class action complaints in January 2017, and defendants moved to dismiss those complaints in March 2017. An independent pharmacy plaintiff filed a similar class action complaint in the U.S. District Court for the Eastern District of Pennsylvania in March 2017. Since November 2016, several class action complaints have been filed in the U.S. District Court for the Eastern District of Pennsylvania against certain of our subsidiaries, including Par and PPI, and other manufacturers seeking compensatory and punitive or treble damages, as well as injunctive relief, and alleging that certain marketing and pricing practices regarding divalproex ER violated federal and/or state antitrust laws and/or gave rise to state consumer protection and/or unjust enrichment claims. Beginning in December 2016, multiple class action complaints were filed in the U.S. District Court for the Eastern District of Pennsylvania and U.S. District Court for the Southern District of New York against us and certain of our subsidiaries, including PPI, and other manufacturers seeking compensatory and punitive or treble damages, as well as injunctive relief, and alleging that certain marketing and pricing practices regarding propranolol violated federal and/or state antitrust laws and/or gave rise to state consumer protection and/or unjust enrichment claims. Defendants moved to dismiss one direct purchaser complaint pending in the Eastern District of Pennsylvania in March 2017. The remaining Eastern District of Pennsylvania actions relating to propranolol were stayed pending a ruling from the U.S. Judicial Panel on Multidistrict Litigation on the motion to transfer described below. In the Southern District of New York actions, the indirect purchasers filed a consolidated amended complaint in February 2017, and the direct purchasers filed a consolidated amended complaint in March 2017. Defendants moved to dismiss both consolidated amended complaints, and those motions were denied in April 2017, except as to certain state law claims brought by the indirect purchaser plaintiffs. Beginning in March 2017, several class action complaints were filed in the U.S. District Court for the Eastern District of Pennsylvania against our subsidiary PPI and other manufacturers seeking compensatory and punitive or treble damages, as well as injunctive relief, and alleging that certain marketing and pricing practices regarding baclofen violated federal and/or state antitrust laws and/or gave rise to state consumer protection and/or unjust enrichment claims. Also beginning in March 2017, several class action complaints were filed in the U.S. District Courts for the Eastern District of Pennsylvania and the Southern District of New York against us and certain of our subsidiaries, including PPI, and other manufacturers seeking compensatory and punitive or treble damages, as well as injunctive relief, and alleging that certain marketing and pricing practices regarding amitriptyline or amitriptyline hydrochloride violated federal and/or state antitrust laws and/or gave rise to state consumer protection and/or unjust enrichment claims. In January 2017, Rochester Drug Co-Operative, Inc. filed a motion with the U.S. Judicial Panel on Multidistrict Litigation seeking to transfer certain of the foregoing antitrust complaints to the U.S. District Court for the Eastern District of Pennsylvania for inclusion in MDL No. 2724, which would then be renamed In re Generic Pharmaceuticals Pricing Antitrust Litigation. In April 2017, the U.S. Judicial Panel on Multidistrict Litigation issued an order renaming MDL No. 2724 as requested and expanding it to include actions in which: (a) plaintiffs assert claims for price fixing of generic drugs in violation of the Sherman Act and/or state antitrust laws on behalf of overlapping putative nationwide classes of direct or indirect purchasers of generic pharmaceuticals; (b) the average market price of the subject generic pharmaceutical is alleged to have increased between 2012 and the present; (c) defendants are alleged to have effectuated the alleged conspiracy through direct company-to-company contacts and through joint activities undertaken through trade associations, in particular meetings of the Generic Pharmaceutical Association; and (d) the allegations stem from the same government investigation into anticompetitive conduct in the generic pharmaceuticals industry. Pursuant to this order, the propranolol and amitriptyline hydrochloride cases filed in the U.S. District Court for the Southern District of New York were transferred to the U.S. District Court for the Eastern District of Pennsylvania as part of MDL No. 2724. As noted above, the digoxin and doxycycline, divalproex ER and baclofen cases were already pending in the U.S. District Court for the Eastern District of Pennsylvania, and they all have been consolidated into MDL No. 2724. We expect consolidated amended class action complaints to be filed in August 2017. We intend to contest these litigations vigorously and to explore all options as appropriate in our best interests. Lawsuits similar to these pricing matters described above may be brought by others. We are unable to predict the outcome of these litigations or the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss for these litigations, if any. Securities Related Class Action Litigation In May 2016, a putative class action entitled Craig Friedman v. Endo International plc, Rajiv Kanishka Liyanaarchchie de Silva and Suketu P. Upadhyay was filed in the U.S. District Court for the Southern District of New York by an individual shareholder on behalf of himself and all similarly situated shareholders. In August 2016, the Steamfitters’ Industry Pension Fund and Steamfitters’ Industry Security Benefit Fund were appointed lead plaintiffs in the action. In October 2016, a second amended complaint was filed, which added Paul Campanelli as a defendant, and we filed a motion to dismiss the case. In response, and without resolving the motion, the Court permitted lead plaintiffs to file a third amended complaint. The lawsuit alleges violations of Sections 10(b) and 20(a) of the Exchange Act based on the Company’s revision of its 2016 earnings guidance and certain disclosures about its generics business, the integration of Par and its subsidiaries, certain other alleged business issues and the receipt of a CID from the U.S. Attorney’s Office for the Southern District of New York regarding contracts with Pharmacy Benefit Managers concerning FROVA®. Lead plaintiffs seek class certification, damages in an unspecified amount and attorneys’ fees and costs. We filed a motion to dismiss the third amended complaint in December 2016. Briefing on that motion has been completed but no ruling has been issued. In February 2017, a putative class action entitled Public Employees’ Retirement System of Mississippi v. Endo International plc was filed in the Court of Common Pleas of Chester County, Pennsylvania by an institutional purchaser of shares in our June 2, 2015 public offering, on behalf of itself and all similarly situated purchasers. The lawsuit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 against Endo, certain of Endo’s current and former directors and officers, and the underwriters who participated in the offering, based on certain disclosures about Endo’s generics business. In March 2017 defendants removed the case to the U.S. District Court for the Eastern District of Pennsylvania. In May 2017, the plaintiff moved to remand the case back to Pennsylvania state court; briefing on their motion has been completed, but no ruling has been issued. In April 2017, a putative class action entitled Phaedra A. Makris v. Endo International plc, Rajiv Kanishka Liyanaarchchie de Silva and Suketu P. Upadhyay was filed in the Superior Court of Justice in Ontario, Canada by an individual shareholder on behalf of herself and similarly-situated Canadian-based investors who purchased Endo’s securities between January 11 and May 5, 2016. The statement of claim generally seeks class certification, declaratory relief, damages, interest and costs based on alleged violations of the Ontario Securities Act. The statement of claim alleges negligent misrepresentations concerning the Company’s revenues, profit margins and earnings per share; its receipt of a subpoena from the State of Connecticut regarding doxycycline hyclate, amitriptyline hydrochloride, doxazosin mesylate, methotrexate sodium and oxybutynin chloride; and the erosion of the Company’s U.S. generic pharmaceutical business. We intend to contest these litigations vigorously and to explore all options as appropriate in our best interests. Lawsuits similar to these securities related class action matters described above may be brought by others. We are unable to predict the outcome of these litigations or the ultimate legal and financial liability, if any, and at this time cannot reasonably estimate the possible loss or range of loss for these litigations, if any. Paragraph IV Certifications on OPANA® ER In late 2012, two patents (U.S. Patent Nos. 8,309,122 and 8,329,216) were issued to EPI covering OPANA® ER (oxymorphone hydrochloride extended-release tablets CII). In December 2012, EPI filed a complaint against Actavis in U.S. District Court for the Southern District of New York for patent infringement based on its ANDA for a non-INTAC® technology version of OPANA® ER. In May 2013 and June 2013, EPI filed similar suits in the U.S. District Court for the Southern District of New York against the following applicants for non-INTAC® technology OPANA® ER: Roxane Laboratories, Inc. (Roxane) and Ranbaxy Laboratories Limited, which was acquired by Sun Pharmaceutical Industries Ltd. (Ranbaxy). Those suits allege infringement of U.S. Patent Nos. 7,851,482, 8,309,122 and 8,329,216. In July 2013, Actavis and Roxane were granted FDA approval to market all strengths of their respective non-INTAC® technology formulations of OPANA® ER. A trial in this case was held from March 2015 through April 2015 in the U.S. District Court for the Southern District of New York. In August 2015, the District Court ruled that all defendants infringed the claims of U.S. Patent Nos. 8,309,122 and 8,329,216. The District Court also ruled that the defendants failed to show that U.S. Patent Nos. 8,309,122 and 8,329,216 were invalid, enjoined the defendants from launching their generic products until the expiration of those patents and directed Actavis to withdraw its generic product within 60 days. In October 2015, the District Court tolled the 60-day period until it decided two pending post-trial motions. In April 2016, the District Court issued an order upholding its August 2015 ruling in EPI’s favor and confirming the prior injunction against the manufacture or sale of the generic version of the non-INTAC® technology OPANA® ER currently offered by Actavis and the additional approved but not yet marketed generic version of the product developed by Roxane. The defendants filed appeals to the Court of Appeals for the Federal Circuit. We intend to continue vigorously asserting our intellectual property rights and to oppose any such appeal. From September 21, 2012 through October 30, 2013, EPI and its partner Grünenthal received Paragraph IV Notices from each of Teva Pharmaceuticals USA, Inc., Amneal Pharmaceuticals, LLC (Amneal), ThoRx Laboratories, Inc. (ThoRx), Actavis, Impax and Ranbaxy (now Sun Pharmaceutical Industries Ltd.), advising of the filing by each such company of an ANDA for a generic version of the formulation of OPANA® ER with INTAC® technology. These Paragraph IV Notices refer to U.S. Patent Nos. 7,851,482, 8,075,872, 8,114,383, 8,192,722, 8,309,060, 8,309,122 and 8,329,216, which variously cover the formulation of OPANA® ER, a highly pure version of the active pharmaceutical ingredient and the release profile of OPANA® ER. EPI filed lawsuits against each of these filers in the U.S. District Court for the Southern District of New York. Each lawsuit was filed within the 45-day deadline to invoke a 30-month stay of FDA approval pursuant to the Hatch-Waxman legislative scheme. A trial in this case was held from March 2015 through April 2015 in the U.S. District Court for the Southern District of New York against the remaining filers. In August 2015, the District Court issued an Opinion holding that all defendants infringed the claims of U.S. Patent Nos. 8,309,060, 8,309,122 and 8,329,216. The Opinion also held that the defendants had shown that U.S. Patent No. 8,309,060 was invalid, but that the defendants had failed to show that U.S. Patent Nos. 8,309,122 and 8,329,216 were invalid. The District Court also issued an Order enjoining the defendants from launching their generic products until the expiration of U.S. Patent Nos. 8,309,122 and 8,329,216. The defendants filed appeals to the Court of Appeals for the Federal Circuit. We intend to continue to vigorously assert our intellectual property and oppose appeals by the defendants. However, there can be no assurance that we and/or Grünenthal will be successful. If we are unsuccessful and Teva, Amneal, ThoRx, Actavis or Impax is able to obtain FDA approval of its product, generic versions of OPANA® ER INTAC® technology may be launched prior to the applicable patents’ expirations in 2023. Additionally, we cannot predict or determine the timing or outcome of this defense but will explore all options as appropriate in our best interests. In August 2014 and October 2014, the U.S. Patent Office issued U.S. Patent Nos. 8,808,737 and 8,871,779 respectively, which cover a method of using OPANA® ER and a highly pure version of the active pharmaceutical ingredient of OPANA® ER. In November 2014, EPI filed lawsuits against Teva, ThoRx, Actavis, Impax, Ranbaxy, Roxane, Amneal and Sandoz Inc. based on their ANDAs filed against both the INTAC® technology and non-INTAC® technology versions of OPANA® ER. Those lawsuits were filed in the U.S. District Court for the District of Delaware alleging infringement of these new patents, which expire in 2027 and 2029, respectively. On November 17, 2015, the District Court held the ‘737 patent invalid for claiming unpatentable subject matter. That patent has been dismissed from all suits and the suits administratively closed as to that patent, subject to appeal at the end of the case on the ‘779 patent. Beginning July 11, 2016, a three-day trial was held in the U.S. District Court for the District of Delaware against Teva and Amneal for infringement of the ‘779 patent. In October 2016, the District Court issued an Opinion holding that the defendants infringed the claims of U.S. Patent No. 8,871,779. The Opinion also held that the defendants had failed to show that U.S. Patent No. 8,871,779 was invalid. The District Court issued an Order enjoining the defendants from launching their generic products until the expiration of U.S. Patent No. 8,871,779 in November 2029. A trial for infringement of the ‘799 patent by Actavis was held in February 2017 in the same court (U.S. District Court for the District of Delaware) in front of the same judge. We intend to defend vigorously our intellectual property rights and to pursue all available legal and regulatory avenues in defense of both the non-INTAC® technology formulation OPANA® ER and the INTAC® technology formulation OPANA® ER, including enforcement of the product’s intellectual property rights and approved labeling. However, there can be no assurance that we will be successful. If we are unsuccessful, competitors that already have obtained, or are able to obtain, FDA approval of their products may be able to launch their generic versions of OPANA® ER prior to the applicable patents’ expirations. Additionally, we cannot predict or determine the timing or outcome of related litigation but will explore all options as appropriate in our best interests. In addition to the above litigation, it is possible that another generic manufacturer may also seek to launch a generic version of OPANA® ER and challenge the applicable patents. Other Proceedings and Investigations In addition to the above proceedings, proceedings similar to those described above may also be brought in the future. Additionally, we are involved in, or have been involved in, arbitrations or various other proceedings that arise from the normal course of our business. We cannot predict the timing or outcome of these other proceedings. Currently, neither we nor our subsidiaries are involved in any other proceedings that we expect to have a material effect on our business, financial condition, results of operations and cash flows. |
Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 12. OTHER COMPREHENSIVE INCOME (LOSS) The following table presents the tax effects allocated to each component of Other comprehensive income (loss) for the three months ended June 30, 2017 and 2016 (in thousands):
The following table presents the tax effects allocated to each component of Other comprehensive income for the six months ended June 30, 2017 and 2016 (in thousands):
The following is a summary of the accumulated balances related to each component of Other comprehensive income, net of taxes, at June 30, 2017 and December 31, 2016 (in thousands):
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Shareholders' Equity |
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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 six months ended June 30, 2017 (in thousands):
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The following table displays a reconciliation of our beginning and ending balances in shareholders’ equity for the six months ended June 30, 2016 (in thousands):
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. During the second quarter of 2017, the Company’s shareholders approved an amendment to the Endo International plc Amended and Restated 2015 Stock Incentive Plan (the Plan). The Plan was amended and restated to increase the number of the Company’s ordinary shares that may be issued with respect to awards under the Plan by 10.0 million ordinary shares and to make certain other changes to the Plan’s terms. None of the additional ordinary shares reserved were issued during the six months ended June 30, 2017. The Company recognized share-based compensation expense of $27.0 million and $29.6 million during the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, the total remaining unrecognized compensation cost related to all non-vested share-based compensation awards amounted to $66.6 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 June 30, 2017, the weighted average remaining requisite service period of the non-vested stock options was 2.9 years and for non-vested restricted stock units was 2.3 years. |
Other (Income) Expense, Net |
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OTHER (INCOME) EXPENSE, NET | NOTE 14. OTHER (INCOME) EXPENSE, NET The components of Other (income) expense, net for the three and six months ended June 30, 2017 and 2016 are as follows (in thousands):
Foreign currency (gain) loss, net results from the remeasurement of the Company’s foreign currency denominated assets and liabilities. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15. INCOME TAXES During the three months ended June 30, 2017, the Company recognized income tax benefit of $57.5 million on $753.5 million of loss from continuing operations before income tax, compared to $555.3 million of income tax benefit on $165.5 million of loss from continuing operations before income tax during the comparable 2016 period. The income tax benefit for the current period is primarily related to the geographic mix of pretax earnings, the discrete tax benefits associated with goodwill and intangible asset impairments in the U.S. Branded Pharmaceuticals segment, and the net discrete tax benefit associated with intangible asset impairments in the International Pharmaceuticals segment. During the second quarter of 2016, the Company implemented a legal entity restructuring as part of its continuing integration of its businesses that resulted in the realization of a $644.0 million discrete tax benefit arising from outside basis differences, reduced by a $196.0 million valuation allowance. The reorganization also provided operating flexibility and benefits and reduced the impact related to potential future limits that could apply to the use of tax attributes by utilizing most of the Company’s attributes to offset the gain in the intercompany sale that stepped-up the tax basis of the U.S. Generic Pharmaceuticals business assets. The Company also benefited from an improved mix of jurisdictional pre-tax income and losses. During the six months ended June 30, 2017, the Company recognized income tax benefit of $69.4 million on $930.9 million of loss from continuing operations before income tax, compared to $674.0 million of income tax benefit on $372.9 million of loss from continuing operations before income tax during the comparable 2016 period. The income tax benefit for the current period is primarily related to the geographic mix of pretax earnings and the discrete tax benefits associated with goodwill and intangible asset impairments in the U.S. Branded Pharmaceuticals segment and intangible asset impairments in the International Pharmaceuticals segment. The income tax benefit for the comparable 2016 period was primarily related to benefits arising from losses from continued operations and the net discrete tax benefit recorded in the second quarter discussed above. As further discussed in Note 2. Recent Accounting Pronouncements, the Company adopted ASU 2016-16, effective January 1, 2017, resulting in the elimination of previously recorded deferred charges that were established in 2016. Specifically, the Company eliminated a $24.1 million current deferred charge and a $348.8 million non-current deferred charge that were reflected in our Condensed Consolidated Balance Sheet at December 31, 2016 as Prepaid expenses and other current assets and Other assets, respectively. The eliminations of these deferred charges were recorded as adjustments to retained earnings as of January 1, 2017. On adoption, the Company also recorded net deferred tax assets, primarily related to certain intangibles and tax deductible goodwill, of $479.7 million, fully offset by a corresponding valuation allowance. |
Net (Loss) Income Per Share |
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NET (LOSS) INCOME PER SHARE | NOTE 16. NET (LOSS) INCOME PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net (loss) income per share for the three and six months ended June 30, 2017 and 2016 (in thousands):
Basic net (loss) income per share data is computed based on the weighted average number of ordinary shares outstanding during the period. Diluted (loss) income per share data is computed based on the weighted average number of ordinary shares outstanding and, if there is net income from continuing operations attributable to Endo ordinary shareholders during the period, the dilutive impact of ordinary share equivalents outstanding during the period. Ordinary share equivalents are measured under the treasury stock method. Due to the Company’s adoption of ASU 2016-09, effective January 1, 2017, the Company will no longer consider excess tax benefits resulting from share-based compensation awards when applying the treasury stock method to calculate diluted weighted average shares outstanding. Therefore, the adoption of this ASU will have the effect of increasing dilution in periods where there is net income from continuing operations attributable to Endo ordinary shareholders and there are weighted average dilutive awards outstanding. All stock options and stock awards were excluded from the diluted share calculation for the three and six months ended June 30, 2017 because their effect would have been anti-dilutive, as the Company was in a loss position. During the three and six months ended June 30, 2016, aggregate stock options and stock awards of 5.9 million and 4.7 million, respectively, were excluded from the diluted share calculation because their effect would have been anti-dilutive. |
Recent Accounting Pronouncements (Policies) |
6 Months Ended |
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Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Issued/Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards update (ASU) No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09). ASU 2014-09 represents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled to receive in exchange for those goods or services. This ASU sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which defers the effective date of ASU 2014-09 by one year, but permits companies to adopt one year earlier if they choose (i.e., the original effective date). As such, ASU 2014-09 will be effective for annual and interim reporting periods beginning after December 15, 2017. In March and April 2016, the FASB issued ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consideration (Reporting Revenue Gross versus Net)” and ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” respectively, which clarifies the guidance on reporting revenue as a principal versus agent, identifying performance obligations and accounting for intellectual property licenses. In addition, in May 2016, the FASB issued ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends certain narrow aspects of Topic 606, and in December 2016, the FASB issued ASU No. 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which amends certain narrow aspects of Topic 606. The Company will adopt the new revenue recognition standard on January 1, 2018. The Company is currently evaluating the impact of ASU 2014-09 on its consolidated results of operations and financial position. The Company’s cross-functional implementation team consisting of representatives from across its business segments is progressing towards the completion of the diagnostic assessment of the impact of the standard on its contract portfolio, including review of customer contracts, as well as the Company’s current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to its revenue contracts. The majority of the Company’s revenue is generated from product sales and the Company currently does not anticipate a significant impact to revenue related to these arrangements; however, this analysis is preliminary and remains subject to change. In certain limited situations, under current GAAP, the Company has deferred revenue for certain product sales because the sales price was not deemed to be fixed or determinable. Under the new standard, the Company will be required to estimate the variable consideration associated with these transactions and record revenue at the point of sale. The Company continues to evaluate the impact on certain less significant transactions, including certain licensing arrangements, and expects to substantially complete its diagnostic assessment during the third quarter of 2017. The Company is also continuing to evaluate the internal control implications associated with the adoption of the new standard, including the identification and implementation, if necessary, of changes to its business processes, systems and controls to support recognition and disclosure under the new standard. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company will utilize the modified retrospective method of adoption. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02). ASU 2016-02 establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. This guidance results in a more faithful representation of the rights and obligations arising from operating and capital leases by requiring lessees to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-02 on the Company’s consolidated results of operations and financial position. In August 2016, the FASB issued ASU No. 2016-15 “Classification of Certain Cash Receipts and Cash Payments” (ASU 2016-15). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period but all of ASU 2016-15 must be adopted in the same period. The Company is currently evaluating the impact of ASU 2016-15 on the Company’s consolidated statement of cash flows. In November 2016, the FASB issued ASU No. 2016-18 “Statement of Cash Flows (Topic 230) - Restricted Cash” (ASU 2016-18). ASU 2016-18 states that a statement of cash flows should explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period, and all updates should be applied using a retrospective transition method. Subsequent to the adoption of ASU 2016-18 the mesh-related qualified settlement funds and other restricted cash accounts will be included in the beginning-of-period and end-of-period Cash and cash equivalents on the Condensed Consolidated Statements of Cash Flows and transfers into and out of the qualified settlement funds will therefore no longer result in separate investing cash flows in the Condensed Consolidated Statements of Cash Flows. In May 2017, the FASB issued ASU No. 2017-09 “Compensation - Stock Compensation” (ASU 2017-09). ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. It is intended to reduce both (1) diversity in practice and (2) cost and complexity when accounting for changes to the terms or conditions of share-based payment awards. ASU 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of ASU 2017-09 on the Company’s consolidated results of operations and financial position. Recently Adopted Accounting Pronouncements In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” (ASU 2015-11). ASU 2015-11 states that an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public entities, ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2015-11 on January 1, 2017 and the adoption did not impact the Company’s consolidated results of operations and financial position. In March 2016, the FASB issued ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting” (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of share-based payments to employees including: (a) requiring all income tax effects of awards to be recognized in the income statement, rather than in additional paid in capital, when the awards vest or are settled, (b) eliminating the requirement that excess tax benefits be realized before companies can recognize them, (c) requiring companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity, (d) increasing the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation, (e) requiring an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on its statement of cash flows and (f) electing whether to account for forfeitures of share-based payments by (1) recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted the new guidance on January 1, 2017 on a prospective basis, except for the provision requiring companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity, which was adopted retrospectively. As a result of the adoption, during the three and six months ended June 30, 2017, the Company recognized tax expense of $0.4 million and $4.8 million, respectively, in its Condensed Consolidated Statement of Operations that would have been recorded as additional paid-in capital prior to adoption. In addition, the Company retrospectively adjusted its statement of cash flows for the six months ended June 30, 2016 to present an inflow of $3.9 million related to excess tax benefits as an operating activity, rather than as a financing activity. The adoption of ASU 2016-09 did not impact beginning retained earnings and the Company will continue to estimate forfeitures to determine the amount of compensation cost to be recognized in each period. None of the other provisions in this amended guidance had a significant impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16 “Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 states that an entity should recognize the income tax consequences when an intra-entity transfer of an asset other than inventory occurs. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted as long as it is adopted in the first interim period of a fiscal year beginning after December 15, 2016. The Company early adopted ASU 2016-16 on January 1, 2017, resulting in the elimination of previously recorded deferred charges that were established in 2016. Specifically, the Company eliminated a $24.1 million current deferred charge and a $348.8 million non-current deferred charge that were reflected in our Condensed Consolidated Balance Sheet at December 31, 2016 as Prepaid expenses and other current assets and Other assets, respectively. The eliminations of these deferred charges were recorded as adjustments to retained earnings as of January 1, 2017. On adoption, the Company also recorded net deferred tax assets, primarily related to certain intangibles and tax deductible goodwill, of $479.7 million, fully offset by a corresponding valuation allowance. In January 2017, the FASB issued ASU No. 2017-01 “Business Combinations (Topic 805) - Clarifying the Definition of a Business” (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update provide a screen to determine when an integrated set of assets and activities (collectively referred to as a “set”), is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments in this update should be applied prospectively on or after the effective date. Early application of the amendments in this update is allowed. The Company adopted this new standard on January 1, 2017. In January 2017, the FASB issued ASU No. 2017-04 “Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment” (ASU 2017-04). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge 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. Additionally, an entity should consider the income tax effects of any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and an entity should apply the amendments of ASU 2017-04 on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard on January 1, 2017. |
Discontinued Operations and Assets and Liabilities Held For Sale (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disposal groups, including discontinued operations, income statement, balance sheet and additional disclosures | The following table provides the operating results of AMS Discontinued operations, net of tax for the three and six months ended June 30, 2017 and 2016 (in thousands):
The following table provides the components of Assets and Liabilities held for sale of Somar as of June 30, 2017 (in thousands):
The following table provides the components of Assets and Liabilities held for sale of Litha as of June 30, 2017 and December 31, 2016 (in thousands):
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Restructuring and related costs | A summary of expenses related to the Astora restructuring initiative is included below for the three and six months ended June 30, 2016 (in thousands):
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Schedule of restructuring reserve by type of cost | Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
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Restructuring (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring reserve by type of cost | Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2017 were as follows (in thousands):
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Segment Results (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reportable segments information | The following represents selected information for the Company’s reportable segments for the three and six months ended June 30, 2017 and 2016 (in thousands):
__________
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Schedule of reconciliations of consolidated loss from continuing operations before income tax | The table below provides reconciliations of our consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our total segment adjusted income from continuing operations before income tax for the three and six months ended June 30, 2017 and 2016 (in thousands):
__________
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets and liabilities measured at fair value on recurring basis | The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2017 and December 31, 2016 were as follows (in thousands):
At June 30, 2017, money market funds include $21.9 million in QSFs to be disbursed to mesh-related product liability claimants. See Note 11. Commitments and Contingencies for further discussion of our product liability cases.
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Changes to liability for acquisition-related contingent consideration | The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2017 and 2016 (in thousands):
The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the six months ended June 30, 2017 by acquisition (in thousands):
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Summary of available-for-sale securities | The following is a summary of available-for-sale securities held by the Company at June 30, 2017 and December 31, 2016 (in thousands):
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Summary of nonrecurring fair value measurements | The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2017 were as follows (in thousands):
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | Inventories consist of the following at June 30, 2017 and December 31, 2016 (in thousands):
__________ (1) The components of inventory shown in the table above are net of allowance for obsolescence. |
Goodwill And Other Intangibles (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | Changes in the carrying amount of our goodwill for the six months ended June 30, 2017 were as follows (in thousands):
The carrying amount of goodwill at June 30, 2017 and December 31, 2016 is net of the following accumulated impairments:
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Schedule of other intangible assets | The following is a summary of other intangible assets held by the Company at June 30, 2017 and December 31, 2016 (in thousands):
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Additional information on the changes in the total gross carrying amount of our other intangible assets is presented below (in thousands):
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Schedule of changes in gross carrying amount of other intangible assets | Additional information on the changes in the total gross carrying amount of our other intangible assets is presented below (in thousands):
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Schedule of future amortization expense | Estimated amortization of intangibles for the five fiscal years subsequent to December 31, 2016 is as follows (in thousands):
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Accounts Payable And Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses include the following at June 30, 2017 and December 31, 2016 (in thousands):
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | Any outstanding amounts borrowed pursuant to the 2017 Credit Facility will immediately mature if any of the following of our senior notes are not refinanced or repaid in full prior to the date that is 91 days prior to the stated maturity date thereof:
The following table presents the carrying amounts of the Company’s total indebtedness at June 30, 2017 and December 31, 2016 (in thousands):
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Outstanding principal balance of non-recourse notes percentage | On or after April 15, 2020, the Issuers may on any one or more occasions redeem all or a part of the 2024 Notes, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and additional interest, if any, on the notes redeemed if such notes are redeemed during the twelve-month period beginning on April 15 of the years indicated below:
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Schedule of maturities of long-term debt | The following table presents, subsequent to the closing of the April 2017 Refinancing, the maturities on our long-term debt for each of the five fiscal years subsequent to December 31, 2016 (in thousands):
__________
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Commitments And Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Qualified Settlement Funds accounts and product liability balance | The following table presents the changes in the QSFs and mesh liability accrual balance during the six months ended June 30, 2017 (in thousands):
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Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of tax effects allocated to each component of other comprehensive income | The following table presents the tax effects allocated to each component of Other comprehensive income (loss) for the three months ended June 30, 2017 and 2016 (in thousands):
The following table presents the tax effects allocated to each component of Other comprehensive income for the six months ended June 30, 2017 and 2016 (in thousands):
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Schedule of accumulated other comprehensive income (loss) | The following is a summary of the accumulated balances related to each component of Other comprehensive income, net of taxes, at June 30, 2017 and December 31, 2016 (in thousands):
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Shareholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in stockholders' equity | The following table displays a reconciliation of our beginning and ending balances in shareholders’ equity for the six months ended June 30, 2017 (in thousands):
__________
The following table displays a reconciliation of our beginning and ending balances in shareholders’ equity for the six months ended June 30, 2016 (in thousands):
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Other (Income) Expense, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Component of Operating Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other income, net | The components of Other (income) expense, net for the three and six months ended June 30, 2017 and 2016 are as follows (in thousands):
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Net (Loss) Income Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the numerator and denominator of basic and diluted net loss per share | The following is a reconciliation of the numerator and denominator of basic and diluted net (loss) income per share for the three and six months ended June 30, 2017 and 2016 (in thousands):
|
Discontinued Operations and Assets and Liabilities Held For Sale (Operating Results of Discontinued Operations) (Details) - Discontinued Operations, Disposed of by Sale - AMS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | $ 179 | $ 863 | $ 179 | $ 29,714 |
Litigation-related and other contingencies, net | 775,474 | 0 | 775,684 | 2,450 |
Asset impairment charges | 0 | 149 | 0 | 21,328 |
Loss from discontinued operations before income taxes | (791,588) | (22,492) | (804,485) | (91,324) |
Income tax benefit | (91,090) | 23,724 | (95,582) | 0 |
Discontinued operations, net of tax | $ (700,498) | $ (46,216) | $ (708,903) | $ (91,324) |
Discontinued Operations and Assets and Liabilities Held For Sale (American Medical Systems) (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Purchases of property, plant and equipment | $ 59,729,000 | $ 53,705,000 | ||
AMS | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Purchases of property, plant and equipment | 0 | |||
Discontinued Operations, Disposed of by Sale | AMS | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Discontinued operations gain (loss), net of tax | $ (700,498,000) | $ (46,216,000) | (708,903,000) | (91,324,000) |
Purchases of property, plant and equipment | 100,000 | |||
Depreciation and amortization expense | $ 0 | $ 0 | $ 0 | $ 0 |
Discontinued Operations and Assets and Liabilities Held For Sale (Astora Restructuring) (Narrative) (Details) - Astora Restructuring |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
employee
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Number of positions reduced | employee | 250 | ||||
Restructuring expenses | $ 0 | $ 5,951,000 | $ 0 | $ 66,624,000 | |
Expected restructuring costs remaining | $ 0 | $ 0 |
Discontinued Operations and Assets and Liabilities Held For Sale (Summary of Restructuring Activities) (Details) - Astora Restructuring $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning liability balance | $ 5,516 |
Cash distributions | (4,127) |
Ending liability balance | 1,389 |
Employee Separation and Other Benefit-Related Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning liability balance | 3,855 |
Cash distributions | (3,175) |
Ending liability balance | 680 |
Contract Termination Charges | |
Restructuring Reserve [Roll Forward] | |
Beginning liability balance | 1,661 |
Cash distributions | (952) |
Ending liability balance | $ 709 |
Discontinued Operations and Assets and Liabilities Held For Sale (Somar) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets | $ 166,190 | $ 116,985 |
Liabilities held for sale | 44,367 | $ 24,338 |
Somar | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Aggregate purchase price | 124,000 | |
Current assets | 63,780 | |
Property, plant and equipment | 2,347 | |
Other assets | 455 | |
Assets held for sale | 66,582 | |
Current liabilities | 13,933 | |
Liabilities held for sale | $ 13,933 |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Minimum | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate range (percent) | 3.00% | |
Maximum | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Discount rate range (percent) | 22.00% | |
Restricted cash and cash equivalents | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Available-for-sale securities, amortized cost | $ 21,888 | $ 26,210 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 138,686 | $ 175,240 |
Work-in-process | 96,618 | 100,494 |
Finished goods | 254,448 | 279,937 |
Total | 489,752 | 555,671 |
Long-term inventory | 27,200 | 22,900 |
Inventories not yet available for sale | $ 5,300 | $ 16,800 |
Goodwill And Other Intangibles (Accumulated Impairment) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 3,734,936 | $ 3,426,209 |
U.S. Generic Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 2,342,549 | 2,342,549 |
U.S. Branded Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 855,810 | 675,380 |
International Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 536,577 | $ 408,280 |
Goodwill And Other Intangibles (Schedule Of Estimated Amortization Of Intangibles) (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2017 | $ 764,409 |
2018 | 544,485 |
2019 | 473,230 |
2020 | 442,265 |
2021 | $ 427,558 |
Accounts Payable And Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Accrued Liabilities [Abstract] | ||
Trade accounts payable | $ 114,710 | $ 126,712 |
Returns and allowances | 310,852 | 332,455 |
Rebates | 218,166 | 227,706 |
Chargebacks | 18,426 | 33,092 |
Accrued interest | 129,208 | 128,254 |
Accrued payroll and related benefits | 79,942 | 115,224 |
Accrued royalties and other distribution partner payables | 63,807 | 191,433 |
Acquisition-related contingent consideration—short-term | 94,460 | 109,373 |
Other | 203,765 | 189,835 |
Total | $ 1,233,336 | $ 1,454,084 |
Debt (Credit Facility) (Narrative) (Details) $ in Millions |
Jun. 30, 2017
USD ($)
|
---|---|
Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Credit facility, remaining borrowing capacity | $ 995.8 |
Debt (Percentage Of Outstanding Principal Balance Of Non-Recourse Notes) (Details) - Senior Secured Notes Due 2024 |
Apr. 27, 2017 |
---|---|
Debt Instrument [Line Items] | |
Redemption price (percent) | 101.00% |
2020 | |
Debt Instrument [Line Items] | |
Redemption price (percent) | 102.938% |
2021 | |
Debt Instrument [Line Items] | |
Redemption price (percent) | 101.469% |
2022 and thereafter | |
Debt Instrument [Line Items] | |
Redemption price (percent) | 100.00% |
Debt (Maturities On Long-Term Debt For Each Of The Next Five Years) (Details) - USD ($) |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
2017 | $ 44,700,000 | |
2018 | 34,150,000 | |
2019 | 34,150,000 | |
2020 | 34,150,000 | |
2021 | 34,150,000 | |
Debt Instrument [Line Items] | ||
Principal amount | $ 8,400,055,000 | $ 8,398,930,000 |
Senior Notes | 2017 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 1,100,000,000.0 |
Commitments And Contingencies (Schedule of Loss Contingencies) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Qualified Settlement Funds | ||
Cash contributions to Qualified Settlement Funds | $ 326,795 | |
Mesh Liability Accrual | ||
Balance as of June 30, 2017 | $ 1,335,600 | |
Vaginal Mesh Cases | ||
Qualified Settlement Funds | ||
Balance as of January 1, 2017 | 275,987 | |
Cash contributions to Qualified Settlement Funds | 522,770 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (440,190) | |
Other | 510 | |
Balance as of June 30, 2017 | 359,077 | |
Vaginal Mesh Cases | Mesh Product Liability Accrual | ||
Mesh Liability Accrual | ||
Balance as of January 1, 2017 | 963,117 | |
Additional charges | 775,474 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (440,190) | |
Cash distributions to settle disputes | (3,794) | |
Balance as of June 30, 2017 | $ 1,294,607 |
Other Comprehensive Income (Loss) (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Change in other comprehensive loss, net of tax | $ 809,106 | $ 2,701,589 | $ 6,261,538 | $ 5,967,976 |
Net unrealized gains | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Change in other comprehensive loss, net of tax | 1,040 | 895 | ||
Foreign currency translation loss | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Change in other comprehensive loss, net of tax | (328,855) | (354,329) | ||
Accumulated other comprehensive loss | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Change in other comprehensive loss, net of tax | $ (327,815) | $ (353,434) |
Other (Income) Expense, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
|
Component of Operating Income [Abstract] | ||||
Foreign currency (gain) loss, net | $ (3,870) | $ 1,554 | $ (6,854) | $ 2,550 |
Equity (earnings) loss from investments accounted for under the equity method, net | (1,090) | 3,828 | (88) | 1,484 |
Other miscellaneous, net | (1,749) | (207) | (1,804) | (766) |
Other (income) expense, net | $ (6,709) | $ 5,175 | $ (8,746) | $ 3,268 |
Net (Loss) Income Per Share (Narrative) (Details) - shares shares in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2016 |
|
Stock Options And Stock Awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from calculation (shares) | 5.9 | 4.7 |
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