UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q



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

For the quarterly period ended ~~September 30, 2017~~March 31, 2020



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

For the transition period from_____________to___________

Commission File Number 333-199861

MYLAN N.V.

(Exact name of registrant as specified in its charter)



~~The~~ Netherlands		~~98-1189497~~98-1493528
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Building 4, Trident Place, Mosquito Way, Hatfield, Hertfordshire, AL10 9UL, England

(Address of principal executive offices)

+44 (0) ~~1707-853-000~~1707-853-000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:

Ordinary shares, nominal value €0.01	MYL	The NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ☑ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes þ☑ No ¨☐

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



Large accelerated filer	þ☑	Accelerated filer	¨☐

Non-accelerated filer	¨ ~~(Do not check if a smaller reporting company)~~☐	Smaller reporting company	¨☐

		Emerging growth company	¨☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No þ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~November 2, 2017,~~May 6, 2020, there were ~~536,436,323~~516,944,470 of the issuer’s €0.01 nominal value ordinary shares outstanding.

MYLAN N.V. AND SUBSIDIARIES

INDEX TO FORM 10-Q

For the Quarterly Period Ended

~~September 30, 2017~~March 31, 2020



		Page
	PART I — FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations — Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	3
	Condensed Consolidated Statements of Comprehensive ~~Earnings~~Loss — Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	4
	Condensed Consolidated Balance Sheets — ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019	5
	Condensed Consolidated Statements of ~~Cash Flows~~Equity — ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019	6

	~~Notes to~~ Condensed Consolidated ~~Financial~~ Statements of Cash Flows — Three Months Ended March 31, 2020 and 2019	7

	Notes to Condensed Consolidated Financial Statements	8

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	62

ITEM 3.4.	~~Quantitative~~Controls and ~~Qualitative Disclosures About Market Risk~~Procedures	82

~~ITEM 4.~~	~~Controls and Procedures~~	8263

	PART II — OTHER INFORMATION
ITEM 1.	Legal Proceedings	8364

ITEM 1A.	Risk Factors	83

~~ITEM 5.~~	~~Other Information~~	8364

ITEM 6.	Exhibits	8466

SIGNATURES		8567

PART I — FINANCIAL INFORMATION

MYLAN N.V. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited; in millions, except per share amounts)


	Three Months Ended					Nine Months Ended						Three Months Ended
	September 30,					September 30,						March 31,
	2017		2016			2017			2016			2020		2019
Revenues:
Net sales	$	2,956.3	$	3,029.5		$	8,570.2		$	7,745.5		$	2,588.2	$	2,460.6
Other revenues	30.8		27.6			98.6			63.6			31.0		34.9
Total revenues	2,987.1		3,057.1			8,668.8			7,809.1			2,619.2		2,495.5
Cost of sales	1,809.0		1,773.8			5,180.3			4,447.1			1,713.1		1,690.3
Gross profit	1,178.1		1,283.3			3,488.5			3,362.0			906.1		805.2
Operating expenses:
Research and development	182.3		199.1			580.9			632.2			114.2		172.6
Selling, general and administrative	664.6		656.9			1,916.8			1,787.6			605.4		607.9
Litigation settlements and other contingencies, net	15.2		558.0			(25.8		)	556.4			1.8		0.7
Total operating expenses	862.1		1,414.0			2,471.9			2,976.2			721.4		781.2
Earnings (loss) from operations	316.0		(130.7		)	1,016.6			385.8
Earnings from operations												184.7		24.0
Interest expense	131.8		144.4			406.3			305.0			119.9		131.2
Other expense, net	4.6		50.2			34.4			184.0			34.1		7.3
Earnings (loss) before income taxes	179.6		(325.3		)	575.9			(103.2		)
Earnings (Loss) before income taxes												30.7		(114.5		)
Income tax provision (benefit)	91.3		(205.5		)	124.2			(165.7		)	9.9		(89.5		)
Net earnings (loss)	$	88.3	$	(119.8	)	$	451.7		$	62.5		$	20.8	$	(25.0	)
Earnings (loss) per ordinary share:
Earnings (Loss) per ordinary share:
Basic	$	0.17	$	(0.23	)	$	0.84		$	0.12		$	0.04	$	(0.05	)
Diluted	$	0.16	$	(0.23	)	$	0.84		$	0.12		$	0.04	$	(0.05	)
Weighted average ordinary shares outstanding:
Basic	535.2		523.6			534.9			505.9			516.4		515.0
Diluted	537.0		523.6			537.0			515.2			517.0		515.0

See Notes to Condensed Consolidated Financial Statements

Table of Contents

MYLAN N.V. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive ~~Earnings~~Loss

(Unaudited; in millions)

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Net earnings (loss) $ 88.3
$ (119.8 ) $ 451.7
$ 62.5
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustment 423.0
290.6
1,831.9
645.5
Change in unrecognized gain (loss) and prior service cost related to defined benefit plans 1.1
0.1
2.4
(0.3 )
Net unrecognized (loss) gain on derivatives in cash flow hedging relationships (4.5 ) 22.8
29.2
(22.9 )
Net unrecognized loss on derivatives in net investment hedging relationships (72.1 ) (10.4 ) (203.2 ) (10.4 )
Net unrealized (loss) gain on marketable securities (8.9 ) 21.5
3.5
32.5
Other comprehensive earnings, before tax 338.6
324.6
1,663.8
644.4
Income tax (benefit) provision (5.8 ) 13.7
11.3
0.5
Other comprehensive earnings, net of tax 344.4
310.9
1,652.5
643.9
Comprehensive earnings $ 432.7
$ 191.1
$ 2,104.2
$ 706.4



	Three Months Ended
	March 31,
	2020			2019
Net earnings (loss)	$	20.8		$	(25.0	)
Other comprehensive loss, before tax:
Foreign currency translation adjustment	(656.6		)	(338.5		)
Change in unrecognized (loss) gain and prior service cost related to defined benefit plans	(1.6		)	0.2
Net unrecognized (loss) gain on derivatives in cash flow hedging relationships	(51.4		)	26.0
Net unrecognized gain on derivatives in net investment hedging relationships	42.3			58.1
Net unrealized gain on marketable securities	0.2			0.4
Other comprehensive loss, before tax	(667.1		)	(253.8		)
Income tax (benefit) provision	(10.8		)	11.8
Other comprehensive loss, net of tax	(656.3		)	(265.6		)
Comprehensive loss	$	(635.5	)	$	(290.6	)

See Notes to Condensed Consolidated Financial Statements

Table of Contents

MYLAN N.V. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited; in millions, except share and per share amounts)



	March 31, 2020			December 31, 2019
ASSETS
Assets
Current assets:
Cash and cash equivalents	$	572.4		$	475.6
Accounts receivable, net	2,774.6			3,058.8
Inventories	2,639.6			2,670.9
Prepaid expenses and other current assets	613.9			552.0
Total current assets	6,600.5			6,757.3
Property, plant and equipment, net	2,067.0			2,149.6
Intangible assets, net	11,046.9			11,649.9
Goodwill	9,326.7			9,590.6
Deferred income tax benefit	701.3			703.1
Other assets	403.5			405.0
Total assets	$	30,145.9		$	31,255.5

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Accounts payable	$	1,273.5		$	1,528.1
Income taxes payable	254.3			213.0
Current portion of long-term debt and other long-term obligations	1,487.7			1,508.1
Other current liabilities	2,212.7			2,319.9
Total current liabilities	5,228.2			5,569.1
Long-term debt	11,197.8			11,214.3
Deferred income tax liability	1,538.2			1,627.5
Other long-term obligations	919.0			960.8
Total liabilities	18,883.2			19,371.7
Equity
Mylan N.V. shareholders’ equity
Ordinary shares — nominal value €0.01 per ordinary share
Shares authorized: 1,200,000,000
Shares issued: 541,542,294 and 540,746,871 as of March 31, 2020 and December 31, 2019	6.1			6.1
Additional paid-in capital	8,657.9			8,643.5
Retained earnings	6,051.9			6,031.1
Accumulated other comprehensive loss	(2,453.5		)	(1,797.2		)
	12,262.4			12,883.5
Less: Treasury stock — at cost
Ordinary shares: 24,598,074 as of March 31, 2020 and December 31, 2019	999.7			999.7
Total equity	11,262.7			11,883.8
Total liabilities and equity	$	30,145.9		$	31,255.5

September 30,
2017 December 31,
2016
ASSETS
Assets
Current assets:
Cash and cash equivalents $ 614.9
$ 998.8
Accounts receivable, net 3,220.2
3,310.9
Inventories 2,548.1
2,456.4
Prepaid expenses and other current assets 883.4
756.4
Total current assets 7,266.6
7,522.5
Property, plant and equipment, net 2,310.0
2,322.2
Intangible assets, net 15,270.5
14,447.8
Goodwill 9,984.7
9,231.9
Deferred income tax benefit 559.8
633.2
Other assets 427.3
568.6
Total assets $ 35,818.9
$ 34,726.2

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Trade accounts payable $ 1,276.1
$ 1,348.1
Short-term borrowings —
46.4
Income taxes payable 14.8
97.7
Current portion of long-term debt and other long-term obligations 793.0
290.0
Other current liabilities 2,900.1
3,258.5
Total current liabilities 4,984.0
5,040.7
Long-term debt 13,992.4
15,202.9
Deferred income tax liability 2,138.4
2,006.4
Other long-term obligations 1,412.5
1,358.6
Total liabilities 22,527.3
23,608.6
Equity
Mylan N.V. shareholders’ equity
Ordinary shares — nominal value €0.01 per ordinary share

Shares authorized: 1,200,000,000
Shares issued: 537,660,870 and 536,639,291 as of September 30, 2017 and December 31, 2016 6.0
6.0
Additional paid-in capital 8,570.5
8,499.3
Retained earnings 5,393.8
4,942.1
Accumulated other comprehensive loss (611.2 ) (2,263.7 )
13,359.1
11,183.7
Noncontrolling interest —
1.4
Less: Treasury stock — at cost
Ordinary shares: 1,311,193 as of September 30, 2017 and December 31, 2016 67.5
67.5
Total equity 13,291.6
11,117.6
Total liabilities and equity $ 35,818.9
$ 34,726.2

See Notes to Condensed Consolidated Financial Statements

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MYLAN N.V. AND SUBSIDIARIES

Condensed Consolidated Statements of ~~Cash Flows~~Equity

(Unaudited; in ~~millions)~~millions, except share amounts)

Nine Months Ended
September 30,
2017 2016
Cash flows from operating activities:
Net earnings $ 451.7
$ 62.5
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 1,279.8
1,046.4
Share-based compensation expense 64.2
71.1
Deferred income tax expense (benefit) 17.4
(356.6 )
Loss from equity method investments 77.2
85.5
Other non-cash items 265.4
226.1
Litigation settlements and other contingencies, net (45.2 ) 558.6
Write off of financing fees —
35.8
Unrealized losses on acquisition-related foreign currency derivatives —
128.6
Changes in operating assets and liabilities:
Accounts receivable 216.2
183.3
Inventories (87.9 ) (336.7 )
Trade accounts payable (187.4 ) (45.0 )
Income taxes (149.3 ) 51.3
Other operating assets and liabilities, net (332.8 ) (13.2 )
Net cash provided by operating activities 1,569.3
1,697.7
Cash flows from investing activities:
Cash paid for acquisitions, net (71.6 ) (6,151.7 )
Capital expenditures (156.4 ) (239.5 )
Proceeds from the sale of assets 31.1
—
Change in restricted cash 12.6
(50.5 )
Purchase of marketable securities (8.9 ) (22.8 )
Proceeds from the sale of marketable securities 8.9
15.8
Cash paid for Meda's unconditional deferred payment —
(308.0 )
Settlement of acquisition-related foreign currency derivatives —
(128.6 )
Payments for product rights and other, net (558.8 ) (196.3 )
Net cash used in investing activities (743.1 ) (7,081.6 )
Cash flows from financing activities:
Payments of long-term debt (1,747.3 ) (1,067.0 )
Change in short-term borrowings, net (48.3 ) 48.6
Taxes paid related to net share settlement of equity awards (7.4 ) (12.9 )
Contingent consideration payments (10.1 ) (15.5 )
Payments of financing fees (8.7 ) (95.3 )
Proceeds from issuance of long-term debt 555.8
6,519.8
Proceeds from exercise of stock options 12.8
11.1
Acquisition of noncontrolling interest —
(1.0 )
Other items, net (0.7 ) 1.6
Net cash (used in) provided by financing activities (1,253.9 ) 5,389.4
Effect on cash of changes in exchange rates 43.8
15.1
Net (decrease) increase in cash and cash equivalents (383.9 ) 20.6
Cash and cash equivalents — beginning of period 998.8
1,236.0
Cash and cash equivalents — end of period $ 614.9
$ 1,256.6



				Additional Paid-In Capital			Retained Earnings						Accumulated Other Comprehensive Loss			Total Equity
	Ordinary Shares								Treasury Stock
	Shares	Cost							Shares	Cost
Balance at December 31, 2019	540,746,871	$	6.1	$	8,643.5		$	6,031.1	24,598,074	$	(999.7	)	$	(1,797.2	)	$	11,883.8
Net earnings	—	—		—			20.8		—	—			—			20.8
Other comprehensive loss, net of tax	—	—		—			—		—	—			(656.3		)	(656.3		)
Issuance of restricted stock and stock options exercised, net	795,423	—		0.6			—		—	—			—			0.6
Taxes related to the net share settlement of equity awards	—	—		(5.6		)	—		—	—			—			(5.6		)
Share-based compensation expense	—	—		19.4			—		—	—			—			19.4
Balance at March 31, 2020	541,542,294	$	6.1	$	8,657.9		$	6,051.9	24,598,074	$	(999.7	)	$	(2,453.5	)	$	11,262.7



				Additional Paid-In Capital			Retained Earnings							Accumulated Other Comprehensive Loss			Total Equity
	Ordinary Shares									Treasury Stock
	Shares	Cost								Shares	Cost
Balance at December 31, 2018	539,289,665	$	6.0	$	8,591.4		$	6,010.7		23,490,867	$	(999.7	)	$	(1,441.3	)	$	12,167.1
Net loss	—	—		—			(25.0		)	—	—			—			(25.0		)
Other comprehensive loss, net of tax	—	—		—			—			—	—			(265.6		)	(265.6		)
Issuance of restricted stock and stock options exercised, net	653,679	—		2.3			—			—	—			—			2.3
Taxes related to the net share settlement of equity awards	—	—		(5.2		)	—			—	—			—			(5.2		)
Share-based compensation expense	—	—		18.0			—			—	—			—			18.0
Cumulative effect of the adoption of new accounting standards	—	—		—			3.6			—	—			(3.6		)	—
Balance at March 31, 2019	539,943,344	$	6.0	$	8,606.5		$	5,989.3		23,490,867	$	(999.7	)	$	(1,710.5	)	$	11,891.6

See Notes to Condensed Consolidated Financial Statements

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MYLAN N.V. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited; in millions)



	Three Months Ended
	March 31,
	2020			2019
Cash flows from operating activities:
Net earnings (loss)	$	20.8		$	(25.0	)
Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	415.0			500.5
Share-based compensation expense	19.4			18.0
Deferred income tax (benefit) expense	(43.9		)	6.7
Loss from equity method investments	17.3			17.0
Other non-cash items	28.7			(2.3		)
Litigation settlements and other contingencies, net	7.2			(3.7		)
Changes in operating assets and liabilities:
Accounts receivable	73.6			62.8
Inventories	(131.8		)	(183.0		)
Accounts payable	(201.0		)	(277.5		)
Income taxes	10.8			(213.6		)
Other operating assets and liabilities, net	75.0			60.4
Net cash provided by (used in) operating activities	291.1			(39.7		)
Cash flows from investing activities:
Cash paid for acquisitions, net	—			(7.1		)
Capital expenditures	(43.4		)	(53.1		)
Purchase of available for sale securities and other investments	(53.6		)	(7.8		)
Proceeds from the sale of marketable securities	18.1			7.6
Payments for product rights and other, net	(67.1		)	(15.4		)
Proceeds from the sale of assets	0.4			0.2
Net cash used in investing activities	(145.6		)	(75.6		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	33.1			0.1
Payments of long-term debt	(33.0		)	(0.2		)
Change in short-term borrowings, net	—			(1.5		)
Taxes paid related to net share settlement of equity awards	(5.0		)	(7.1		)
Contingent consideration payments	(19.3		)	(31.8		)
Payments of financing fees	—			(1.2		)
Proceeds from exercise of stock options	0.6			2.4
Other items, net	(1.2		)	(0.8		)
Net cash used in financing activities	(24.8		)	(40.1		)
Effect on cash of changes in exchange rates	(23.9		)	(3.0		)
Net increase (decrease) in cash, cash equivalents and restricted cash	96.8			(158.4		)
Cash, cash equivalents and restricted cash — beginning of period	491.1			389.3
Cash, cash equivalents and restricted cash — end of period	$	587.9		$	230.9

See Notes to Condensed Consolidated Financial Statements

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.General

The accompanying unaudited ~~Condensed Consolidated Financial Statements~~condensed consolidated financial statements (“interim financial statements”) of Mylan N.V. and subsidiaries (“Mylan” or the “Company”) were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q; therefore, as permitted under these rules, certain footnotes and other financial information included in audited financial statements were condensed or omitted. The interim financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the interim results of operations, comprehensive earnings, financial position, equity and cash flows for the periods presented.

The global spread of the coronavirus disease 2019 (“COVID-19”) has created significant volatility, uncertainty and economic disruption affecting the markets we serve in North America, Europe and Rest of World, including Asia. Certain significant impacts of COVID-19 on our business are discussed in these notes to the condensed consolidated financial statements.

These interim financial statements should be read in conjunction with the ~~Consolidated Financial Statements~~consolidated financial statements and ~~Notes~~notes thereto in Mylan N.V.’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019, as ~~amended.~~amended (the “2019 Form 10-K”). The December 31, ~~2016Condensed Consolidated Balance Sheet~~2019condensed consolidated balance sheet was derived from audited financial statements.

The interim results of operations, ~~and~~ comprehensive earnings ~~for the three and nine months ended~~ ~~September 30, 2017~~ and cash flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.


2.	Revenue Recognition and Accounts Receivable

The Company recognizes revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes net revenue for product sales when ~~title and risk~~control of ~~loss pass~~the promised goods or services is transferred to ~~its~~our customers ~~and when~~in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenues are recorded net of provisions for ~~estimates,~~variable consideration, including discounts, ~~sales allowances,~~rebates, governmental rebate programs, price adjustments, returns, chargebacks, promotional programs and other ~~promotional programs are reasonably determinable.~~

~~Accounts receivable~~sales allowances. Accruals for these provisions are presented in the condensed consolidated financial statements as reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).

Our net sales may be impacted by wholesaler and distributor inventory levels of ~~allowances relating~~our products, which can fluctuate throughout the year due to ~~these provisions.~~ the seasonality of certain products, pricing, the timing of product demand, purchasing decisions and other factors. Such fluctuations may impact the comparability of our net sales between periods.

Consideration received from licenses of intellectual property is recorded as other revenues. Royalty or profit share amounts, which are based on sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur. Such consideration is included in other revenue in the condensed consolidated statements of operations.

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The following table presents the Company’s net sales by therapeutic franchise for each of our reportable segments for the three months ended March 31, 2020 and 2019, respectively:



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended March 31, 2020
Central Nervous System & Anesthesia	$	141.2	$	225.7	$	60.4	$	427.3
Infectious Disease	45.1		72.3		229.7		347.1
Respiratory & Allergy	280.6		133.4		49.7		463.7
Cardiovascular	66.1		128.9		33.2		228.2
Gastroenterology	37.4		151.2		59.0		247.6
Diabetes & Metabolism	65.1		77.1		27.5		169.7
Dermatology	30.2		77.3		19.7		127.2
Women’s Healthcare	84.4		61.3		17.7		163.4
Oncology	129.1		18.6		24.6		172.3
Immunology	9.1		25.6		8.2		42.9
Other ⁽¹⁾	67.2		50.5		81.1		198.8
Total	$	955.5	$	1,021.9	$	610.8	$	2,588.2



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended March 31, 2019
Central Nervous System & Anesthesia	$	135.7	$	190.3	$	64.0	$	390.0
Infectious Disease	18.1		58.8		215.6		292.5
Respiratory & Allergy	238.6		107.8		43.7		390.1
Cardiovascular	46.9		100.7		34.2		181.8
Gastroenterology	34.2		127.8		77.5		239.5
Diabetes & Metabolism	151.0		57.2		39.2		247.4
Dermatology	13.9		61.6		20.4		95.9
Women’s Healthcare	78.9		44.6		15.1		138.6
Oncology	124.8		17.6		29.0		171.4
Immunology	10.1		7.2		6.4		23.7
Other ⁽¹⁾	70.7		121.7		97.3		289.7
Total	$	922.9	$	895.3	$	642.4	$	2,460.6

____________


⁽¹⁾	Other consists of numerous therapeutic franchises, none of which individually exceeds 5% of consolidated net sales.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Variable Consideration and Accounts Receivable

The following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the three months ended March 31, 2020 and 2019, respectively:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Gross sales	$	4,424.0		$	4,158.5
Gross to net adjustments:
Chargebacks	(854.4		)	(703.7		)
Rebates, promotional programs and other sales allowances	(845.6		)	(856.2		)
Returns	(59.0		)	(45.8		)
Governmental rebate programs	(76.8		)	(92.2		)
Total gross to net adjustments	$	(1,835.8	)	$	(1,697.9	)
Net sales	$	2,588.2		$	2,460.6

No significant revisions were made to the methodology used in determining these provisions or the nature of the provisions during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2020. Such allowances were ~~$1.92 billion and $2.05 billion~~comprised of the following at ~~September 30, 2017~~March 31, 2020 and December 31, 2016, respectively. Other current liabilities include $808.9 million and $809.0 million at September 30, 2017 and December 31, 2016, respectively, for certain sales allowances and other adjustments that are settled in cash.2019, respectively:



(In millions)	March 31, 2020		December 31, 2019
Accounts receivable, net	$	1,393.8	$	1,512.0
Other current liabilities	700.5		796.5
Total	$	2,094.3	$	2,308.5

Accounts receivable, net was comprised of the following at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively:



(In millions)	March 31, 2020		December 31, 2019
Trade receivables, net	$	2,429.2	$	2,640.1
Other receivables	345.4		418.7
Accounts receivable, net	$	2,774.6	$	3,058.8

(In millions) September 30,
2017 December 31,
2016
Trade receivables, net $ 2,822.6
$ 3,015.4
Other receivables 397.6
295.5
Accounts receivable, net $ 3,220.2
$ 3,310.9
Receivables Facility and Note Securitization Facility

Through its wholly owned subsidiary Mylan Pharmaceuticals Inc. (“MPI”), the Company has access to a ~~$400~~$400 million accounts receivable securitization facility (the “Receivables Facility”) and a $200 million note securitization facility (the “Note Securitization Facility”). The receivables underlying any borrowings are included in accounts receivable, net, in the ~~Condensed Consolidated Balance Sheets~~.condensed consolidated balance sheets. There were ~~$785.6~~$373.1 million and ~~$1.13 billion~~$407.0 million of securitized accounts receivable at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~,2019, respectively.

Accounts Receivable Factoring Arrangements

We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. We derecognized $125.7 million and $90.1 million of accounts receivable as of March 31, 2020 and December 31, 2019, respectively, under these factoring arrangements.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


3.	Recent Accounting Pronouncements

~~In August 2017, the Financial~~Adoption of New Accounting Standards ~~Board (the “FASB”)~~and Amended SEC Rules

In June 2016, the FASB issued Accounting Standards Update ~~2017-12,~~ ~~Derivatives~~2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses (“ASU 2016-13”), which requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and ~~Hedging~~reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic ~~815)~~326):Targeted ~~Improvements~~Transition Relief (“ASU 2019-05”). ASU 2019-05 provides transition relief for ASU 2016-13 by providing entities with an alternative to irrevocably elect the fair value option for eligible financial assets measured at amortized cost upon adoption of ASU 2016-13. The Company applied the provisions of ASU 2016-13 and its subsequent revisions as of January 1, 2020 and the adoption did not have a material impact on its condensed consolidated financial statements and disclosures.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-03”), which adds to and modifies certain disclosure requirements for fair value measurements including a requirement to disclose changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and a requirement to disclose the range and weighted average used to develop significant inputs for Level 3 fair value measurements. The Company applied the provisions of ASU 2018-13 as of January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s disclosures.

In August 2018, the FASB issued Accounting Standards Update 2018-15, Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for ~~Hedging Activities~~Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The objective of this update is to ~~improve~~clarify and align the accounting and capitalization of implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The updated guidance will require an entity in a hosting arrangement that is a service contract, to follow guidance in ASC 350 to determine which implementation costs to capitalize as an asset and which costs to expense. The Company applied the provisions of ASU 2018-15 as of January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and disclosures.

In November 2018, the FASB issued Accounting Standards Update 2018-18, Collaborative Arrangements (Topic 808)—Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”). The amendments in ASU 2018-18 make targeted improvements to U.S. GAAP for collaborative arrangements by clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation, and disclosure requirements. In addition, unit-of-account guidance in Topic 808 was aligned with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. The Company applied the provisions of ASU 2018-18 as of January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and disclosures.

In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding the financial ~~reporting~~disclosure requirements for guarantors and issuers of ~~hedging relationships to better portray~~guaranteed securities registered or being registered. Among other things, the ~~economic results~~amendments narrow the circumstances that require separate financial statements of ~~an entity’s risk management activities~~subsidiary issuers and guarantors and streamline the alternative disclosures required in ~~its~~lieu of those financial statements. The ~~amendments in this update also make certain targeted improvements to simplify the application~~effective date of the ~~hedge~~amendment is January 4, 2021 with earlier voluntary compliance permitted. We have chosen to voluntarily comply with the amended rules effective during the three months ended March 31, 2020 and have included the required disclosures as a component of Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition of this Form 10-Q as permitted by the amendments.

Accounting Standards Issued Not Yet Adopted

In January 2020, the FASB issued Accounting Standards Update 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (“ASU 2020-01”), which clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, ASU 2020-01 states that for the purpose of applying paragraph 815-10-15-141(a) an entity should not consider whether, upon

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in ~~current U.S. GAAP based on feedback received from preparers, auditors, users, and other stakeholders. This guidance is~~Topic 825. ASU 2020-01 will be effective for fiscal years, ~~beginning after December 15, 2018,~~ and interim periods within those fiscal years, beginning after December 15, 2020 with early ~~adoption permitted, including~~ adoption in any interim ~~period.~~period permitted. The Company is currently assessing the impact of the adoption of this guidance on its condensed consolidated financial statements and disclosures.

In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. Entities can apply the provisions of ASU 2020-04 immediately, as applicable, and generally the provisions of the guidance are available through December 31, 2022 as entities transition away from reference rates that are expected to be discontinued. The Company is currently assessing the impact of the adoption of this guidance on its condensed consolidated financial statements and disclosures.

In addition, the following recently issued accounting standards have not been adopted. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as amended, for additional information and their potential impacts.



Accounting Standard Update	Effective Date
ASU 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20) Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans	January 1, 2021


4.	Acquisitions and Other Transactions

Upjohn Business Combination Agreement

On July 29, 2019, the Company, Pfizer Inc. (“Pfizer”), Upjohn Inc., a wholly-owned subsidiary of Pfizer (“Upjohn” or “Newco”), and certain other affiliated entities entered into a Business Combination Agreement (the “Business Combination Agreement”) pursuant to which the Company will combine with Pfizer’s Upjohn Business (the “Upjohn Business”) in a Reverse Morris Trust transaction (the “Combination”). Newco, which will be the parent entity of the combined Upjohn Business and Mylan business, will be renamed “Viatris” effective as of the closing of the Combination. The Upjohn Business is a global, primarily off-patent branded and generic established medicines business, which includes 20 primarily off-patent solid oral dose legacy brands, such as Lyrica, Lipitor, Celebrex and Viagra.

Prior to the Combination and pursuant to a Separation and Distribution Agreement (the “Separation Agreement”), dated as of July 29, 2019, between Pfizer and Newco, Pfizer will, among other things, transfer to Newco substantially all of the assets and liabilities comprising the Upjohn Business (the “Separation”) and, thereafter, Pfizer will distribute to Pfizer stockholders all of the issued and outstanding shares of Newco (the “Distribution”). When the Distribution and Combination are completed, Pfizer stockholders as of the record date of the Distribution will own 57% of the outstanding shares of Newco common stock, and Mylan shareholders as of immediately before the Combination will own 43% of the outstanding shares of Newco common stock, in each case on a fully diluted basis. Newco will make a cash payment to Pfizer equal to $12 billion, to be funded with the proceeds of debt to be incurred by Newco in connection with the foregoing transactions, as partial consideration for the contribution of the Upjohn Business from Pfizer to Newco.

Newco has obtained commitments for the initial financing of the transaction in the form of a bridge loan from certain financial institutions. If Newco obtains additional funding by issuing securities or obtaining other loans, the amount of the bridge facility will be correspondingly reduced. The bridge loan is subject to customary terms and conditions including a financial covenant.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

~~In May 2017,~~terms of the ~~FASB issued Accounting Standards Update 2017-09,~~ ~~Compensation - Stock Compensation (Topic 718): Scope~~Separation Agreement, (c) the approval of ~~Modification Accounting~~ ~~(“ASU 2017-09”), which amends~~ the ~~scope~~Combination by Mylan shareholders, (d) the absence of ~~modification accounting for share-based payment arrangements. ASU 2017-09 provides guidance on~~any legal restraint (including legal actions or proceedings pursued by U.S. state authorities in the ~~types~~relevant states) preventing the consummation of ~~changes~~the transactions, (e) in the case of Pfizer’s and Newco’s obligations to consummate the transactions, (i) the distribution of $12 billion in cash from Upjohn to Pfizer in accordance with the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the ~~awards are~~Separation Agreement and (ii) the same immediately before and after the modification. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

~~In March 2017, the FASB issued Accounting Standards Update 2017-07,~~ ~~Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~, which requires companies to disaggregate the service cost component from the other components of net benefit cost and disclose the amount of net benefit cost that is included in the income statement or capitalized in assets,receipt by line item. This guidance requires companies to report the service cost component in the same line item(s) as other compensation costs and to report other pension-related costs (which include interest costs, amortization of pension-related costs from prior periods and gains or losses on plan assets) separately and exclude them from the subtotal of operating income. This guidance also allows only the service cost component to be eligible for capitalization when applicable. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. This guidance should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The update allows a practical expedient that permits a company to use the amounts disclosed in its pension and other postretirement plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

~~In January 2017, the FASB issued Accounting Standards Update 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~ (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test which previously required measurement of any goodwill impairment loss by comparing the implied fair valuePfizer of a reporting unit’s goodwill with the carrying amount of that goodwill. 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 value and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; without exceeding the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company has elected to early adopt this guidance as of January 1, 2017 and is applying it on a prospective basis. The adoption did not have a material impact on its condensed consolidated financial statements.

~~In January 2017, the FASB issued Accounting Standards Update 2017-01,~~ ~~Business Combinations (Topic 805) Clarifying the Definition of a Business~~, which narrows the definition of a business and requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, which would not constitute the acquisition of a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company has elected to early adopt this guidance as of January 1, 2017 and will apply it on a prospective basis. The adoption did not have a material impact on its condensed consolidated financial statements.

~~In March 2016, the FASB issued Accounting Standards Update 2016-09,~~ ~~Compensation - Stock Compensation (Topic 718)~~U.S. Internal Revenue Service (“~~ASU 2016-09”~~IRS”)~~, which simplifies the accounting for share-based compensation payments. The new standard requires all excess tax benefits~~ ruling and tax ~~deficiencies (including~~opinion of its tax benefits of dividends on share-based payment awards) to be recognized as income tax expense or benefit on the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. ASU 2016-09 also addresses the classification of excess tax benefits in the statement of cash flows. As required, the Company applied the provisions of ASU 2016-09 on a prospective basis as of January 1, 2017 and the adoption did not have a material impact on its condensed consolidated financial statements.

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~In May 2014, the FASB issued Accounting Standards Update 2014-09,~~ ~~Revenue from Contracts with Customers~~ (updated with Accounting Standards Update 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20), which revises accounting guidance on revenue recognition that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principal of this guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. This guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This guidance is effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years, and can be applied using a full retrospective or modified retrospective approach. The Company has substantially completed its review of revenue arrangements and currently is finalizing the quantification of any impact. Although the Company is continuing to assess the impact of the new standard, based upon its preliminary assessment, the Company believes that there may be arrangements under which the Company will recognize revenue earlier under the new standard, however such arrangements are not expected to be a significant part of the Company’s operations. In addition, upon implementation there may be certain changes in the presentation of certain items, including changes related to the classification of certain costs in the consolidated statements of operations. The Company currently expects to adopt the standard using the modified retrospective approach.


4.	~~Acquisitions and Other Transactions~~

~~Meda AB~~

On February 10, 2016, the Company issued an offer announcement under the Nasdaq Stockholm’s Takeover Rules and the Swedish Takeover Act (collectively, the “Swedish Takeover Rules”) setting forth a public offer to the shareholders of Meda AB (publ.) (“Meda”) to acquire all of the outstanding shares of Meda (the “Offer”), with an enterprise value, including the net debt of Meda, of approximately Swedish kronor (“SEK” or “kr”) 83.6 billion (based on a SEK/USD exchange rate of 8.4158) or $9.9 billion at announcement. On August 2, 2016, the Company announced that the Offer was accepted by Meda shareholders holding an aggregate of approximately 343 million shares, representing approximately 94% of the total number of outstanding Meda shares, as of July 29, 2016, and the Company declared the Offer unconditional. On August 5, 2016, settlement occurredcounsel with respect to the ~~Meda shares duly tendered by July 29, 2016~~Combination, and ~~as a result, Meda became a controlled subsidiary of~~(f) other customary closing conditions. On March 17, 2020, Pfizer received the ~~Company. Pursuant~~IRS ruling with respect to the ~~terms of~~Combination, which is generally binding, unless the Offer, each Meda shareholder that duly tendered Meda shares into the Offer received at settlement (1) in respect of 80% of the number of Meda shares tendered by such shareholder, 165kr in cash per Meda share, and (2) in respect of the remaining 20% of the number of Meda shares tendered by such shareholder, 0.386 of the Company’s ordinary shares per Meda share (subjectrelevant facts or circumstances change prior to treatment of fractional shares as described in the offer document published on June 16, 2016). The non-tendered shares were required to be acquired for cash through a compulsory acquisition proceeding, in accordance with the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)). The compulsory acquisition proceeding price accrued interest as required by the Swedish Companies Act. Meda’s shares were delisted from the Nasdaq Stockholm exchange on August 23, 2016.closing.

On ~~November 1, 2016,~~February 13, 2020, the Company made an offer to the remaining Meda shareholders to tender all their Meda shares for cash consideration of 161.31kr per Meda share (the “November Offer”) to provide such remaining shareholders with an opportunity to sell their shares in Meda to the Company in advance of the automatic acquisition of their shares for cashregistration statement on Form S-4 filed by Newco in connection with the compulsory acquisition proceeding. At the end of November 2016, Mylan completed the acquisition of approximately 19 million Meda shares duly tendered for aggregate cash consideration of approximately $330.3 million. In March 2017, the Company received full legal ownership to the remaining non-tendered Meda shares in exchange for a cash payment of approximately $71.6 million, equal to the uncontested portion of the compulsory acquisition price plus statutory interest, and the Company’s arrangement of a customary bank guarantee to secure the payment of any additional cash consideration that may be awarded to the former Meda shareholders in the compulsory acquisition proceeding. In October 2017, the arbitration tribunal awarded a price of 163.07kr per Meda share, plus statutory interest of 1.5% per annum, to the former Meda shareholders subject to the compulsory acquisition proceeding. Mylan expects to pay an additional approximately $0.9 million plus interest to such former Meda shareholders and, in accordance with Swedish law, pay the fees of the arbitrators and costs of other parties to the compulsory acquisition proceeding. Mylan expects that the award will become final in mid-December 2017, at which time Mylan will cause the bank guarantee to be released, definitively concluding the compulsory acquisition proceeding. As of September 30, 2017, the Company continues to maintain the bank guarantee as required by Swedish law.

~~On August 5, 2016, the total purchase price~~Combination was ~~approximately $6.92 billion, net of cash acquired, which includes cash consideration paid of approximately $5.3 billion, the issuance of approximately 26.4 million Mylan N.V. ordinary shares~~

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~at a fair value of approximately $1.3 billion based on the closing price of the Company’s ordinary shares on August 5, 2016, as reported~~declared effective by the NASDAQ Global Select Stock Market (“NASDAQ”) and an assumed liability of approximately $431.0 million related to the November Offer and the compulsory acquisition proceeding for the non-tendered Meda shares. In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction have been recorded at their respective estimated fair values at the acquisition date.

During the nine months ended September 30, 2017, adjustments were made to the preliminary purchase price and are reflected as “Measurement Period Adjustments” in the table below. The allocation of the $6.92 billion purchase price to the assets acquired and liabilities assumed for Meda is as follows:

(In millions)
Preliminary Purchase Price Allocation as of December 31, 2016^(a)

Measurement Period Adjustments ^(b)
Purchase Price Allocation as of September 30, 2017 (as adjusted)
Current assets (excluding inventories and net of cash acquired) $ 482.5
$ (9.2 ) $ 473.3
Inventories 463.1
5.0
468.1
Property, plant and equipment 177.5
—
177.5
Identified intangible assets 8,060.7
—
8,060.7
Goodwill 3,676.9
7.7
3,684.6
Other assets 9.5
(0.7 ) 8.8
Total assets acquired 12,870.2
2.8
12,873.0
Current liabilities (1,105.9 ) (4.9 ) (1,110.8 )
Long-term debt, including current portion (2,864.6 ) —
(2,864.6 )
Deferred tax liabilities (1,613.9 ) 0.7
(1,613.2 )
Pension and other postretirement benefits (322.3 ) —
(322.3 )
Other noncurrent liabilities (42.4 ) 1.4
(41.0 )
Net assets acquired $ 6,921.1
$ —
$ 6,921.1

~~____________~~


^(a)	~~As previously reported in the Company’s December 31, 2016 Annual Report on Form 10-K, as amended.~~


^(b)	The measurement period adjustments recorded during the nine months ended September 30, 2017 are primarily related to certain income tax adjustments and working capital related estimates to reflect facts and circumstances that existed as of the acquisition date.

~~The acquisition of Meda created~~SEC, Newco filed a more diversified and expansive portfolio of branded and generic medicines along with a strong and growing portfolio of over-the-counter (“OTC”) products. The combined company has a balanced global footprint with significant scale in key geographic markets, particularly the U.S. and Europe. The acquisition of Meda also expanded our presence in emerging markets, which includes countries in Africa, as well as countries throughout Asia and the Middle East, and is complemented by Mylan’s presence in India, Brazil and Africa (including South Africa). The Company recorded a step-up in the fair value of inventory of approximately $107 million at the acquisition date, which was fully amortized as of December 31, 2016.

The identified intangible assets of $8.06 billion are comprised of product rights and licenses that have a weighted average useful life of 20 years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. The goodwill of $3.68 billion arising from the acquisition consisted largely of the value of the employee workforce and the expected value of products to be developed in the future. Approximately $3.4 billion of goodwill recognized was allocated to the Europe segment, with approximately $290 million allocated to the North America segment, and approximately $6 million allocated to the Rest of World segment. None of the goodwill recognized in this transaction is currently expected to be deductible for income tax purposes.

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~RenaissanceTopicals Business~~

On June 15, 2016, the Company completed the acquisition of the non-sterile, topicals-focused business (the “Topicals Business”) of Renaissance Acquisition Holdings, LLC (“Renaissance”) for approximately $1.0 billion in cash at closing, including amounts deposited into escrow for potential contingent payments, subject to customary adjustments. The Topicals Business provided the Company with a complementary portfolio of approximately 25 products, an active pipeline of approximately 25 products, and an established U.S. sales and marketing infrastructure targeting dermatologists. The Topicals Business also provided an integrated manufacturing and development platform. In accordance with U.S. GAAP, the Company used the acquisition method of accounting to account for this transaction. Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction were recorded at their respective estimated fair values at the acquisition date. The U.S. GAAP purchase price was $972.7 million, which includes estimated contingent consideration of approximately $16 million related to the potential $50 million payment contingent on the achievement of certain 2016 financial targets. The final resolution of the contingent consideration has not been completed at September 30, 2017. The $50 million contingent payment remains in escrow and is classified as restricted cash included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016.

~~The allocation of the $972.7 million purchase price to the assets acquired and liabilities assumed for the Topicals Business is as follows:~~

(In millions)
Current assets (excluding inventories) $ 57.7
Inventories 74.2
Property, plant and equipment 54.8
Identified intangible assets 467.0
In-process research and development 275.0
Goodwill 318.6
Other assets 0.1
Total assets acquired 1,247.4
Current liabilities (74.2 )
Deferred tax liabilities (194.6 )
Other noncurrent liabilities (5.9 )
Net assets acquired $ 972.7

The acquisition of the Topicals Business broadened the Company’s dermatological portfolio. The amount allocated to in-process research and development (“IPR&D”) represents an estimate of the fair value of purchased in-process technology for research projects that, as of the closing date of the acquisition, had not reached technological feasibility and had no alternative future use. The fair value of IPR&D of $275.0 million was based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory charges. A discount rate of 12.5% was utilized to discount net cash inflows to present values. IPR&D is accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until completion or abandonment of the projects. Upon successful completion and launch of each product, the Company will make a determination of the estimated useful life of the individual asset. The acquired IPR&D projects are in various stages of completion and the estimated costs to complete these projects total approximately $48 million, which is expected to be incurred through 2019. There are risks and uncertainties associatedprospectus with the ~~timely~~SEC in connection with the Combination and ~~successful completion of~~Mylan filed a definitive proxy statement with the ~~projects included~~SEC in ~~IPR&D, and no assurances can be given that~~connection with the ~~underlying assumptions used to estimate the fair value of IPR&D will not change or the timely completion of each project to commercial success will occur.~~

The identified intangible assets of $467.0 million are comprised of $454.0 million of product rights and licenses that have a weighted average useful life of 14 years and $13.0 million of contract manufacturing agreements that have a weighted average useful life of five years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP.

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

The goodwill of $318.6 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of products to be developed in the future. All of the goodwill was assigned to the North America segment. None of the goodwill recognized in this transaction is currently expected to be deductible for income tax purposes. The acquisition did not have a material impact on a pro forma basis for the three and nine month periods ended September 30, 2016.

~~Unaudited Pro Forma Financial Results~~

The following table presents supplemental unaudited pro forma information for the acquisition of Meda, as if it had occurred on January 1, 2015. The unaudited pro forma results reflect certain adjustments related to past operating performance and acquisition accounting adjustments, such as increased amortization expense based on the fair value of assets acquired, the impact of transaction costs and the related income tax effects. The unaudited pro forma results do not include any anticipated synergies which may be achievable, or have been achieved, subsequent to the closing of the Meda transaction. Accordingly, the unaudited pro forma results are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on the stated dates above, nor are they indicative of the future operating results of Mylan N.V. and its subsidiaries.

Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited, in millions, except per share amounts) 2016 2016
Total revenues $ 3,168.6
$ 9,008.2
Net (loss) earnings $ (111.4 ) $ 132.0
(Loss) earnings per ordinary share:
Basic $ (0.21 ) $ 0.25
Diluted $ (0.21 ) $ 0.25
Weighted average ordinary shares outstanding:
Basic 533.9
526.9
Diluted 533.9
536.2

~~Other Transactions~~

On February 14, 2017, the Company entered into a joint development and marketing agreement for a respiratory product that resulted in approximately $50 million in research and development (“R&D”) expense in the first quarter of 2017.Combination.

On March ~~29, 2017, the Company~~26, 2020, Mylan and Pfizer announced that ~~it had completed its acquisition of the global rights~~due to the ~~Cold-EEZE® brand cold remedy line from ProPhase Labs, Inc. for approximately $50 million in cash. The Company accounted for this transaction as an asset acquisition and~~unprecedented circumstances surrounding the ~~asset is being amortized over a useful life of 15 years.~~

On June 2, 2017, the Company completed the acquisition of additional intellectual property rights and marketing authorizations in certain rest of world markets for a product that the Company previously licensed in certain European markets. The acquisition price was $128.0 million and the Company accounted for this transaction as an asset acquisition. The intangible asset is being amortized over a useful life of five years.

~~On June 19, 2017, the Company completed the acquisition of a portfolio of four generic pharmaceutical products~~COVID-19 pandemic, including associated delays in the ~~U.S. The acquisition price~~regulatory review process, the Combination is now anticipated to close in the second half of 2020. It was ~~$277.9 million~~also announced that, in light of increased meeting and other restrictions due to COVID-19 developments in the ~~Company accounted for this transaction as an asset acquisition. The intangible asset recognized totaled $252.5 million~~Netherlands, Mylan’s extraordinary general meeting of shareholders to approve certain matters in connection with the ~~remaining assets primarily consisting of receivables. The intangible asset is being amortized over a useful life of seven years.~~

~~On September 29, 2017, the Company completed the acquisition of intellectual property rights and marketing authorizations related~~Combination was rescheduled from April 27, 2020 to ~~a product in certain markets for $40 million. The Company accounted for this transaction as an asset acquisition and the asset is being amortized over a useful life of five years.~~

On October 3, 2017, the Company completed the acquisition of a U.S. based developer and manufacturer of active pharmaceutical ingredients (“API”) for approximately $189 million, which includes $15 million of contingent payments based

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

on the achievement of certain financial results of the acquired business following the closing of the transaction. The Company will account for this transaction as the acquisition of a business. Due to the limited time since the acquisition date and limitations on access to the financial information prior to the acquisition date, the initial accounting for the business combination was incomplete at November 6, 2017. As a result, the Company was unable to provide amounts recognized as of the acquisition date for major classes of assets and liabilities acquired resulting from the acquisition, including information related to contingencies and goodwill. The Company anticipates that the majority of the goodwill will be assigned to the North America and Rest of World segments and does not currently expect the goodwill recognized to be deductible for income tax purposes. The acquisition does not have a material impact on the Company’s results of operations on a pro forma basis for the three and nine month periods ended SeptemberJune 30, ~~2017 and 2016.~~

As part of the Meda acquisition, the Company acquired the in-licensed rights to Betadine in certain European markets. These rights were set to expire on December 31, 2017. Under the licensing agreement, Meda had a binding option to acquire a perpetual license for the rights to Betadine under certain conditions. In October 2017, the Company finalized an agreement to acquire the perpetual license. An estimated liability of approximately $300 million for the purchase of these rights was accrued for on the Meda acquisition opening balance sheet. The Company does not expect that a material adjustment to this liability will be necessary upon closing of the transaction in early 2018.2020.


5.	Share-Based Incentive Plan

The Company’s shareholders have approved the 2003 Long-Term Incentive Plan (as amended, the “2003 Plan”). Under the 2003 Plan, 55,300,000 ordinary shares are reserved for issuance to key employees, consultants, independent contractors and non-employee directors of the Company through a variety of incentive awards, including: stock options, stock appreciation rights (“SAR”), restricted ordinary shares ~~restricted stock~~and units, performance awards (“PSU”), other stock-based awards and short-term cash awards. Stock option awards are granted with an exercise price equal to the fair market value of the ordinary shares underlying the stock options at the date of the grant, generally become exercisable over periods ranging from three to four years,, and generally expire in ten years. ~~Since approval of the 2003 Plan, no further grants of stock options have been made under any other previous plan.~~

The following table summarizes stock option and SAR (together, “stock awards”) activity:



	Number of Shares Under Stock Awards		Weighted Average Exercise Price per Share
Outstanding at December 31, 2019	6,347,709		$	36.97
Granted	699,491		17.61
Exercised	(27,615	)	21.13
Forfeited	(240,740	)	25.19
Outstanding at March 31, 2020	6,778,845		$	35.45
Vested and expected to vest at March 31, 2020	6,572,572		$	35.72
Exercisable at March 31, 2020	5,145,065		$	38.65

Number of Shares Under Stock Awards Weighted Average Exercise Price per Share
Outstanding at December 31, 2016 7,699,441
$ 33.38
Granted 905,521
42.93
Exercised (659,621 ) 19.62
Forfeited (381,659 ) 49.16
Outstanding at September 30, 2017 7,563,682
$ 34.92
Vested and expected to vest at September 30, 2017 7,314,174
$ 34.53
Exercisable at September 30, 2017 5,707,402
$ 31.37

As of ~~September 30, 2017~~,March 31, 2020, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had average remaining contractual terms of 5.7 years,, 5.6 years and ~~4.7~~4.6 years,, respectively. Also, at ~~September 30, 2017~~,March 31, 2020, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable ~~each~~ had anno aggregate intrinsic ~~value of $36.6 million.~~values.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

A summary of the status of the Company’s nonvested ~~restricted ordinary shares~~ and restricted stock unit awards, including PSUs (collectively, “restricted stock awards”), as of ~~September 30, 2017~~March 31, 2020 and the changes during the ~~nine~~three months ended~~September 30, 2017~~ March 31, 2020 are presented below:



	Number of Restricted Stock Awards		Weighted Average Grant-Date Fair Value per Share
Nonvested at December 31, 2019	4,105,689		$	34.42
Granted	2,944,296		17.48
Released	(1,100,256	)	36.56
Forfeited	(238,662	)	44.14
Nonvested at March 31, 2020	5,711,067		$	24.87

Number of Restricted Stock Awards Weighted Average Grant-Date Fair Value per Share
Nonvested at December 31, 2016 5,667,830
$ 42.46
Granted 1,402,907
44.04
Released (500,854 ) 52.29
Forfeited (274,034 ) 45.96
Nonvested at September 30, 2017 6,295,849
$ 41.88

As of ~~September 30, 2017~~,March 31, 2020, the Company had ~~$139.7~~$111.2 million of total unrecognized compensation expense, net of estimated forfeitures, related to all of its stock-based awards, which ~~will be recognized~~we expect to recognize over the remaining weighted average vesting period of ~~1.9 years~~.1.8 years. The total intrinsic value of stock awards exercised and restricted stock units released during the ~~nine~~three months ended~~September 30, 2017~~ March 31, 2020 and ~~2016~~2019 was ~~$34.7~~$19.0 million and ~~$49.1~~$22.1 million,, respectively.


6.	Pensions and Other Postretirement Benefits

Defined Benefit Plans

The Company sponsors various defined benefit pension plans in several countries. Benefits provided generally depend on length of service, pay grade and remuneration levels. The Company maintains ~~two~~2 fully frozen defined benefit pension plans in the U.S., and employees in the U.S. and Puerto Rico are generally provided retirement benefits through defined contribution plans.

The Company also sponsors other postretirement benefit plans including plans that provide for postretirement supplemental medical coverage. Benefits from these plans are provided to employees and their spouses and dependents who meet various minimum age and service requirements. In addition, the Company sponsors other plans that provide for life insurance benefits and postretirement medical coverage for certain officers and management employees.

Net Periodic Benefit Cost

Components of net periodic benefit cost for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:



	Pension and Other Postretirement Benefits
	Three Months Ended
	March 31,
(In millions)	2020			2019
Service cost	$	5.3		$	5.3
Interest cost	2.9			3.8
Expected return on plan assets	(3.4		)	(3.0		)
Amortization of prior service costs	—			0.3
Recognized net actuarial losses (gains)	0.2			(0.2		)
Net periodic benefit cost	$	5.0		$	6.2

Pension and Other Postretirement Benefits
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Service cost $ 5.0
$ 4.8
$ 15.1
$ 12.6
Interest cost 3.7
2.8
11.2
5.7
Expected return on plan assets (3.5 ) (3.0 ) (10.6 ) (7.0 )
Amortization of prior service costs 0.1
0.1
0.2
0.2
Recognized net actuarial losses 0.2
0.2
0.5
0.7
Net periodic benefit cost $ 5.5
$ 4.9
$ 16.4
$ 12.2

The Company is making the minimum mandatory contributions to its U.S. defined benefit pension plans in the ~~2017~~2020 plan year. The Company expects to make total benefit payments of approximately ~~$30.4~~$35.2 million from pension and other postretirement benefit ~~plans.~~plans in 2020. The Company anticipates making contributions to pension and other postretirement benefit plans of approximately ~~$30.2~~$35.1 million in ~~2017.~~2020.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


7.	Balance Sheet Components

Selected balance sheet components consist of the following:

Cash and restricted cash



(In millions)	March 31, 2020		December 31, 2019
Cash and cash equivalents	$	572.4	$	475.6
Restricted cash, included in prepaid expenses and other current assets	15.5		15.5
Cash, cash equivalents and restricted cash	$	587.9	$	491.1

Inventories



(In millions)	March 31, 2020		December 31, 2019
Raw materials	$	859.3	$	886.8
Work in process	395.6		417.2
Finished goods	1,384.7		1,366.9
Inventories	$	2,639.6	$	2,670.9

(In millions) September 30,
2017 December 31,
2016
Raw materials $ 885.1
$ 783.4
Work in process 381.0
436.0
Finished goods 1,282.0
1,237.0
Inventories $ 2,548.1
$ 2,456.4

Prepaid and other current assets


(In millions)	September 30, 2017		December 31, 2016		March 31, 2020		December 31, 2019
Prepaid expenses	$	153.6	$	169.1	$	162.0	$	156.7
Restricted cash	135.9		148.1		15.5		15.5
Available-for-sale securities	87.6		83.7
Available-for-sale fixed income securities					36.9		26.8
Fair value of financial instruments	82.5		62.2		55.9		43.3
Trading securities	32.7		29.6
Equity securities					32.6		39.0
Other current assets	391.1		263.7		311.0		270.7
Prepaid expenses and other current assets	$	883.4	$	756.4	$	613.9	$	552.0

Prepaid expenses consist primarily of prepaid rent, insurance and other individually insignificant items.

Property, plant and equipment, net



(In millions)	March 31, 2020		December 31, 2019
Machinery and equipment	$	2,513.8	$	2,523.7
Buildings and improvements	1,193.2		1,197.3
Construction in progress	236.8		277.3
Land and improvements	122.0		124.6
Gross property, plant and equipment	4,065.8		4,122.9
Accumulated depreciation	1,998.8		1,973.3
Property, plant and equipment, net	$	2,067.0	$	2,149.6

(In millions) September 30,
2017 December 31, 2016
Machinery and equipment $ 2,310.3
$ 2,227.9
Buildings and improvements 1,175.5
1,106.5
Construction in progress 277.0
328.8
Land and improvements 146.9
144.7
Gross property, plant and equipment 3,909.7
3,807.9
Accumulated depreciation 1,599.7
1,485.7
Property, plant and equipment, net $ 2,310.0
$ 2,322.2

~~Other assets~~

(In millions) September 30,
2017 December 31, 2016
Equity method investments, clean energy investments $ 274.8
$ 320.6
Equity method investments, Sagent Agila —
75.8
Other long-term assets 152.5
172.2
Other assets $ 427.3
$ 568.6

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

~~Trade accounts~~Other assets



(In millions)	March 31, 2020		December 31, 2019
Equity method investments, clean energy investments	$	81.1	$	92.2
Operating lease right-of-use assets	236.4		254.6
Other long-term assets	86.0		58.2
Other assets	$	403.5	$	405.0

Accounts payable



(In millions)	March 31, 2020		December 31, 2019
Trade accounts payable	$	875.3	$	1,061.9
Other payables	398.2		466.2
Accounts payable	$	1,273.5	$	1,528.1

(In millions) September 30,
2017 December 31,
2016
Accounts payable $ 799.0
$ 939.5
Other payables 477.1
408.6
Trade accounts payable $ 1,276.1
$ 1,348.1

Other current liabilities



(In millions)	March 31, 2020		December 31, 2019
Accrued sales allowances	$	700.5	$	796.5
Legal and professional accruals, including litigation accruals	127.2		138.2
Payroll and employee benefit liabilities	394.3		467.1
Contingent consideration	117.3		120.4
Accrued interest	151.0		59.1
Restructuring	19.7		26.0
Equity method investments, clean energy investments	48.3		47.7
Fair value of financial instruments	70.3		12.9
Operating lease liability	70.5		76.7
Other	513.6		575.3
Other current liabilities	$	2,212.7	$	2,319.9

(In millions) September 30,
2017 December 31, 2016
Accrued sales allowances $ 808.9
$ 809.0
Legal and professional accruals, including litigation accruals 473.7
720.4
Payroll and employee benefit plan accruals 373.4
409.8
Contingent consideration 119.4
256.9
Accrued interest 167.7
41.0
Restructuring 55.8
138.6
Equity method investments, clean energy investments 67.0
64.7
Fair value of financial instruments 10.1
15.3
Compulsory acquisition proceeding —
70.2
Other 824.1
732.6
Other current liabilities $ 2,900.1
$ 3,258.5

On March 31, 2017, the Company announced that Meridian Medical Technologies (“Meridian”), a Pfizer company that manufactures the EpiPen® Auto-Injector, expanded a voluntary recall of select lots of EpiPen® Auto-Injector and EpiPen Jr® Auto-Injector to include additional lots distributed in the U.S. and other markets in consultation with the U.S. Food and Drug Administration (“FDA”) (the “EpiPen® Auto-Injector Recall”). This recall was conducted as a result of the receipt of two previously disclosed reports outside of the U.S. of the failure to activate the device due to a potential defect in a supplier component. Both reports were related to the single lot that was previously recalled. The expanded voluntary recall was initiated in the U.S. and also extends to additional markets in Europe, Asia, North and South America. The Company is replacing recalled devices at no cost to the consumer. Estimated costs to Mylan related to product recalls are based on a formal campaign soliciting return of the product and are accrued when they are deemed to be probable and can be reasonably estimated. As of September 30, 2017, the Company recorded an accrual for certain costs of the recall but there can be no assurance that future costs related to the recall will not exceed amounts recorded. In addition, Meridian is contractually obligated to reimburse Mylan for costs related to the EpiPen® Auto-Injector Recall, and the Company has recorded an asset for the recovery of such costs.

Other long-term obligations


(In millions)	September 30, 2017		December 31, 2016		March 31, 2020		December 31, 2019
Employee benefit liabilities	$	432.9	$	396.7	$	405.6	$	408.9
Contingent consideration	351.7		307.7		118.9		130.3
Equity method investments, clean energy investments	264.8		302.3		48.0		57.2
Tax contingencies	247.7		239.3
Tax related items, including contingencies					100.5		109.6
Operating lease liability					164.1		175.7
Other	115.4		112.6		81.9		79.1
Other long-term obligations	$	1,412.5	$	1,358.6	$	919.0	$	960.8


8.	Equity Method Investments

The Company currently has ~~five~~3 equity method investments in limited liability companies that own refined coal production plants (the “clean energy investments”)~~, who’s~~ whose activities qualify for income tax credits under Section 45 of the U.S. Internal Revenue Code of 1986, as ~~amended.~~amended (the “Code”).

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Since December 2013, the Company held a 50% interest in Sagent Agila LLC (“Sagent Agila”), which was a joint venture established to develop, manufacture and distribute certain generic injectable products in the U.S. In April 2017, the Company and Sagent Pharmaceuticals Inc. (“Sagent”) finalized an agreement to dissolve the joint venture. Under the terms of the agreement, Mylan received Sagent’s interest in the joint venture in exchange for an approved product right. The assets in the joint venture consisted entirely of product rights for commercialized generic injectables. As a result of this transaction, during the nine months ended September 30, 2017, the Company recognized a loss of $5.7 million as a component of net losses from equity method investments. Additionally, during the nine months ended September 30, 2017, the Company received a dividend payment of $8.4 million from Sagent Agila, which reduced the carrying value of the equity investment. In the second quarter of 2017, the Company reclassified its investment in Sagent Agila to product rights and licenses and is amortizing the amount over the remaining estimated useful lives of the products.

Summarized financial information, in the aggregate, for the Company’s significant equity method investments on a 100% basis for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 are as follows:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Total revenues	$	87.5		$	86.9
Gross loss	(1.1		)	(1.0		)
Operating and non-operating expense	4.7			4.9
Net loss	$	(5.8	)	$	(5.9	)

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Total revenues $ 129.3
$ 170.0
$ 352.0
$ 418.2
Gross loss (2.4 ) (3.0 ) (8.8 ) (3.8 )
Operating and non-operating expense 6.5
6.3
16.9
16.3
Net loss $ (8.9 ) $ (9.3 ) $ (25.7 ) $ (20.1 )

The Company’s net losses from its equity method investments ~~includes~~include amortization expense related to the excess of the cost basis of the Company’s investment over the underlying assets of each individual investee. For the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, the Company recognized net losses from equity method investments of ~~$22.4~~$17.3 million and ~~$29.7 million, respectively. For the nine months ended September 30, 2017 and 2016, the Company recognized net losses from equity method investments of $77.2 million and $85.5~~$17.0 million, respectively, which ~~was~~were recognized as a component of other expense, net in the ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations.~~operations. The Company recognizes the income tax credits and benefits from the clean energy investments as part of its provision for income taxes.


9.	Earnings (Loss) per Ordinary Share

Basic earnings (loss) per ordinary share is computed by dividing net earnings (loss) by the weighted average number of ordinary shares outstanding during the period. Diluted earnings (loss) per ordinary share is computed by dividing net earnings (loss) by the weighted average number of ordinary shares outstanding during the period increased by the number of additional shares that would have been outstanding related to potentially dilutive securities or instruments, if the impact is dilutive.

On April 15, 2016, in connection with the expiration and settlement of the Company’s equity classified warrants, the Company issued approximately 17.0 million Mylan N.V. ordinary shares. The dilutive impact of the warrants, prior to settlement, is included in the calculation of diluted earnings per ordinary share based upon the average market value of the Company’s ordinary shares during the period as compared to the exercise price. For the nine months ended September 30, 2016, 6.6 million warrants were included in the calculation of diluted earnings per ordinary share.

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Basic and diluted earnings (loss) per ordinary share are calculated as follows:



	Three Months Ended
	March 31,
(In millions, except per share amounts)	2020		2019
Basic earnings (loss) (numerator):
Net earnings (loss)	$	20.8	$	(25.0	)
Shares (denominator):
Weighted average ordinary shares outstanding	516.4		515.0
Basic earnings (loss) per ordinary share	$	0.04	$	(0.05	)

Diluted earnings (loss) (numerator):
Net earnings (loss)	$	20.8	$	(25.0	)
Shares (denominator):
Weighted average ordinary shares outstanding	516.4		515.0
Share-based awards	0.6		—
Total dilutive shares outstanding	517.0		515.0
Net earnings (loss) per diluted ordinary share	$	0.04	$	(0.05	)

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions, except per share amounts) 2017 2016 2017 2016
Basic earnings (numerator):
Net earnings (loss) $ 88.3
$ (119.8 ) $ 451.7
$ 62.5
Shares (denominator):
Weighted average ordinary shares outstanding 535.2
523.6
534.9
505.9
Basic earnings (loss) per ordinary share $ 0.17
$ (0.23 ) $ 0.84
$ 0.12

Diluted earnings (numerator):
Net earnings (loss) $ 88.3
$ (119.8 ) $ 451.7
$ 62.5
Shares (denominator):
Weighted average ordinary shares outstanding 535.2
523.6
534.9
505.9
Share-based awards and warrants 1.8
—
2.1
9.3
Total dilutive shares outstanding 537.0
523.6
537.0
515.2
Diluted earnings (loss) per ordinary share $ 0.16
$ (0.23 ) $ 0.84
$ 0.12

Additional stock awards and restricted stock awards were outstanding during the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, but were not included in the computation of diluted earnings per ordinary share for each respective period because the effect would be anti-dilutive. Excluded shares at ~~September 30, 2017~~March 31, 2020 include certain share-based compensation awards ~~and restricted ordinary shares~~ whose performance conditions had not been fully met. Such excluded shares and anti-dilutive awards represented ~~8.9~~9.6 million shares and ~~8.6~~8.9 million shares for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020 and ~~13.9 million shares and 7.3 million shares for the three and nine months ended September 30, 2016,~~2019, respectively.

1817

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


10.	Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the ~~nine~~three months ended~~September 30, 2017~~ March 31, 2020 are as follows:


(In millions)	North America Segment			Europe Segment			Rest of World Segment			Total			North America Segment			Europe Segment			Rest of World Segment			Total
Balance at December 31, 2016:
Balance at December 31, 2019:
Goodwill	$	3,990.4		$	3,859.1		$	1,767.4		$	9,616.9		$	3,708.4		$	4,548.6		$	1,718.6		$	9,975.6
Accumulated impairment losses	(385.0		)	—			—			(385.0		)	(385.0		)	—			—			(385.0		)
	3,605.4			3,859.1			1,767.4			9,231.9			3,323.4			4,548.6			1,718.6			9,590.6
Reclassifications⁽¹⁾	(199.0		)	371.8			(172.8		)	—
Measurement period adjustments	—			7.7			—			7.7
Divestiture	—			(1.3		)	—			(1.3		)
Foreign currency translation	52.9			614.6			78.9			746.4			(76.6		)	(117.5		)	(69.8		)	(263.9		)
	$	3,459.3		$	4,851.9		$	1,673.5		$	9,984.7		$	3,246.8		$	4,431.1		$	1,648.8		$	9,326.7
Balance at September 30, 2017:
Balance at March 31, 2020:
Goodwill	$	3,844.3		$	4,851.9		$	1,673.5		$	10,369.7		$	3,631.8		$	4,431.1		$	1,648.8		$	9,711.7
Accumulated impairment losses	(385.0		)	—			—			(385.0		)	(385.0		)	—			—			(385.0		)
	$	3,459.3		$	4,851.9		$	1,673.5		$	9,984.7		$	3,246.8		$	4,431.1		$	1,648.8		$	9,326.7

~~____________~~


⁽¹⁾	~~The reclassifications in the year-to-date period relate to the allocation of goodwill for the Meda acquisition.~~

Intangible assets consist of the following components at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016:~~2019:

(In millions) Weighted Average Life (Years) Original Cost Accumulated Amortization Net Book Value
September 30, 2017
Amortized intangible assets:
Product rights and licenses 15 $ 19,193.0
$ 4,947.7
$ 14,245.3
Patents and technologies 20 116.7
112.0
4.7
Other ⁽¹⁾
6 505.3
404.1
101.2
19,815.0
5,463.8
14,351.2
In-process research and development 919.3
—
919.3
$ 20,734.3
$ 5,463.8
$ 15,270.5
December 31, 2016
Amortized intangible assets:
Product rights and licenses 15 $ 16,968.4
$ 3,585.7
$ 13,382.7
Patents and technologies 20 116.6
108.5
8.1
Other ⁽¹⁾
6 465.9
330.0
135.9
17,550.9
4,024.2
13,526.7
In-process research and development 921.1
—
921.1
$ 18,472.0
$ 4,024.2
$ 14,447.8



(In millions)	Weighted Average Life (Years)	Original Cost		Accumulated Amortization		Net Book Value
March 31, 2020
Product rights, licenses and other ⁽¹⁾	15	$	19,653.5	$	8,721.5	$	10,932.0
In-process research and development		114.9		—		114.9
		$	19,768.4	$	8,721.5	$	11,046.9
December 31, 2019
Product rights, licenses and other ⁽¹⁾	15	$	20,109.1	$	8,579.5	$	11,529.6
In-process research and development		120.3		—		120.3
		$	20,229.4	$	8,579.5	$	11,649.9

____________


⁽¹⁾	Represents amortizable intangible assets. Other intangible assets ~~consist~~consists principally of customer lists and contractual ~~rights and other contracts.~~rights.

In December 2011, the Company completed the acquisition of the exclusive worldwide rights to develop, manufacture and commercialize a generic equivalent to GlaxoSmithKline’s Advair® Diskus and Seretide® Diskus incorporating Pfizer

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Inc.’s proprietary dry powder inhaler delivery platform (the “respiratory delivery platform”). The Company accounted for this transaction as a purchase of a business and utilized the acquisition method of accounting. In conjunction with the Company’s Generic Drug User Fee Agreement goal date, on March 28, 2017, the Company received a complete response letter from the FDA regarding its Abbreviated New Drug Application (“ANDA”) for the respiratory delivery platform. As of September 30, 2017, the Company has an IPR&D asset of $347.2 million and a related contingent consideration liability of $361.0 million. The Company performed an analysis and valuation of the IPR&D asset and the fair value of the related contingent consideration liability using a discounted cash flow model. The model contained certain key assumptions including: the expected product launch date, the number of competitors, the timing of competition and a discount factor based on an industry specific weighted average cost of capital. Based on the analysis performed, the Company determined that the IPR&D asset was not impaired at September 30, 2017. Additionally, no fair value adjustment was required for the contingent consideration during the three months ended September 30, 2017. In the second quarter of 2017, a fair value adjustment was required for the contingent consideration liability resulting in a gain of approximately $88.1 million based upon changes to assumptions relating to the timing of the product launch along with other competitive and market factors. The fair value of the contingent consideration liability was determined based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note 11 - ~~Financial Instruments and Risk Management~~. Resolution of the matters with the FDA, market conditions and other factors may result in significant future changes in the projections and assumptions utilized in the discounted cash flow model, which could lead to material adjustments to the amounts recorded for IPR&D and contingent consideration.

During the three months ended ~~June 30, 2017,~~March 31, 2019, the Company ~~performed its annual~~recognized impairment ~~review~~charges of ~~its IPR&D assets acquired as part of the Topicals Business and recorded an impairment charge in the amount of $13.0~~$29.5 million which ~~has~~have been recorded as a component of amortization expense, infor the ~~nine months ended September 30, 2017.~~impairment of certain in-process research and development (“IPR&D”) assets. The impairment charge ~~resulted from~~recorded during the ~~Company’s updated estimate~~first quarter of 2019 related to certain assets acquired as part of the acquisition of the non-sterile, topicals-focused business of Renaissance Acquisition Holdings, LLC. No impairment charges were recognized during the three months ended March 31, 2020. The impairment testing involved calculating the fair value of ~~these~~the assets ~~which was based upon updated forecasts and future development plans, compared with the assigned fair values as of the acquisition date, June 15, 2016. The fair value was determined~~ based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note 11 - Financial Instruments and Risk Management. These valuations reflect, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Changes in any of the Company’s assumptions may result in a further reduction to the estimated fair values of these ~~IPR&D~~ assets and could result in additional future impairment charges.

The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. As a result of the decline in the Company’s share price during the first quarter of 2020, and the general uncertainty and volatility in the economic environments in which the Company operates, including the impacts of the COVID-19 pandemic, the Company performed an interim goodwill impairment test as of March 31, 2020.

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The Company has performed its ~~annual~~interim goodwill impairment test ~~as of April 1, 2017~~ on a quantitative basis for its four reporting units, North America Generics, North America ~~Specialty,~~Brands, Europe and Rest of World. As of the date of our annual impairment test, the allocation of the Company’s total goodwill was as follows: North America Generics $2.89 billion, North America Specialty $0.35 billion, Europe $4.30 billion and Rest of World $1.79 billion. The fair value of the North America Generics, North America Specialty and Rest of World reporting units was substantially in excess of the respective unit’s carrying value. For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $800 million or 6%. The excess fair value over the carrying value declined from the prior year primarily as a result of an increase in the discount rate utilized in the income approach from 8.5% to 9.0% and an increase in the estimated tax rate from 22.0% to 24.0%. Additionally, the net assets acquired as part of the Meda acquisition, the majority of which were allocated to the Europe reporting unit, were included in the April 1, 2017 impairment test for the first time. As it relates to the income approach for the Europe reporting unit at April 1, 2017, the Company forecasted cash flows for the next 5 years. During the forecast period, the revenue compound annual growth rate was approximately 4%. A terminal value year was calculated with a 2.0% revenue growth rate applied. Under the market-based approach, we utilized an estimated range of market multiples of 9.0 to 10.5 times EBITDA plus a control premium of 15%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 2.0% or an increase in discount rate by 1.5% would result in an impairment charge for the Europe reporting unit.

In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing both income and market-based ~~approaches.~~approaches, except for the North America Brands reporting unit where the fair value was estimated utilizing the income approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are not limited to, market multiples, control premiums, the discount rate, terminal growth rates, operating income before depreciation and amortization, and capital expenditures forecasts.

As of March 31, 2020, the allocation of the Company’s total goodwill was as follows: North America Generics $2.60 billion, North America Brands $0.65 billion, Europe $4.43 billion and Rest of World $1.65 billion.

As of March 31, 2020, the Company determined that the fair value of the North America Generics, North America Brands and Rest of World reporting units was substantially in excess of the respective unit’s carrying value. However, when compared to the April 1, 2019 test, the fair value of our overall business declined because of future forecasts and the decline in our share price.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $1.3 billion or 11.0%. The excess fair value for the Europe reporting unit is consistent with the result of the Company’s 2019 annual impairment test. As it relates to the income approach for the Europe reporting unit at March 31, 2020, the Company forecasted cash flows for the next 5 years. During the forecast period, the revenue compound annual growth rate was approximately 7.5%. A terminal year value was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 11.0% and the estimated tax rate was 25.5%. Under the market-based approach, we utilized an estimated range of market multiples of 8.0 to 9.5 times EBITDA plus a control premium of 15.0%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 3.5% or an increase in discount rate by 3.5% would result in an impairment charge for the Europe reporting unit.

Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition, changes in underlying assumptions, especially as it relates to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.

Amortization expense, which is classified primarily within cost of sales in the condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019 totaled:



	Three Months Ended
	March 31,
(In millions)	2020		2019
Intangible asset amortization expense	$	351.2	$	405.5
IPR&D intangible asset impairment charges	—		29.5
Total intangible asset amortization expense (including impairment charges)	$	351.2	$	435.0

Intangible asset amortization expense over the remainder of 2020 and for the years ended December 31, 2021 through 2024 is estimated to be as follows (excludes the potential impact of the Combination):



(In millions)
2020	$	1,056
2021	1,331
2022	1,264
2023	1,103
2024	995

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Amortization expense, which is classified primarily within cost of sales in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016 totaled:

Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Intangible asset amortization expense $ 369.4
$ 364.3
$ 1,065.6
$ 852.9

~~Intangible asset amortization expense over the remainder of 2017 and for the years ended December 31, 2018 through 2021 is estimated to be as follows:~~

(In millions)
2017 $ 339
2018 1,341
2019 1,248
2020 1,129
2021 1,050


11.	Financial Instruments and Risk Management

The Company is exposed to certain financial risks relating to its ongoing business operations. The primary financial risks that are managed by using derivative instruments are foreign currency risk and interest rate risk.

Foreign Currency Risk Management

In order to manage certain foreign currency risks, the Company enters into foreign exchange forward contracts to mitigate risk associated with changes in spot exchange rates of mainly non-functional currency denominated assets or liabilities. The foreign exchange forward contracts are measured at fair value and reported as current assets or current liabilities on the ~~Condensed Consolidated Balance Sheets~~condensed consolidated balance sheets. Any gains or losses on the foreign exchange forward contracts are recognized in earnings in the period incurred in the ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations~~operations.

The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international subsidiaries. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities on the ~~Condensed Consolidated Balance Sheets~~condensed consolidated balance sheets. Any changes in the fair value of designated cash flow hedges are ~~included~~deferred in ~~earnings or deferred through~~ accumulated other comprehensive earnings (“AOCE”)~~, depending on~~ and are reclassified into earnings when the ~~nature~~hedged item impacts earnings.

Net Investment Hedges

The Company may hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries by either borrowing directly in foreign currencies and ~~effectiveness~~designating all or a portion of the ~~offset. Any ineffectiveness in~~foreign currency debt as a ~~cash flow hedging relationship is recognized immediately in earnings in~~hedge of the ~~Condensed Consolidated Statements~~applicable net investment position or entering into foreign currency swaps that are designated as hedges of ~~Operations~~.net investments.

~~During the nine months ended September 30, 2017, the~~The Company has designated certain Euro borrowings as a hedge of its investment in certain Euro-functional currency subsidiaries in order to manage foreign currency translation risk. The notional amount of the net investment hedges was €1.9 billion and consisted of €1.0 billion aggregate principal amount of the 2.250% Euro Senior Notes due 2024 (the “2024 Euro Notes”), €750 million aggregate principal amount of 3.125% Euro Senior Notes due 2028 (the “2028 Euro Notes”) and €104 million of the €750 million aggregate principal amount of the 1.250% Euro Senior Notes due 2020 (the “2020 Euro Notes”).

Borrowings designated as net investment hedges are ~~marked to market~~marked-to-market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of AOCE until the sale or substantial liquidation of the underlying net investments. ~~The Company recorded no ineffectiveness from its net investment hedges for the nine months ended September 30, 2017.~~ In addition, the Company manages the related foreign exchange risk of the ~~€500 million aggregate principal amount of floating rate Senior Notes due 2018 (the “2018 Floating Rate~~ Euro ~~Notes”), €500 million aggregate principal amount of the Floating Rate Senior Notes due 2020 (the “2020 Floating Rate Euro Notes”) and the remaining portion of the 2020 Euro Notes~~borrowings not designated as net investment hedges through certain Euro denominated financial assets and forward ~~contracts.~~currency swaps.

The following table summarizes the principal amounts of the Company’s outstanding Euro borrowings and the notional amounts of the Euro borrowings designated as net investment hedges:

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~



			Notional Amount Designated as a Net Investment Hedge
(in millions)	Principal Amount		March 31, 2020		December 31, 2019
2.250% Euro Senior Notes due 2024	€	1,000.0	€	1,000.0	€	1,000.0
3.125% Euro Senior Notes due 2028	750.0		750.0		750.0
1.250% Euro Senior Notes due 2020	750.0		104.0		104.0
2.125% Euro Senior Notes due 2025	500.0		500.0		500.0
Floating Rate Euro Notes due 2020	500.0		—		—
Total	€	3,500.0	€	2,354.0	€	2,354.0

Interest Rate Risk Management

The Company enters into interest rate swaps from time to time in order to manage interest rate risk associated with the Company’s fixed-rate and floating-rate debt. ~~These~~Interest rate swaps that meet specific accounting criteria are accounted for as fair value or cash flow hedges. All derivative instruments used to manage interest rate risk are measured at fair value and reported as current assets or current liabilities in the ~~Condensed Consolidated Balance Sheets~~condensed consolidated balance sheets.

~~Cash Flow Hedging Relationships~~

The Company’s interest rate swaps designated as cash flow hedges fix the interest rate on a portion of the Company’s variable-rate debt or hedge part of the Company’s interest rate exposure associated with variability in future cash flows attributable to changes in interest rates or foreign currencies. Any changes in fair value are included in earnings or deferred through AOCE, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the Condensed Consolidated Statements of Operations.

~~Fair Value Hedging Relationships~~

~~The Company’s interest rate swaps designated as~~ For fair value hedges, ~~convert~~ the ~~fixed rate on a portion of the Company’s fixed-rate senior notes to a variable rate. Any~~ changes in the fair value of ~~these derivative instruments, as well as~~both the ~~offsetting~~hedging instrument and the underlying debt obligations are included in interest expense. For cash flow hedges, the change in fair value of the ~~portion~~hedging instrument is deferred through AOCE and is reclassified into earnings when the hedged item impacts earnings.

Table of ~~the fixed-rate debt being hedged, is included in interest expense.~~Contents

MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Credit Risk Management

The Company regularly reviews the creditworthiness of its financial counterparties and does not expect to incur a significant loss from the failure of any counterparties to perform under any agreements. The Company is not subject to any obligations to post collateral under derivative instrument contracts. Certain derivative instrument contracts entered into by the Company are governed by master agreements, which contain credit-risk-related contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an event of default on other specified borrowings. The Company records all derivative instruments on a gross basis in the ~~Condensed Consolidated Balance Sheets~~condensed consolidated balance sheets. Accordingly, there are no offsetting amounts that net assets against liabilities.

The Effect of Derivative Instruments onin theCondensed Consolidated Balance Sheets

Fair Values of Derivative Instruments

Derivatives Designated as Hedging Instruments



	Asset Derivatives
	March 31, 2020			December 31, 2019
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Prepaid expenses and other current assets	$	—	Prepaid expenses and other current assets	$	22.3
Foreign currency forward contracts	Prepaid expenses and other current assets	—		Prepaid expenses and other current assets	12.5
Total		$	—		$	34.8



	Liability Derivatives
	March 31, 2020			December 31, 2019
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign currency forward contracts	Other current liabilities	39.2		Other current liabilities	—
Total		$	39.2		$	—

The Effect of Derivative Instruments in theCondensed Consolidated Balance Sheets

Fair Values of Derivative Instruments

Derivatives Not Designated as Hedging Instruments


	Asset Derivatives						Asset Derivatives
	September 30, 2017			December 31, 2016			March 31, 2020			December 31, 2019
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Prepaid expenses and other current assets	$	25.3	Prepaid expenses and other current assets	$	26.2
Foreign currency forward contracts	Prepaid expenses and other current assets	43.8		Prepaid expenses and other current assets	21.9		Prepaid expenses and other current assets	$	55.9	Prepaid expenses and other current assets	$	8.5
Total		$	69.1		$	48.1		$	55.9		$	8.5



	Liability Derivatives
	March 31, 2020			December 31, 2019
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign currency forward contracts	Other current liabilities	$	31.1	Other current liabilities	$	12.9
Total		$	31.1		$	12.9

Table of Contents

MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The Effect of Derivative Instruments onin theCondensed Consolidated ~~Balance Sheets~~

~~Fair Values~~Statement of ~~Derivative Instruments~~

~~Derivatives Not Designated as Hedging Instruments~~

Asset Derivatives
September 30, 2017 December 31, 2016
(In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Foreign currency forward contracts Prepaid expenses and other current assets $ 13.4
Prepaid expenses and other current assets $ 14.0
Total $ 13.4
$ 14.0

Liability Derivatives
September 30, 2017 December 31, 2016
(In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Foreign currency forward contracts Other current liabilities $ 10.1
Other current liabilities $ 15.3
Total $ 10.1
$ 15.3

~~The Effect of Derivative Instruments on theCondensed Consolidated Statements of~~ Operations

Derivatives in Fair Value Hedging Relationships


	Location of Gain (Loss) Recognized in Earnings on Derivatives		Amount of Gain (Loss) Recognized in Earnings on Derivatives											Location of Gain (Loss) Recognized in Earnings on Derivatives		Amount of Gain (Loss) Recognized in Earnings on Derivatives
(In millions)			Three Months Ended						Nine Months Ended							Three Months Ended
		Location of Gain (Loss) Recognized in Earnings on Derivatives	September 30,						September 30,						Location of Gain (Loss) Recognized in Earnings on Derivatives	March 31,
			2017			2016			2017			2016				2020		2019
Interest rate swaps	Interest expense		$	(2.5	)	$	(9.7	)	$	(1.0	)	$	30.2	Interest expense		$	22.1	$	7.5
Total			$	(2.5	)	$	(9.7	)	$	(1.0	)	$	30.2			$	22.1	$	7.5



	Location of Gain (Loss) Recognized in Earnings on Hedged Items	Amount of Gain (Loss) Recognized in Earnings on Hedged Items
(In millions)		Three Months Ended
		March 31,
		2020			2019
2023 Senior Notes (3.125% coupon)	Interest expense	$	(22.1	)	$	(7.5	)
Total		$	(22.1	)	$	(7.5	)

Location of Gain (Loss)
Recognized in Earnings
on Hedged Items
Amount of Gain (Loss) Recognized in Earnings on Hedged Items
(In millions) Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
2023 Senior Notes (3.125% coupon) Interest expense $ 2.5
$ 9.7
$ 1.0
$ (30.2 )
Total $ 2.5
$ 9.7
$ 1.0
$ (30.2 )
In the first quarter of 2020, the Company terminated interest rate swaps designated as a fair value hedge resulting in net proceeds of approximately $45 million. The amount included in the above tables represents the fair value adjustment recognized at the date the interest rate swaps were settled.

The Effect of Derivative Instruments onin theCondensed Consolidated Statements of Comprehensive Earnings

Derivatives in Cash Flow Hedging Relationships



	Amount of Gain (Loss) Recognized in AOCE (Net of Tax) on Derivative
	Three Months Ended
	March 31,
(In millions)	2020			2019
Foreign currency forward contracts	$	(42.8	)	$	15.5
Total	$	(42.8	)	$	15.5

Amount of Gain (Loss) Recognized in AOCE (Net of Tax) on Derivative (Effective Portion)
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Foreign currency forward contracts $ (8.8 ) $ 2.9
$ 7.5
$ (16.3 )
Interest rate swaps (3.3 ) (0.9 ) (2.0 ) (38.0 )
Total $ (12.1 ) $ 2.0
$ 5.5
$ (54.3 )
The Effect of Derivative Instruments in theCondensed Consolidated Statements of Comprehensive Earnings

Derivatives in Net Investment Hedging Relationships



	Amount of Gain (Loss) Recognized in AOCE (Net of Tax) on Derivative
	Three Months Ended
	March 31,
(In millions)	2020		2019
Foreign currency borrowings and forward contracts	$	40.1	$	55.2
Total	$	40.1	$	55.2

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The Effect of Derivative Instruments onin theCondensed Consolidated ~~Statements~~Statement of ~~Comprehensive Earnings~~

~~Derivatives in Net Investment Hedging Relationships~~

Amount of Gain (Loss) Recognized in AOCE
(Net of Tax) on Derivative
(Effective Portion)
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Foreign currency borrowings and forward contracts $ (72.1 ) $ (8.1 ) $ (203.2 ) $ (8.1 )
Total $ (72.1 ) $ (8.1 ) $ (203.2 ) $ (8.1 )

~~The Effect of Derivative Instruments on theCondensed Consolidated Statements of~~ Operations

Derivatives in Cash Flow Hedging Relationships


	Location of Gain (Loss) Reclassified from AOCE into Earnings (Effective Portion)	Amount of Gain (Loss) Reclassified from AOCE into Earnings (Effective Portion)												Location of Gain (Loss) Reclassified from AOCE into Earnings	Amount of Gain (Loss) Reclassified from AOCE into Earnings
		Three Months Ended						Nine Months Ended							Three Months Ended
		September 30,						September 30,							March 31,
(In millions)		2017			2016			2017			2016				2020			2019
Foreign currency forward contracts	Net sales	$	2.0		$	(10.7	)	$	(3.8	)	$	(34.2	)	Net sales	$	0.1		$	0.3
Interest rate swaps	Interest expense	(1.9		)	(2.3		)	(5.5		)	(6.6		)	Interest expense	(1.1		)	(1.8		)
Total		$	0.1		$	(13.0	)	$	(9.3	)	$	(40.8	)		$	(1.0	)	$	(1.5	)

Location of Gain (Loss) Excluded from the Assessment of Hedge Effectiveness Amount of Gain (Loss) Excluded from the Assessment of Hedge Effectiveness
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Foreign currency forward contracts Other expense, net $ 3.3
$ 8.9
$ 6.9
$ 26.0
Total $ 3.3
$ 8.9
$ 6.9
$ 26.0

At ~~September 30, 2017~~March 31, 2020, the Company expects that approximately ~~$11~~$47.0 million of pre-tax net ~~gains~~losses on cash flow hedges will be reclassified from AOCE into earnings during the next twelve months.

The Effect of Derivative Instruments onin theCondensed Consolidated ~~Statements~~Statement of Operations

Derivatives Not Designated as Hedging Instruments



	Location of Gain (Loss) Recognized in Earnings on Derivatives	Amount of Gain (Loss) Recognized in Earnings on Derivatives
		Three Months Ended
		March 31,
(In millions)		2020		2019
Foreign currency option and forward contracts	Other expense, net	$	29.4	$	(5.8	)
Total		$	29.4	$	(5.8	)

Location of Gain (Loss) Recognized in Earnings on Derivatives Amount of Gain (Loss) Recognized in Earnings on Derivatives
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 2017 2016 2017 2016
Foreign currency option and forward contracts Other expense, net $ (43.0 ) $ (36.8 ) $ (60.1 ) $ (98.3 )
Total $ (43.0 ) $ (36.8 ) $ (60.1 ) $ (98.3 )

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Fair Value Measurement

Fair value is based on the price that would be received from the sale of an identical asset or paid to transfer an identical liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy has been established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

~~Level 1:~~ ~~Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.~~

~~Level 2:~~ ~~Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.~~

~~Level 3:~~ ~~Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.~~


•	Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.


•	Level 2: Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.


•	Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value.

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Financial assets and liabilities carried at fair value are classified in the tables below in one of the three categories described above:


	September 30, 2017								March 31, 2020
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Recurring fair value measurements
Financial Assets
Cash equivalents:
Money market funds	$	170.8	$	—	$	—	$	170.8	$	0.7	$	—	$	—	$	0.7
Total cash equivalents	170.8		—		—		170.8		0.7		—		—		0.7
Trading securities:
Equity securities — exchange traded funds	32.7		—		—		32.7
Total trading securities	32.7		—		—		32.7
Equity securities:
Exchange traded funds									31.9		—		—		31.9
Marketable securities									0.7		—		—		0.7
Total equity securities									32.6		—		—		32.6
Available-for-sale fixed income investments:
Corporate bonds	—		17.0		—		17.0		—		16.3		—		16.3
U.S. Treasuries	—		7.4		—		7.4		—		12.5		—		12.5
Agency mortgage-backed securities	—		4.3		—		4.3		—		2.1		—		2.1
Asset backed securities	—		1.9		—		1.9		—		5.4		—		5.4
Other	—		1.7		—		1.7		—		0.6		—		0.6
Total available-for-sale fixed income investments	—		32.3		—		32.3		—		36.9		—		36.9
Available-for-sale equity securities:
Marketable securities	55.3		—		—		55.3
Total available-for-sale equity securities	55.3		—		—		55.3
Foreign exchange derivative assets	—		57.2		—		57.2		—		55.9		—		55.9
Interest rate swap derivative assets	—		25.3		—		25.3		—		—		—		—
Total assets at recurring fair value measurement	$	258.8	$	114.8	$	—	$	373.6	$	33.3	$	92.8	$	—	$	126.1
Financial Liabilities
Foreign exchange derivative liabilities	$	—	$	10.1	$	—	$	10.1	—		70.3		—		70.3
Contingent consideration	—		—		471.1		471.1		—		—		236.2		236.2
Total liabilities at recurring fair value measurement	$	—	$	10.1	$	471.1	$	481.2	$	—	$	70.3	$	236.2	$	306.5

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued



	December 31, 2019
(In millions)	Level 1		Level 2		Level 3		Total
Recurring fair value measurements
Financial Assets
Cash equivalents:
Money market funds	$	0.7	$	—	$	—	$	0.7
Total cash equivalents	0.7		—		—		0.7
Equity securities:
Exchange traded funds	38.3		—		—		38.3
Marketable securities	0.7		—		—		0.7
Total equity securities	39.0		—		—		39.0
Available-for-sale fixed income investments:
Corporate bonds	—		10.8		—		10.8
U.S. Treasuries	—		9.5		—		9.5
Agency mortgage-backed securities	—		2.3		—		2.3
Asset backed securities	—		3.6		—		3.6
Other	—		0.6		—		0.6
Total available-for-sale fixed income investments	—		26.8		—		26.8
Foreign exchange derivative assets	—		21.0		—		21.0
Interest rate swap derivative assets	—		22.3		—		22.3
Total assets at recurring fair value measurement	$	39.7	$	70.1	$	—	$	109.8
Financial Liabilities
Foreign exchange derivative liabilities	$	—	$	12.9	$	—	$	12.9
Contingent consideration	—		—		250.7		250.7
Total liabilities at recurring fair value measurement	$	—	$	12.9	$	250.7	$	263.6

December 31, 2016
(In millions) Level 1 Level 2 Level 3 Total
Recurring fair value measurements
Financial Assets
Cash equivalents:
Money market funds $ 433.7
$ —
$ —
$ 433.7
Total cash equivalents 433.7
—
—
433.7
Trading securities:
Equity securities — exchange traded funds 29.6
—
—
29.6
Total trading securities 29.6
—
—
29.6
Available-for-sale fixed income investments:
Corporate bonds —
17.5
—
17.5
U.S. Treasuries —
6.0
—
6.0
Agency mortgage-backed securities —
4.0
—
4.0
Asset backed securities —
1.6
—
1.6
Other —
2.3
—
2.3
Total available-for-sale fixed income investments —
31.4
—
31.4
Available-for-sale equity securities:
Marketable securities 52.3
—
—
52.3
Total available-for-sale equity securities 52.3
—
—
52.3
Foreign exchange derivative assets —
35.9
—
35.9
Interest rate swap derivative assets —
26.2
—
26.2
Total assets at recurring fair value measurement $ 515.6
$ 93.5
$ —
$ 609.1
Financial Liabilities
Foreign exchange derivative liabilities $ —
$ 15.3
$ —
$ 15.3
Contingent consideration —
—
564.6
564.6
Total liabilities at recurring fair value measurement $ —
$ 15.3
$ 564.6
$ 579.9

For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including the LIBOR yield curve, foreign exchange forward prices and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities:


•	Cash equivalents — valued at observable net asset value prices.


•	Equity securities, exchange traded funds — valued at the active quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date. Unrealized gains and losses attributable to changes in fair value are included in other expense, net, in the condensed consolidated statements of operations.


•	Equity securities, marketable securities — valued using quoted stock prices from public exchanges at the reporting date. Unrealized gains and losses attributable to changes in fair value are included in other expense, net, in the condensed consolidated statements of operations.


•	Available-for-sale fixed income investments — valued at the quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date. Unrealized gains and losses attributable to changes in fair value, net of income taxes, are included in accumulated other comprehensive loss as a component of shareholders’ equity.


•	Interest rate swap derivative assets and liabilities — valued using the LIBOR/EURIBOR yield curves at the reporting date. Counterparties to these contracts are highly rated financial institutions.


•	Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices and spot rates at the reporting date. Counterparties to these contracts are highly rated financial institutions.

~~Cash equivalents~~ ~~— valued at observable net asset value prices.~~

~~Trading securities~~ ~~— valued at the active quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date.~~

~~Available-for-sale fixed income investments~~ ~~— valued at the quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date.~~

~~Available-for-sale equity securities~~ ~~— valued using quoted stock prices from public exchanges at the reporting date.~~

~~Foreign exchange derivative assets and liabilities~~ ~~— valued using quoted forward foreign exchange prices and spot rates at the reporting date. Counterparties to these contracts are highly rated financial institutions.~~

~~Interest rate swap derivative assets and liabilities~~ ~~— valued using the LIBOR/EURIBOR yield curves at the reporting date. Counterparties to these contracts are highly rated financial institutions.~~

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Contingent Consideration

The fair value measurement of contingent consideration is determined using Level 3 inputs. The Company’s contingent consideration represents a component of the total purchase consideration for ~~the respiratory~~Pfizer Inc.’s proprietary dry powder inhaler delivery platform the acquisition of Agila Specialties Private Limited (“Agila”), the acquisition of certain female healthcare businesses from Famy Care Limited (such businesses “Jai Pharma Limited”), the acquisition of the Topicals Business and certain other acquisitions. The measurement is calculated using unobservable inputs based on the Company’s own ~~assumptions. For the respiratory delivery platform, Jai Pharma Limited, the Topicals Business and certain other acquisitions, significant unobservable inputs in the valuation include the~~assumptions primarily related to probability and timing of future development and commercial milestones and future profit sharing payments. When valuing the contingent consideration related to the respiratory delivery platform and Jai Pharma Limited, the value of the obligations are derived from a probability assessment based on expectations of when certain milestones or profit share payments ~~occur~~ which are discounted using a market rate of return. At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, discount rates ranging from ~~0.5%~~3.5% to ~~10.0%~~11.0% were utilized in the valuations. Significant changes in unobservable inputs could result in material changes to the contingent consideration liability.

A rollforward of the activity in the Company’s fair value of contingent consideration from December 31, ~~2016~~2019 to ~~September 30, 2017~~March 31, 2020 is as follows:


(In millions)	Current Portion⁽¹⁾			Long-Term Portion ⁽²⁾			Total Contingent Consideration			Current Portion⁽¹⁾			Long-Term Portion ⁽²⁾			Total Contingent Consideration
Balance at December 31, 2016	$	256.9		$	307.7		$	564.6
Balance at December 31, 2019										$	120.4		$	130.3		$	250.7
Payments	(36.1		)	(0.2		)	(36.3		)	(24.3		)	—			(24.3		)
Reclassifications	(38.5		)	38.5			—			17.0			(17.0		)	—
Accretion	—			20.8			20.8			—			3.2			3.2
Fair value adjustments ⁽³⁾	(62.9		)	(15.1		)	(78.0		)
Balance at September 30, 2017	$	119.4		$	351.7		$	471.1
Fair value loss ⁽³⁾										4.2			2.4			6.6
Balance at March 31, 2020										$	117.3		$	118.9		$	236.2

____________


⁽¹⁾	Included in other current liabilities onin the ~~Condensed Consolidated Balance Sheets.~~condensed consolidated balance sheets.


⁽²⁾	Included in other long-term obligations onin the ~~Condensed Consolidated Balance Sheets.~~condensed consolidated balance sheets.


⁽³⁾	Included in litigation settlements and other contingencies, net in the ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations.~~operations.

~~2017 Significant Changes to Contingent Consideration:~~ During the nine months ended September 30, 2017, the Company recorded a fair value gain of $88.1 million related to the respiratory delivery platform contingent consideration offset by a fair value loss of $9.9 million related to Jai Pharma Limited contingent consideration. In addition, the Company made payments of approximately $12.5 million related to the Agila contingent consideration and payments of approximately $20.0 million related to the Jai Pharma Limited contingent consideration.

Although the Company has not elected the fair value option for other financial assets and liabilities, any future transacted financial asset or liability will be evaluated for the fair value election.

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~


12.	Debt

~~Long-Term Debt~~Short-Term Borrowings

~~A summary~~The Company had no short-term borrowings as of ~~long-term debt is as follows:~~

(In millions) Interest Rate as of September 30, 2017 September 30,
2017 December 31,
2016
Current portion of long-term debt:
Meda 2.0kr billion Term Loan $ —
$ 219.6
2018 Senior Notes ^*
2.600 % 649.8
—
Meda Medium Term Notes due 2018 2.356 % 72.2
—
Other 2.2
3.7
Deferred financing fees (1.4 ) —
Current portion of long-term debt $ 722.8
$ 223.3

Non-current portion of long-term debt:
2016 Term Loans due 2019^{(a) **}
2.610 % $ 100.0
$ 1,600.0
Meda Medium Term Notes due 2019 1.173 % 91.4
146.4
2018 Floating Rate Euro Notes^{(b) **}
0.541 % 590.7
526.0
2018 Senior Notes ^*
2.600 % —
649.6
2018 Senior Notes ^**
3.000 % 499.7
499.6
2019 Senior Notes ^**
2.500 % 999.4
999.1
2019 Senior Notes ^*
2.550 % 499.6
499.5
2020 Floating Rate Euro Notes^(c) ^**
0.172 % 590.7
—
2020 Euro Senior Notes ^**
1.250 % 883.1
785.7
2020 Senior Notes ^**
3.750 % 499.9
499.9
2021 Senior Notes ^**
3.150 % 2,248.0
2,247.7
2023 Senior Notes ^*
3.125 % 774.4
775.3
2023 Senior Notes ^*
4.200 % 498.7
498.6
2024 Euro Senior Notes ^**
2.250 % 1,178.6
1,049.2
2026 Senior Notes ^**
3.950 % 2,234.6
2,233.5
2028 Euro Senior Notes ^**
3.125 % 877.7
781.1
2043 Senior Notes ^*
5.400 % 497.1
497.0
2046 Senior Notes ^**
5.250 % 999.8
999.8
Other 7.2
7.1
Deferred financing fees (78.2 ) (92.2 )
Long-term debt $ 13,992.4
$ 15,202.9

~~____________~~

^(a)

The 2016 Term Loans bear interest at LIBOR plus a base rate, which margins can fluctuate based on the Company’s credit ratings. The Company voluntarily prepaid $400 million of the aggregate principal amount of the 2016 Term Loans in the fourth quarter of 2016. An additional $1.50 billion was voluntarily prepaid during the nine months ended September 30, 2017 utilizing proceeds from the issuance of theMarch 31, 2020 ~~Floating Rate Euro Notes~~ and ~~cash on-hand.~~


^(b)	~~Instrument bears interest at a rate of three-month EURIBOR plus 0.870% per annum, reset quarterly.~~


^(c)	~~Instrument bears interest at a rate of three-month EURIBOR plus 0.50% per annum, reset quarterly.~~


^*	~~Instrument was issued by Mylan Inc.~~


^**	~~Instrument was issued by Mylan N.V.~~

~~For additional information, see Note 8~~ ~~Debt~~ ~~in Mylan N.V.’s Annual Report filed on Form 10-K for the year ended~~ December 31, ~~2016,~~2019. The following provides an overview of the Company’s short-term credit facilities.

Receivables Facility and Note Securitization Facility

The Company has a $400 million receivables facility which expires in April 2022 (the “Receivables Facility”). The Company also has a $200 million notes securitization facility which expires on August 31, 2020 (the “Note Securitization Facility”). Borrowings outstanding under the Receivables Facility bear interest at a commercial paper rate plus 0.775% and under the Note Securitization Facility at LIBOR plus 0.75% and are included as ~~amended.~~

~~Table~~a component of ~~Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes~~short-term borrowings, while the accounts receivable securing these obligations remain as a component of accounts receivable, net, in our condensed consolidated balance sheets. Effective April 22, 2020, borrowings outstanding under the Note Securitization Facility bear interest at a rate per annum quoted from time to ~~Condensed Consolidated Financial Statements (Unaudited) - Continued~~time by MUFG Bank, Ltd. plus 0.75%. In addition, the agreements governing the Receivables Facility and Note Securitization Facility contain various customary affirmative and negative covenants, and customary default and termination provisions with which the Company was compliant as of March 31, 2020. As of March 31, 2020, the Company had no amounts outstanding under the Receivables Facility or the Note Securitization Facility.

Commercial Paper Program

~~On June 8, 2017, the~~The Company ~~established an unsecured~~maintains a $1.65 billion commercial paper program (the ~~“CP~~“Commercial Paper Program”) ~~pursuant~~ to ~~which the Company may issue short-term, unsecured~~support its working capital requirements and for general corporate purposes. There were no commercial paper notes ~~pursuant~~(the “CP Notes”) outstanding under this program as of March 31, 2020 and December 31, 2019. Amounts available under the Commercial Paper

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Program may be borrowed, repaid and re-borrowed from time to time, with the ~~exemption from registration contained in Section 4(a)(2)~~aggregate principal amount of the ~~Securities Act~~CP Notes outstanding under the Commercial Paper Program at any time not to exceed $1.65 billion. The Company’s Revolving Credit Facility (as defined below) will be available to pay the CP Notes, if necessary. The maturities of ~~1933,~~the CP Notes will vary but will not exceed 364 days from the date of issue.

Long-Term Debt

A summary of long-term debt is as ~~amended.~~ follows:



(In millions)	Interest Rate as of March 31, 2020		March 31, 2020			December 31, 2019
Current portion of long-term debt:
2020 Floating Rate Euro Notes^{(a) **}			551.6			560.6
2020 Euro Senior Notes^**	1.250	%	826.9			840.1
2020 Senior Notes^**	3.750	%	50.0			50.0
Other			6.3			8.3
Deferred financing fees			(0.9		)	(1.4		)
Current portion of long-term debt			$	1,433.9		$	1,457.6

Non-current portion of long-term debt:
2021 Senior Notes ^**	3.150	%	2,249.3			2,249.2
2023 Senior Notes ^(b) ^*	3.125	%	793.2			771.8
2023 Senior Notes ^*	4.200	%	499.2			499.1
2024 Euro Senior Notes ^**	2.250	%	1,101.5			1,119.3
2025 Euro Senior Notes ^*	2.125	%	550.6			559.6
2026 Senior Notes ^**	3.950	%	2,238.5			2,238.1
2028 Euro Senior Notes ^**	3.125	%	821.1			834.3
2028 Senior Notes ^*	4.550	%	748.4			748.4
2043 Senior Notes ^*	5.400	%	497.2			497.2
2046 Senior Notes^**	5.250	%	999.8			999.8
2048 Senior Notes^*	5.200	%	747.7			747.7
Other			8.0			8.9
Deferred financing fees			(56.7		)	(59.1		)
Long-term debt			$	11,197.8		$	11,214.3

____________


^(a)	Instrument bears interest at a rate of three-month EURIBOR plus 0.50% per annum, reset quarterly.


^(b)	In the first quarter of 2020, the Company terminated interest rate swaps designated as a fair value hedge resulting in net proceeds of approximately $45 million. The fair value adjustment will be amortized to interest expense over the remaining term of the notes.


^*	Instrument was issued by Mylan Inc.


^**	Instrument was issued by Mylan N.V.

For additional information, see Note 1210 Debt in ~~the Company’s Quarterly Report filed on~~Mylan N.V.’s 2019 Form ~~10-Q for the quarter ended June 30, 2017. At September 30, 2017, the Company had no amounts outstanding under the CP program.~~10-K.

~~2016~~ Revolving ~~Facility, Receivables Facility and 2016 Term~~Credit Facility

~~At September 30, 2017 and December 31, 2016, the~~The Company ~~had no amounts outstanding under the~~has a $2.0 billion revolving credit facility which is scheduled to expire in July 2023 (the “2016 Revolving Facility”) and had no short-term borrowings under the $400 million Receivables Facility in the Condensed Consolidated Balance Sheets. At September 30, 2017, the Company had $100 million outstanding under the $2.0 billion term credit facility (the “2016 Term“Revolving Credit Facility”). ~~For additional information, see Note 8~~ ~~Debt~~ ~~in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2016, as amended.~~

The ~~2016 Term~~Revolving Credit Facility ~~and 2016 Revolving Facility contain~~contains a maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of 3.75 to 1.00 for consolidated total indebtedness as of the end of any quarter to consolidated

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

EBITDA for the trailing four quarters as defined in the related credit ~~agreements (“leverage ratio”).~~agreements. The Company is in compliance at ~~September 30, 2017.~~

Following the Meda acquisition (a qualifying acquisition), the leverage ratio changed to 4.25 to 1.00 through June 30, 2017. On November 3, 2017, the Company entered into amendments to the agreements for the 2016 Term FacilityMarch 31, 2020 and ~~2016 Revolving Facility to extend the leverage ratio covenant of 4.25 to 1.00 through the December 31, 2018 reporting period. The Company~~ expects to remain in compliance for the next twelve months.

~~Euro Notes~~

~~On May 24, 2017, the Company completed its offering of €500 million aggregate principal amount of 2020 Floating Rate Euro Notes. For additional information, see Note~~ 12~~Debt~~ ~~in the Company’s Quarterly Report filed on Form 10-Q for the quarter ended June 30, 2017.~~

During the nine months ended September 30, 2017, the Company recorded mark-to-market losses related to the 2018 Floating Rate Euro Notes, 2020 Floating Rate Euro Notes, 2020 Euro Notes, 2024 Euro Notes and 2028 Euro Notes of approximately $64.8 million, $36.2 million, $97.1 million, $129.5 million and $97.1 million, respectively. Refer to Note 11~~Financial Instruments and Risk Management~~ ~~for further discussion of the foreign currency risk management of these instruments.~~

Fair Value

At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, the aggregate fair value of the Company’s 2.600% Senior Notes due 2018, 3.000% Senior Notes due 2018, 2.500% Senior Notes due 2019, 2.550% Senior Notes due 2019, 3.750% Senior Notes due 2020, 3.150% Senior Notes due 2021, 3.125% Senior Notes due 2023, 4.200% Senior Notes due 2023, 3.950% Senior Notes due 2026, 5.400% Senior Notes due 2043 and 5.250% Senior Notes due 2046 (collectively, the “Senior Notes”), 1.250% Euro Senior Notes due 2020, 2.250% Euro Senior Notes due in 2024, 3.125% Euro Senior Notes due in 2028, 2018 Floating Rate Euro Notes and 2020 Floating Rate Euro Notes (collectively, the “Euro Notes”)outstanding notes was approximately ~~$15.0~~$12.7 billion and ~~$13.2~~$13.4 billion, respectively. The fair values of the ~~Senior Notes and Euro Notes~~outstanding notes were valued at quoted market prices from broker or dealer quotations and were classified as Level 2 in the fair value hierarchy. ~~Based~~

Mandatory minimum repayments remaining on ~~quoted market rates~~the notional amount of ~~interest and maturity schedules of similar~~outstanding long-term debt ~~issues, the fair values~~at March 31, 2020 were as follows for each of the ~~Company’s 2016 Term Loans and~~periods ending December 31:



(In millions)	Total
2020	$	1,429
2021	2,250
2022	—
2023	1,250
2024	1,103
Thereafter	6,629
Total	$	12,661


13.	Comprehensive Loss

Accumulated other comprehensive loss, as reflected on the ~~Meda borrowings, determined based on Level 2 inputs, approximate their carrying values at September 30, 2017 and December 31, 2016.~~

condensed consolidated balance sheets, is comprised of the following:



(In millions)	March 31, 2020			December 31, 2019
Accumulated other comprehensive loss:
Net unrealized gain on marketable securities, net of tax	$	0.8		$	0.6
Net unrecognized loss and prior service cost related to defined benefit plans, net of tax	(19.0		)	(17.4		)
Net unrecognized loss on derivatives in cash flow hedging relationships, net of tax	(70.1		)	(31.6		)
Net unrecognized loss on derivatives in net investment hedging relationships, net of tax	(34.1		)	(74.3		)
Foreign currency translation adjustment	(2,331.1		)	(1,674.5		)
	$	(2,453.5	)	$	(1,797.2	)

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

~~Mandatory minimum repayments remaining on the notional amount~~Components of ~~outstanding long-term debt at September 30, 2017 are as follows for each of the periods ending December 31:~~

(In millions) Total
2017 $ —
2018 1,813
2019 1,691
2020 1,977
2021 2,250
Thereafter 7,068
Total $ 14,799


~~13.~~	~~Comprehensive Earnings~~

~~Accumulated~~accumulated other comprehensive loss, ~~as reflected on the Condensed Consolidated Balance Sheets, is comprised~~before tax, consist of the ~~following:~~following, for the three months ended March 31, 2020 and 2019:



	Three Months Ended March 31, 2020
	Gains and Losses on Derivatives in Cash Flow Hedging Relationships						Gains and Losses on Net Investment Hedges			Gains and Losses on Marketable Securities		Defined Pension Plan Items			Foreign Currency Translation Adjustment			Totals
(In millions)	Foreign Currency Forward Contracts		Interest Rate Swaps	Total
Balance at December 31, 2019, net of tax				$	(31.6	)	$	(74.3	)	$	0.6	$	(17.4	)	$	(1,674.5	)	$	(1,797.2	)
Other comprehensive (loss) earnings before reclassifications, before tax				(52.4		)	42.3			0.2		(1.8		)	(656.6		)	(668.3		)
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales	(0.1	)		(0.1		)												(0.1		)
Loss on interest rate swaps classified as cash flow hedges, included in interest expense			1.1	1.1														1.1
Amortization of prior service costs included in SG&A												—						—
Amortization of actuarial gain included in SG&A												0.2						0.2
Net other comprehensive (loss) earnings, before tax				(51.4		)	42.3			0.2		(1.6		)	(656.6		)	(667.1		)
Income tax (benefit) provision				(12.9		)	2.1			—		—			—			(10.8		)
Balance at March 31, 2020, net of tax				$	(70.1	)	$	(34.1	)	$	0.8	$	(19.0	)	$	(2,331.1	)	$	(2,453.5	)

(In millions) September 30,
2017 December 31,
2016
Accumulated other comprehensive loss:
Net unrealized gain on marketable securities, net of tax $ 16.6
$ 14.5
Net unrecognized gains (losses) and prior service cost related to defined benefit plans, net of tax 1.4
(0.5 )
Net unrecognized losses on derivatives in cash flow hedging relationships, net of tax (18.8 ) (38.6 )
Net unrecognized losses on derivatives in net investment hedging relationships, net of tax (204.6 ) (1.4 )
Foreign currency translation adjustment (405.8 ) (2,237.7 )
$ (611.2 ) $ (2,263.7 )

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

~~Components of accumulated other comprehensive loss, before tax, consist of the following, for the~~ ~~three and nine months endedSeptember 30, 2017~~ ~~and 2016:~~



	Three Months Ended March 31, 2019
	Gains and Losses on Derivatives in Cash Flow Hedging Relationships						Gains and Losses on Net Investment Hedges			Gains and Losses on Marketable Securities		Defined Pension Plan Items			Foreign Currency Translation Adjustment			Totals
(In millions)	Foreign Currency Forward Contracts		Interest Rate Swaps	Total
Balance at December 31, 2018, net of tax				$	(53.1	)	$	(130.9	)	$	—	$	1.7		$	(1,259.0	)	$	(1,441.3	)
Other comprehensive earnings (loss) before reclassifications, before tax				24.5			58.1			0.4		0.1			(338.5		)	(255.4		)
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales	(0.3	)		(0.3		)												(0.3		)
Loss on interest rate swaps classified as cash flow hedges, included in interest expense			1.8	1.8														1.8
Amortization of prior service costs included in SG&A												0.3						0.3
Amortization of actuarial loss included in SG&A												(0.2		)				(0.2		)
Net other comprehensive earnings (loss), before tax				26.0			58.1			0.4		0.2			(338.5		)	(253.8		)
Income tax provision (benefit)				8.8			2.9			—		0.1			—			11.8
Cumulative effect of the adoption of new accounting standards				(3.4		)	—			—		(0.2		)	—			(3.6		)
Balance at March 31, 2019, net of tax				$	(39.3	)	$	(75.7	)	$	0.4	$	1.6		$	(1,597.5	)	$	(1,710.5	)

Three Months Ended September 30, 2017
Gains and Losses on Derivatives in Cash Flow Hedging Relationships Gains and Losses on Net Investment Hedges Gains and Losses on Marketable Securities Defined Pension Plan Items Foreign Currency Translation Adjustment Totals
(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total
Balance at June 30, 2017, net of tax $ (17.1 ) $ (132.5 ) $ 22.3
$ 0.5
$ (828.8 ) $ (955.6 )
Other comprehensive (loss) earnings before reclassifications, before tax (4.4 ) (72.1 ) (8.9 ) 0.8
423.0
338.4
Amounts reclassified from accumulated other comprehensive earnings (loss), before tax:
Loss on foreign exchange forward contracts classified as cash flow hedges, included in net sales (2.0 ) (2.0 ) (2.0 )
Gain on interest rate swaps classified as cash flow hedges, included in interest expense 1.9
1.9
1.9
Amortization of prior service costs included in SG&A 0.1
0.1
Amortization of actuarial loss included in SG&A 0.2
0.2
Net other comprehensive (loss) earnings, before tax (4.5 ) (72.1 ) (8.9 ) 1.1
423.0
338.6
Income tax (benefit) provision (2.8 ) —
(3.2 ) 0.2
—
(5.8 )
Balance at September 30, 2017, net of tax $ (18.8 ) $ (204.6 ) $ 16.6
$ 1.4
$ (405.8 ) $ (611.2 )

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Nine Months Ended September 30, 2017
Gains and Losses on Derivatives in Cash Flow Hedging Relationships Gains and Losses on Net Investment Hedges Gains and Losses on Marketable Securities Defined Pension Plan Items Foreign Currency Translation Adjustment Totals
(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total
Balance at December 31, 2016, net of tax $ (38.6 ) $ (1.4 ) $ 14.5
$ (0.5 ) $ (2,237.7 ) $ (2,263.7 )
Other comprehensive earnings (loss) before reclassifications, before tax 19.9
(203.2 ) 3.5
1.7
1,831.9
1,653.8
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales 3.8
3.8
3.8
Gain on interest rate swaps classified as cash flow hedges, included in interest expense 5.5
5.5
5.5
Amortization of prior service costs included in SG&A 0.2
0.2
Amortization of actuarial loss included in SG&A 0.5
0.5
Net other comprehensive earnings (loss), before tax 29.2
(203.2 ) 3.5
2.4
1,831.9
1,663.8
Income tax provision 9.4
—
1.4
0.5
—
11.3
Balance at September 30, 2017, net of tax $ (18.8 ) $ (204.6 ) $ 16.6
$ 1.4
$ (405.8 ) $ (611.2 )

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Three Months Ended September 30, 2016
Gains and Losses on Derivatives in Cash Flow Hedging Relationships Gains and Losses on Net Investment Hedges Gains and Losses on Marketable Securities Defined Pension Plan Items Foreign Currency Translation Adjustment Totals
(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total
Balance at June 30, 2016, net of tax $ (46.7 ) $ —
$ 6.0
$ (15.2 ) $ (1,375.4 ) $ (1,431.3 )
Other comprehensive earnings (loss) before reclassifications, before tax 9.8
(10.4 ) 21.5
(0.2 ) 290.6
311.3
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales 10.7
10.7
10.7
Gain on interest rate swaps classified as cash flow hedges, included in interest expense 2.3
2.3
2.3
Amortization of prior service costs included in SG&A —
—
Amortization of actuarial gain included in SG&A 0.3
0.3
Net other comprehensive earnings (loss), before tax 22.8
(10.4 ) 21.5
0.1
290.6
324.6
Income tax provision (benefit) 8.0
(2.3 ) 8.0
—
—
13.7
Balance at September 30, 2016, net of tax $ (31.9 ) $ (8.1 ) $ 19.5
$ (15.1 ) $ (1,084.8 ) $ (1,120.4 )

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Nine Months Ended September 30, 2016
Gains and Losses on Derivatives in Cash Flow Hedging Relationships Gains and Losses on Net Investment Hedges Gains and Losses on Marketable Securities Defined Pension Plan Items Foreign Currency Translation Adjustment Totals
(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total
Balance at December 31, 2015, net of tax $ (18.1 ) $ —
$ (1.0 ) $ (14.9 ) $ (1,730.3 ) $ (1,764.3 )
Other comprehensive (loss) earnings before reclassifications, before tax (63.7 ) (10.4 ) 32.5
(1.2 ) 645.5
602.7
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales 34.2
34.2
34.2
Gain on interest rate swaps classified as cash flow hedges, included in interest expense 6.6
6.6
6.6
Amortization of prior service costs included in SG&A 0.2
0.2
Amortization of actuarial gain included in SG&A 0.7
0.7
Net other comprehensive (loss) earnings, before tax (22.9 ) (10.4 ) 32.5
(0.3 ) 645.5
644.4
Income tax (benefit) provision (9.1 ) (2.3 ) 12.0
(0.1 ) —
0.5
Balance at September 30, 2016, net of tax $ (31.9 ) $ (8.1 ) $ 19.5
$ (15.1 ) $ (1,084.8 ) $ (1,120.4 )


14.	~~Shareholders’ Equity~~

~~A summary of the changes in shareholders’ equity for the~~ ~~nine months endedSeptember 30, 2017~~ ~~and~~ ~~2016~~ ~~is as follows:~~

(In millions) Total
Mylan N.V.
Shareholders' Equity Noncontrolling Interest Total
December 31, 2016 $ 11,116.2
$ 1.4
$ 11,117.6
Net earnings 451.7
—
451.7
Other comprehensive earnings, net of tax 1,652.5
—
1,652.5
Stock option activity 12.8
—
12.8
Share-based compensation expense 64.2
—
64.2
Issuance of restricted stock, net of shares withheld (5.8 ) —
(5.8 )
Other —
(1.4 ) (1.4 )
September 30, 2017 $ 13,291.6
$ —
$ 13,291.6

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

(In millions) Total
Mylan N.V.
Shareholders' Equity Noncontrolling Interest Total
December 31, 2015 $ 9,764.4
$ 1.4
$ 9,765.8
Net earnings 62.5
—
62.5
Other comprehensive earnings, net of tax 643.9
—
643.9
Stock option activity 11.1
—
11.1
Share-based compensation expense 71.1
—
71.1
Issuance of restricted stock, net of shares withheld (9.6 ) —
(9.6 )
Tax benefit of stock option plans 2.2
—
2.2
Issuance of ordinary shares to purchase Meda 1,281.7
—
1,281.7
Other —
0.1
0.1
September 30, 2016 $ 11,827.3
$ 1.5
$ 11,828.8


~~15.~~	Segment Information

As a result of our acquisition of Meda and the integration of our portfolio across our branded, generics and OTC platforms in all of our regions, effective October 1, 2016, the Company expanded its reportable segments. The Company has three reportable segmentsMylan reports segment information on a geographic ~~basis as follows:~~ basis. This approach reflects the company’s focus on bringing its broad and diversified portfolio of generic, branded generic, brand-name and over-the-counter products to people in markets everywhere. Our North America ~~Europe and Rest of World. Our North America~~ segment ~~is made up of~~comprises our operations in the U.S. and ~~Canada and includes the operations of our previously reported Specialty segment.~~Canada. Our Europe segment ~~is made up of~~encompasses our operations in 35 countries, ~~within~~including France, Italy, Germany, the ~~region.~~United Kingdom (“U.K.”) and Spain. Our Rest of World segment ~~is primarily made up of~~reflects our operations in more than 120 countries, including Japan, Australia, China, Brazil, Russia, India, ~~Australia, Japan~~South Africa and ~~New Zealand. Also included~~certain markets in ~~our Rest of World segment are our operations in emerging markets, which include countries in Africa (including South Africa) as well as Brazil and other countries throughout Asia and~~ the Middle ~~East. Comparative segment financial information has been recast for prior periods to conform to this revised segment reporting.~~East and Southeast Asia.

The Company’s chief operating decision maker is the Chief Executive Officer, who evaluates the performance of its segments based on total revenues and segment profitability. Segment profitability represents segment gross profit less direct research and development (“R~~&D expenses~~&D”) and direct ~~selling, general and administrative (“~~SG~~&A”) expenses.~~&A. Certain general and administrative and R&D expenses not allocated to the segments, including certain special items, net charges for litigation settlements and other contingencies, amortization of intangible assets, impairment charges and other expenses not directly attributable to the segments ~~and certain intercompany transactions, including eliminations,~~ are reported ~~in Corporate/Other. Additionally, amortization~~separately or outside of ~~intangible assets and other purchase accounting related items, as well as certain other significant special items, are included in Corporate/Other.~~segment profitability. Items below the earnings from operations line on the Company’s ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations~~operations are not presented by segment, since they are excluded from the measure of segment profitability. The

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Company does not report depreciation expense, total assets and capital expenditures by segment, as such information is not used by the chief operating decision maker.

The accounting policies of the segments are the same as those described in ~~the “Summary~~Note 2 Summary of Significant Accounting ~~Policies”~~Policies included in ~~Mylan N.V.’s Annual Report on~~the 2019 Form 10-K, ~~for the year ended December 31, 2016, as amended.~~and Note 3 Recent Accounting Pronouncements, Adoption of New Accounting Standards included in this Form 10-Q. Intersegment revenues are accounted for at current market values and are eliminated at the consolidated level.

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Presented in the table below is segment information for the periods identified and a reconciliation of segment information to total consolidated information.


(In millions)	North America		Europe		Rest of World		Corporate / Other			Consolidated		North America		Europe		Rest of World		Eliminations			Consolidated
Three Months Ended September 30, 2017
Third party net sales	$	1,172.2	$	1,040.8	$	743.3	$	—		$	2,956.3
Three Months Ended March 31, 2020
Net sales												$	955.5	$	1,021.9	$	610.8	$	—		$	2,588.2
Other revenue	20.0		8.9		1.9		—			30.8		19.5		4.2		7.3		—			31.0
Intersegment	15.5		18.4		87.7		(121.6		)	—
Intersegment revenue												41.0		28.4		120.1		(189.5		)	—
Total	$	1,207.7	$	1,068.1	$	832.9	$	(121.6	)	$	2,987.1	$	1,016.0	$	1,054.5	$	738.2	$	(189.5	)	$	2,619.2

Segment profitability	$	575.8	$	290.3	$	133.9	$	(684.0	)	$	316.0	$	444.9	$	275.6	$	68.2	$	—		$	788.7

Nine Months Ended September 30, 2017
Third party net sales	$	3,666.7	$	2,887.1	$	2,016.4	$	—		$	8,570.2
Other revenue	67.3		25.0		6.3		—			98.6
Intersegment	60.5		87.6		275.4		(423.5		)	—
Total	$	3,794.5	$	2,999.7	$	2,298.1	$	(423.5	)	$	8,668.8

Segment profitability	$	1,810.5	$	776.8	$	437.1	$	(2,007.8	)	$	1,016.6
Intangible asset amortization expense																					(351.2		)
Globally managed research and development costs																					(25.7		)
Corporate costs and special items																					(225.3		)
Litigation settlements & other contingencies																					(1.8		)
Earnings from operations																					$	184.7



(In millions)	North America		Europe		Rest of World		Eliminations			Consolidated
Three Months Ended March 31, 2019
Net sales	$	922.9	$	895.3	$	642.4	$	—		$	2,460.6
Other revenue	22.1		4.7		8.1		—			34.9
Intersegment revenue	15.6		20.8		113.3		(149.7		)	—
Total	$	960.6	$	920.8	$	763.8	$	(149.7	)	$	2,495.5

Segment profitability	$	394.5	$	204.1	$	93.8	$	—		$	692.4

Intangible asset amortization expense										(405.5		)
Intangible asset impairment charges										(29.5		)
Globally managed research and development costs										(70.6		)
Corporate costs and special items										(162.1		)
Litigation settlements & other contingencies										(0.7		)
Earnings from operations										$	24.0

(In millions) North America Europe Rest of World Corporate / Other Consolidated
Three Months Ended September 30, 2016
Third party net sales $ 1,505.5
$ 841.2
$ 682.8
$ —
$ 3,029.5
Other revenue 21.6
3.9
2.1
—
27.6
Intersegment 10.3
53.2
105.0
(168.5 ) —
Total $ 1,537.4
$ 898.3
$ 789.9
$ (168.5 ) $ 3,057.1

Segment profitability $ 784.7
$ 252.6
$ 115.6
$ (1,283.6 ) $ (130.7 )

Nine Months Ended September 30, 2016
Third party net sales $ 4,064.5
$ 2,026.4
$ 1,654.6
$ —
$ 7,745.5
Other revenue 54.3
4.5
4.8
—
63.6
Intersegment revenue 24.5
104.0
291.9
(420.4 ) —
Total $ 4,143.3
$ 2,134.9
$ 1,951.3
$ (420.4 ) $ 7,809.1

Segment profitability $ 2,141.2
$ 495.1
$ 221.5
$ (2,472.0 ) $ 385.8

3631

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MYLAN N.V. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


~~16.~~	~~Subsidiary Guarantors~~

The following tables present condensed consolidating financial information for (a) Mylan N.V., the issuer of the 3.000% Senior Notes due 2018, 2.500% Senior Notes due 2019, 3.750% Senior Notes due 2020, 3.150% Senior Notes due 2021, 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 (collectively, the “Mylan N.V. Senior Notes”), which are guaranteed on a senior unsecured basis by Mylan Inc.; (b) Mylan Inc., the issuer of the 2.600% Senior Notes due 2018, 2.550% Senior Notes due 2019, 3.125% Senior Notes due 2023, 4.200% Senior Notes due 2023 and 5.400% Senior Notes due 2043 (collectively, the “Mylan Inc. Senior Notes”), which are guaranteed on a senior unsecured basis by Mylan N.V.; and (c) all other subsidiaries of the Company on a combined basis, none of which guarantee the Mylan N.V. Senior Notes or guarantee the Mylan Inc. Senior Notes (“Non-Guarantor Subsidiaries”). The consolidating adjustments primarily relate to eliminations of investments in subsidiaries and intercompany balances and transactions. The condensed consolidating financial statements present investments in subsidiaries using the equity method of accounting.

The following financial information presents the unaudited Condensed Consolidating Statements of Operations for the three and nine months ended September 30, 2017 and 2016, the unaudited Condensed Consolidating Statements of Comprehensive Earnings for the three and nine months ended September 30, 2017 and 2016, the unaudited Condensed Consolidating Balance Sheets as of September 30, 2017 and December 31, 2016 and the unaudited Condensed Consolidating Statements of Cash Flows for the nine months ended September 30, 2017 and 2016. This unaudited condensed consolidating financial information has been prepared and presented in accordance with SEC Regulation S-X Rule 3-10 “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~Three Months Ended September 30, 2017~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Revenues:
Net sales $ —
$ —
$ —
$ 2,956.3
$ —
$ 2,956.3
Other revenues —
—
—
30.8
—
30.8
Total revenues —
—
—
2,987.1
—
2,987.1
Cost of sales —
—
—
1,809.0
—
1,809.0
Gross profit —
—
—
1,178.1
—
1,178.1
Operating expenses:
Research and development —
—
—
182.3
—
182.3
Selling, general and administrative 6.5
184.3
—
473.8
—
664.6
Litigation settlements and other contingencies, net —
17.0
—
(1.8 ) —
15.2
Total operating expenses 6.5
201.3
—
654.3
—
862.1
(Loss) earnings from operations (6.5 ) (201.3 ) —
523.8
—
316.0
Interest expense 93.3
26.7
—
11.8
—
131.8
Other (income) expense, net (122.3 ) (44.7 ) —
171.6
—
4.6
Earnings (loss) before income taxes 22.5
(183.3 ) —
340.4
—
179.6
Income tax provision (benefit) 2.4
(0.6 ) —
89.5
—
91.3
Earnings of equity interest subsidiaries 68.2
129.9
—
—
(198.1 ) —
Net earnings (loss) $ 88.3
$ (52.8 ) $ —
$ 250.9
$ (198.1 ) $ 88.3

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~Nine Months Ended September 30, 2017~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Revenues:
Net sales $ —
$ —
$ —
$ 8,570.2
$ —
$ 8,570.2
Other revenues —
—
—
98.6
—
98.6
Total revenues —
—
—
8,668.8
—
8,668.8
Cost of sales —
—
—
5,180.3
—
5,180.3
Gross profit —
—
—
3,488.5
—
3,488.5
Operating expenses:
Research and development —
—
—
580.9
—
580.9
Selling, general and administrative 32.4
477.6
—
1,406.8
—
1,916.8
Litigation settlements and other contingencies, net —
17.0
—
(42.8 ) —
(25.8 )
Total operating expenses 32.4
494.6
—
1,944.9
—
2,471.9
(Loss) earnings from operations (32.4 ) (494.6 ) —
1,543.6
—
1,016.6
Interest expense 285.6
77.8
—
42.9
—
406.3
Other (income) expense, net (331.3 ) (161.5 ) —
527.2
—
34.4
Earnings (loss) before income taxes 13.3
(410.9 ) —
973.5
—
575.9
Income tax provision 1.4
5.1
—
117.7
—
124.2
Earnings of equity interest subsidiaries 439.8
788.8
—
—
(1,228.6 ) —
Net earnings $ 451.7
$ 372.8
$ —
$ 855.8
$ (1,228.6 ) $ 451.7

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~Three Months Ended September 30, 2016~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Revenues:
Net sales $ —
$ —
$ —
$ 3,029.5
$ —
$ 3,029.5
Other revenues —
—
—
27.6
—
27.6
Total revenues —
—
—
3,057.1
—
3,057.1
Cost of sales —
—
—
1,773.8
—
1,773.8
Gross profit —
—
—
1,283.3
—
1,283.3
Operating expenses:
Research and development —
—
—
199.1
—
199.1
Selling, general and administrative 43.1
134.0
—
479.8
—
656.9
Litigation settlements and other contingencies, net —
—
—
558.0
—
558.0
Total operating expenses 43.1
134.0
—
1,236.9
—
1,414.0
(Loss) earnings from operations (43.1 ) (134.0 ) —
46.4
—
(130.7 )
Interest expense 70.7
40.9
—
32.8
—
144.4
Other (income) expense, net (31.4 ) (102.7 ) —
184.3
—
50.2
Loss from operations (82.4 ) (72.2 ) —
(170.7 ) —
(325.3 )
Income tax provision (benefit) —
8.1
—
(213.6 ) —
(205.5 )
(Loss) earnings of equity interest subsidiaries (37.4 ) 442.9
—
—
(405.5 ) —
Net (loss) earnings $ (119.8 ) $ 362.6
$ —
$ 42.9
$ (405.5 ) $ (119.8 )

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS~~

~~Nine Months Ended September 30, 2016~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Revenues:
Net sales $ —
$ —
$ —
$ 7,745.5
$ —
$ 7,745.5
Other revenues —
—
—
63.6
—
63.6
Total revenues —
—
—
7,809.1
—
7,809.1
Cost of sales —
—
—
4,447.1
—
4,447.1
Gross profit —
—
—
3,362.0
—
3,362.0
Operating expenses:
Research and development —
—
—
632.2
—
632.2
Selling, general and administrative 75.8
499.2
—
1,212.6
—
1,787.6
Litigation settlements and other contingencies, net —
—
—
556.4
—
556.4
Total operating expenses 75.8
499.2
—
2,401.2
—
2,976.2
(Loss) earnings from operations (75.8 ) (499.2 ) —
960.8
—
385.8
Interest expense 115.1
126.3
—
63.6
—
305.0
Other expense (income), net 53.6
(305.7 ) —
436.1
—
184.0
(Loss) earnings before income taxes (244.5 ) (319.8 ) —
461.1
—
(103.2 )
Income tax provision (benefit) —
22.1
—
(187.8 ) —
(165.7 )
Earnings of equity interest subsidiaries 307.0
1,055.7
—
—
(1,362.7 ) —
Net earnings $ 62.5
$ 713.8
$ —
$ 648.9
$ (1,362.7 ) $ 62.5

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS~~

~~Three Months Ended September 30, 2017~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net earnings (loss) $ 88.3
$ (52.8 ) $ —
$ 250.9
$ (198.1 ) $ 88.3
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustment 423.0
—
—
423.0
(423.0 ) 423.0
Change in unrecognized gain and prior service cost related to defined benefit plans 1.1
0.1
—
1.2
(1.3 ) 1.1
Net unrecognized (loss) gain on derivatives in cash flow hedging relationships (4.5 ) 1.9
—
(6.4 ) 4.5
(4.5 )
Net unrecognized loss on derivatives in net investment hedging relationships (72.1 ) —
—
—
—
(72.1 )
Net unrealized loss on marketable securities (8.9 ) (8.9 ) —
—
8.9
(8.9 )
Other comprehensive earnings (loss), before tax 338.6
(6.9 ) —
417.8
(410.9 ) 338.6
Income tax (benefit) provision (5.8 ) 2.5
—
(8.0 ) 5.5
(5.8 )
Other comprehensive earnings (loss), net of tax 344.4
(9.4 ) —
425.8
(416.4 ) 344.4
Comprehensive earnings (loss) $ 432.7
$ (62.2 ) $ —
$ 676.7
$ (614.5 ) $ 432.7

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS~~

~~Nine Months Ended September 30, 2017~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net earnings $ 451.7
$ 372.8
$ —
$ 855.8
$ (1,228.6 ) $ 451.7
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustment 1,831.9
—
—
1,831.9
(1,831.9 ) 1,831.9
Change in unrecognized gain and prior service cost related to defined benefit plans 2.4
0.3
—
2.1
(2.4 ) 2.4
Net unrecognized gain on derivatives in cash flow hedging relationships 29.2
5.5
—
23.7
(29.2 ) 29.2
Net unrecognized loss on derivatives in net investment hedging relationships (203.2 ) —
—
—
—
(203.2 )
Net unrealized gain (loss) on marketable securities 3.5
3.7
—
(0.2 ) (3.5 ) 3.5
Other comprehensive earnings, before tax 1,663.8
9.5
—
1,857.5
(1,867.0 ) 1,663.8
Income tax provision (benefit) 11.3
(3.5 ) —
14.8
(11.3 ) 11.3
Other comprehensive earnings, net of tax 1,652.5
13.0
—
1,842.7
(1,855.7 ) 1,652.5
Comprehensive earnings $ 2,104.2
$ 385.8
$ —
$ 2,698.5
$ (3,084.3 ) $ 2,104.2

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS~~

~~Three Months Ended September 30, 2016~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net (loss) earnings $ (119.8 ) $ 362.6
$ —
$ 42.9
$ (405.5 ) $ (119.8 )
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustment 290.6
1.5
—
289.0
(290.5 ) 290.6
Change in unrecognized gain (loss) and prior service cost related to defined benefit plans 0.1
0.2
—
(0.1 ) (0.1 ) 0.1
Net unrecognized gain on derivatives in cash flow hedging relationships 22.8
2.3
—
20.5
(22.8 ) 22.8
Net unrecognized loss on derivatives in net investment hedging relationships (10.4 ) —
—
(10.4 ) 10.4
(10.4 )
Net unrealized gain (loss) on marketable securities 21.5
21.5
—
(0.1 ) (21.4 ) 21.5
Other comprehensive earnings, before tax 324.6
25.5
—
298.9
(324.4 ) 324.6
Income tax provision 13.7
8.7
—
3.9
(12.6 ) 13.7
Other comprehensive earnings, net of tax 310.9
16.8
—
295.0
(311.8 ) 310.9
Comprehensive earnings $ 191.1
$ 379.4
$ —
$ 337.9
$ (717.3 ) $ 191.1

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS~~

~~Nine Months Ended September 30, 2016~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net earnings $ 62.5
$ 713.8
$ —
$ 648.9
$ (1,362.7 ) $ 62.5
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustment 645.5
—
—
645.5
(645.5 ) 645.5
Change in unrecognized (loss) gain and prior service cost related to defined benefit plans (0.3 ) 0.2
—
(0.6 ) 0.4
(0.3 )
Net unrecognized (loss) gain on derivatives in cash flow hedging relationships (22.9 ) (49.8 ) —
26.9
22.9
(22.9 )
Net unrealized loss on derivatives in net investment hedging relationships (10.4 ) —
—
(10.4 ) 10.4
(10.4 )
Net unrealized gain on marketable securities 32.5
31.5
—
0.9
(32.4 ) 32.5
Other comprehensive earnings (loss), before tax 644.4
(18.1 ) —
662.3
(644.2 ) 644.4
Income tax provision (benefit) 0.5
(6.8 ) —
6.3
0.5
0.5
Other comprehensive earnings (loss), net of tax 643.9
(11.3 ) —
656.0
(644.7 ) 643.9
Comprehensive earnings $ 706.4
$ 702.5
$ —
$ 1,304.9
$ (2,007.4 ) $ 706.4

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET~~

~~As of September 30, 2017~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Assets
Current assets:
Cash and cash equivalents $ —
$ 82.2
$ —
$ 532.7
$ —
$ 614.9
Accounts receivable, net —
4.8
—
3,215.4
—
3,220.2
Inventories —
—
—
2,548.1
—
2,548.1
Intercompany receivables 329.2
447.8
—
12,224.7
(13,001.7 ) —
Prepaid expenses and other current assets 9.9
250.4
—
623.1
—
883.4
Total current assets 339.1
785.2
—
19,144.0
(13,001.7 ) 7,266.6
Property, plant and equipment, net —
300.7
—
2,009.3
—
2,310.0
Investments in subsidiaries 19,248.7
10,991.2
—
—
(30,239.9 ) —
Intercompany notes and interest receivable 7,832.5
10,156.1
—
1,722.6
(19,711.2 ) —
Intangible assets, net —
—
—
15,270.5
—
15,270.5
Goodwill —
17.1
—
9,967.6
—
9,984.7
Other assets 4.4
91.5
—
891.2
—
987.1
Total assets $ 27,424.7
$ 22,341.8
$ —
$ 49,005.2
$ (62,952.8 ) $ 35,818.9

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Trade accounts payable $ —
$ 36.3
$ —
$ 1,239.8
$ —
$ 1,276.1
Short-term borrowings —
—
—
—
—
—
Income taxes payable —
3.7
—
11.1
—
14.8
Current portion of long-term debt and other long-term obligations —
648.6
—
144.4
—
793.0
Intercompany payables 650.4
12,290.5
—
60.8
(13,001.7 ) —
Other current liabilities 138.0
363.3
—
2,398.8
—
2,900.1
Total current liabilities 788.4
13,342.4
—
3,854.9
(13,001.7 ) 4,984.0
Long-term debt 11,641.3
2,252.7
—
98.4
—
13,992.4
Intercompany notes payable 1,703.4
3,296.2
—
14,711.6
(19,711.2 ) —
Other long-term obligations —
58.4
—
3,492.5
—
3,550.9
Total liabilities 14,133.1
18,949.7
—
22,157.4
(32,712.9 ) 22,527.3

Total equity 13,291.6
3,392.1
—
26,847.8
(30,239.9 ) 13,291.6

Total liabilities and equity $ 27,424.7
$ 22,341.8
$ —
$ 49,005.2
$ (62,952.8 ) $ 35,818.9

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET~~

~~As of December 31, 2016~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Assets
Current assets:
Cash and cash equivalents $ 0.3
$ 12.3
$ —
$ 986.2
$ —
$ 998.8
Accounts receivable, net —
12.3
—
3,298.6
—
3,310.9
Inventories —
—
—
2,456.4
—
2,456.4
Intercompany receivables 215.9
416.0
—
10,506.6
(11,138.5 ) —
Prepaid expenses and other current assets —
256.4
—
500.0
—
756.4
Total current assets 216.2
697.0
—
17,747.8
(11,138.5 ) 7,522.5
Property, plant and equipment, net —
360.3
—
1,961.9
—
2,322.2
Investments in subsidiaries 15,606.2
8,277.8
—
—
(23,884.0 ) —
Intercompany notes and interest receivable 7,952.3
9,817.3
—
16.7
(17,786.3 ) —
Intangible assets, net —
—
—
14,447.8
—
14,447.8
Goodwill —
17.1
—
9,214.8
—
9,231.9
Other assets 5.2
51.9
—
1,144.7
—
1,201.8
Total assets $ 23,779.9
$ 19,221.4
$ —
$ 44,533.7
$ (52,808.8 ) $ 34,726.2

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Trade accounts payable $ 3.9
$ 69.6
$ —
$ 1,274.6
$ —
$ 1,348.1
Short-term borrowings —
—
—
46.4
—
46.4
Income taxes payable —
—
—
97.7
—
97.7
Current portion of long-term debt and other long-term obligations —
0.2
—
289.8
—
290.0
Intercompany payables 416.0
10,722.5
—
—
(11,138.5 ) —
Other current liabilities 90.9
388.8
—
2,778.8
—
3,258.5
Total current liabilities 510.8
11,181.1
—
4,487.3
(11,138.5 ) 5,040.7
Long-term debt 12,151.5
2,897.6
—
153.8
—
15,202.9
Intercompany notes payable —
3,870.9
—
13,915.4
(17,786.3 ) —
Other long-term obligations —
58.1
—
3,306.9
—
3,365.0
Total liabilities 12,662.3
18,007.7
—
21,863.4
(28,924.8 ) 23,608.6

Total equity 11,117.6
1,213.7
—
22,670.3
(23,884.0 ) 11,117.6

Total liabilities and equity $ 23,779.9
$ 19,221.4
$ —
$ 44,533.7
$ (52,808.8 ) $ 34,726.2

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~Nine Months Ended September 30, 2017~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities $ (175.1 ) $ (338.8 ) $ —
$ 2,083.2
$ —
$ 1,569.3
Cash flows from investing activities:
Capital expenditures —
(31.4 ) —
(125.0 ) —
(156.4 )
Change in restricted cash —
—
—
12.6
—
12.6
Purchase of marketable securities —
—
—
(8.9 ) —
(8.9 )
Proceeds from the sale of assets —
—
—
31.1
—
31.1
Proceeds from the sale of marketable securities —
—
—
8.9
—
8.9
Cash paid for acquisitions, net (71.6 ) —
—
—
—
(71.6 )
Investments in affiliates —
(21.1 ) —
—
21.1
—
Dividends from affiliates 168.1
—
—
—
(168.1 ) —
Loans to affiliates (143.7 ) (364.1 ) —
(2,558.0 ) 3,065.8
—
Repayments of loans from affiliates 1,066.4
0.3
—
943.6
(2,010.3 ) —
Payments for product rights and other, net —
(0.3 ) —
(558.5 ) —
(558.8 )
Net cash provided by (used in) investing activities 1,019.2
(416.6 ) —
(2,254.2 ) 908.5
(743.1 )
Cash flows from financing activities:
Payments of financing fees (8.3 ) (0.4 ) —
—
—
(8.7 )
Change in short-term borrowings, net —
—
—
(48.3 ) —
(48.3 )
Proceeds from issuance of long-term debt 554.5
—
—
1.3
—
555.8
Payments of long-term debt (1,500.0 ) —
—
(247.3 ) —
(1,747.3 )
Proceeds from exercise of stock options 12.8
—
—
—
—
12.8
Taxes paid related to net share settlement of equity awards (7.4 ) —
—
—
—
(7.4 )
Contingent consideration payments —
—
—
(10.1 ) —
(10.1 )
Capital contribution from affiliates —
—
—
21.1
(21.1 ) —
Capital payments to affiliates —
—
—
(168.1 ) 168.1
—
Payments on borrowings from affiliates —
(1,664.4 ) —
(345.9 ) 2,010.3
—
Proceeds from borrowings from affiliates 104.0
2,497.5
—
464.3
(3,065.8 ) —
Other items, net —
(7.4 ) —
6.7
—
(0.7 )
Net cash (used in) provided by financing activities (844.4 ) 825.3
—
(326.3 ) (908.5 ) (1,253.9 )
Effect on cash of changes in exchange rates —
—
—
43.8
—
43.8
Net (decrease) increase in cash and cash equivalents (0.3 ) 69.9
—
(453.5 ) —
(383.9 )
Cash and cash equivalents — beginning of period 0.3
12.3
—
986.2
—
998.8
Cash and cash equivalents — end of period $ —
$ 82.2
$ —
$ 532.7
$ —
$ 614.9

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS~~

~~Nine Months Ended September 30, 2016~~

(In millions) Mylan N.V. Mylan Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities $ (1.6 ) $ 724.7
$ —
$ 974.6
$ —
$ 1,697.7
Cash flows from investing activities:
Capital expenditures —
(64.8 ) —
(174.7 ) —
(239.5 )
Change in restricted cash —
(49.5 ) —
(1.0 ) —
(50.5 )
Purchase of marketable securities —
(4.1 ) —
(18.7 ) —
(22.8 )
Cash paid for Meda’s unconditional deferred payment —
—
—
(308.0 ) —
(308.0 )
Proceeds from the sale of marketable securities —
—
—
15.8
—
15.8
Cash paid for acquisitions, net (5,278.5 ) (931.3 ) —
58.1
—
(6,151.7 )
Settlement of acquisition-related foreign currency derivatives (128.6 ) —
—
—
—
(128.6 )
Investments in affiliates —
(43.6 ) —
—
43.6
—
Dividends from affiliates 135.6
—
—
—
(135.6 ) —
Loans to affiliates (7,971.9 ) (417.0 ) —
(726.3 ) 9,115.2
—
Repayments of loans from affiliates 6,838.3
442.6
—
1,031.3
(8,312.2 ) —
Payments for product rights and other, net —
(0.4 ) —
(195.9 ) —
(196.3 )
Net cash used in investing activities (6,405.1 ) (1,068.1 ) —
(319.4 ) 711.0
(7,081.6 )
Cash flows from financing activities:
Payments of financing fees (95.3 ) —
—
—
—
(95.3 )
Change in short-term borrowings, net —
—
—
48.6
—
48.6
Proceeds from issuance of long-term debt 6,478.8
—
—
41.0
—
6,519.8
Payments of long-term debt —
(500.0 ) —
(567.0 ) —
(1,067.0 )
Proceeds from exercise of stock options 11.1
—
—
—
—
11.1
Taxes paid related to net share settlement of equity awards (12.9 ) —
—
—
—
(12.9 )
Contingent consideration payments —
—
—
(15.5 ) —
(15.5 )
Capital contribution from affiliates —
—
—
43.6
(43.6 ) —
Capital payments to affiliates —
—
—
(135.6 ) 135.6
—
Payments on borrowings from affiliates —
(1,361.8 ) —
(6,950.4 ) 8,312.2
—
Proceeds from borrowings from affiliates 25.0
1,380.8
—
7,709.4
(9,115.2 ) —
Acquisition of noncontrolling interest —
—
—
(1.0 ) —
(1.0 )
Other items, net —
(12.9 ) —
14.5
—
1.6
Net cash provided by (used in) financing activities 6,406.7
(493.9 ) —
187.6
(711.0 ) 5,389.4
Effect on cash of changes in exchange rates —
—
—
15.1
—
15.1
Net (decrease) increase in cash and cash equivalents —
(837.3 ) —
857.9
—
20.6
Cash and cash equivalents — beginning of period —
870.5
—
365.5
—
1,236.0
Cash and cash equivalents — end of period $ —
$ 33.2
$ —
$ 1,223.4
$ —
$ 1,256.6

~~Table of Contents~~

~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~


~~17.~~15.	Restructuring

2020 Restructuring Program

On February 27, 2020, the Company announced that it has formalized the next steps in its efforts to sustain long-term value creation through the proactive transformation of its business. This transformation initiative includes a new global restructuring program. The program is intended to support the Company’s effort to improve operating performance and meet anticipated market demands, by ensuring that the Company is appropriately structured and resourced to deliver sustainable value to customers, patients, other stakeholders and shareholders. Key activities under the program include supply chain network optimization intended to maximize the efficiency of the Company’s global manufacturing and distribution network capacity and further optimizing functional capabilities that support business growth.

The Company is currently developing the details of the initiatives, including workforce actions and other restructuring activities. Further details will be disclosed as plans are finalized, including the estimated amount or range of amounts to be incurred by major cost type and future cash expenditures associated with those initiatives.As a result of the COVID-19 pandemic and the related uncertainty and complexity of the current environment, the Company has delayed the implementation of the 2020 restructuring program.

2016 Restructuring Program

On December 5, 2016, the Company announced a restructuring ~~programs in certain locations~~program representing ~~initial steps in~~ a series of actions in certain locations that are anticipated to further streamline its operations globally. Since 2015, the Company has made a number of significant acquisitions, and as part of the holistic, global integration of these acquisitions, the Company is focused on how to best optimize and maximize all of its assets across the organization and across all geographies.

Charges for restructuring and ongoing cost reduction initiatives are recorded in the period the Company commits to a restructuring or cost reduction plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met.

~~The~~During the second quarter of 2018, the Company ~~continues~~commenced comprehensive restructuring and remediation activities, which are aimed at reducing the complexity at the Morgantown, West Virginia plant and include the discontinuation and transfer to ~~develop the details~~other manufacturing sites of a number of products, a reduction of the ~~cost reduction initiatives, including~~ workforce ~~actions~~ and ~~other potential restructuring activities beyond the programs announced, including potential shutdown or consolidation of certain operations.~~extensive process and facility remediation. The ~~continued~~ restructuring actions other than for this plant are expected to be implemented through fiscal year 2018. In the fourth quarter of 2017, the Company committed to additional actions and now anticipates total aggregate pre-tax charges for committed restructuring activities ranging between $375.0 million and $450.0 million, inclusive of the 2016 and year to date 2017 restructuring charges of $262.4 million. As additional restructuring activities are undertaken, the Company expects to incur additional costs including employee related costs, such as severance and continuation of healthcare and other benefits; asset impairments; accelerated depreciation; costs associated with contract terminations; and other closure costs.substantially complete. At this time, the total expenses related to the additional restructuring and remediation activities at the Morgantown plant cannot be reasonably estimated.

The following table summarizes the restructuring charges and the reserve activity from December 31, ~~2016~~2019 to ~~September 30, 2017:~~March 31, 2020:


(In millions)	Employee Related Costs			Other Exit Costs			Total			Employee Related Costs			Other Exit Costs			Total
Balance at December 31, 2016:	$	138.6		$	1.6		$	140.2
Charges	9.6			13.5			23.1
Reclassifications	(8.3		)	8.3			—
Balance at December 31, 2019:										$	26.4		$	2.8		$	29.2
Charges ⁽¹⁾										2.9			4.7			7.6
Cash payment	(54.2		)	(1.0		)	(55.2		)	(6.0		)	(0.9		)	(6.9		)
Utilization	—			(19.8		)	(19.8		)	—			(3.7		)	(3.7		)
Foreign currency translation	(9.8		)	—			(9.8		)	(0.4		)	(0.1		)	(0.5		)
Balance at March 31, 2017:	$	75.9		$	2.6		$	78.5
Charges	13.2			3.0			16.2
Cash payment	(32.4		)	(1.9		)	(34.3		)
Utilization	—			(1.8		)	(1.8		)
Foreign currency translation	(4.4		)	—			(4.4		)
Balance at June 30, 2017:	$	52.3		$	1.9		$	54.2
Charges ⁽¹⁾	20.0			53.4			73.4
Reclassifications	—			—			—
Cash payment	(14.2		)	(0.7		)	(14.9		)
Utilization	—			(53.4		)	(53.4		)
Foreign currency translation	(3.3		)	—			(3.3		)
Balance at September 30, 2017:	$	54.8		$	1.2		$	56.0
Balance at March 31, 2020:										$	22.9		$	2.8		$	25.7

____________

⁽¹⁾

For the three months ended ~~September 30, 2017,~~March 31, 2020, total restructuring charges in North America, Europe, Rest of World, and ~~Corporate / Other~~corporate were approximately ~~$5.6~~$4.4 million, ~~$16.3~~$2.4 million, ~~$19.1~~$0.3 million, and $32.4 million respectively. For the nine months ended September 30, 2017, total restructuring charges in North America, Europe, Rest of World and Corporate / Other were approximately $12.8 million, $32.9 million, $33.7 million and $33.3$0.5 million, respectively.

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, accrued liabilities for restructuring and other cost reduction programs were primarily included in other current liabilities onin the condensed consolidated balance sheets.

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Notes to Condensed Consolidated ~~Balance Sheets.~~Financial Statements (Unaudited) - Continued


~~18.~~16.	Collaboration and Licensing Agreements

We periodically enter into collaboration and licensing agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products. Our significant collaboration agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biologic compounds, insulin analog products and respiratory products, among other complex products. Under these agreements, we have future potential milestone payments and co-development expenses payable to third parties as part of our licensing, development and co-development programs. Payments under these agreements generally become due and are payable upon the satisfaction or achievement of certain developmental, regulatory or commercial milestones or as development expenses are incurred on defined projects. Milestone payment obligations are uncertain, including the prediction of timing and the occurrence of events triggering a future obligation and are not reflected as liabilities in the ~~Condensed Consolidated Balance Sheets,~~condensed consolidated balance sheets, except for ~~milestone and royalty~~ obligations reflected as acquisition related contingent consideration. Refer to Note 11Financial Instruments and Risk Management for further discussion of contingent ~~consideration~~consideration. Our potential maximum development milestones not accrued for at March 31, 2020 totaled approximately $404 million. We estimate that the amounts ~~recorded.~~that may be paid through the end of 2020 to be approximately $94 million. These agreements may also include potential sales-based milestones and call for us to pay a percentage of amounts earned from the sale of the product as a royalty or a profit share. The amounts disclosed do not include ~~sales based~~sales-based milestones or royalty or profit share obligations on future sales of product as the timing and amount of future sales levels and costs to produce products subject to these obligations is not reasonably estimable. These sales-based milestones or royalty or profit share obligations may be significant depending upon the level of commercial sales for each product.

On February 28, 2018, the Company and Revance Therapeutics, Inc. (“Revance”) entered into a collaboration agreement (the “Revance Collaboration Agreement”) pursuant to which the Company and Revance will collaborate exclusively, on a world-wide basis (excluding Japan), to develop, manufacture and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

On August 22, 2019, the Company and Revance entered into an amendment (the “Amendment”) to the Revance Collaboration Agreement, pursuant to which Revance has agreed to extend the period of time for the Company to decide whether to continue the development and commercialization of a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX® beyond the initial development plan to prepare for and conduct the Biosimilar Initial Advisory Meeting (BIAM) with the U.S. Food and Drug Administration. In accordance with the Amendment, the Company is required to notify Revance of its decision on or before the later of (i) April 30, 2020 or (ii) thirty calendar days from the date that Revance provides Mylan with certain deliverables. The Company is continuing discussions with Revance on whether to move forward with the program and expects to provide its decision by May 31, 2020.

There have been no other significant changes to our collaboration and licensing agreements as disclosed in our ~~Annual Report on~~2019 Form ~~10-K for the year ended December 31, 2016, as amended.~~10-K.


~~19.~~17.	Income Taxes

CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act includes several provisions, including increasing the amount of deductible interest, allowing companies to carryback certain Net Operating Losses (“NOLs”) and increasing the amount of NOLs that corporations can use to offset income. We anticipate that the applicable provisions of the CARES Act will reduce our 2020 income tax expense by approximately $30.0 million. We will continue to monitor and assess the impact the CARES Act may have on our business and financial results.

Tax Examinations

The Company is subject to income taxes and tax audits in many jurisdictions. A certain degree of estimation is thus required in recording the assets and liabilities related to income taxes. Tax audits and examinations can involve complex issues, interpretations, and judgments and the resolution of matters that may span multiple years, particularly if subject to litigation or negotiation.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Although the Company believes that adequate provisions have been made for these uncertain tax positions, the Company’s assessment of uncertain tax positions is based on estimates and assumptions that the Company believes are reasonable but the estimates for unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variations from such estimates could materially affect the Company’s financial condition, results of operations or cash flows in the period of resolution, settlement or when the statutes of limitations expire.

Mylan is subject to ongoing IRS examinations. The years 2015 through 2018 are open years under examination. The years 2012, 2013 and 2014 have one matter open, and a Tax Court petition has been filed regarding the matter and a trial was held in December 2018 and is discussed further below.

Several international audits are currently in progress. In some cases, the tax auditors have proposed adjustments to our tax positions including with respect to intercompany transactions, and we are in ongoing discussions with the auditors regarding the validity of their positions. In certain cases, these audits can also result in non-tax consequences. For example, under French law, certain tax matters are automatically referred for criminal investigation.

The Company’s major state taxing jurisdictions remain open from fiscal year 2013 through 2018, with several state audits currently in progress. The Company’s major international taxing jurisdictions remain open from 2012 through 2018, some of which are indemnified by Strides Arcolab Limited (“Strides Arcolab”) for tax assessments.

Tax Court Proceedings

The Company's U.S. federal income tax returns for 2012 through 2014 had been subject to proceedings in U.S. Tax Court involving a dispute with the IRS regarding whether certain costs related to abbreviated new drug applications (“ANDAs”) were eligible to be expensed and deducted immediately or required to be amortized over longer periods. A trial was held in U.S. Tax Court in December 2018. Both parties delivered their final post-trial briefs on June 27, 2019 and are awaiting the court’s final decision.

Accounting for Uncertainty in Income Taxes

The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained.

During the three months ended March 31, 2019, primarily due to the expiration of federal and foreign statutes of limitations expirations, the Company reduced its net liability for unrecognized tax benefits by approximately $83.8 million.


18.	Litigation

The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, tax proceedings and litigation matters, both in the U.S. and abroad, that arise from time to time, some of which could result in losses, including damages, fines and/or civil penalties, and/or criminal charges against the Company. These matters are often complex and have outcomes that are difficult to predict. The Company is also party to certain proceedings and litigation matters for which it may be entitled to indemnification under the respective sale and purchase agreements relating to the acquisitions of the former Merck Generics business, Agila Specialties Private Limited, Abbott Laboratories’ non-U.S. developed markets specialty and branded generics business, and certain other acquisitions.

While the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of time,, and so it is not possible to predict the ultimate resolution of any such matter. It is possible that an unfavorable resolution of any of the ongoing matters or the inability or denial of Merck KGaA, Strides Arcolab Limited, Abbott Laboratories, or another indemnitor or insurer to pay an indemnified claim, could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and/or ordinary share price.

Some of these governmental inquiries, investigations, proceedings and litigation matters with which the Company is involved are described below, and unless otherwise disclosed,, the Company is unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses. The Company records accruals for loss contingencies to the extent we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The Company is also involved in other pending proceedings ~~that,~~for which, in the opinion of the Company based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s business, financial position, results of operations, cash flows and/or ordinary share price. If and when any reasonably possible losses associated with the resolution of such other pending proceedings, in the opinion of the Company, become material, the Company will disclose such matters.

Legal costs are recorded as incurred and are classified in SG&A in the Company’s ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations.~~

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~Lorazepam and Clorazepate~~

On June 1, 2005, a jury verdict was rendered against Mylan, MPI, and co-defendants Cambrex Corporation and Gyma Laboratories in the U.S. District Court for the District of Columbia in the amount of approximately ~~$12.0 million~~, which was accrued for by the Company. The jury found that Mylan and its co-defendants willfully violated Massachusetts, Minnesota and Illinois state antitrust laws in connection with active pharmaceutical ingredient supply agreements entered into between the Company and its API supplier (Cambrex) and broker (Gyma) for ~~two~~ ~~drugs, Lorazepam and Clorazepate, in 1997, and subsequent price increases on these drugs in 1998. The case was brought by~~ ~~four~~ health insurers who opted out of earlier class action settlements agreed to by the Company in 2001 and represents the last remaining antitrust claims relating to Mylan’s 1998 price increases for Lorazepam and Clorazepate. Following the verdict, the Company filed a motion for judgment as a matter of law, a motion for a new trial, a motion to dismiss two of the insurers and a motion to reduce the verdict. On December 20, 2006, the Company’s motion for judgment as a matter of law and motion for a new trial were denied and the remaining motions were denied on January 24, 2008. In post-trial filings, the plaintiffs requested that the verdict be trebled and that request was granted on January 24, 2008. On February 6, 2008, a judgment was issued against Mylan and its co-defendants in the total amount of approximately ~~$69.0 million, which, in the case of~~ ~~three~~ ~~of the plaintiffs, reflects trebling of the compensatory damages in the original verdict (approximately~~ ~~$11.0 million~~ in total) and, in the case of the fourth plaintiff, reflects their amount of the compensatory damages in the original jury verdict plus doubling this compensatory damage award as punitive damages assessed against each of the defendants (approximately ~~$58.0 million~~ in total), some or all of which may be subject to indemnification obligations by Mylan. Plaintiffs are also seeking an award of attorneys’ fees and litigation costs in unspecified amounts and prejudgment interest of approximately ~~$8.0 million~~. The Company and its co-defendants appealed to the U.S. Court of Appeals for the D.C. Circuit and have challenged the verdict as legally erroneous on multiple grounds. The appeals were held in abeyance pending a ruling on the motion for prejudgment interest, which has been granted. Mylan has contested this ruling along with the liability finding and other damages awards as part of its appeal, which was filed in the Court of Appeals for the D.C. Circuit. On January 18, 2011, the Court of Appeals issued a judgment remanding the case to the District Court for further proceedings based on lack of diversity with respect to certain plaintiffs. On June 13, 2011, Mylan filed a certiorari petition with the U.S. Supreme Court requesting review of the judgment of the D.C. Circuit. On October 3, 2011, the certiorari petition was denied. The case is now proceeding before the District Court. On January 14, 2013, following limited court-ordered jurisdictional discovery, the plaintiffs filed a fourth amended complaint containing additional factual averments with respect to the diversity of citizenship of the parties, along with a motion to voluntarily dismiss ~~775~~ ~~(of~~ ~~1,387) self-funded customers whose presence would destroy the District Court’s diversity jurisdiction. The plaintiffs also moved for a remittitur (reduction) of approximately~~ ~~$8.1 million~~ from the full damages award. Mylan’s brief in response to the new factual averments in the complaint was filed on February 13, 2013. On July 29, 2014, the court granted both plaintiffs�� motion to amend the complaint and their motion to dismiss ~~775~~ self-funded customers. The Court granted the plaintiffs’ motion for remittitur on August 18, 2017, reducing approximately $9.5 million from the full damages award. The Court entered final judgment on August 30, 2017 in the amount of approximately $67 million (not including post-judgment interest and fees and costs). Mylan filed a notice of appeal on September 15, 2017 with the United States Court of Appeals for the District of Columbia Circuit. The total accrual for this matter at September 30, 2017 is approximately $29 million, which includes a $17 million charge recorded in the third quarter of 2017 as a result of the final judgment.

~~In connection with the Company’s appeal of the judgment, the Company submitted a surety bond underwritten by a third-party insurance company in the amount of~~ ~~$74.5 million~~ ~~in February 2008. On May 30, 2012, the District Court ordered the amount of the surety bond reduced to~~ ~~$66.6 million~~.

~~Pricing and Medicaid Litigation~~

Dey L.P. (now known as Mylan Specialty L.P. and herein as “Mylan Specialty”), a wholly owned subsidiary of the Company, was named as a defendant in several class actions brought by consumers and third-party payors. Mylan Specialty reached a settlement of these class actions, which was approved by the court and all claims have been dismissed. Additionally, a complaint was filed under seal by a plaintiff on behalf of the United States of America against Mylan Specialty in August 1997. In August 2006, the Government filed its complaint-in-intervention and the case was unsealed in September 2006. The Government asserted that Mylan Specialty was jointly liable with a co-defendant and sought recovery of alleged overpayments, together with treble damages, civil penalties and equitable relief. Mylan Specialty completed a settlement of this action in December 2010. These cases all have generally alleged that Mylan Specialty falsely reported certain price information concerning certain drugs marketed by Mylan Specialty, that Mylan Specialty caused false claims to be made to Medicaid and to Medicare, and that Mylan Specialty caused Medicaid and Medicare to make overpayments on those claims.

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Under the terms of the purchase agreement with Merck KGaA, Mylan is fully indemnified for the claims in the preceding paragraph and Merck KGaA is entitled to any income tax benefit the Company realizes for any deductions of amounts paid for such pricing litigation. Under the indemnity, Merck KGaA is responsible for all settlement and legal costs, and, as such, these settlements had no impact on the Company’s Consolidated Statements of Operations. At September 30, 2017, the Company has accrued approximately $63.3 million in other current liabilities, which represents its estimate of the remaining amount of anticipated income tax benefits due to Merck KGaA. We are not aware of any outstanding related claims.operations.

Modafinil Antitrust Litigation ~~and FTC Inquiry~~

Beginning in April 2006, Mylan and ~~four~~4 other drug manufacturers were named as defendants in civil lawsuits filed in or transferred to the U.S. District Court for the Eastern District of Pennsylvania (“EDPA”) by a variety of plaintiffs purportedly representing direct and indirect purchasers of the drug modafinil and in a lawsuit filed by Apotex, Inc., a manufacturer of generic drugs. These actions alleged violations of federal antitrust and state laws in connection with the generic defendants’ settlement of patent litigation with Cephalon relating to modafinil. ~~On March 24, 2015,~~ Mylan ~~reached a settlement in principle with~~has settled the lawsuits filed by the putative ~~indirect purchasers,~~direct purchaser class and ~~on November 20, 2015, Mylan~~retailer opt-out plaintiffs and Apotex and has entered into a settlement agreement with the putative indirect purchasers for approximately ~~$16 million. Plaintiffs have not yet moved for preliminary~~$14.4 million, which the Court granted final approval of that settlement. In December 2016, Mylan reached a settlement with the putative direct purchaser class and the retailer opt-out plaintiffs for $165 million, of which approximately $68.5 million was paid before December 31, 2016. The settlement with the retailer opt-out plaintiffs has been completed. On February 3, 2017, the putative direct purchaser class moved for preliminary approval of the settlement. The direct purchaser class’ motion for preliminary approval of the settlement was denied on August 29, 2017. The parties are engaging in a continuing dialogue to resolve this matter according to the terms of the settlement agreement. On June 8, 2017, Mylan and Apotex agreed to a settlement in principle. The settlement with Apotex has been completed. The Company has also received subpoenas from certain state Attorneys General requesting documents related to the modafinil patent litigation.

On June 29, 2015, the City of Providence, Rhode Island filed suit in the District of Rhode Island against the same parties named as defendants in litigation pending in the Eastern District of Pennsylvania, including Mylan, asserting state law claims based on the same underlying allegations. All defendants, including Mylan, moved to dismiss the suit on October 15, 2015, and the case was subsequently settled.April 21, 2020.

On July 10, 2015, the Louisiana Attorney General filed a lawsuit in the 19th Judicial District Court in Louisiana ~~a petition~~ against Mylan and ~~three~~3 other drug manufacturers asserting state law claims based on the same underlying allegations as those made in the litigation then pending in the ~~Eastern~~EDPA. On December 8, 2016, the District ~~of Pennsylvania. The petition was filed by~~Court dismissed the lawsuit with prejudice, which the State of Louisiana ~~purportedly in its capacity as an indirect purchaser. On May 16, 2016,~~appealed. The appeals court subsequently remanded the ~~Judicial~~lawsuit to the District Court ~~deferred Mylan’s declinatory exception of no personal jurisdiction and its peremptory exception of prescription, and granted~~to include certain language in part and denied in part Mylan’s peremptory exceptions of no cause of action and no right of action. On June 30, 2016, the plaintiff filed a supplemental and amended petition. The defendants filed a motionorder to strike and joint peremptory exceptions to the amended petition. On July 21, 2016, the plaintiff filed in the First Circuit Court of Appeal its application for a supervisory writ regarding the granting of defendant’s exceptions, which the defendants opposed. The appeal was denied on October 31, 2016. On April 20, 2016, the State of Louisiana filed a motion to consolidate the pending action with four other actions against other pharmaceutical manufacturers concerning products not related to modafinil, which Mylan opposed. On June 27, 2016, the Judicial District Court declined to consolidate Mylan’s case with the other four actions, with leave to renew the consolidation request after filing the above-referenced amended petition. On July 21, 2016, the plaintiff filed a motion to reurge consolidation. Subsequently, the action to which plaintiff seeks to join Mylan was stayed, resulting in a stay of the consolidation motion. On December 8, 2016, Mylan’s peremptory exceptions of no cause of action with respect to the supplemental and amended petition were granted in their entirety and with prejudice and judgment was entered. On February 17, 2017, the plaintiff filed in the 19th Judicial District Court a motion for appeal, which the Judicial District Court granted on February 21, 2017. The appeal was lodged with the First Circuit Court of Appeal on April 4, 2017. Briefing on the appeal has been completed and an oral argument was held November 1, 2017.

~~On July 28, 2016, United Healthcare filed a complaint against Mylan and four other drug manufacturers in the United States District Court for~~make the District of Minnesota, asserting state law claims based on the same underlying allegations as those made in litigation pending in the Eastern District of Pennsylvania. On January 6, 2017, the case was transferred to the Eastern District of Pennsylvania. Mylan filed its answer to the complaint on March 31, 2017.

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

Court’s dismissal decision final and appealable.

The Company believes that it has strong defenses to ~~these~~the remaining ~~cases.~~case. Although it is reasonably possible that the Company may incur additional losses from these matters, any amount cannot be reasonably estimated at this time.

~~In addition, by letter dated July 11, 2006, Mylan was notified by~~The Company recorded and paid approximately $18.0 million of expense during the ~~U.S. Federal Trade Commission (“FTC”) of an investigation relating to~~year ended December 31, 2019. At December 31, 2019 and March 31, 2020, the settlement of the modafinil patent litigation. In its letter, the FTC requested certain information from Mylan, MPI and Mylan Technologies, Inc. pertaining to the patent litigation and the settlement thereof. On March 29, 2007, the FTC issued a subpoena, and on April 26, 2007, the FTC issued a civil investigative demand to Mylan, requesting additional information from the Company relating to the investigation. Mylan has cooperated fully with the government’s investigation and completed all requests for information. On February 13, 2008, the FTC filed a lawsuit against Cephalon in the U.S. District Court for the District of Columbia and the case was subsequently transferred to the U.S. District Court for the Eastern District of Pennsylvania. On July 1, 2010, the FTC issued a third party subpoena to Mylan, requesting documents in connection with its lawsuit against Cephalon. Mylan has responded to the subpoena. The lawsuit against Cephalon settled and a Stipulated Order for Permanent Injunction and Equitable Monetary Relief was entered by the Court on June 17, 2015.

~~The~~ Company has a total accrual of approximately ~~$112.5~~$14.4 million related to this matter, ~~at September 30, 2017,~~ which is included in other current liabilities in the ~~Condensed Consolidated Balance Sheets.~~condensed consolidated balance sheets.

Pioglitazone

Beginning in December 2013, Mylan, Takeda, and several other drug manufacturers ~~have been~~were named as defendants in civil lawsuits consolidated in the U.S. District Court for the Southern District of New York (“SDNY”) by plaintiffs which purport to represent direct and indirect purchasers of branded or generic Actos® and Actoplus Met®. These actions allege violations of state and federal competition laws in connection with the defendants’ settlements of patent litigation in 2010 ~~relating~~related to Actos and Actoplus Met®. Plaintiffs filed an amended complaint on August 22, 2014. Mylan and the other defendants filed motions to dismiss the amended complaint on October 10, 2014. Two additional complaints were subsequently filed by plaintiffs purporting to represent classes of direct purchasers of branded or generic Actos® and Actoplus Met®. ~~On September 23, 2015, the District Court granted defendants’ motions~~Mylan’s motion to dismiss the indirect ~~purchasers amended complaints with prejudice. The indirect purchasers filed a notice of~~purchasers’ complaint was granted and no appeal on October 22, 2015; however they have since abandoned and dismissed their appeal of the District Court’s dismissal of claims asserted against Mylan. The putative direct purchaser class filed an amended complaint on January 8, 2016. Defendants’ motion to dismiss was filed on January 28, 2016 and the briefing has been completed. The case was stayed pending the resolution of the indirect purchasers’ appeal against the defendants remaining in that case. A decision was issued by the Second Circuit on February 8, 2017, reversing in part and affirming in part, the District Court’s decision as to Mylan. Following the ~~remaining defendants. Following this~~appellate decision relating to other defendants, the direct purchasers filed an amended ~~complaint;~~complaint against Mylan and the other manufacturers. Mylan’s motion to dismiss ~~is pending.~~was granted with prejudice on October 8, 2019.

~~SEC Investigation~~Trade Agreements Act (“TAA”)

On ~~September 10, 2015,~~April 9, 2018, a subsidiary of Mylan N.V. received a ~~subpoena~~civil investigative demand from the ~~SEC seeking documents with regard to certain related party matters. Mylan is fully cooperating with the SEC.~~

~~EpiPen® Auto-Injector and Certain Congressional Matters~~

~~Classification~~Commercial Litigation Branch of ~~EpiPen® Auto-Injector and EpiPen Jr® Auto-Injector~~

~~In November 2014, the Company received a subpoena from~~ the U.S. Department of Justice (“DOJ”) ~~related~~concerning its TAA compliance for certain products. The company fully cooperated with DOJ. On September 14, 2018, the United States District Court for the Southern District of Ohio unsealed a qui tam lawsuit filed against the Mylan N.V. subsidiary concerning its TAA compliance for the same products identified in DOJ’s civil investigative demand. DOJ has declined to the classification of the EpiPen® Auto-Injector for purposes of the Medicaid Drug Rebate Program. The Company complied with various information requests received from the DOJ pursuant to the subpoena. The questionintervene in the ~~underlying matter was whether EpiPen® Auto-Injector should be classified with the Centers for Medicare~~lawsuit and Medicaid Services (“CMS”) as a non-innovator drug under the applicable definition in the Medicaid Rebate statute and subject to the formula that is used to calculate rebates to Medicaid for such drugs. EpiPen® Auto-Injector had been classified with CMS as a non-innovator drug since before Mylan acquired the product in 2007 based on longstanding written guidance from the federal government. Beginning in August 2016, questions regarding the pricing of the EpiPen® Auto-Injector significantly increased and the Company has ~~received or~~closed its investigation. The lawsuit has been ~~the subject of additional inquiries, including with respect~~stayed and we believe that its claims are without merit and intend to the classification of EpiPen® Auto-Injector for purposes of the Medicaid Drug Rebate Program and certain other federal programs, from committees and members of Congress and from other federal and state governmental agencies.defend against them vigorously.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Subsequent to these developments, on October 7, 2016, Mylan agreed to the terms of a $465 million settlement, plus interest, with the DOJ and other government agencies related to the classification of the EpiPen® Auto-Injector ~~for purposes of the Medicaid Drug Rebate Program (the “Medicaid Drug Rebate Program Settlement”). On August 17, 2017, two of Mylan’s subsidiaries - Mylan Inc.~~ and Mylan Specialty L.P. - signed an agreement with the DOJ and two relators finalizing the $465 million settlement. The settlement agreement provides for resolution of all potential Medicaid rebate liability claims by the federal government, as well as potential claims by certain hospitals and other covered entities that participate in the 340B Drug Pricing Program. The settlement agreement allocates money to the Medicaid programs of all 50 states and establishes a framework for resolving all potential state Medicaid rebate liability claims within 60 days. All 50 states plus the District of Columbia have agreed to the settlement, and therefore, all potential state Medicaid rebate liability claims have been resolved. In connection with the settlement, Mylan Inc. and Mylan Specialty L.P. entered into a Corporate Integrity Agreement (the “CIA”) with the Office of Inspector General of the Department of Health and Human Services (“OIG-HHS”). The CIA has a five-year term and requires, among other things, that an independent review organization annually review various matters relating to the Medicaid Drug Rebate Program. Neither the settlement agreement nor the CIA contains an admission or finding of wrongdoing. In connection with the settlement, Mylan Specialty L.P. has reclassified EpiPen® Auto-Injector as an innovator product for purposes of the Medicaid Drug Rebate Program effective April 1, 2017. The Company recorded an accrual of $465 million related to the settlement during the year ended December 31, 2016 and recorded an additional accrual for interest related to the settlement amount during the nine months ended September 30, 2017.Certain Congressional Matters

Department of Veterans Affairs Request for Information

On June 30, 2017, the Company responded to a request for information from the Department of Veterans Affairs ~~(VA)~~(“VA”) (acting on behalf of itself and other government agencies) requesting certain historical pricing data related to the EpiPen® Auto-Injector. The Company and the VA ~~are~~have been engaged in a continuing dialogue regarding the classification of the EpiPen® Auto-Injector as a covered drug under Section 603 of the Veterans Health Care Act of 1992, Public Law 102-585. The Company historically classified EpiPen® Auto-Injector ~~has been classified~~ as a ~~non covered~~non-covered drug with the VA based upon long standing written guidance from the federal government. The Company has voluntarily reclassified the EpiPen® Auto-Injector as a covered drug, effective from April 1, 2017. The Company is fully cooperating with the VA.

~~SEC Request for Information/Subpoena~~

On October 7, 2016, Mylan received a document request from the Division of Enforcement at the SEC seeking communications with CMS and documents concerning Mylan products sold and related to the Medicaid Drug Rebate Program, and any related complaints. On November 15, 2016, Mylan received a follow-up letter, modifying the initial document request, seeking information on and public disclosures regarding the $465 million Medicaid Drug Rebate Program Settlement and the classification of the EpiPen® Auto-Injector under the Medicaid Drug Rebate Program. On February 6, 2017, Mylan received a subpoena from the SEC in this matter, seeking additional documents. Mylan is fully cooperating with the SEC.

On April 25, 2017, Mylan received a comment letter from the staff of the SEC’s Division of Corporation Finance with respect to Mylan’s Annual Report on Form 10-K for the year ended December 31, 2016 requesting information regarding Mylan’s accounting treatment for the Medicaid Drug Rebate Program Settlement with the DOJ. The Company responded to the comment letter in May 2017 and will continue to cooperate fully with the SEC.

~~FTC Request for Information~~

On November 18, 2016, Mylan received a request from the FTC Bureau of Competition seeking documents and information relating to its preliminary investigation into potential anticompetitive practices relating to epinephrine auto-injectors. Mylan is fully cooperating with the FTC.

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~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

~~Federal Securities Litigation~~

Purported class action complaints were filed in October 2016 against Mylan N.V., Mylan Inc. and certain of their current and former directors and officers (collectively, for purposes of this paragraph, the “defendants”) in the United States District Court for the Southern District of New York on behalf of certain purchasers of securities of Mylan N.V. and/or Mylan Inc. on the NASDAQ. The complaints alleged that defendants made false or misleading statements and omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures relating to Mylan N.V. and Mylan Inc.’s classification of their EpiPen® Auto-Injector as a non-innovator drug for purposes of the Medicaid Drug Rebate Program. The complaints sought damages, as well as the plaintiffs’ fees and costs. On March 20, 2017, after the actions were consolidated, a consolidated amended complaint was filed, alleging substantially similar claims and seeking substantially similar relief, but adding allegations that defendants made false or misleading statements and omissions of purportedly material fact in connection with allegedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs, and alleging violations of both federal securities laws (on behalf of a purported class of certain purchasers of securities of Mylan N.V. and/or Mylan Inc. on the NASDAQ) and Israeli securities laws (on behalf of a purported class of certain purchasers of securities of Mylan N.V. on the Tel Aviv Stock Exchange). Defendants’ motion to dismiss the consolidated amended complaint was filed on May 30, 2017 and has been fully briefed. We believe that the claims in the consolidated amended complaint are without merit and intend to defend against them vigorously.

~~Israeli Securities Litigation~~

On October 13, 2016, a purported shareholder of Mylan N.V. filed a lawsuit, together with a motion to certify the lawsuit as a class action on behalf of certain Mylan N.V. shareholders on the Tel Aviv Stock Exchange, against Mylan N.V. and four of its directors and officers (collectively, for purposes of this paragraph, the “defendants”) in the Tel Aviv District Court (Economic Division). The plaintiff alleges that the defendants made false or misleading statements and omissions of purportedly material fact in Mylan N.V.’s reports to the Tel Aviv Stock Exchange regarding Mylan N.V.’s classification of its EpiPen® Auto-Injector for purposes of the Medicaid Drug Rebate Program, in violation of both U.S. and Israeli securities laws, the Israeli Companies Law and the Israeli Torts Ordinance. The plaintiff seeks damages, among other remedies. On January 19, 2017, the Court stayed this case until a final judgment is issued in the securities litigation currently pending in the United States District Court for the Southern District of New York. On April 30, 2017, another purported shareholder of Mylan N.V. filed a separate lawsuit, together with a motion to certify the lawsuit as a class action on behalf of certain Mylan N.V. shareholders on the Tel Aviv Stock Exchange, in the Tel Aviv District Court (Economic Division), alleging substantially similar claims and seeking substantially similar relief against the defendants and other directors and officers of Mylan N.V., but alleging also that this group of defendants made false or misleading statements and omissions of purportedly material fact in connection with allegedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs, and alleging violations of both U.S. federal securities laws and Israeli law. We believe that the claims in these lawsuits are without merit and intend to defend against them vigorously.

EpiPen® Auto-Injector Civil Litigation

~~Beginning in August 2016,~~ Mylan Specialty ~~L.P.~~ and other Mylan-affiliated entities have been named as defendants in ~~fifteen~~ putative indirect purchaser class actions relating to the pricing and/or marketing of the EpiPen® Auto-Injector. The plaintiffs in these cases assert violations of various federal and state antitrust and consumer protection laws, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), as well as common law claims. Plaintiffs’ claims include purported challenges to the prices charged for the EpiPen® Auto-Injector and/or the marketing of the product in packages containing two auto-injectors, as well as allegedly anti-competitive conduct. A Mylan officer and other non-Mylan affiliated companies were also ~~have been~~ named as defendants in some of the class actions. These lawsuits were filed in the U.S. District Courts for the Northern District of California, Northern District of Illinois, District of Kansas, Eastern District of Michigan, Western District of Washington, District of New Jersey, the Southern District of Alabama,various federal and ~~the Western District of Pennsylvania, as well as the Hamilton County, Ohio Court of Common Pleas (later removed to the Southern District of Ohio). All of these lawsuits~~state courts and have either been dismissed or transferred into a multidistrict litigation (“MDL”) in the U.S. District Court for the District of Kansas and have been ~~consolidated through~~consolidated. Mylan filed a motion to dismiss the ~~filing of an~~consolidated amended complaint, which was granted in part and denied in part. On December 7, 2018, the Plaintiffs filed a motion for class certification. On February 27, 2020, the District Court issued an order denying in part and granting in part Plaintiffs’ motion for class certification. The District Court declined to certify consumer protection and unjust enrichment damages classes, as well as an injunctive relief class. The District Court certified an antitrust class that applies to 17 states and a RICO class. We filed a petition for permission to appeal the class certification decision on ~~October 17, 2017.~~March 12, 2020, which is pending before the Tenth Circuit. A trial date has been scheduled for ~~July 2020.~~April 2021. We believe that the remaining claims in these lawsuits are without merit and intend to defend against them vigorously.

On February 14, 2020, Mylan Specialty and other Mylan-affiliated entities, together with other non-Mylan affiliated companies, were named as defendants in a putative direct purchaser class action filed in the U.S. District Court for the District of Kansas relating to the pricing and/or marketing of the EpiPen® Auto-Injector. The plaintiff in this case asserts federal antitrust claims which are based on allegations that are similar to those in the putative indirect purchaser class actions discussed above. We believe that the claims in ~~these lawsuits~~this lawsuit are without merit and intend to defend against them vigorously.

On March 29, 2020, Mylan Inc. and Mylan Specialty, together with other non-Mylan affiliated companies, were named as defendants in a putative direct purchaser class action filed in the U.S. District Court for the District of Minnesota relating to contracts with certain pharmacy benefit managers concerning EpiPen® Auto-Injector. The plaintiff claims that the alleged conduct resulted in the exclusion or restriction of competing products and the elimination of pricing constraints in violation of RICO and federal antitrust law. We believe that the claims in this lawsuit are without merit and intend to defend against them vigorously.

On April 24, 2017, Sanofi-Aventis U.S., LLC (“Sanofi”) filed a lawsuit against Mylan Inc. and Mylan Specialty ~~L.P.~~ in the U.S. District Court for the District of New Jersey. This lawsuit has been transferred into the aforementioned ~~MDL in the U.S. District Court for the District of Kansas.~~MDL. In this lawsuit, Sanofi alleges exclusive dealings and anti-competitive marketing

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practices in violation of the antitrust laws in connection with the sale and marketing of the EpiPen® Auto-Injector. On November 1, 2018, Sanofi filed a Motion for a Suggestion of Remand of the case to the U.S. District Court for the District of New Jersey. On January 23, 2019, the Court denied Sanofi’s motion without prejudice. On June 28, 2019, Mylan filed a motion for summary judgment as to the claims asserted by Sanofi and Sanofi filed both a motion for partial summary judgment with respect to its claims against Mylan and for summary judgment with respect to Mylan’s ~~Motion to Dismiss is~~counterclaims. These motions remain pending. We believe that ~~the~~Sanofi’s claims in this lawsuit are without merit and intend to defend against them vigorously.

On September 29, 2017, plaintiffs in a pending putative class action brought against certain pharmacy benefit managers (“PBMs”) defendants in the U.S. District Court for the District of Kansas filed a motion for leave to file an amended complaint that would add Mylan N.V., Mylan Specialty, and Mylan Pharmaceuticals Inc. as additional defendants to this case. In the proposed amended complaint, plaintiffs bring claims under the Employee Retirement Income Security Act of 1974 for allegedly knowingly participating in conduct related to the pricing of EpiPen products that plaintiffs assert was a breach of fiduciary duties by the PBMs. The motion remains pending. We believe that the claims in this lawsuit are without merit and intend to defend against them vigorously.

~~EpiPen® Auto-Injector State AG Investigations~~

Beginning in August 2016, the Company and certain of its affiliated entities have received subpoenas and informal requests from various state attorneys general seeking information and documents relating to the pricing and/or marketing of the EpiPen® Auto-Injector. The Company is fully cooperating with the various state attorneys general.

~~U.S. Congress/State Requests for Information and Documents~~

Beginning in August 2016, Mylan has received several requests for information and documents from various Committees of the U.S. Congress and federal and state lawmakers concerning the marketing, distribution and sales of Mylan products. Mylan has cooperated and intends to continue cooperating with federal and state lawmakers as appropriate in response to their requests.

The Company has a total accrual of approximately ~~$228.4~~$10.0 million related to this matter at ~~September 30, 2017,~~March 31, 2020, which is included in other current liabilities in the Condensed Consolidated Balance Sheets. During the three months ended September 30, 2017, the Company made payments of approximately $255.2 million related to this matter. Subsequent to September 30, 2017, the Company made additional payments of approximately $217.5 million, which was accrued for at September 30, 2017.condensed consolidated balance sheets. The Company believes that it has strong defenses to current and future potential civil litigation, as well as governmental investigations and enforcement proceedings,

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discussed in this “EpiPen® Auto-Injector and Certain Congressional Matters” section of this Note 19 18 Litigation. Although it is reasonably possible that the Company may incur additional losses from these matters, any amount cannot be reasonably estimated at this time. In addition, the Company expects to incur additional legal and other professional service expenses associated with such matters in future periods and will recognize these expenses as services are received. The Company believes that the ultimate amount paid for these services and claims could have a material effect on the Company's business, ~~consolidated~~ financial condition, results of operations, cash flows and/or ordinary share price in future periods.

~~Opioid Subpoena, Missouri State AG Civil Investigative Demand and Congressional Request~~

On July 27, 2017, Mylan N.V. received a subpoena from the DOJ seeking information relating to opioids manufactured, marketed or sold by Mylan during the period from January 1, 2013 to December 31, 2016. On August 29, 2017, Mylan N.V. received a civil investigative demand from the Attorney General of the State of Missouri seeking information relating to opioids manufactured, marketed or sold by Mylan during the period from January 1, 2010 to the present and related subject matter. Mylan is fully cooperating with these subpoena requests.

Mylan also has responded to a letter from the ranking member of the U.S. Senate Committee on Homeland Security and Governmental Affairs seeking information relating to sales, marketing and educational strategies for opioid products manufactured by Mylan.

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Drug Pricing Matters

Department of Justice~~Subpoena~~

On December 3, 2015, a subsidiary of Mylan N.V. received a subpoena from the Antitrust Division of the DOJ seeking information relating to the marketing, pricing, and sale of our generic Doxycycline products and any communications with competitors about such products.

On September 8, 2016, a subsidiary of Mylan N.V., as well as certain employees and a member of senior management, received subpoenas from the DOJ seeking additional information relating to the marketing, pricing and sale of our generic Cidofovir, Glipizide-metformin, Propranolol and Verapamil products and any communications with competitors about such products. Related search warrants also were executed.

On May 10, 2018, a subsidiary of Mylan N.V. received a civil investigative demand from the Civil Division of the DOJ seeking information relating to the pricing and sale of its generic drug products.

The Company is fully cooperating with the DOJ.

Civil Litigation

~~On March 2,~~Beginning in 2016, ~~a putative class action was filed in~~ the ~~United States District Court for the Eastern District of Pennsylvania (“EDPA”) by indirect purchasers against Mylan and several~~Company, along with other manufacturers, has been named as a defendant in lawsuits generally alleging anticompetitive conduct with respect to ~~certain~~ generic ~~doxycycline and digoxin products.~~drugs. The ~~complaint alleges harm under federal antitrust laws, state antitrust laws, state consumer protection laws and theories of unjust enrichment. Subsequently, additional cases were~~lawsuits have been filed by plaintiffs, including putative classes of indirect purchasers, direct purchasers and an indirect reseller. These cases were consolidated in an MDL proceeding in the EDPA. Similar lawsuits were filed by direct and indirect purchasers in the EDPA, the Southern District of New York, the District of Puerto Rico and the District of New Jersey involving Mylan’s and other manufacturer’s pravastatin, divalproex, levothyroxine, propranolol, clomipramine, albuterol, benazepril and amitriptyline products (as well as non-Mylan products clobatesol, desonide, fluocinonide, econazole, lidocaine/prilocaine, glyburide, ursodiol and baclofen). All of the above-referenced lawsuits have also been consolidated in the MDL proceeding in the EDPA. Putative classes of direct purchasers, indirect purchasers, and indirect resellers, as well as individual direct and indirect purchasers and certain counties. They allege harm under federal and state laws, including federal and state antitrust laws, state consumer protection laws and unjust enrichment claims. Some of the lawsuits also name as defendants Mylan’s President, including allegations against him with respect to doxycycline hyclate delayed release, and one of Mylan’s sales employees, including allegations against him with respect to certain generic drugs. The lawsuits have been consolidated in an MDL proceeding in the EDPA. Defendants filed ~~consolidated~~motions to dismiss certain complaints that each allege anticompetitive conduct with respect to single drug products. On October 16, 2018, the Court denied the motions with respect to the federal law claims. On February 15, 2019, the Court granted in part and denied in part the motions with respect to the state law claims. On February 21, 2019, Defendants filed a motion to dismiss certain complaints that allege anticompetitive conduct with respect to multiple drug products, ~~referenced above~~which was denied on August 15, ~~2017. Mylan is no longer a named defendant in the pravastatin lawsuits. Defendants’ Motions to Dismiss briefing is ongoing.~~2019. The Company believes that the claims in these lawsuits ~~are without merit and intends to defend against them vigorously.~~

A complaint was filed on January 31, 2017 by putative classes of direct and indirect purchasers against Mylan Pharmaceuticals Inc. and other pharmaceutical manufacturers in the United States District Court for the District of Connecticut. Plaintiffs generally allege anticompetitive conduct and RICO violations with respect to, among other things, certain Doxycycline products. This case has been transferred to the above-mentioned MDL. Mylan Pharmaceuticals Inc. believes that the claims in this lawsuit are without merit and intends to defend against them vigorously.

Attorneys General Litigation

On December 21, 2015, the Company received a subpoena and interrogatories from the Connecticut Office of the Attorney General seeking information relating to the marketing, pricing and sale of certain of the Company’s generic products (including ~~Doxycycline)~~generic doxycycline) and communications with competitors about such products. On December 14, 2016, attorneys general of ~~twenty~~certain states originally filed a complaint in the United States District Court for the District of Connecticut against several generic pharmaceutical drug manufacturers, including Mylan, alleging anticompetitive conduct with respect to, among other things, ~~Doxycycline Hyclate Delayed Release. On March 1, 2017, the~~doxycycline hyclate delayed release. The complaint ~~was~~has subsequently been amended, including on June 18, 2018, to add ~~the~~ attorneys general ~~of twenty additional states; the complaint alleges violation~~alleging violations of federal and state antitrust laws, as well as ~~violation~~violations of various states’ consumer protection laws. ~~On July 17, 2017, another complaint containing similar allegations as those contained in the complaints referenced above was filed by four additional states and the District of Columbia.~~ This lawsuit has been transferred to the aforementioned MDL proceeding in the EDPA. ~~On October 31, 2017,~~The operative complaint includes attorneys general of ~~forty-five~~NaN states, the District of Columbia and the Commonwealth of Puerto ~~Rico filed a motion for leave to file a consolidated amended complaint (“proposed amended complaint”) against various drug manufacturers, including Mylan.~~Rico. Mylan is alleged to have engaged in anticompetitive conduct with respect to ~~Doxycycline Hyclate Delayed Release, Doxycycline Monohydrate, Glipizide-Metformin,~~doxycycline hyclate delayed release, doxycycline monohydrate, glipizide-metformin, and ~~Verapamil.~~verapamil. The ~~proposed~~ amended complaint also includes claims asserted by attorneys general of ~~thirty-four~~NaN states and the Commonwealth of Puerto Rico against certain individuals, including ~~Rajiv Malik,~~Mylan’s President, ~~of Mylan,~~ with respect to ~~Doxycycline Hyclate Delayed Release. The allegations in~~doxycycline hyclate delayed release. On February 21, 2019, Defendants filed motions to dismiss the ~~proposed~~ amended complaint are similar to those in the previously filed complaints. We believe that the claims in this lawsuit against Mylan and Rajiv Malik are without merit and intend to defend against them vigorously.

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complaint’s allegations of anticompetitive conduct with respect to multiple drug products, which was denied on August 15, 2019, and the ability of the state attorneys general to seek certain forms of relief under federal antitrust law, which remains pending. On May 31, 2019, Defendants filed a motion to dismiss certain state law claims, which remains pending.

On May 10, 2019, certain attorneys general filed a new complaint against various drug manufacturers and individuals, including Mylan and one of its sales employees, alleging anticompetitive conduct with respect to additional generic drugs. On November 1, 2019, the May 10, 2019 complaint was amended, adding additional states as plaintiffs. The operative complaint was brought by attorneys general of NaN states, the District of Columbia, the Commonwealths of Puerto Rico and the Northern Mariana Islands and the Territories of American Samoa and Guam. The amended complaint also includes claims asserted by attorneys general of NaN states, the Commonwealths of Puerto Rico and the Northern Mariana Islands and the Territories of American Samoa and Guam against several individuals, including a Mylan sales employee.

We believe that the claims in these lawsuits are without merit and intend to defend against them vigorously.

Securities Litigation

U.S. Securities Litigation

Purported class action complaints were filed in October 2016 against Mylan N.V., Mylan Inc. and certain of their current and former directors and officers (collectively, for purposes of this paragraph, the “defendants”) in the SDNY on behalf of certain purchasers of securities of Mylan N.V. and/or Mylan Inc. on the NASDAQ. The complaints alleged that defendants made false or misleading statements and omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures relating to Mylan N.V. and Mylan Inc.’s classification of their EpiPen® Auto-Injector as a non-innovator drug for purposes of the MDRP. The complaints sought damages, as well as the plaintiffs’ fees and costs. On March 20, 2017, a consolidated amended complaint was filed, alleging substantially similar claims and seeking substantially similar relief, but adding allegations that defendants made false or misleading statements and omissions of purportedly material fact in connection with allegedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs, and alleging violations of both federal securities laws (on behalf of a purported class of certain purchasers of securities of Mylan N.V. and/or Mylan Inc. on the NASDAQ) and Israeli securities laws (on behalf of a purported class of certain purchasers of securities of Mylan N.V. on the Tel Aviv Stock Exchange). On March 28, 2018, defendants’ motion to dismiss the consolidated amended complaint was granted in part (including the dismissal of claims arising under Israeli securities laws) and denied in part. On July 6, 2018, the plaintiffs filed a second amended complaint, including certain current and former directors and officers and additional allegations in connection with purportedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs. On August 6, 2018, defendants filed a motion to dismiss the second amended complaint, which was granted in part and denied in part on March 29, 2019. On June 17, 2019, plaintiffs filed a third amended complaint, including certain current and former directors and employees/officers and additional allegations in connection with purportedly anticompetitive conduct with respect to certain generic drugs. On July 31, 2019, defendants filed a motion to dismiss certain of the claims in the third amended complaint, which was granted in part and denied in part on April 6, 2020. On August 30, 2019, plaintiffs filed a motion for class certification, which was granted on April 6, 2020. The certified class covers all persons or entities that purchased Mylan common stock between February 21, 2012 and May 24, 2019 excluding defendants, current and former officers and directors of Mylan, members of their immediate families and their legal representatives, heirs, successors or assigns, and any entity in which defendants have or had a controlling interest.

On February 26, 2019, MYL Litigation Recovery I LLC (an assignee of entities that purportedly purchased stock of Mylan N.V.) filed an additional complaint against Mylan N.V., Mylan Inc., and certain of their current and former directors and officers in the SDNY asserting allegations pertaining to EpiPen® Auto-Injector under the federal securities laws that overlap in part with those asserted in the third amended complaint identified above. MYL Litigation Recovery I LLC’s complaint seeks damages as well as the plaintiff’s costs. On June 5, 2019, defendants filed a motion to dismiss certain of MYL Litigation Recovery I LLC’s claims, which was granted in part and denied in part on March 30, 2020. On May 6, 2020, plaintiff filed an amended complaint against Mylan N.V, Mylan Inc., and certain of their current and former officers and directors, including allegations in connection with purportedly anticompetitive conduct with respect to EpiPen® Auto-Injector.

On February 14, 2020, the Abu Dhabi Investment Authority filed a complaint against Mylan N.V. and Mylan Inc. in the SDNY asserting allegations pertaining to EpiPen® Auto-Injector and certain generic drugs under the federal securities laws that overlap with those asserted in the third amended complaint identified above. The Abu Dhabi Investment Authority’s complaint seeks damages as well as the plaintiff’s fees and costs.

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~~Tax Court Proceeding~~

~~The Company's U.S.~~Beginning in April 2020, Mylan N.V., its directors and certain of its officers were named as defendants in lawsuits filed in federal ~~income tax returns~~court, including a putative class action, alleging certain federal securities law violations for ~~2007 through 2011 have been subject~~purportedly failing to ~~proceedings~~disclose or misrepresenting material information in ~~U.S. Tax Court involving a dispute~~the definitive proxy statement filed by Mylan N.V. with the ~~IRS regarding whether the proceeds received by the Company~~SEC in connection with the ~~2008 sale~~Combination. The lawsuits generally seek various relief including (i) enjoining the defendants from proceeding with consummating, or closing the Combination and any vote on the Combination unless and until Mylan discloses and disseminates the purportedly material information; (ii) in the event the Combination is consummated, rescinding it and setting it aside or awarding rescissory damages; and (iii) reasonable attorneys and expert fees.

We believe that the claims in these lawsuits are without merit and intend to defend against them vigorously.

Israeli Securities Litigation

On October 13, 2016, a purported shareholder of Mylan N.V. filed a lawsuit, together with a motion to certify the lawsuit as a class action on behalf of certain Mylan N.V. shareholders on the Tel Aviv Stock Exchange, against Mylan N.V. and 4 of its ~~rights~~directors and officers (collectively, for purposes of this paragraph, the “defendants”) in ~~nebivolol constituted a capital gain~~the Tel Aviv District Court (Economic Division) (the “Friedman Action”). The plaintiff alleges that the defendants made false or ~~ordinary income. On May 16, 2017,~~misleading statements and omissions of purportedly material fact in Mylan N.V.’s reports to the ~~Company~~Tel Aviv Stock Exchange regarding Mylan N.V.’s classification of its EpiPen® Auto-Injector for purposes of the MDRP, in violation of both U.S. and Israeli securities laws, the Israeli Companies Law and the ~~IRS~~Israeli Torts Ordinance. The plaintiff seeks damages, among other remedies. On April 30, 2017, another purported shareholder of Mylan N.V. filed a ~~joint stipulation~~separate lawsuit, together with a motion to certify the lawsuit as a class action on behalf of ~~settled issues~~certain Mylan N.V. shareholders on the Tel Aviv Stock Exchange, in the Tel Aviv District Court (Economic Division), alleging substantially similar claims and seeking substantially similar relief against the defendants and other directors and officers of Mylan N.V., but alleging also that this group of defendants made false or misleading statements and omissions of purportedly material fact in connection with allegedly anticompetitive conduct with respect to EpiPen® Auto-Injector and certain generic drugs, and alleging violations of both U.S. federal securities laws and Israeli law (the “IEC Fund Action”). On April 10, 2018, the ~~Tax~~Tel Aviv District Court granted the motion filed by plaintiffs in both the Friedman Action and the IEC Fund Action, voluntarily dismissing the Friedman Action and staying the IEC Fund Action until a judgment is issued in the purported class action securities litigation pending in the U.S. We believe that ~~resolved all issues~~the claims in ~~this dispute. The final computations resulting~~the IEC Fund Action are without merit and intend to defend against them vigorously.

Opioids

On July 27, 2017, Mylan N.V. received a subpoena from the ~~stipulation~~DOJ seeking information relating to opioids manufactured, marketed or sold by Mylan during the period from January 1, 2013 to December 31, 2016. On August 29, 2017, Mylan N.V. received a civil investigative demand from the Attorney General of the State of Missouri seeking information relating to opioids manufactured, marketed or sold by Mylan during the period from January 1, 2010 to the present and related subject matter. In November 2019, a subsidiary of Mylan N.V. received a subpoena from the New York Department of Financial Services as part of an industry-wide inquiry into the effect of opioid prescriptions on New York health insurance premiums. Mylan is fully cooperating with these subpoena requests.

Mylan along with other manufacturers, distributors, pharmacies, pharmacy benefit managers, and individual healthcare providers is a defendant in more than 1,000 cases in the United States and Canada filed by various plaintiffs, including counties, cities and other local governmental entities, asserting civil claims related to sales, marketing and/or distribution practices with respect to prescription opioid products. In addition, lawsuits have been filed as putative class actions including on behalf of children with Neonatal Abstinence Syndrome due to alleged exposure to opioids. The lawsuits generally seek equitable relief and monetary damages (including punitive and/or exemplary damages) based on a variety of legal theories, including various statutory and/or common law claims, such as negligence, public nuisance and unjust enrichment. The vast majority of these lawsuits have been consolidated in an MDL in the U.S. District Court for the Northern District Court of Ohio. Mylan believes that the claims in these lawsuits are ~~being prepared by the Company~~without merit and ~~the IRS,~~intends to defend against them vigorously.

Valsartan

Mylan N.V., and ~~will be filed with the Tax Court. The Company expects that a portion~~certain of its ~~unrecognized tax benefits will be reduced~~subsidiaries, along with numerous other manufacturers, retailers and others, have been named (or plaintiffs are seeking to name certain Mylan entities) as ~~a result~~defendants in lawsuits in the United States, Canada and other countries stemming from recalls of valsartan-containing medications. The United States litigation, which is taking place in an MDL in the District of New Jersey, includes class action and individual allegations seeking the refund of the ~~resolution~~purchase price and

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other economic damages allegedly sustained by consumers who purchased valsartan-containing products as well as claims for personal injuries allegedly caused by ingestion of the medication. Moreover, Mylan has received requests to indemnify purchasers of Mylan’s active pharmaceutical ingredient and/or finished dose forms of the product. We believe that the claims in these lawsuits are without merit and intend to defend against them vigorously.

European Commission Proceedings

Perindopril

On ~~or around~~ July ~~8, 2009,~~9, 2014, the European Commission (the “Commission”) stated that it had initiated antitrust proceedings pursuant to Article 11(6) of Regulation No. 1/2003 and Article 2(1) of Regulation No. 773/2004 to explore possible infringement of Articles 81 and 82 EC and Articles 53 and 54 of the European Economic Area Agreement by Les Laboratoires Servier (“Servier”) as well as possible infringement of Article 81 EC by the Company’s Indian subsidiary, Mylan Laboratories Limited, and ~~four~~ other companies, each of which entered into agreements with Servier relating to the product Perindopril. On July 30, 2012, the Commission issued a Statement of Objections to Servier SAS, Servier Laboratories Limited, Les Laboratories Servier, Adir, Biogaran, Krka, d.d. Novo mesto, Lupin Limited, Mylan Laboratories Limited, Mylan, Niche Generics Limited, Teva UK Limited, Teva Pharmaceutical Industries Ltd., Teva Pharmaceuticals Europe B.V. and Unichem Laboratories Limited. Mylan Inc. and Mylan Laboratories Limited filed responses to the Statement of Objections. On July 9, 2014, the Commission issued a decision finding that Mylan Laboratories Limited and Mylan, as well as ~~the~~several other companies, ~~noted above (with the exception of Adir, a subsidiary of Servier),~~ had violated European Union (“EU”) competition rules relating to the product Perindopril and fined Mylan Laboratories Limited approximately €17.2 million, including approximately €8.0 million jointly and severally with Mylan Inc. The Company paid approximately $21.7 million related to this matter during the fourth quarter of 2014. In September 2014, the Company filed an appeal of the Commission’s decision to the General Court of the ~~European Union.~~EU. A hearing on the appeal before the General Court of the ~~European Union~~EU was held in June 2017 and the Commission’s decision was affirmed. Mylan appealed the decision to the European Court of Justice (“CJEU”). Mylan has received a ~~decision is pending.~~notice from an organization representing health insurers in the Netherlands stating an intention to commence follow-on litigation and asserting damages.

Citalopram

~~On March 19, 2010, Mylan and~~ ~~Generics [U.K.] Limited~~, a wholly owned subsidiary of the Company, received notice that the Commission had opened proceedings against Lundbeck with respect to alleged unilateral practices and/or agreements related to Citalopram in the European Economic Area. On July 25, 2012 a Statement of Objections was issued to Lundbeck, Merck KGaA, ~~Generics [U.K.] Limited, Arrow, Resolution Chemicals, Xelia Pharmaceuticals, Alpharma, A.L. Industrier and Ranbaxy.~~ ~~Generics [U.K.] Limited~~ ~~filed a response to the Statement of Objections and vigorously defended itself against allegations contained therein.~~ On June 19, 2013, the Commission issued a decision finding that Generics [U.K.] Limited,, (“GUK”) as well as ~~the~~several other companies, ~~noted above,~~ had violated ~~European Union~~EU competition rules relating to the product Citalopram and fined ~~Generics [U.K.] Limited~~GUK approximately ~~€7.8~~€7.8 million,, jointly and severally with Merck KGaA. ~~Generics [U.K.] Limited~~GUK appealed the Commission’s decision to the General Court of the ~~EU and a hearing took place~~EU. The case is currently on ~~October 8, 2015. On September 8, 2016, the General Court dismissed all appeals against the European Commission’s decision. Mylan filed an~~ appeal ~~of the decision on November 18, 2016~~ to the ~~European Court of Justice.~~CJEU. The ~~United Kingdom has~~U.K. applied and was granted permission to intervene in this proceeding. ~~The Company has accrued approximately $8.8 million and $8.2 million as of September 30, 2017 and December 31, 2016, respectively, related to this matter. Generics [U.K.] Limited~~GUK has received notices from ~~NHS Departments across the United Kingdom~~European national health services and health insurers stating an intention to commence follow-on litigation and asserting damages. ~~Generics [U.K.] Limited~~The national health service in England and Wales has instituted litigation against all parties to the Commission’s decision, including GUK. This litigation has been stayed pending the CJEU’s decision.

GUK has also sought indemnification from Merck KGaA with respect to the €7.8 million portion of the fine for which Merck KGaA and ~~Generics [U.K.] Limited~~GUK were held jointly and severally liable. Merck KGaA has counterclaimed against ~~Generics [U.K.] Limited~~GUK seeking the same indemnification. In June 2018, the Frankfurt Regional Court issued a judgment dismissing GUK claims against Merck KGaA and ordered GUK to indemnify Merck KGaA with respect to the amount for which the parties were held jointly and severally liable. GUK has appealed this decision. The proceedings have been stayed pending the CJEU appeal decision.

The Company has accrued approximately €7.4 million as of each of December 31, 2019 and March 31, 2020 related to this matter. It is reasonably possible that we will incur additional losses above the amount accrued but we cannot estimate a range of such reasonably possible losses at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

U.K. Competition and Markets Authority

Paroxetine

On August 12, 2011, ~~Generics [U.K.] Limited~~GUK received notice that the Office of Fair Trading (subsequently changed to the Competition and Markets Authority (the “CMA”)) ~~was opening~~opened an investigation to explore the possible infringement of the Competition Act 1998 and Articles 101 and 102 of the Treaty on the Functioning of the ~~European Union,~~EU, with respect to alleged agreements related to Paroxetine. On April 19, 2013, a Statement of Objections was issued to Beecham Group plc, GlaxoSmithKline UK Limited, GlaxoSmithKline plc and SmithKline Beecham Limited (formerly, SmithKline Beecham plc) (together, “GlaxoSmithKline”), ~~Generics [U.K.] Limited~~, Merck KGaA, Actavis UK Limited (formerly, Alpharma Limited), Xellia Pharmaceuticals ApS (formerly, Alpharma ApS) and Alpharma LLC (formerly, Zoetis Products LLC, Alpharma LLC, and Alpharma Inc.) (together, “Alpharma”), and Ivax LLC (formerly, Ivax Corporation) and Norton Healthcare Limited (which previously traded as Ivax Pharmaceuticals UK) (together, “Ivax”). ~~Generics [U.K.] Limited~~ filed a response to the Statement of Objections, defending itself against the allegations contained therein. The CMA issued a Supplementary Statement of Objections (“SSO”) to the above-referenced parties on October 21, 2014 and a hearing with regard to the SSO took place on December 19, 2014. The CMA issued a decision on February 12, 2016, finding that, ~~GlaxoSmithKline,~~ ~~Generics [U.K.] Limited~~,GUK, Merck KGaA and ~~Alpharma,~~other companies were liable for infringing EU and U.K. competition rules. With respect to Merck KGaA and ~~Generics [U.K.] Limited~~,GUK, the CMA issued a penalty of approximately £5.8 million, for which Merck KGaA is liable for the entire amount; and of that amount ~~Generics [U.K.] Limited~~GUK is jointly and severally liable for approximately £2.7 million, which ~~was~~has been accrued for ~~at September 30, 2017.~~ ~~Generics [U.K.] Limited~~ ~~has appealed the decision.~~as of December 31, 2019 and March 31, 2020. The ~~hearing before~~matter is currently on appeal to the Competition Appeals Tribunal ~~concluded~~(“CAT”), which on March ~~30, 2017~~8, 2018, referred certain questions of law to the CJEU. The CJEU sought written observations from GUK, which were filed in September 2018. A hearing on the questions and the ~~parties are presently awaiting a decision.~~parties’ observations was held before the CJEU on September 19, 2019. On January 30, 2020, the CJEU ruled on the questions of law referred to it and the proceedings before the CAT will now resume.

~~Nefopam~~

~~On October 10, 2017, Mylan~~

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MYLAN N.V. ~~and Meda Pharmaceuticals Limited received notice that the CMA was opening~~AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Italy Investigation

The Public Prosecutor’s Office in Milan, Italy is conducting an investigation ~~to explore~~of Mylan S.p.A. and other pharmaceutical companies concerning interactions with an Italian hospital and sales of certain reimbursable drugs. Certain employees of Mylan S.p.A. have been served with search warrants in connection with the possible infringement of the Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union, with respect to alleged agreements related to Nefopam, a product from Meda’s portfolio. On October 16, 2017, the CMA issued a notice under Section 26 of the Competition Act 1998 to Mylan N.V. and Meda Pharmaceuticals Limited to provide specified information and produce specified documents.investigation. The Company is fully cooperating and assisting its employees in their cooperation with the ~~CMA.~~investigation.

Product Liability

The Company is involved in a number of product liability lawsuits and claims related to alleged personal injuries arising out of certain products manufactured and/or distributed by the ~~Company, including but not limited to Phenytoin, Alendronate Sodium and Reglan.~~Company. The Company believes that it has meritorious defenses to these lawsuits and claims and ~~is vigorously defending itself with respect~~intends to ~~those matters.~~defend against them vigorously. From time to time, the Company has agreed to settle or otherwise resolve certain lawsuits and claims on terms and conditions that are in the best interests of the Company. The Company has accrued approximately ~~$10.9~~$14.5 million and ~~$31.5~~$11.8 million at ~~September 30, 2017 and~~ December 31, ~~2016,~~2019 and March 31, 2020, respectively. It is reasonably possible that we will incur additional losses and fees above the amount accrued but we cannot estimate a range of such reasonably possible losses or legal fees related to these claims at this time. There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.

Intellectual Property

MPI filed with the FDA a Paragraph IV certification stating that approval of MPI’s ANDA for glatiramer acetate injection, 20 mg/mL will not infringe any valid claim of patents owned or controlled by Teva Pharmaceuticals USA, Inc., Yeda Research and Development Co., or their affiliates (“Plaintiffs”), listed in the FDA’s Orange Book. There are currently no unexpired patents for the product listed in the FDA’s Orange Book. On October 3, 2017, Mylan received final FDA approval and launched its 20 mg/mL glatiramer acetate product in the United States.

MPI filed with the FDA a Paragraph IV certification stating that approval of MPI’s ANDA for glatiramer acetate injection, 40 mg/mL will not infringe any valid claim of patents owned or controlled by the Plaintiffs listed in the FDA’s Orange Book. On October 6, 2014, Plaintiffs filed suit against MPI and Mylan Inc. in the District Court for the District of Delaware seeking monetary damages, injunctive relief, attorneys’ fees, costs and other relief. In February and March 2015, Mylan filed petitions with the Patent Trial and Appeal Board requesting ~~inter partes~~ ~~review of the claims of three asserted patents. On August 24, 2016 and September 1, 2016, respectively, the Patent Trial and Appeal Board issued final written~~

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~~MYLAN N.V. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued~~

decisions finding all claims of three asserted patents unpatentable as obvious. After Plaintiffs’ requests for reconsideration of those decisions, the Patent Trial and Appeal Board issued revised final written decisions addressing issues raised in the requests for reconsideration and again finding all claims of three asserted patents unpatentable as obvious. On January 30, 2017, the Delaware District Court found, after trial, the asserted claims of the four patents-in-suit invalid as obvious. Plaintiffs have appealed both decisions, and those appeals are pending. On January 17, 2017, Plaintiffs filed suit against Mylan in the District Court for the Northern District of West Virginia asserting claims related to a process patent not listed in the FDA’s Orange Book seeking monetary damages, injunctive relief, attorneys’ fees, costs and other relief. The West Virginia District Court granted Mylan’s request to transfer the case to the Delaware District Court, and the case remains pending. A trial date has been scheduled for October 9, 2018. On October 3, 2017, Mylan received final FDA approval and launched its 40 mg/mL glatiramer acetate product in the United States.

On October 19, 2017, Teva Pharmaceutical Industries Ltd. commenced an action with the Irish High Court against Mylan Teoranta alleging that Mylan’s glatiramer acetate 40mg/mL product, which is manufactured in Ireland, approved by the FDA and is currently being sold in the U.S., infringes two European patents, EP (IE) 2 949 335 and EP (IE) 3 050 556. Teva is seeking damages and/or an account of profits from Mylan for the alleged infringement. Teva has also requested the Irish High Court to enjoin Mylan Teoranta from making, offering, putting on the market and/or using its glatiramer acetate 40mg/mL product in Ireland pending final determination of the action. A hearing on Teva’s Ireland injunction request is set for January 2018.

The Company ~~has used~~uses its business judgment ~~in connection with the decision to launch the 40mg/mL glatiramer acetate product and has also used its business judgment in certain other situations~~ to decide to market and sell certain products, in each case based on its belief that the applicable patents are invalid and/or that its products do not infringe, notwithstanding the fact that allegations of patent infringement(s) or other potential third party rights have not been finally resolved by the courts. The risk involved in doing so can be substantial because the remedies available to the owner of a patent for infringement may include, a reasonable royalty on sales or damages measured by the profits lost by the patent owner. If there is a finding of willful infringement, damages may be increased up to ~~three~~3 times. Moreover, because of the discount pricing typically involved with bioequivalent products, patented branded products generally realize a substantially higher profit margin than ~~bioequivalent~~generic and biosimilar products. AnMylan intends to defend against any such patent infringement claims vigorously. However, an adverse decision could have an adverse effect that is material to our business, financial condition, results of operations, cash flows and/or ordinary share price.

Other Litigation

The Company is involved in various other legal proceedings that are considered normal to its business. The Company has approximately ~~$8.8~~$7.1 million accrued related to these various other legal proceedings at ~~September 30, 2017.~~March 31, 2020.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis addresses material changes in the financial condition and results of operations of Mylan N.V. and subsidiaries for the periods presented. Unless context requires otherwise, the “Company”, “Mylan”, “our”, or “we” refer to Mylan N.V. and its subsidiaries. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements, the related Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Mylan N.V.’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2019, as amended (the “2019 Form 10-K”), the unaudited interim financial statements and related Notes included in Part I — ITEM 1 of this Quarterly Report on Form 10-Q (“Form 10-Q”) and our other Securities and Exchange Commission (the “SEC”) filings and public disclosures. The interim results of operations and comprehensive earnings for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020, and cash flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.

This Form 10-Q contains “forward-looking statements.” ~~These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.~~ Such forward-looking statements may include, without limitation, statements about the acquisition of Meda AB (publ.) (“Meda”) by Mylan (the “Meda Transaction”), Mylan’s acquisition (the “EPD Transaction”) of Mylan Inc. and Abbott Laboratories’ non-U.S. developed markets specialty and branded generics business (the “EPD Business”)proposed Combination (as defined below), the ~~potential~~expected timetable for completing the Combination, the benefits and synergies of the ~~EPD Transaction and the Meda Transaction,~~Combination, future opportunities for ~~Mylan~~the combined company and products and any other statements regarding Mylan’s, the Upjohn Business’s (as defined below) or the combined company’s future operations, financial or operating results, capital allocation, dividend policy, debt ratio, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, ~~competition,~~competitions, and other expectations and targets for future periods. These may often be identified by the use of words such as “will,” “may,” “could,” “should,” “would,” “project,” “believe,” “anticipate,” “expect,” “plan,” ~~“estimate,~~

“estimate,” “forecast,” “potential,” “pipeline,” “intend,” “continue,” “target,” “seek” and variations of these words or comparable words. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to:

with respect to the Combination, the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the ~~EPD Transaction and the Meda Transaction;~~Combination, changes in relevant tax and other laws, the parties’ ability to consummate the Combination, the conditions to the completion of the Combination, including ~~but~~receipt of approval of Mylan’s shareholders, not ~~limited to changes in~~being satisfied or waived on the ~~U.S. tax code and healthcare and pharmaceutical laws and regulations in~~anticipated timeframe or at all, the ~~U.S. and abroad; actions and decisions of healthcare and pharmaceutical regulators;~~regulatory approvals required for the Combination not being obtained on the terms expected or on the anticipated schedule or at all, the integration of Mylan and the ~~EPD~~Upjohn Business ~~and Meda~~ being more difficult, ~~time-consuming,~~time consuming or costly than expected; operating costs, customer loss, and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients, or suppliers) being greater than expected, ~~following the EPD Transaction~~Mylan’s and the ~~Meda Transaction; the retention of certain key employees of the EPD Business~~Upjohn Business’s failure to achieve expected or targeted future financial and ~~Meda being difficult;~~operating performance and results, the possibility that ~~Mylan~~the combined company may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the ~~EPD Transaction, the Meda Transaction, and the December 2016 announced restructuring program in certain locations,~~Combination within the expected ~~time-frames~~timeframes or at all ~~and~~or to successfully integrate Mylan and the ~~EPD~~Upjohn Business, customer loss and ~~Meda;~~business disruption being greater than expected following the Combination, the retention of key employees being more difficult following the Combination, changes in third-party relationships and changes in the economic and financial conditions of the business of Mylan or the Upjohn Business;

the potential impact of public health outbreaks, epidemics and pandemics, such as the COVID-19 pandemic;

actions and decisions of healthcare and pharmaceutical regulators;

failure to achieve expected or targeted future financial and operating performance and results; uncertainties regarding future demand, pricing and reimbursement for our or the ~~capacity~~Upjohn Business’s products;

any regulatory, legal, or other impediments to Mylan’s or the Upjohn Business’s ability to bring new products to market, including, but not limited to, where Mylan or the Upjohn Business uses its business judgment and decides to manufacture, market, and/or sell products, directly or through third parties, notwithstanding the fact that allegations of patent infringement(s) have not been finally resolved by the courts (i.e., an “at-risk launch”); any regulatory, legal, or other impediments to Mylan’s ability to bring new products, including but not limited to generic Advair and Glatiramer Acetate Injection 20 mg/mL and 40 mg/mL, to market, including ongoing and unresolved allegations of patent infringement around our launch of Glatiramer Acetate Injection 40 mg/mL;

success of clinical trials and Mylan’s or the Upjohn Business’s ability to execute on new product ~~opportunities, including but not limited to generic Advair and Glatiramer Acetate Injection 20 mg/mL and 40 mg/mL;~~ opportunities;

any changes in or difficulties with our or the Upjohn Business’s manufacturing facilities, including with respect to remediation and restructuring activities, supply chain or inventory ~~of, and our~~or the ability ~~to manufacture and distribute, the EpiPen® Auto-Injector and EpiPen Jr® Auto-Injector (collectively, “EpiPen® Auto-Injector”)~~ to meet anticipated demand; ~~the potential impact of any change in patient access to the EpiPen® Auto-Injector and the introduction of a generic version of the EpiPen® Auto-Injector;~~ the scope, timing, and outcome of any ongoing legal proceedings, including government investigations, and the impact of any such proceedings on our or the Upjohn Business’s financial condition, results of operations, and/or cash flows;

the ability to meet expectations regarding the accounting and tax treatments of acquisitions; changes in relevant tax and other laws, including but not limited to changes in the U.S. tax code and healthcare and pharmaceutical laws and regulations in the U.S. and abroad;

any significant breach of data security or data privacy or disruptions to our or the Upjohn Business’s information technology systems; the ability to protect intellectual property and preserve intellectual property rights;

the effect of any changes in customer and supplier relationships and customer purchasing patterns; the ability to attract and retain key personnel; ~~changes in third-party relationships;~~ the impact of competition; ~~changes in the economic and financial conditions of the businesses of Mylan; the inherent challenges, risks, and costs in~~

identifying, acquiring, and integrating complementary or strategic acquisitions of other companies, products, or assets being more difficult, time-consuming or costly than anticipated;

the possibility that Mylan may be unable to achieve expected synergies and operating efficiencies in ~~achieving anticipated synergies;~~ connection with business transformation initiatives, strategic acquisitions, strategic initiatives or restructuring programs within the expected timeframes or at all;

uncertainties and matters beyond the control of ~~management;~~ management, including but not limited to general political and economic conditions and global exchange rates;

and inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements, and the providing of estimates of financial measures, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and related standards or on an adjusted basis.

For more detailed information on the risks and uncertainties associated with Mylan’s business activities, see the risks described in ~~Mylan’s Annual Report on~~the 2019 Form 10-K, ~~for the year ended December 31, 2016, as amended~~this Form 10-Q and our other

filings with the SEC.These risks, as well as other risks associated with Mylan, the Upjohn Business, the combined company and the Combination are also more fully discussed in the Registration Statement on Form S-4, which was filed by Upjohn (as defined below) with the SEC and subsequently amended, and declared effective by the SEC on February 13, 2020, the Registration Statement on Form 10, which has been filed by Upjohn with the SEC and subsequently amended and withdrawn, and is expected to be refiled prior to its effectiveness, a definitive proxy statement, which was filed by Mylan with the SEC on February 13, 2020, and the prospectus, which was filed by Upjohn with the SEC on February 13, 2020. You can access Mylan’s filings with the SEC through the SEC website at www.sec.gov or through our website, and Mylan strongly encourages you to do so. Mylan routinely posts information that may be important to investors on our website at investor.mylan.com, and we ~~may~~ use this website address as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the ~~SEC's~~SEC’s Regulation Fair Disclosure (Reg FD). The contents of our website are not incorporated by reference in this ~~Report on~~ Form 10-Q and shall not be deemed “filed” under the Securities Exchange ~~Act.~~Act of 1934, as amended. Mylan undertakes no obligation to update any statements herein for revisions or changes after the filing date of this Form ~~10-Q.~~10-Q other than as required by law.

~~Executive~~Company Overview

Mylan is a ~~leading~~ global pharmaceutical company ~~which develops, licenses, manufactures, markets and distributes generic, brand name and over-the-counter (“OTC”) products in a variety of dosage forms and therapeutic categories. Mylan is~~ committed to setting new standards in healthcare ~~by creating better health for a better world,~~ and ~~our mission is to provide the world’s~~ providing 7 billion people access to high quality medicine. ~~To do so, we innovate to satisfy unmet needs; make reliability and service excellence~~We offer a ~~habit; do what’s right, not what’s easy; and impact the future through passionate global leadership.~~

~~Mylan offers one~~portfolio of ~~the industry’s broadest product portfolios, including generic, brand name and OTC products in a variety of dosage forms and therapeutic categories. The Company’s product portfolio includes~~ more than 7,500 ~~marketed~~ products, ~~globally,~~including prescription generic, branded generic, brand-name drugs and ~~reaches customers~~over-the-counter (“OTC”) remedies. We market our products in more than 165 countries and territories. ~~We operate~~Every member of our approximately 35,000-strong global workforce is dedicated to delivering better health for a better world.

Over the last several years, Mylan has transformed itself through a clear, consistent and differentiated strategy into a company that is built to last. Fueling that durability is a business model anchored in providing access, Mylan’s core purpose.

Providing access requires that we satisfy the needs of an incredibly diverse global ~~high quality vertically-integrated manufacturing platform around~~marketplace whose economic and political systems, approaches to delivering and paying for healthcare, languages and traditions, and customer and patient requirements vary by location and over time.

With these considerations in mind, we built and scaled our commercial, operational and scientific platforms to meet customers’ evolving needs in ways that are globally consistent and locally sensitive. As a result, not only are we succeeding in expanding people’s access to medicine, we are continually diversifying our business.

That diversification is what drives our durability. Durability allows us to withstand and overcome competitive pressures while continuing to innovate. It also allows us to generate consistent financial results, including reliable cash flows capable of supporting ongoing investments in long-term growth.

Certain Market and Industry Factors

As more fully explained in the ~~world~~2019 Form 10-K, the global pharmaceutical industry is a highly competitive and ~~one~~highly regulated industry. As a result, we face a number of ~~the world’s largest active pharmaceutical ingredient (“API”) operations. We also operate a strong~~industry-specific factors and ~~innovative research~~challenges, which can significantly impact our results. The following discussion highlights some of these key factors and ~~development (“R&D”) network that has consistently delivered a robust product pipeline, including complex products such as injectables.~~market conditions.

Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on the Company’s financial results. The entrance into the market of additional competition generally has a negative impact on the volume and pricing of the affected products. Additionally, pricing is often affected by factors outside of the Company’s control.

For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales. OTC

products also participate in a competitive environment that includes both branded and private label products. In the OTC space, value is realized through innovation, access and consumer activation.

Certain markets ~~within Europe~~ in which we do business outside of the U.S. have undergone government-imposed price reductions, and further government-imposed price reductions are expected in the future. Such measures, along with the tender systems discussed below, are likely to have a negative impact on sales and gross profit in these markets. However, government initiatives in certain markets that appear to favor generic products could help to mitigate this unfavorable effect by increasing rates of generic substitution and penetration. ~~In France, we remain the generics market leader.~~

AAdditionally, a number of markets in which we operate ~~in Europe~~outside of the U.S. have implemented, or may implement, tender systems for generic pharmaceuticals in an effort to lower prices. Generally speaking, tender systems can have an unfavorable impact on sales and profitability. Under such tender systems, manufacturers submit bids that establish prices for generic pharmaceutical products. Upon winning the tender, the winning company will receive priority placement for a period of time. The tender system often results in companies underbidding one another by proposing low pricing in order to win the tender. The loss of a tender by a third party to whom we supply ~~API~~active pharmaceutical ingredients can also have a negative impact on our sales and profitability. Sales continue to be negatively affected by the impact of tender ~~systems.~~

Assystems in ~~Europe, both Australia and Japan have undergone government-imposed price reductions that have had, and could continue to have, a negative impact on sales and gross profit in these markets.~~

The acquisition of Meda significantly increased our operations and revenues throughout Europe, but particularly in France, Italy, Germany and Sweden. Additionally, through the acquisition, we have significantly expanded and strengthened our presence in emerging markets including China, Southeast Asia and the Middle East. These markets provide opportunities for future growth and expansion and are complemented by Mylan’s historical presence in India, Brazil and certain ~~countries in Africa (including South Africa).~~countries.

Effective October 1, 2016, the Company expanded its reportable segments and now reports in three segments on a geographic basis as follows: North America, Europe and Rest of World. Comparative segment financial information have been recast for prior periods to conform to this revised segment structure.

From time to time, a limited number of our products may represent a significant portion of our net sales, gross profit and net earnings. Generally, this is due to the timing of new product introductions and the amount, if any, of additional competition in the market. Our top ten products in terms of sales, in the aggregate, represented approximately 23% and 30% of the Company’s net sales for the three months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, our top ten products in terms of sales, in the aggregate, represented approximately 22% and 30%, respectively.

Recent Developments

InIMPACT OF THE CORONAVIRUS PANDEMIC ON OUR BUSINESS AND RESULTS OF OPERATIONS

As a leading global pharmaceutical company, Mylan is committed to continue doing its part in support of public health needs amid the ~~fourth~~evolving COVID-19 pandemic. The Company’s priorities remain protecting the health and safety of our workforce, continuing to produce critically needed medicines, deploying resources and expertise in the fight against COVID-19 through potential prevention and treatment efforts, supporting the communities in which we operate and maintaining the health of our overall business.

The following section discusses the important measures the Company is taking in light of the COVID-19 pandemic.

Employee Health and Safety

Mylan continues to align with government and health authority guidelines in an effort to safeguard our workforce and continues to make assessments on an ongoing basis.

While Mylan’s business operations are currently considered essential based on government guidelines throughout the world due to the important role pharmaceutical manufacturers play within the global healthcare system, many Mylan administrative offices are currently operating under work from home protocols.

Because protecting the health and safety of our workforce remains paramount, Mylan has taken extra precautions at manufacturing facilities to aid in the protection of site personnel and operations, including the implementation of social distancing guidelines, daily health assessments and split shifts where feasible.

Customer facing field personnel have moved to a remote engagement model to ensure continued support for healthcare professionals, patient care and access to needed products.

Global restrictions have been placed on travel and in-person meetings.

Mylan has taken steps to protect the safety of study participants, our employees and staff at clinical trial sites and ensure regulatory compliance and scientific integrity of trial data.

Continuing to Produce Critically Needed Medicines

Manufacturing and Supply

Mylan has activated worldwide business continuity plans to seek to ensure that our global supply chain platform continues to operate without significant disruption.

We currently are not experiencing any significant disruptions to our supply chain, including the availability of active pharmaceutical ingredients, that would delay our ability to provide service to customers and patients.

All of our manufacturing facilities, and those of our key global partners, are currently operational and, at this time, we have sufficient safety stock to address current needs.

Mylan continues to engage with regulatory authorities around the world who are committed to maintaining ongoing regulatory processes while also continuing to make available our global research and development ("R&D"), regulatory and manufacturing expertise and capacity to partners who may be in need of additional resources.

Commercial Operations

We currently are not experiencing any significant negative impact on overall global demand trends. We will continue to monitor trends closely as we work to ensure patients have access to needed medicine.

Inventory levels, both ours and those in our distribution channel, remain in-line with normal levels and are currently assessed to be sufficient for anticipated demand.

Deploying Resources and Expertise in the Fight Against COVID-19

Clinical Trials

The Company is donating 10 million tablets of hydroxychloroquine sulfate (200mg) to the U.S. Department of Health and Human Services for possible use under an investigational new drug application authorized by the U.S. Food and Drug Administration ("FDA") or an Emergency Use Authorization granted by the FDA.

Mylan is also donating product to the World Health Organization (WHO) to support its investigation of the potential effectiveness of several medicines in treating COVID-19 as part of the WHO’s global SOLIDARITY trial.

Mylan is also working with other public health institution partners currently studying potential prophylactic measures and has designated additional hydroxychloroquine doses for donation.

Maintaining the Health of Our Overall Business

Access to Capital Markets and Liquidity

While currently we do not see any negative liquidity trends related to the COVID-19 pandemic, we continue to closely monitor developments and the potential negative impact on our operating performance and our ability to access the capital markets.

Due to the Company’s ability to generate significant cash flows from operations, as well as its revolving credit agreement, other short-term borrowing facilities and access to capital markets, we believe that we currently have, and will maintain, the ability to meet foreseeable liquidity needs.

Impact on Results of Operations

The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption affecting the markets we serve in North America, Europe and Rest of World, including Asia. The COVID-19 pandemic did not have a material negative impact to our condensed consolidated results of operations in the first quarter of ~~2016,~~2020 as we were able to continue manufacturing and distributing products that are essential to the health of patients and consumers across the world. The extent to which the COVID-19 pandemic will impact our business, operations and financial results in future periods will depend on numerous evolving factors that are beyond our control and that we may not be able to accurately predict.

2020 Restructuring Program

On February 27, 2020, the Company announced that it has formalized the next steps in its efforts to sustain long-term value creation through the proactive transformation of its business. This transformation initiative includes a new global restructuring ~~programs~~program. The program is intended to support the Company’s effort to improve operating performance and meet anticipated market demands, by ensuring that the Company is appropriately structured and resourced to deliver sustainable value to customers, patients, other stakeholders and shareholders. Key activities under the program include supply chain network optimization intended to maximize the efficiency of the Company’s global manufacturing and distribution network capacity and further optimizing functional capabilities that support business growth.

Upjohn Business Combination Agreement

The consummation of the Combination is subject to the satisfaction (or, if applicable, valid waiver) of various conditions, including (a) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the rules and regulations promulgated thereunder and the receipt of regulatory approvals in certain ~~locations~~other jurisdictions, (b) the consummation of the Separation and the Distribution in accordance with the terms of the Separation Agreement, (c) the approval of the Combination by Mylan shareholders, (d) the absence of any legal restraint (including legal actions or proceedings pursued by U.S. state authorities in the relevant states) preventing the consummation of the transactions, (e) in the case of Pfizer’s and Newco’s obligations to consummate the transactions, (i) the distribution of $12 billion in cash from Upjohn to Pfizer in accordance with the terms of the Separation Agreement and (ii) the receipt by Pfizer of a U.S. Internal Revenue Service (“IRS”) ruling and tax opinion of its tax counsel with respect to the Combination, and (f) other customary closing conditions. On March 17, 2020, Pfizer received the IRS ruling with respect to the Combination, which is generally binding, unless the relevant facts or circumstances change prior to closing.

On February 13, 2020, the registration statement on Form S-4 filed by Newco in connection with the Combination was declared effective by the SEC, Newco filed a prospectus with the SEC in connection with the Combination and Mylan filed a definitive proxy statement with the SEC in connection with the Combination.

On March 26, 2020, Mylan and Pfizer announced that due to the unprecedented circumstances surrounding the COVID-19 pandemic, including associated delays in the regulatory review process, the Combination is now anticipated to close in the second half of 2020. It was also announced that, in light of increased meeting and other restrictions due to COVID-19 developments in the Netherlands, Mylan’s extraordinary general meeting of shareholders to approve certain matters in connection with the Combination was rescheduled from April 27, 2020 to June 30, 2020.

2016 Restructuring Program

The Company previously announced a restructuring program representing ~~initial steps in~~ a series of actions in certain locations that are anticipated to further streamline ~~our~~its operations globally. The restructuring actions, other than the additional restructuring and remediation activities at the Morgantown, West Virginia plant described below, are substantially complete.

In April 2018, the U.S. Food and Drug Administration (the “FDA”) completed an inspection at Mylan’s plant in Morgantown, West Virginia and made observations through a Form 483. The Company ~~continues~~submitted a comprehensive response to ~~develop~~ the ~~details~~FDA and committed to a robust improvement plan. In addition, based upon the Company’s recognition of the ~~cost reduction initiatives, including workforce actions~~continued evolution of industry dynamics and ~~other potential restructuring activities beyond~~regulatory expectations, during the ~~programs already announced. During the three and nine months ended September 30, 2017,~~second quarter of 2018, the Company ~~recorded pre-tax charges~~commenced comprehensive restructuring and remediation activities, which are aimed at reducing the complexity at the Morgantown plant and include the discontinuation and transfer to other manufacturing sites of ~~$73.4 million~~a number of products, a reduction of the workforce and $112.7 million, respectively. Included within the charges during the nine months ended September 30, 2017 were $64.9 million for non-cash asset impairment charges with the remaining charges primarily related to severanceextensive process and employee benefits. For the charges recognized during the three months ended September 30, 2017, $53.4 million were non-cash asset impairment charges and the remaining charges were primarily related to severance and employee benefits. The continued restructuring actions are expected to be implemented through fiscal year 2018.facility remediation. In the fourth quarter of ~~2017,~~2018, the Company ~~committed~~received a warning letter related to ~~additional actions and now anticipates total aggregate pre-tax charges for committed restructuring activities ranging between $375.0 million and $450.0 million, inclusive~~the previously disclosed observations at the plant. The issues raised in the warning letter are being addressed within the context of the ~~2016~~Company’s comprehensive restructuring and ~~year~~remediation activities.

We have continued to ~~date 2017~~make significant progress on our comprehensive and ongoing remediation efforts at our Morgantown plant. This progress is evidenced by the fact that in April 2020 the FDA revised the site compliance classification to Voluntary Action Indicated (“VAI”), and that the plant is considered to be in an acceptable state of compliance with regard to current good manufacturing practice (“CGMP”). On May 11, 2020 we received the close-out of the warning letter.

For the three months ended March 31, 2020, the Company incurred expenses amounting to approximately $61.9 million for incremental manufacturing variances, site remediation and restructuring charges ~~of $262.4 million. In addition, management believes~~related to the potential annual savings from these committed restructuring activities will be between approximately $350.0 million and $425.0 million once fully implemented, with the majority of these savings improving operating cash flow.Morgantown plant, as well as continued product rationalization. At this time, the total expenses related to the additional restructuring and remediation activities at the Morgantown plant cannot be reasonably estimated.

~~On August 17, 2017,~~Mylan remains committed to maintaining the ~~Company announced that~~highest quality manufacturing standards at its ~~subsidiaries, Mylan Inc.~~facilities around the world and ~~Mylan Specialty L.P., signed an agreement with the U.S. Department~~to continuous assessment and improvement in a time of ~~Justice ("DOJ")~~evolving industry dynamics and two relators finalizing the $465 million settlement, plus interest, with the DOJ and other government agencies related to the classification of the EpiPen® Auto-Injector for purposes of the Medicaid Drug Rebate Program that Mylan had agreed to the terms of on October 7, 2016 (the “Medicaid Drug Rebate Program Settlement”). The settlement resolves claims relating to the classification of EpiPen® Auto-Injector for purposes of the Medicaid Drug Rebate Program.regulatory expectations.

In October 2017, the Company announced the U.S. launch of the first Glatiramer Acetate Injection 40 mg/mL for 3-times-a-week injection that is an AP-rated substitutable generic version of Teva's Copaxone® 40 mg/mL, as well as Glatiramer Acetate Injection 20 mg/mL for once-daily injection, an AP-rated, substitutable generic version of Teva's Copaxone® 20 mg/mL. These products are indicated for the treatment of patients with relapsing forms of multiple sclerosis (MS), a chronic inflammatory disease of the central nervous system. The Company also announced in October 2017 that its partner, Synthon, received marketing authorization approval in Europe for Glatiramer Acetate Injection 40 mg/mL. Mylan is partnered with Synthon, the developer and supplier of its European Glatiramer Acetate Injection products, and has exclusive distribution and supply rights in certain key European markets.

Financial Summary

The tables below are a summary of the Company’s financial results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 compared to the prior year ~~period:~~periods:

Three Months Ended
September 30,
(In millions, except per share amounts) 2017 2016 Change % Change
Total revenues $ 2,987.1
$ 3,057.1
$ (70.0 ) (2 )%
Gross profit 1,178.1
1,283.3
(105.2 ) (8 )%
Earnings (loss) from operations 316.0
(130.7 ) 446.7
342 %
Net earnings (loss) 88.3
(119.8 ) 208.1
174 %
Diluted earnings per ordinary share $ 0.16
$ (0.23 ) $ 0.39
170 %


	Nine Months Ended								Three Months Ended
	September 30,								March 31,
(In millions, except per share amounts)	2017		2016		Change		% Change		2020		2019			Change		% Change
Total revenues	$	8,668.8	$	7,809.1	$	859.7	11	%	$	2,619.2	$	2,495.5		$	123.7	5	%
Gross profit	3,488.5		3,362.0		126.5		4	%	906.1		805.2			100.9		13	%
Earnings from operations	1,016.6		385.8		630.8		164	%	184.7		24.0			160.7		670	%
Net earnings	451.7		62.5		389.2		623	%
Diluted earnings per ordinary share	$	0.84	$	0.12	$	0.72	600	%
Net earnings (loss)									20.8		(25.0		)	45.8		183	%
Net earnings (loss) per diluted ordinary share									$	0.04	$	(0.05	)	$	0.09	180	%

A detailed discussion of the Company’s financial results can be found below in the section titled “Results of Operations.” As part of this discussion, we also report sales performance using the non-GAAP financial measures of “constant currency” ~~third party~~ net sales and total revenues. ~~This measure provides~~These measures provide information on the change in net sales and total revenues assuming that foreign currency exchange rates had not changed between the prior and current period. The comparisons

presented at constant currency rates reflect comparative local currency sales at the prior year’s foreign exchange rates. We routinely evaluate our ~~third party~~ net sales and total revenues performance at constant currency so that sales results can be viewed without the impact of foreign currency exchange rates, thereby facilitating a period-to-period comparison of our operational activities, and believe that this presentation also provides useful information to investors for the same reason. The following table compares third party net sales on an actual and constant currency basis for each reportable segment and consolidated total revenues on an actual and constant currency basis for the three and nine months ended September 30, 2017 and 2016.

More information about non-GAAP measures used by the Company as part of this discussion, including adjusted cost of sales, adjusted gross margins, adjusted net earnings and adjusted ~~EPS~~EBITDA (all of which are defined below) can be found in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Use of Non-GAAP Financial Measures.”

Results of Operations

Three Months Ended ~~September 30, 2017~~March 31, 2020 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2019


	Three Months Ended													Three Months Ended
	September 30,													March 31,
(In millions)	2017		2016		% Change		2017 Currency Impact ⁽¹⁾			2017 Constant Currency Revenues		Constant Currency % Change ⁽²⁾		2020		2019		% Change		2020 Currency Impact ⁽¹⁾		2020 Constant Currency Revenues		Constant Currency % Change ⁽²⁾
Third party net sales
Net sales
North America ⁽³⁾	$	1,172.2	$	1,505.5	(22	)%	$	(3.1	)	$	1,169.1	(22	)%	$	955.5	$	922.9	4	%	$	1.0	$	956.5	4	%
Europe ⁽³⁾	1,040.8		841.2		24	%	(45.5		)	995.3		18	%	1,021.9		895.3		14	%	33.3		1,055.2		18	%
Rest of World ⁽³⁾	743.3		682.8		9	%	(6.2		)	737.1		8	%	610.8		642.4		(5	)%	29.9		640.7		—	%
Total third party net sales⁽³⁾	2,956.3		3,029.5		(2	)%	$	(54.8	)	$	2,901.5	(4	)%
Total net sales														2,588.2		2,460.6		5	%	64.2		2,652.4		8	%

Other third party revenues	30.8		27.6		12	%	(0.5		)	30.3		10	%
Other revenues ⁽³⁾														31.0		34.9		(11	)%	0.3		31.3		(10	)%
Consolidated total revenues(4)	$	2,987.1	$	3,057.1	(2	)%	$	(55.3	)	$	2,931.8	(4	)%	$	2,619.2	$	2,495.5	5	%	$	64.5	$	2,683.7	8	%

____________


⁽¹⁾	Currency impact is shown as unfavorable (favorable).


⁽²⁾	The constant currency percentage change is derived by translating ~~third party~~ net sales or revenues for the current period at prior year comparative period exchange rates, and in doing so shows the percentage change from ~~2017~~2020 constant currency ~~third party~~ net sales or revenues to the corresponding amount in the prior year.

⁽³⁾

~~Effective October 1, 2016,~~For the ~~Company expanded its reportable segments as follows:~~three months ended March 31, 2020, other revenues in North America, Europe, and Rest of ~~World. As a result,~~World were approximately $19.5 million, $4.2 million, and $7.3 million, respectively. For the ~~amounts previously reported under the Specialty segment have been recast to~~three months ended March 31, 2019, other revenues in North America, Europe, and ~~amounts related to Brazil are included in~~ Rest of World ~~for all periods presented.~~were approximately $22.1 million, $4.7 million, and $8.1 million, respectively.


⁽⁴⁾	Amounts exclude intersegment revenue that eliminates on a consolidated basis.

Total Revenues

For the ~~current quarter,~~three months ended March 31, 2020, Mylan reported total revenues of ~~$2.99~~$2.62 billion,, compared to ~~$3.06~~$2.50 billion for the comparable prior year period, representing ~~a decrease~~an increase of ~~$70.0~~$123.7 million, or 2%5%. Total revenues include both net sales and other revenues from third parties. ~~Third party net~~Net sales for the ~~current quarter~~three months ended March 31, 2020 were ~~$2.96~~$2.59 billion,, compared to ~~$3.03~~$2.46 billion for the comparable prior year period, representing ~~a decrease~~an increase of ~~$73.2~~$127.6 million, or 5%. While there were negative impacts on certain of our products due to the COVID-19 pandemic, the Company estimates that overall volume growth in the first quarter of 2020 was favorably impacted by increased customer buying patterns and patient prescription trends resulting from the COVID-19 pandemic, primarily in our Europe segment. We have estimated that the net impact of the pandemic increased net sales and consolidated revenue by approximately 2%. In North America, we experienced slight volume increases for Perforomist and Cold-EEZE related to COVID-19, but these increases were more than offset by volume decreases in Rest of World, mostly in Asian countries, partially the result of COVID-19 where the pandemic impacts started earlier in the first quarter. While the Company currently does not expect the impact of the pandemic in the second quarter to be material, we cannot currently estimate the impact for the rest of the year. Other ~~third party~~ revenues for the ~~current quarter~~three months ended March 31, 2020 were ~~$30.8~~$31.0 million,, compared to ~~$27.6~~$34.9 million for the comparable prior year ~~period,~~period.

The increase in net sales was primarily the result of an increase in net sales in the Europe segment of ~~$3.2 million.~~

~~The decrease~~14% and an increase in ~~total revenues was due primarily to a 22% decline in third party~~ net sales in the North America ~~segment. This result was~~segment of 4%, which were partially offset by ~~third party~~a decrease in net sales ~~growth in the Europe segment of 24%, and~~ in the Rest of World segment of 9%5%. ~~The incremental impact on third party~~Mylan’s net sales from the acquisition of Meda was approximately $163.6 million. Net sales of existing products and new product introductions decreased in total by approximately $291.6 million. The decrease from existing products was due primarily to lower pricing and, to a lesser extent, lower volumes in the current period. Mylan’s current quarter total revenues were ~~favorably~~unfavorably impacted by the effect of foreign currency translation, primarily reflecting changes in the U.S. Dollar as compared to the currencies of Mylan’s subsidiaries in the European Union, India, and ~~India, which was partially offset by the~~Australia. The unfavorable ~~impact from changes in the Japanese Yen. The favorable~~ impact of foreign currency translation on current ~~quarter total revenues~~year net sales was approximately ~~$55.3~~$64.2 million, ~~resulting in~~or 3%. On a ~~decrease in~~ constant currency ~~total revenues of~~basis, the increase in net sales was approximately ~~$125.3~~$191.8 million, or ~~4%.~~8% for the three months ended March 31, 2020. This increase was primarily driven by higher volumes of existing products, and to a lesser extent, new product sales, partially offset by lower pricing.

From time to time, a limited number of our products may represent a significant portion of our net sales, gross profit and net earnings. Generally, this is due to the timing of new product introductions and the amount, if any, of additional competition in the market. Our top ten products in terms of net sales, in the aggregate, represented approximately 22% and 25% for the three months ended March 31, 2020 and 2019, respectively. This percentage may fluctuate based upon many factors, including the timing of new product launches, seasonality and the timing of the discontinuation of products.

~~Third party net~~Net sales are derived from our three geographic reporting segments: North America, Europe and Rest of World. The graph below shows ~~third party~~ net sales by segment for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 and the ~~increase (decrease)~~net change period over period:

~~North America Segment~~

Third party net sales from North America decreased by $333.3 million or 22% during the three months ended September 30, 2017 when compared to the prior year period, including the decrease in sales of the EpiPen® Auto-Injector of $245.1 million. Incremental net sales from the acquisition of Meda were approximately $8.2 million in the current quarter. Net sales were negatively impacted in the current quarter due to a decline in sales of existing products as a result of lower pricing and volume, partially offset by new product introductions. As anticipated, our North American generics business experienced higher price erosion than previous quarters, including the impact of the loss of market exclusivity of armodafinil. Sales of the EpiPen® Auto-Injector declined in the current quarter as a result of the impact of the launch of the authorized generic, higher governmental rebates as a result of the Medicaid Drug Rebate Program Settlement, and increased competition. The impact of foreign currency translation on current period third party net sales was less than 1% within North America.

~~Europe Segment~~

~~Third party net sales from Europe increased by $199.6 million or~~ ~~24%~~ during the three months ended September 30, 2017 when compared to the prior year period. The increase included the result of the incremental net sales from the acquisition of Meda which totaled approximately $117.2 million. The remaining increase in net sales was the result of new product introductions combined with favorable volume and pricing on existing products. The favorable impact of foreign currency translation on current period third party net sales was $45.5 million, or 5% within Europe. Constant currency third party net sales increased by approximately $154.1 million, or 18% when compared to the prior year period.

~~Rest of World Segment~~

~~Third party net sales from Rest of World increased by $60.5 million, or~~ 9% during the three months ended September 30, 2017 when compared to the prior year period. This increase was partially driven by incremental net sales from the acquisition of Meda which totaled approximately $38.2 million. In addition, net sales were positively impacted by new products and increased net sales in emerging markets, which were driven primarily by higher volumes. These increases were partially offset by lower pricing and volumes on existing products from our anti-retroviral (“ARV”) franchise, including active pharmaceutical ingredients. Net sales in Australia increased as a result of sales of new products. Net sales in Japan increased slightly as a result of sales of new products and favorable volumes. Overall, third party net sales from Rest of World were favorably impacted by the effect of foreign currency translation by approximately $6.2 million, or 1% during the three months ended September 30, 2017. Constant currency third party net sales increased by approximately $54.3 million, or 8%.

In addition to third party net sales, the Rest of World segment supplies finished dosage form (“FDF”) generic products and API, primarily from Mylan India, to Mylan subsidiaries in conjunction with the Company’s vertical integration strategy. Intercompany sales related to this strategy were approximately $117.4 million and $133.9 million in the three months ended September 30, 2017 and 2016, respectively. These intercompany sales are eliminated in consolidation and therefore are not included in the consolidated third party net sales.

~~Cost of Sales and Gross Profit~~

Cost of sales increased from $1.77 billion for the three months ended September 30, 2016 to $1.81 billion for the three months ended September 30, 2017. Significant components of cost of sales were purchase accounting related amortization of acquired intangible assets, acquisition related costs, restructuring and other special items, which are described further in the section titled ~~Use of Non-GAAP Financial Measures.~~ Gross profit for the three months ended September 30, 2017 was $1.18 billion and gross margins were 39%. For the three months ended September 30, 2016, gross profit was $1.28 billion and gross margins were 42%. Gross margins were negatively impacted in the current quarter by lower gross profit from the sales of existing products in North America, including the EpiPen® Auto-Injector which reduced gross profit by approximately 435 basis points, partially offset by lower purchase accounting amortization by approximately 200 basis points as a result of the prior year amortization of the step-up in the fair value of acquired inventory. Adjusted gross margins were approximately 53% for the three months ended September 30, 2017, compared to approximately 57% for the three months ended September 30, 2016. For the quarter ended September 30, 2017, adjusted gross margins were negatively impacted in the current quarter as a result of lower gross profit from the sales of existing products in North America, including the EpiPen® Auto-Injector which reduced adjusted gross profit by approximately 335 basis points, partially offset by the contributions from acquired businesses and new product introductions.

A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the three months ended September 30, 2017 compared to the three months ended September 30, 2016 is as follows:

Three Months Ended
September 30,
(In millions) 2017 2016
U.S. GAAP cost of sales $ 1,809.0
$ 1,773.8
Deduct:
Purchase accounting amortization and other related items (361.4 ) (421.5 )
Restructuring related costs (21.0 ) (9.7 )
Acquisition related items 0.2
(8.5 )
Other special items (12.3 ) (12.0 )
Adjusted cost of sales $ 1,414.5
$ 1,322.1

Adjusted gross profit ^(a)
$ 1,572.6
$ 1,735.0

Adjusted gross margin ^(a)
53 % 57 %

~~____________~~


^(a)	~~Adjusted gross profit is calculated as total revenues less adjusted cost of sales. Adjusted gross margin is calculated as adjusted gross profit divided by total revenues.~~

~~Operating Expenses~~

~~Research & Development Expense~~

~~R&D expense for the three months ended~~ ~~September 30, 2017~~ ~~was~~ ~~$182.3 million, compared to~~ ~~$199.1 million~~ for the comparable prior year period, a decrease of $16.8 million. This decrease was primarily due to lower expenditures related to the Company’s respiratory programs due to the timing of clinical activities when compared to the prior year period. The decrease was partially offset by the incremental impact of the Meda acquisition of approximately $4.1 million in the current quarter.

~~Selling, General & Administrative Expense~~

Selling, general and administrative expense (“SG&A”) for the current quarter was $664.6 million, compared to $656.9 million for the comparable prior year period, an increase of $7.7 million. The increase included additional expense related to the Meda acquisition which increased SG&A by approximately $35.5 million in the current quarter. Partially offsetting this increase were lower acquisition related costs, including consulting and legal costs, and the benefit of integration activities in the current quarter.

~~Litigation Settlements and Other Contingencies, Net~~

~~During the three months ended~~ ~~September 30, 2017~~ and 2016, the Company recorded a charge, net of $15.2 million and $558.0 million, respectively. The net charge for the three months ended September 30, 2017, consists primarily of an increase to an accrual for an anti-trust related matter. The net charge in the prior year period was primarily related to the Medicaid Drug Rebate Program Settlement and the settlement with Strides Arcolab regarding substantially all outstanding regulatory, warranty and indemnity claims (the “Strides Settlement”) related to the acquisition of Agila Specialties Private Limited (“Agila”).

~~Interest Expense~~

~~Interest expense for the three months ended~~ ~~September 30, 2017~~ ~~totaled~~ ~~$131.8 million, compared to~~ ~~$144.4 million~~ ~~for the three months ended September 30, 2016, a decrease of $12.6 million. The decrease in the current quarter is primarily due to lower long-term debt balances in relation to the prior year period.~~

~~Other Expense, Net~~

Other expense, net, was $4.6 million in the current quarter, compared to $50.2 million for the comparable prior year period. Other expense, net, includes losses from equity affiliates, foreign exchange gains and losses, interest, and other investment gains and losses. Other expense, net was comprised of the following for the three months ended September 30, 2017 and 2016, respectively:

Three Months Ended September 30,
(In millions) 2017 2016
Losses from equity affiliates, primarily clean energy investments $ 22.4
$ 29.7
Foreign exchange (gains)/losses, net (14.9 ) 27.8
Other gains, net (2.9 ) (7.3 )
Other expense, net $ 4.6
$ 50.2

In the prior year period, other expense, net included foreign exchange losses of $27.8 million which included $44.4 million of mark-to-market losses related to the Company’s SEK non-designated foreign currency contracts related to the Meda acquisition partially offset by foreign currency gains.

~~Income Tax Provision (Benefit)~~

For the three months ended September 30, 2017, the Company recognized an income tax provision of $91.3 million, compared to an income tax benefit of $205.5 million for the comparable prior year period. The effective tax rate for the three months ended September 30, 2017 versus the comparable prior year period was impacted by the changing mix of income earned in jurisdictions with differing tax rates, and changes in 2017 valuation allowances applied to certain tax attributes. In addition, during the third quarter of 2016, the Company received approvals from the relevant Indian regulatory authorities to legally merge its wholly owned subsidiary, Jai Pharma Limited, into Mylan Laboratories Limited. The merger resulted in the recognition of a deferred tax asset of $150 million for the tax deductible goodwill in excess of the book goodwill with a corresponding benefit to income tax provision for the three months ended September 30, 2016. In addition to the benefit recognized for the merger of the aforementioned entities, the effective tax rate for the three months ended September 30, 2016 was impacted by the accrual for the Medicaid Drug Rebate Program Settlement.

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

Nine Months Ended
September 30,
(In millions) 2017 2016 % Change
2017 Currency Impact ⁽¹⁾
2017 Constant Currency Revenues
Constant Currency % Change ⁽²⁾
Third party net sales
North America ⁽³⁾
$ 3,666.7
$ 4,064.5
(10 )% $ (2.3 ) $ 3,664.4
(10 )%
Europe ⁽³⁾
2,887.1
2,026.4
42 % (2.4 ) 2,884.7
42 %
Rest of World ⁽³⁾
2,016.4
1,654.6
22 % (27.0 ) 1,989.4
20 %
Total third party net sales⁽³⁾
8,570.2
7,745.5
11 % (31.7 ) 8,538.5
10 %

Other third party revenues 98.6
63.6
55 % —
98.6
55 %
Consolidated total revenues $ 8,668.8
$ 7,809.1
11 % $ (31.7 ) $ 8,637.1
11 %

~~____________~~


⁽¹⁾	~~Currency impact is shown as unfavorable (favorable).~~


⁽²⁾	The constant currency percentage change is derived by translating third party net sales or revenues for the current period at prior year comparative period exchange rates, and in doing so shows the percentage change from 2017 constant currency third party net sales or revenues to the corresponding amount in the prior year.


⁽³⁾	Effective October 1, 2016, the Company expanded its reportable segments as follows: North America, Europe and Rest of World. As a result, the amounts previously reported under the Specialty segment have been recast to North America and amounts related to Brazil are included in Rest of World for all periods presented.

~~Total Revenues~~

For the nine months ended September 30, 2017, Mylan reported total revenues of $8.67 billion, compared to $7.81 billion for the comparable prior year period, representing an increase of $859.7 million, or 11%. Total revenues include both net sales and other revenues from third parties. Third party net sales for the nine months ended September 30, 2017 were $8.57 billion, compared to $7.75 billion for the comparable prior year period, representing an increase of $824.7 million, or 11%. Other third party revenues for the nine months ended September 30, 2017 were $98.6 million, compared to $63.6 million for the comparable prior year period, an increase of $35.0 million. The increase in other third party revenues was principally the result of an increase in royalty income from arrangements acquired in the Meda acquisition.

The increase in total revenues included third party net sales growth in the Europe segment of 42%, and in the Rest of World segment of 22%. Third party net sales decreased in the North America segment by 10%. Contributing to the overall increase in total revenues were net sales from the acquisitions of Meda and the non-sterile, topicals-focused business (the “Topicals Business”) of Renaissance Acquisition Holdings, LLC of approximately $1.40 billion. This increase was partially offset by a net decrease in net sales from existing products and lower new product introductions of approximately $609.4 million. The decrease from existing products was due primarily to lower pricing and, to a lesser extent, lower volumes in the current period. Mylan’s total revenues were favorably impacted by the effect of foreign currency translation, primarily reflecting changes in the U.S. Dollar as compared to the currencies of Mylan’s subsidiaries in India, Australia, and the European Union, which was partially offset by the unfavorable impact from changes in Japan and the United Kingdom. The favorable impact of foreign currency translation on current year total revenues was approximately $31.7 million. Constant currency total revenue growth for the nine months ended September 30, 2017 was approximately $828.0 million, or 11%.

Third party net sales are derived from our three geographic reporting segments: North America, Europe and Rest of World. The graph below shows third party net sales by segment for the nine months ended September 30, 2017 and 2016 and the increase (decrease) period over period:

North America Segment

~~Third party net~~Net sales from North America ~~decreased~~increased by ~~$397.8~~$32.6 million or ~~10%~~4% during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 when compared to the prior year ~~including the decrease in sales of the EpiPen® Auto-Injector of $523.5 million. Net~~period. This increase was due primarily to higher volumes on sales of existing products, ~~decreased~~and to a lesser extent, new product sales. The higher volumes were primarily driven by the expected growth of Yupelri and Wixela due to ~~lower pricing and volume.~~the launch timing of each product’s impact on the prior year period. This increase was partially offset by lower net sales ~~from the acquisitions~~ of ~~Meda and the Topicals Business, totaling approximately $340.0 million. As anticipated, for the nine months ended September 30, 2017, the U.S. generics~~existing products ~~experienced price erosion in the high-single-digits. Sales of the EpiPen® Auto-Injector declined in the nine month period~~ as a result of lower pricing. Lower pricing on sales of existing products was driven by changes in the ~~impact of the launch of the authorized generic, higher governmental rebates as a result of the Medicaid Drug Rebate Program Settlement, and increased competition.~~competitive environment, including for Levothryoxine Sodium. The impact of foreign currency translation on ~~the~~ current period ~~third party~~ net sales was insignificant within North America.

Europe Segment

~~Third party net~~Net sales from Europe increased by ~~$860.7~~$126.6 million or ~~42%~~14% during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 when compared to the prior year period. This increase was primarily the result of higher net ~~sales from the acquisition of Meda of approximately $833.2 million during the nine months ended September 30, 2017. Net~~ sales of existing products, ~~increased~~ as a result of increased volumes, and to a lesser extent new product sales. In addition to the estimated impact of COVID-19, volumes increased by approximately $40.0 million due to the resolution of supply disruptions encountered in the prior year period. The remainder of the increase was the result of expected net sales ~~and favorable pricing, slightly~~growth in the region. The increase in net sales was partially offset by ~~lower volume. Overall,~~ the ~~favorable~~unfavorable impact of foreign currency translation of approximately $33.3 million or 4%, and to a lesser extent by lower pricing on ~~current period third party~~sales of existing products. Constant currency net sales ~~was not significant~~increased by approximately $159.9 million, or 18%, when compared to the ~~Europe segment.~~prior year period.

Rest of World Segment

~~Third party net~~Net sales from Rest of World ~~increased~~decreased by ~~$361.8~~$31.6 million or ~~22%~~5% during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 when compared to the prior year period. ~~This increase~~The decrease was primarily due to the ~~result~~unfavorable impact of foreign currency translation and the estimated negative impact from COVID-19 in China and Japan. Also, net sales ~~from the acquisition~~ of ~~Meda totaling approximately $229.2 million. In addition, net sales from~~ existing products ~~increased principally as a result of higher volumes~~were impacted by lower pricing primarily driven by government price cuts in Australia ~~emerging markets,~~ and ~~from our ARV franchise. Throughout the segment,~~Japan. Partially offsetting lower pricing were new product sales, ~~from new products, particularly from our ARV franchise and~~primarily in Australia, and higher volumes onof existing products. Higher volumes of existing products ~~more than offset lower pricing. Sales~~were primarily driven by the Company’s anti-retroviral therapy franchise. Overall, net sales from ~~existing products in Japan~~Rest of World were ~~flat as higher volumes were offset~~unfavorably impacted by ~~unfavorable pricing. The favorable impact~~the effect of foreign currency translation ~~was $27.0~~of approximately $29.9 million, or 2%5%. Constant currency ~~third party~~ net sales ~~increased~~decreased by approximately ~~$334.8~~$1.7 million, or ~~20%.~~

~~In addition~~less than 1%, when compared to ~~third party net sales,~~ the Rest of World segment also supplies FDF generic products and API, primarily from Mylan India, to Mylan subsidiaries in conjunction with the Company’s vertical integration strategy. Intercompany sales related to this strategy were approximately $331.1 million and $308.3 million in the nine months ended ~~September 30, 2017~~ ~~and~~ ~~2016, respectively. These intercompany sales are eliminated in consolidation and are not included in the consolidated third party net sales.~~prior year period.

Cost of Sales and Gross Profit

Cost of sales increased from ~~$4.45~~$1.69 billion for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2019 to ~~$5.18~~$1.71 billion for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2020. Cost of sales was primarily impacted by purchase accounting related amortization of acquired intangible assets ~~acquisition related costs, restructuring,~~ and other special items, which are described further in the section titled Use of Non-GAAP Financial ~~Measures~~.Measures. Gross profit for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was ~~$3.49 billion~~$906.1 million and gross margins were ~~40%~~35%. For the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2019, gross profit was ~~$3.36 billion~~$805.2 million and gross margins were ~~43%~~32%. Gross margins were positively impacted by approximately 400 basis points from lower amortization expense of acquired intangible assets and intangible asset impairment charges realized in the prior year period. In addition, gross margins were positively impacted as a result of higher gross profit from sales of new products and from sales of existing products in Europe. Gross margins were negatively impacted in the current period by increased amortization expense as a result of the acquisitions of Meda and the Topicals Business by approximately 162 basis points, lower gross profit from the sales of existing products in North America, including the EpiPen® Auto-Injector which reduced gross profit by approximately 318 basis points, partially offset by the contributions from the acquisitions noted above. Adjusted gross margins were approximately 53% for the nine months ended September 30, 2017, compared to approximately 56% for the nine months ended September 30, 2016. Adjusted gross margins were negatively impacted in the current period as a result of lower gross profit from ~~the~~ sales of existing products in Rest of World and in North ~~America, including~~America. In addition, gross margins were negatively impacted by a special bonus for plant employees as a result of the ~~EpiPen® Auto-Injector which reduced adjusted~~COVID-19 pandemic. Adjusted gross ~~profit by approximately 245 basis points, partially offset by~~margins were 53% for the ~~contributions from~~three months ended March 31, 2020, compared to 54% for the ~~acquisitions noted above.~~three months ended March 31, 2019.

A reconciliation between cost of sales, as reported under U.S. GAAP, and adjusted cost of sales and adjusted gross margin for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 compared to the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2019 is as follows:


	Nine Months Ended						Three Months Ended
	September 30,						March 31,
(In millions)	2017			2016			2020			2019
U.S. GAAP cost of sales	$	5,180.3		$	4,447.1		$	1,713.1		$	1,690.3
Deduct:
Purchase accounting amortization and other related items	(1,054.9		)	(914.8		)	(352.2		)	(435.4		)
Acquisition related items	(1.9		)	(39.8		)	(0.8		)	(0.5		)
Restructuring related costs	(37.3		)	(13.8		)
Restructuring and related costs							(3.7		)	(14.5		)
Share-based compensation expense							(0.3		)	—
Other special items	(39.2		)	(34.1		)	(117.3		)	(85.1		)
Adjusted cost of sales	$	4,047.0		$	3,444.6		$	1,238.8		$	1,154.8

Adjusted gross profit ^(a)	$	4,621.8		$	4,364.5		$	1,380.4		$	1,340.7

Adjusted gross margin ^(a)	53		%	56		%	53		%	54		%

____________


^(a)	Adjusted gross profit is calculated as total revenues less adjusted cost of sales. Adjusted gross margin is calculated as adjusted gross profit divided by total revenues.

Operating Expenses

Total operating expenses for the three months ended March 31, 2020 were not significantly impacted by the COVID-19 pandemic.

Research & Development Expense

Research and development (“R&D&D”) expense for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 was ~~$580.9~~$114.2 million, compared to ~~$632.2~~$172.6 million for the comparable prior year period, a decrease of ~~$51.3~~$58.4 million. This decrease was primarily due to higher expenses in the prior year period related to licensing arrangements for products in development.

Selling, General & Administrative Expense

Selling, general and administrative (“SG&A”) expense for the three months ended March 31, 2020 was $605.4 million, compared to $607.9 million for the comparable prior year period, a decrease of $2.5 million. The decrease was due primarily to lower ~~expenditures~~legal and promotional expenses. Partially offsetting this decrease were higher consulting fees along with other expenses primarily related to the Company’s respiratory and biologics programs due to the timing of clinical activities when compared to the prior year period. Offsetting the decrease was the impact from the acquisitions of Meda and the Topicals Business, which increased R&D expense bypending Combination totaling approximately ~~$33.9~~$9.0 million in the current year period.

Additionally, during the nine months ended September 30, 2017, the Company entered into a joint development and marketing agreement for a respiratory product resulting in approximately $50 million in R&D expense. In the prior year period, the Company made an upfront payment to Momenta Pharmaceuticals, Inc. (“Momenta”) for $45 million related to the Company’s collaboration agreement with Momenta which was entered into on January 8, 2016.

~~Selling, General & Administrative Expense~~

SG&A for the nine months ended September 30, 2017 was $1.92 billion, compared to $1.79 billion for the comparable prior year period, an increase of $129.2 million. The increase is due primarily to additional expense related to the acquisitions of Meda and the Topicals Business which increased SG&A by approximately $284.0 million. Partially offsetting this increase were lower acquisition related costs, including consulting and legal costs, and the benefit of integration activities in the current period.

Litigation Settlements and Other Contingencies, Net

The following table includes the (gains) / losses recognized in litigation settlements and other contingencies, net during the three months ended March 31, 2020 and March 31, 2019:



	Three Months Ended
	March 31,
(In millions)	2020			2019
Respiratory delivery platform contingent consideration adjustment	$	6.6		$	(4.1	)
Litigation settlements, net	(4.8		)	4.8
Total litigation settlements and other contingencies, net	$	1.8		$	0.7

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, the Company recorded a ~~net gain of $25.8~~$6.6 million while during the nine months ended September 30, 2016, the Company recorded a net charge of $556.4 million, respectively. The net gain recognized during the nine months ended September 30, 2017, consists of a gain of approximately $88.1 millionloss for a fair value ~~adjustment~~adjustments related to the contingent consideration for the exclusive worldwide rights to develop, manufacture and commercialize a generic equivalent to GlaxoSmithKline’s Advair Diskus® and Seretide Diskus® incorporating Pfizer Inc.’s proprietary dry powder inhaler delivery platform (the “respiratory delivery platform”)~~. The~~ contingent consideration. Partially offsetting this item was a net gain of approximately $4.8 million related to a number of litigation settlements. Litigation settlements for the three months ended March 31, 2019, consisted of litigation related charges of approximately $4.8 million for a number of matters, which was partially offset by a gain of $4.1 million for fair value adjustment was the result of changes to assumptions relating to the timing of the product launch along with other competitive and market factors. Offsetting this gain were litigation accruals of approximately $52.5 million primarilyadjustments related to the ~~modafinil settlement, the Medicaid Drug Rebate Program Settlement, an increase to an accrual for an anti-trust related matter, and a fair value loss of $9.9 million related to~~respiratory delivery platform contingent consideration for the acquisition of certain female healthcare businesses from Famy Care Limited (such businesses “Jai Pharma Limited”). The net charge recognized during the nine months ended September 30, 2016 was primarily related to the Medicaid Drug Rebate Program Settlement and the Strides Settlement.consideration.

Interest Expense

Interest expense for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 totaled ~~$406.3~~$119.9 million, compared to ~~$305.0~~$131.2 million for the ~~nine~~three months ended ~~September 30, 2016, an increase~~March 31, 2019, a decrease of ~~$101.3~~$11.3 million. The ~~increase in the current year~~decrease is primarily due to ~~approximately $218.1 million of interest related to~~lower average long-term debt balances during the issuance of the senior notes in June 2016 and the Euro senior notes issued in November 2016. This increase was partially offset by the repayment of the 1.800% Senior Notes due 2016 and the 1.350% Senior Notes due 2016 in June and November of 2016, respectively.current year.

Other Expense, Net

Other expense, net was ~~$34.4~~$34.1 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, compared to ~~$184.0~~$7.3 million for the comparable prior year period. Other expense, net includes losses from equity affiliates, foreign exchange gains and losses and interest and dividend income. Other expense, net was comprised of the following for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, respectively:

Nine Months Ended
September 30,
(In millions) 2017 2016
Losses from equity affiliates, primarily clean energy investments $ 77.2
$ 85.5
Foreign exchange (gains)/losses, net (33.0 ) 81.6
Write off of deferred financing fees —
33.2
Other gains, net (9.8 ) (16.3 )
Other expense, net $ 34.4
$ 184.0

In the prior year period, other expense, net included foreign exchange losses of $81.6 million which included $128.6 million of unrealized mark-to-market losses related to the Company’s SEK non-designated foreign currency contracts that were entered into to economically hedge the SEK purchase price for the Meda acquisition, partially offset by foreign currency gains and the write off of approximately $33.2 million of financing fees related to the termination of the bridge credit agreement relating to the Meda acquisition.



	Three Months Ended
	March 31,
(In millions)	2020		2019
Losses from equity affiliates, primarily clean energy investments	$	17.3	$	17.0
Foreign exchange losses/(gains), net	13.6		(4.4		)
Other losses/(gains), net	3.2		(5.3		)
Other expense, net	$	34.1	$	7.3

Income Tax Provision (Benefit)

For the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, the Company recognized an income tax provision of ~~$124.2~~$9.9 million, compared to ~~an income tax~~a benefit of ~~$165.7~~$89.5 million for the comparable prior year ~~period. The~~period, an increase of $99.4 million. During the three months ended March 31, 2019, primarily due to the expiration of federal and foreign statutes of limitations, the Company reduced its net liability for unrecognized tax benefits by approximately $83.8 million. Also impacting the current year income tax ~~provision for the nine months ended September 30, 2017 versus the comparable prior year period~~expense was ~~impacted by~~ the changing mix of income earned in jurisdictions with differing tax rates, changes in 2017 valuation allowances applied to certain tax attributes, statutory releases of certain tax uncertainties, and the revaluation of deferred tax assets and liabilities in countries that changed their statutory corporate tax rate. During the nine months ended September 30, 2016, the Company received approvals from the relevant Indian regulatory authorities to legally merge its wholly owned subsidiary, Jai Pharma Limited, into Mylan Laboratories Limited. The merger resulted in the recognition of a deferred tax asset of $150 million for the tax deductible goodwill in excess of the book goodwill with a corresponding benefit to income tax provision for the nine months ended September 30, 2016. In addition to the benefit recognized for the merger of the aforementioned entities, the effective tax rate for the nine months ended September 30, 2016 was also impacted by the Medicaid Drug Rebate Program Settlement, a changing mix of income earned in jurisdictions with differing tax rates, and statutory releases of certain tax uncertainties.rates.

Use of Non-GAAP Financial Measures

Whenever the Company uses non-GAAP financial measures, we provide a reconciliation of the non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure. Investors and other readers are encouraged to review the related U.S. GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable U.S. GAAP measure and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with U.S. GAAP. Additionally, since these are not measures determined in accordance with U.S. GAAP, non-GAAP financial measures have no standardized meaning across companies, or as prescribed by U.S. GAAP and, therefore, may not be comparable to the calculation of similar measures or measures with the same title used by other companies.

Management uses these measures internally for forecasting, budgeting, measuring its operating performance, and incentive-based awards. ~~In addition, primarily~~Primarily due to acquisitions and other significant events which may impact comparability of our periodic operating results, we believe that an evaluation of our ongoing operations (and comparisons of our current operations with historical and future operations) would be difficult if the disclosure of our financial results was limited to financial measures prepared only in accordance with U.S. GAAP. We believe that non-GAAP financial measures are useful supplemental information for our investors and when considered together with our U.S. GAAP financial measures and the reconciliation to the most directly comparable U.S. GAAP financial measure, provide a more complete understanding of the factors and trends affecting our operations. The financial performance of the Company is measured by senior management, in part, using adjusted metrics as described below, along with other performance metrics. ~~Management’s~~Beginning in 2020, management’s annual incentive compensation is derived, in part, based on ~~the~~ adjusted ~~EPS metric.~~EBITDA (as defined below).

Adjusted Cost of Sales and Adjusted Gross Margin

We use the non-GAAP financial measure “adjusted cost of sales” and the corresponding non-GAAP financial measure “adjusted gross margin.” The principal items excluded from adjusted cost of sales include restructuring, acquisition related and other special items and purchase accounting amortization and other related items, which are described in greater detail below.

Adjusted Net Earnings ~~and Adjusted EPS~~

Adjusted net earnings ~~(“adjusted earnings”)~~ is a non-GAAP financial measure and provides an alternative view of performance used by management. Management believes that, primarily due to acquisition activity and other significant events, an evaluation of the Company’s ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with U.S. GAAP. Management believes that adjusted net earnings ~~and adjusted earnings per diluted share (“adjusted EPS”) are two of the most~~is an important internal financial ~~metrics~~metric related to the ongoing operating performance of the Company, and are therefore useful to investors and that their understanding of our performance is enhanced by ~~these adjusted measures.~~this measure. Actual internal and forecasted operating results and annual budgets used by management include adjusted ~~earnings~~net earnings.

EBITDA and Adjusted EBITDA

EBITDA and adjusted ~~EPS.~~

EBITDA are non-GAAP financial measures that the Company believes are appropriate to provide additional information to investors to demonstrate the Company’s ability to comply with financial debt covenants and assess the Company’s ability to incur additional indebtedness. The Company also believes that adjusted EBITDA better focuses management on the Company’s underlying operational results and true business performance and, beginning in 2020, is used, in part, for management’s incentive compensation. We calculate “EBITDA” as U.S. GAAP net earnings (loss) adjusted for net contribution attributable to equity method investments, income tax provision (benefit), interest expense and depreciation and amortization. EBITDA is further adjusted for share-based compensation expense, litigation settlements and other contingencies, net, and restructuring and other special items to determine “adjusted EBITDA”. These adjustments are permitted under our credit agreement in calculating Adjusted EBITDA for determining compliance with our debt covenants.

The significant items excluded from adjusted cost of sales, adjusted net earnings, EBITDA and adjusted ~~EPS~~EBITDA include:

Purchase Accounting Amortization and Other Related Items

The ongoing impact of certain amounts recorded in connection with acquisitions of both businesses and assets is excluded from adjusted cost of sales, adjusted net earnings, EBITDA and adjusted ~~EPS.~~EBITDA. These amounts include the amortization of intangible assets, inventory step-up and intangible asset impairment charges, including for in-process research and development. For the acquisition of businesses accounted for under the provisions of the Financial Accounting Standards Board Accounting Standards Codification Topic 805, these purchase accounting impacts are excluded regardless of the financing method used for the acquisitions, including the use of cash, long-term debt, the issuance of ordinary shares, contingent consideration or any combination thereof.

Upfront and Milestone-Related R&D Expenses

These expenses and payments are excluded from adjusted net earnings and adjusted ~~EPS~~EBITDA because they generally occur at irregular intervals and are not indicative of the Company’s ongoing operations. Also included in this adjustment are certain expenses related to the Company’s collaboration agreement with Momenta including certain milestone related costs. Such costs include payments related to Mylan’s future decisions, on a product by product basis, to continue with the development of such product in the collaboration after certain R&D work is performed. Related amounts are excluded from adjusted earnings as Mylan considers such payments as additional upfront buy-in payments for the products.

Accretion of Contingent Consideration Liability and Other Fair Value Adjustments

The impact of changes to the fair value of contingent consideration and accretion expense are excluded from adjusted net earnings and adjusted ~~EPS~~EBITDA because they are not indicative of the Company’s ongoing operations due to the variability of the amounts and the lack of predictability as to the occurrence and/or timing and management believes ittheir exclusion is helpful to understanding the underlying, ongoing operational performance of the business.

Share-based Compensation Expense

Share-based compensation expense is excluded from adjusted net earnings and adjusted EBITDA. Our share-based compensation programs have become increasingly weighted toward performance-based compensation, which leads to variability and to a lack of predictability as to the occurrence and/or timing of amounts incurred. As such, management believes the exclusion of such amounts on an ongoing basis is helpful to understanding the underlying operational performance of the business.

Restructuring, Acquisition Related and Other Special Items

Costs related to restructuring, acquisition and integration activities and other actions are excluded from adjusted cost of sales, adjusted net earnings and adjusted ~~EPS,~~EBITDA, as applicable. These amounts include items such as:

Costs related to formal restructuring programs and actions, including costs associated with facilities to be closed or divested, employee separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs and other restructuring related costs;

Certain acquisition related remediation and integration and planning costs, as well as other costs associated with acquisitions such as advisory and legal fees and certain financing related costs, and other business transformation and/or optimization initiatives, which are not part of a formal restructuring program, including employee separation and post-employment costs;

The pre-tax loss of the Company’s clean energy investments, whose activities qualify for income tax credits under ~~Section 45 of~~ the U.S. Internal Revenue Code of 1986, as ~~amended (the “Code”);~~amended; only included in adjusted net earnings ~~and adjusted EPS~~ is the net tax effect of the entity’s activities; ~~and~~

Other costs, incurred from time to time, related to certain special events or activities that lead to gains or losses, including, but not limited to, incremental manufacturing variances, asset write-downs, or liability adjustments;

Certain costs to further develop and optimize our global enterprise resource planning systems, operations and supply ~~chain.~~chain; and

The impact of changes related to uncertain tax positions is excluded from adjusted net earnings. In addition, tax adjustments to adjusted earnings are recorded to present items on an after-tax basis consistent with the presentation of adjusted net earnings.

The Company has undertaken restructurings and other optimization initiatives of differing types, scope and amount during the covered periods and, therefore, these charges should not be considered non-recurring; however, management

excludes these amounts from adjusted net earnings and adjusted ~~EPS~~EBITDA because it believes it is helpful to understanding the underlying, ongoing operational performance of the business.

Litigation Settlements, Net

Charges and gains related to legal matters, such as those discussed in ~~the Notes to interim financial statements —~~ Note 19 18 Litigation included in Part I, Item 1 of this Form 10-Q are generally excluded from adjusted net earnings and adjusted ~~EPS.~~EBITDA. Normal, ongoing defense costs of the Company made in the normal course of our business are not excluded.

Reconciliation of U.S. GAAP Net Earnings to Adjusted Net Earnings ~~and Adjusted EPS~~

A reconciliation between net earnings ~~and diluted earnings per share,~~(loss) as reported under U.S. GAAP, and adjusted net earnings ~~and adjusted EPS~~ for the periods shown follows:

Three Months Ended September 30, Nine Months Ended September 30,
(In millions, except per share amounts) 2017 2016 2017 2016
U.S. GAAP net earnings and U.S. GAAP EPS $ 88.3
$ 0.16
$ (119.8 ) $ (0.23 ) $ 451.7
$ 0.84
$ 62.5
$ 0.12
Purchase accounting related amortization (primarily included in cost of sales) ^(a)
370.7
427.1
1,074.9
931.8

Litigation settlements, net ^(b)
15.2
468.0
52.5
466.4

Interest expense (primarily related to clean energy investment financing) 5.5
5.5
19.5
18.9

Accretion of contingent consideration liability and other fair value adjustments ^(c)
4.9
100.4
(57.6 ) 120.7

Clean energy investments pre-tax loss 22.4
23.8
66.4
69.4

Acquisition related costs (primarily included in SG&A and cost of sales) ^(d)
15.2
110.5
60.1
346.7

Restructuring related costs ^(e)
73.4
24.2
112.7
45.1

Other special items included in:
Cost of sales 12.3
12.0
39.2
34.1

Research and development expense^(f)
15.2
22.0
90.1
98.4

Selling, general and administrative expense 4.0
(2.0 ) 12.7
0.3

Other expense, net (3.3 ) (1.4 ) 1.8
1.3

Tax effect of the above items and other income tax related items (34.1 ) (343.9 ) (244.5 ) (490.5 )
Adjusted net earnings and adjusted EPS $ 589.7
$ 1.10
$ 726.4
$ 1.38
$ 1,679.5
$ 3.13
$ 1,705.1
$ 3.31
Weighted average diluted ordinary shares outstanding 537.0
523.6
537.0
515.2

~~____________~~



	Three Months Ended March 31,
(In millions)	2020			2019
U.S. GAAP net earnings (loss)	$	20.8		$	(25.0	)
Purchase accounting related amortization (primarily included in cost of sales)	352.2			435.4
Litigation settlements and other contingencies, net	1.8			0.7
Interest expense (primarily clean energy investment financing and accretion of contingent consideration)	5.8			7.3
Clean energy investments pre-tax loss	17.3			17.0
Acquisition related costs (primarily included in SG&A) ^(a)	23.2			8.1
Restructuring related costs ^(b)	7.6			19.9
Share-based compensation expense	19.4			18.0
Other special items included in:
Cost of sales ^(c)	117.3			85.1
Research and development expense^(d)	1.7			33.1
Selling, general and administrative expense	(3.4		)	13.9
Other expense, net	(0.4		)	—
Tax effect of the above items and other income tax related items	(96.1		)	(191.6		)
Adjusted net earnings	$	467.2		$	421.9

Significant items ~~for the three and nine months ended September 30, 2017~~ include the following:

^(a^)(a)

Acquisition related costs consist primarily of transaction costs including legal and consulting fees and integration activities. The increase in purchase accounting related amortization for the nine month period is due to the amortization expense associated with the intangible assets related to the Topicals Business and Meda acquisitions. The decrease in purchase accounting related amortization for the three ~~month period is primarily related~~months ended March 31, 2020 relates to ~~approximately $56 million of inventory step-up amortization related to~~transaction costs for the ~~Topicals Business and Meda acquisitions in the prior year period.~~pending Combination.


^(b)	~~Litigation settlements, net decrease is due to an accrual for~~ For the ~~Medicaid Drug Rebate Settlement in the prior year periods.~~

^(c)

~~Change to contingent consideration liability is due to a gain recognized for the fair value adjustment of $88.1 million for the respiratory delivery platform contingent liability included in the nine~~three months ended ~~September 30, 2017. The three and nine months ended September 30, 2016 include~~March 31, 2020, charges of approximately ~~$90~~$3.7 million ~~related to the Strides Settlement.~~


^(d)	Acquisition related costs incurred in 2016 primarily relate to the acquisition of the Topicals Business (June 2016) and costs related to the Meda acquisition. These costs primarily related to consulting, professional, and legal costs. Acquisition related costs incurred in 2017 consist primarily of integration activities.

^(e)

~~Refer to Note 17~~ ~~Restructuring~~ ~~included in Item 1 in this Form 10-Q. Of the total amount, approximately $21.0 million is~~are included in cost of sales, ~~$1.1~~approximately $0.2 million is included in R&D, and ~~$51.3~~approximately $3.7 million is included in SG~~&A for the three months ended September 30, 2017. For the nine months ended September 30, 2017, approximately $37.3 million is~~&A. Refer to Note 15 Restructuring included in ~~cost~~Part I, Item 1 of ~~sales, $2.4 million is included in R&D and $73.0 million is included in SG&A.~~this Form 10-Q for additional information.

^(f)(c)

Costs incurred during the three months ended March 31, 2020 primarily relate to incremental manufacturing variances and site remediation activities as a result of the activities at the Company’s Morgantown plant of approximately $58.8 million. In addition, the current period includes approximately $25.0 million related to a special bonus for plant employees as a result of the COVID-19 pandemic. The three months ended March 31, 2019 consists primarily of $58.8 million for certain incremental manufacturing variances and site remediation activities at the Company’s Morgantown plant.

^(d)

R&D expense for the three months ended ~~September 30, 2017~~March 31, 2020 consists primarily of expenses for product development arrangements of approximately $1.6 million. R&D expense for the three months ended March 31, 2019 includes ~~$8.0~~$23.3 million related to ~~Momenta~~non-refundable upfront licensing amounts for products in development with the expenses relating to on-going collaboration expense. For the nine months ended September 30, 2017, R&D expense includes an upfront expense of approximately $50 million related to a joint development and marketing agreement for a respiratory product, $22.5 million related to Momentaagreements.

~~collaboration expense~~Reconciliation of U.S. GAAP Net Earnings to EBITDA and ~~other similar smaller agreements. For the nine months ended September 30, 2016, R&D expense includes~~Adjusted EBITDA

Below is a ~~$45 million upfront payment~~reconciliation of U.S. GAAP net earnings (loss) to ~~Momenta~~EBITDA and ~~$15 million of milestone payments to Theravance Biopharma. In addition, included in this amount~~adjusted EBITDA for the three ~~and nine~~ months ended ~~September 30, 2016 is approximately $9.0 million and $22.3 million, respectively, of R&D expense incurred related~~March 31, 2020 compared to the ~~Company’s collaboration with Momenta.~~prior year period:



	Three Months Ended March 31,
(In millions)	2020		2019
U.S. GAAP net earnings (loss)	$	20.8	$	(25.0	)
Add / (deduct) adjustments:
Clean energy investments pre-tax loss	17.3		17.0
Income tax provision (benefit)	9.9		(89.5		)
Interest expense ^(a)	119.9		131.2
Depreciation and amortization ^(b)	415.0		500.5
EBITDA	$	582.9	$	534.2
Add / (deduct) adjustments:
Share-based compensation expense	19.4		18.0
Litigation settlements and other contingencies, net	1.8		0.7
Restructuring, acquisition related and other special items ^(c)	146.6		157.3
Adjusted EBITDA	$	750.7	$	710.2


^(a)	Includes clean energy investment financing and accretion of contingent consideration.


^(b)	Includes purchase accounting related amortization.


^(c)	See items detailed in the Reconciliation of U.S. GAAP Net Earnings to Adjusted Net Earnings.

Liquidity and Capital Resources

Our primary source of liquidity is net cash provided by ~~operations,~~operating activities, which was ~~$1.57 billion~~$291.1 million for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2020. We believe that net cash provided by operating activities and available liquidity will continue to allow us to meet our needs for working capital, capital expenditures and interest and principal payments on debt obligations. Nevertheless, our ability to satisfy our working capital requirements and debt service obligations, or fund planned capital expenditures, will substantially depend upon our future operating performance (which will be affected by prevailing economic conditions), and financial, business and other factors, some of which are beyond our control.

Operating Activities

Net cash provided by operating activities ~~decreased~~increased by ~~$128.4~~$330.8 million to ~~$1.57 billion~~$291.1 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, as compared to net cash ~~provided by~~used in operating activities of ~~$1.70 billion~~$39.7 million for the ~~nine~~three months ended ~~September 30, 2016. Cash~~March 31, 2019. Net cash provided by operating activities is derived byfrom net (loss) earnings adjusted for non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash, including changes in cash primarily reflecting the timing of cash collections from customers, payments to vendors and employees and tax payments in the ordinary course of business.

The net ~~decrease~~increase in net cash provided by operating activities was principally due to the following:

~~a decrease~~an increase in ~~non-cash items~~net earnings of ~~$136.7~~approximately $45.8 million, principally a result of a decrease in litigation settlements and other contingencies expense, net of $603.8 million related to the accrual for the Medicaid Drug Rebate Program Settlement and the Strides Settlement related to the acquisition of Agila recognized in the prior year period and a decrease of $128.6 million related to unrealized losses on acquisition-related foreign currency derivatives recognized in the prior year period partially offset by increased depreciation and amortization as a result of ~~acquisitions of $233.4 million and~~ an increase in ~~the deferred income tax benefit of $374.0 million;~~

a decrease in other operating assets and liabilities, net of $319.6 million, principally a result of payments made of approximately $255.2 million related to the Medicaid Drug Rebate Program Settlement and payments of other accruals;earnings from operations;

a net increase in the amount of cash provided by accounts receivable of $10.8 million, reflecting the timing of sales and cash collections;

a net decrease in the amount of cash used through changes in trade accounts payable of ~~$142.4~~$76.5 million as a result of the timing of cash payments; ~~and~~

a net decrease of $51.2 million in the amount of cash used through changes in inventory balances;

a net increase in the amount of cash ~~used through~~provided by changes in income taxes of ~~$200.6~~$224.4 million as a result of the level and timing of estimated tax payments made during the current ~~period.~~

~~These items were partially offset by the following:~~

~~an increase in net earnings for the nine months ended September 30, 2017 of $389.2 million when compared to the prior year period, principally as a result of an increase in earnings from operations;~~

~~a net decrease of $248.8 million in the amount of cash used through changes in inventory balances;~~period; and

a net increase in the amount of cash provided by ~~accounts receivable, including estimated sales allowances~~changes in other operating assets and liabilities of ~~$32.9 million, reflecting the timing of sales, cash collections and disbursements related to sales allowances.~~$14.6 million.

Investing Activities

~~Cash~~Net cash used in investing activities was ~~$743.1~~$145.6 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, as compared to ~~$7.08 billion~~$75.6 million for the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2019, a net ~~decrease~~increase of ~~$6.34 billion.~~$70.0 million.

In ~~2017,~~2020, significant items in investing activities included the following:

~~cash paid for acquisitions, net totaling approximately $71.6 million related to the acquisition of the remaining non-tendered shares of Meda in the compulsory acquisition proceeding;~~

payments for product rights and other, net totaling approximately ~~$558.8~~$67.1 million, ~~which included a payment of $50.0 million~~primarily related to deferred non-contingent purchase payments for the acquisition of intellectual property rights ~~for the Cold-EEZE® brand cold remedy line, payments of $168.0 million related to the acquisition of additional intellectual property rights~~ and marketing authorizations ~~outside of the U.S. and a payment of $277.9 million~~ ~~related to the acquisition of a portfolio of generic product rights~~ in ~~the U.S.;~~

~~proceeds from the sale of certain European assets for approximately $31.1 million;~~

restricted cash decrease of $12.6 million in the current year due to amounts released from escrow for the payment of certain claims related to the Agila Specialties Private Limited (“Agila”) contingent consideration;prior periods; and

capital expenditures, primarily for equipment and facilities, totaling approximately ~~$156.4~~$43.4 million. While there can be no assurance that current expectations will be realized, capital expenditures for the ~~2017~~2020 calendar year are expected to be approximately $300 million to ~~$350~~$400 million.

In ~~2016,~~2019, significant items in investing activities included the following:

~~cash paid for acquisitions totaling approximately $6.15 billion related to the Company’s acquisitions of Meda and the Topicals Business;~~

restricted cash increase of approximately $50.5 million related to amounts deposited in escrow for potential contingent consideration payments in connection with the acquisition of the Topicals Business;

payments for product rights and other, net totaling approximately ~~$196.3 million which included payments of $57.9 million to acquire a marketed pharmaceutical product~~$15.4 million; and ~~$90 million related to the acquisition of certain European intellectual property rights and marketing authorizations;~~

capital expenditures, primarily for equipment and facilities, totaling approximately ~~$239.5 million;~~

~~cash paid for Meda's unconditional deferred payment of approximately $308.0 million; and~~

~~cash paid for settlement of acquisition-related foreign currency derivatives of approximately $128.6~~$53.1 million.

Financing Activities

~~Cash~~Net cash used in financing activities was ~~$1.25 billion~~$24.8 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, as compared to ~~cash provided by financing activities of $5.39 billion~~$40.1 million for the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2019, a net decrease of ~~$6.64 billion.~~$15.3 million.

In ~~2017,~~2020, significant items in financing activities included the following:

~~proceeds of €500~~payments totaling approximately $19.3 million (of the $24.3 million) in milestone payments related to the ~~issuance~~respiratory delivery platform contingent consideration. The remaining payments related to the respiratory delivery platform contingent consideration are included as a component of ~~the 2020 Floating Rate Euro Notes;~~

~~voluntarily prepayments of $1.5 billion of the 2016 Term Loans~~other operating assets and ~~$245 million of the Meda 2.0kr billion Term Loan; and~~

liabilities, net ~~repayments of short-term borrowings of $48.3 million.~~within net cash from operating activities.

In ~~2016,~~2019, significant items in financing activities included the following:

proceeds from long-term debt of $6.5 billion which was attributable to the Company’s issuance of $1.00 billion aggregate principal amount of 2.500% Senior Notes due 2019, $2.25 billion aggregate principal amount of 3.150% Senior Notes due 2021, $2.25 billion aggregate principal amount of 3.950% Senior Notes due 2026, and $1.00 billion aggregate principal amount of 5.250% Senior Notes due 2046 in the second quarter of 2016 in anticipationpayments totaling $31.8 million of the ~~completion of the offer to acquire all of the outstanding shares of Meda;~~

~~payments of the principal amount of $500.0~~$60.0 million ~~on the 1.800% Senior Notes due 2016 which matured on June 24, 2016 and $567.0 million of Meda’s bank loans;~~

~~net short-term borrowings of $48.6 million; and~~

in milestone payments ~~of financing fees which totaled $95.3 million primarily related to a bridge credit agreement~~ related to the ~~Meda acquisition.~~respiratory delivery platform contingent consideration. The remaining payments related to the respiratory delivery platform contingent consideration are included as a component of other operating assets and liabilities, net within net cash from operating activities.

Capital Resources

Our cash and cash equivalents ~~at our non-U.S. operations~~ totaled ~~$516.8~~$572.4 million at ~~September 30, 2017. A portion~~March 31, 2020, and the majority of these funds ~~represented earnings considered to be permanently reinvested to support the growth strategies of~~are held by our non-U.S. subsidiaries. The Company anticipates having sufficient ~~U.S.~~ liquidity, including existing borrowing capacity under its ~~revolving credit facility dated as of November 22, 2016 (as amended, supplemented or otherwise modified from time to time, the “2016~~ Revolving Facility”), among the Company, certain affiliates and subsidiaries of the Company from time to time party thereto as guarantors, each lender from time to time party thereto and Bank of America, N.A., as administrative agent, including the commercial paper program,Credit Facility, Commercial Paper Program, Receivables Facility and the ~~Receivables~~Note Securitization Facility ~~(as~~(which are each defined ~~below)~~in Note 12 Debt in Part I, Item 1 of this Form 10-Q) combined with cash to be generated from operations, to fund foreseeable ~~U.S.~~ cash needs without requiring the repatriation of non-U.S. cash. If these funds are ultimately needed for the Company’s operations in the U.S., the Company may be required to accrue and pay U.S. taxes to repatriate these funds. If funds are needed from the Company’s subsidiaries that do not have an ultimate U.S. parent, the Company will generally not be required to accrue and pay taxes to repatriate these funds because its foreign parent would not be subject to tax on receipt of these distributions.

The Company has access to $2.0 billion under the ~~2016~~ Revolving Credit Facility which also includes a $200 million subfacility for the issuance of letters of credit and a $175 million sublimit for swingline borrowings. As of September 30, 2017, we had $192.1 million available under the $200 million subfacility on our 2016 Revolving Facility for the issuance of letters of credit.matures in 2023. Up to $1.65 billion of the ~~2016~~ Revolving Credit Facility may be used to support ~~future borrowing~~borrowings under our ~~commercial paper program.~~Commercial Paper Program. As of March 31, 2020, the Company had no amounts outstanding under the Commercial Paper Program.

~~In addition to the 2016 Revolving Facility, MPI, a wholly owned subsidiary of the~~The Company has a $400 million ~~receivables facility (the “Receivables Facility”),~~Receivables Facility which ~~will expire~~expires in ~~January 2018. Although from time-to-time, the available amount of~~April 2022. The Company also has a $200 million Note Securitization Facility which expires on August 31, 2020. Borrowings outstanding under the Receivables Facility ~~may be less than $400 million based on~~bear interest at a commercial paper rate plus 0.775% and under the Note Securitization Facility at LIBOR plus 0.75% and are included as a component of short-term borrowings, while the accounts receivable ~~concentration limits and other eligibility requirements. Under~~securing these obligations remain as a component of accounts receivable, net, in our condensed consolidated balance sheets. Effective April 22, 2020, borrowings outstanding under the ~~terms of~~Note Securitization Facility bear interest at a rate per annum quoted from time to time by MUFG Bank, Ltd. plus 0.75%. In addition, the agreements governing the Receivables Facility ~~MPI sells certain accounts receivable to Mylan~~and Note Securitization ~~LLC, a wholly owned special purpose entity~~Facility contain various customary affirmative and negative covenants, and customary default and termination provisions with which ~~in turn sells a percentage~~the Company was compliant as of ~~ownership interest in the receivables to financial institutions and commercial paper conduits sponsored by financial institutions.~~March 31, 2020. As of ~~September 30, 2017,~~March 31, 2020, the Company had no amounts outstanding under the Receivables Facility or the Note Securitization Facility.

At ~~September 30, 2017,~~March 31, 2020, our long-term debt, including the current portion, totaled ~~$13.99~~$12.63 billion, as compared to ~~$15.20~~$12.67 billion at December 31, ~~2016.~~2019. Total long-term debt is calculated net of deferred financing fees which were ~~$79.6~~$57.6 million and ~~$92.2~~$60.5 million at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively. The decrease in long-term debt was due to the prepayment of a portion of the 2016 Term Loans during the nine months ended September 30, 2017 offset by the issuance of the 2020 Floating Rate Euro Notes. The total long-term debt balance at September 30, 2017 was comprised primarily of $100 million of term loans, $91.4 million of Medium Term Notes acquired from Meda, $12.69 billion of fixed rate senior notes and $1.18 billion of floating rate senior notes. In addition, at September 30, 2017, we had $722.8 million of long-term debt classified as current and payable within the next twelve months, as compared to $223.3 million at December 31, 2016. The increase to the current portion of long-term debt is due to the reclassification of the 2.600% Senior Notes due 2018 which mature in June 2018 offset by the prepayment of the Meda 2.0kr billion Term Loan. In addition to the current portion of long-term debt, the Company has significant debt maturities in the fourth quarter of 2018, as the Floating Rate Euro Notes mature in November 2018 and the 3.000% Senior Notes due 2018 mature in December 2018. The Company intends to utilize available liquidity to fund these repayments.

For additional information regarding our debt and debt agreements refer to Note 12Debt in Part I, Item 1 inof this Form 10-Q.

Long-term Debt Maturity

Mandatory minimum repayments remaining on the outstanding notional amount of long-term debt at ~~September 30, 2017 are~~March 31, 2020 was as follows for each of the periods ending December 31:

The ~~Company’s term loan~~Company has a $2.0 billion revolving credit facility ~~dated as of November 22, 2016 (as amended, supplemented or otherwise modified from time~~which is scheduled to time, the “2016 Term Facility”), among the Company, certain affiliates and subsidiaries of the Company from time to time party thereto as guarantors, each lender from time to time party thereto and Goldman Sachs Bank USA, as administrative agent and 2016expire in July 2023. The Revolving Credit Facility contain customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of business.

~~The 2016 Term Facility and 2016 Revolving Facility contain~~contains a maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of 3.75 to 1.00 for consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four quarters as defined in the related credit ~~agreements (“leverage ratio”).~~agreements. The Company is in compliance at ~~September 30, 2017.~~

~~Revolving Facility to extend the leverage ratio covenant of 4.25 to 1.00 through the December 31, 2018 reporting period. The Company~~ expects to remain in compliance for the next twelve months.

~~Business Acquisitions,~~ Collaboration and Licensing Agreements

We periodically enter into collaboration and licensing agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products. Our significant collaboration agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biologic compounds, insulin analog products and respiratory products, among other complex products. Under these agreements, we have future potential milestone payments and co-development expenses payable to third parties as part of our licensing, development and co-development programs. Payments under these agreements generally become due and are payable upon the satisfaction or achievement of certain developmental, regulatory or commercial milestones or as development expenses are incurred on defined projects. Milestone payment obligations are uncertain, including the prediction of timing and the occurrence of events triggering a future obligation and are not reflected as liabilities in the ~~Condensed Consolidated Balance Sheets,~~condensed consolidated balance sheets, except for ~~milestone and royalty~~ obligations reflected as acquisition related contingent consideration. Refer to Note 11 Financial Instruments and Risk Management in Part I, Item of this Form 10-Q for additional information. Our potential maximum development milestones not accrued for at March 31, 2020 totaled approximately $404 million. We estimate that the amounts that may be paid through the end of 2020 to be approximately $94 million. These agreements may also include potential ~~sales based~~sales-based milestones and call for us to pay a percentage of amounts earned from the sale of the product as a royalty or a profit share. ~~These sales based~~The amounts disclosed do not include sales-based milestones or royalty or profit share obligations on future sales of product as the timing and amount of future sales levels and costs to produce products subject to these obligations is not reasonably estimable. These sales-based milestones or royalty or profit share obligations may be significant depending upon the level of commercial sales for each product.

~~Our~~We are contractually obligated to make potential future development, regulatory and commercial milestone, royalty and/or profit sharing payments in conjunction with acquisitions we have entered into with third parties. The most significant ~~contingent payment~~of these relates to the potential future consideration related to ~~our December 2011 acquisition of~~ the respiratory delivery platform. These payments are contingent upon the occurrence of certain future events and, given the ~~ultimate success of the respective projects. Given the inherent uncertainty~~nature of these events, it is unclear when, if ever, we may be required to pay such amounts or pay amounts in excess of those accrued. The Company has also recorded contingent consideration related to the acquisition of the Topicals Business, the acquisition of Jai Pharma Limited, the acquisition of ~~Agila~~ ~~Specialties Private Limited (“Agila”) and certain other acquisitions.~~amounts. The amount of the contingent consideration ~~recorded~~liabilities was ~~$471.1 million and $564.6~~$236.2 million at ~~September 30, 2017 and December~~March 31, ~~2016, respectively.~~2020. In addition, the Company expects to incur approximately ~~$25~~$10 million to ~~$30~~$15 million of ~~annual~~non-cash accretion expense related to the increase in the net present value of the contingent consideration ~~liability.~~liabilities in 2020.

~~In conjunction~~

Supplemental Guarantor Financial Information

Mylan N.V. is the issuer of the 3.750% Senior Notes due 2020, 3.150% Senior Notes due 2021, 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 (collectively, the “Mylan N.V. Senior Notes”), which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc. Mylan Inc. is the issuer of the 3.125% Senior Notes due 2023, 4.200% Senior Notes due 2023, 4.550% Senior Notes due 2028, 5.400% Senior Notes due 2043 and 5.200% Senior Notes due 2048 (collectively, the “Mylan Inc. Senior Notes” and, together with the ~~Company’s Generic Drug User Fee Agreement goal date,~~Mylan N.V. Senior Notes, the “Senior Notes”), which are fully and unconditionally guaranteed on ~~March 28, 2017, the Company received~~ a ~~complete response letter from the FDA regarding its Abbreviated New Drug Application for the respiratory delivery platform. As~~senior unsecured basis by Mylan N.V.

The respective obligations of ~~September 30, 2017, the Company has an IPR&D asset of $347.2 million~~Mylan N.V. and ~~a related contingent consideration liability of $361.0 million. The Company performed an analysis and valuation~~Mylan Inc. as guarantors of the ~~IPR&D asset~~Senior Notes, as applicable, are senior unsecured obligations of the applicable guarantor and rank pari passu in right of payment with all of such guarantor’s existing and future senior unsecured obligations that are not expressly subordinated to such guarantor’s guarantee of the ~~fair~~applicable series of Senior Notes, rank senior in right of payment to any future obligations of such guarantor that are expressly subordinated to such guarantor’s guarantee of the applicable series of Senior Notes, and are effectively subordinated to such guarantor’s existing and future secured obligations to the extent of the value of the ~~related contingent consideration liability using~~collateral securing such obligations. The respective obligations of Mylan N.V. and Mylan Inc. as guarantors of the Senior Notes, as applicable, are structurally subordinated to all of the existing and future liabilities, including trade payables, of the existing and future subsidiaries of such guarantor that do not guarantee the applicable series of Senior Notes.

The guarantees by Mylan Inc. of the Mylan N.V. Senior Notes will terminate under the following customary circumstances: (1) a ~~discounted~~sale or disposition of Mylan Inc. in a transaction that complies with the applicable indenture such that Mylan Inc. ceases to be a subsidiary of Mylan N.V.; (2) legal defeasance or covenant defeasance, each as described in the applicable indenture, or if Mylan N.V.’s obligations under the applicable indenture are discharged; or (3) the earlier to occur of (i) the release of Mylan N.V.’s guarantee under all applicable Mylan Inc. debt and (ii) Mylan Inc. no longer having any obligations in respect of any Mylan Inc. debt.

The guarantee obligations of Mylan N.V. and Mylan Inc. under the Senior Notes are subject to certain limitations and terms similar to those applicable to other guarantees of similar instruments, including that (i) the guarantees are subject to fraudulent transfer and conveyance laws and (ii) each guarantee is limited in amount to an amount not to exceed the maximum amount that can be guaranteed by the applicable guarantor without rendering the guarantee, as it relates to such guarantor, voidable under applicable fraudulent transfer and conveyance laws or similar laws affecting the rights of creditors generally. In addition, Dutch and English insolvency laws to which Mylan N.V. is or may be subject may not be as favorable to holders of Senior Notes as United States or other insolvency laws, and, because it is a Dutch company, it may be more difficult for holders of Senior Notes to obtain or enforce judgments against Mylan N.V.

Because Mylan N.V. is a holding company, its only material assets are its ownership interests in its subsidiaries, and those subsidiaries conduct substantially all of its operations. As a result, Mylan N.V.’s ability to make payments on its obligations under the Senior Notes will depend on its subsidiaries’ cash flow ~~model.~~and their ability to make payments to Mylan N.V., which will depend on their earnings, applicable covenants in debt and other agreements, business and tax considerations and applicable law (including local law regulating payments of dividends and distributions).

In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered. Among other things, the amendments narrow the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamline the alternative disclosures required in lieu of those financial statements. The ~~model contained certain key assumptions including:~~effective date of the ~~expected product launch date,~~amendment is January 4, 2021 with earlier voluntary compliance permitted. We have chosen to voluntarily comply with the number of competitors, the timing of competition and a discount factor based on an industry specific weighted average cost of capital. Based on the analysis performed, the Company determined that the IPR&D asset was not impaired at September 30, 2017. Additionally, no fair value adjustment was required for the contingent considerationamended rules effective during the three months ended ~~September 30, 2017. In the second quarter~~March 31, 2020.

The following table presents unaudited summarized financial information of ~~2017,~~Mylan N.V. and Mylan Inc. on a ~~fair value adjustment was required~~combined basis as of and for the ~~contingent consideration liability resulting in a gain~~Three Months Ended March 31, 2020 and as of ~~approximately $88.1 million based upon changes to assumptions relating to the timing of the product launch along with other competitive~~ and ~~market factors. The fair value of the contingent consideration liability was determined based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note~~ 11 - ~~Financial Instruments and Risk Management~~. Resolution of the matters with the FDA, market conditions and other factors may result in significant future changes in the projections and assumptions utilized in the discounted cash flow model, which could lead to material adjustments to the amounts recorded for IPR&D and contingent consideration.

~~In October 2017, the Company finalized an agreement to acquire the perpetual license to Betadine in certain European markets. An estimated liability of approximately $300 million~~ for the ~~purchase~~year ended December 31, 2019. All intercompany balances have been eliminated in consolidation. This unaudited combined summarized financial information is presented utilizing the equity method of these rights was accrued for on the Meda acquisition opening balance sheet. The Company does not expect that a material adjustment to this liability will be necessary upon closing of the transaction in early 2018.

On October 3, 2017, the Company completed the acquisition of a U.S. based developer and manufacturer of API for approximately $189 million, which includes $15 million of contingent payments based on the achievement of certain financial results of the acquired business following the closing of the transaction.

We are actively pursuing, and are currently involved in, joint projects related to the development, distribution and marketing of both generic and branded products. Many of these arrangements provide for payments by us upon the attainmentaccounting.

of specified milestones. While these arrangements help to reduce the financial risk for unsuccessful projects, fulfillment of specified milestones or the occurrence of other obligations may result in fluctuations in cash flows.



	Combined Summarized Balance Sheet Information of Mylan N.V. and Mylan Inc.
(In millions)	March 31, 2020		December 31, 2019
ASSETS
Current assets	$	113.6	$	152.2
Non-current assets	39,917.6		41,602.4

LIABILITIES AND EQUITY
Current liabilities	15,704.9		15,414.9
Non-current liabilities	13,063.7		14,455.9



	Combined Summarized Statement of Operations Information of Mylan N.V. and Mylan Inc.
(In millions)	Three Months Ended March 31, 2020			Year Ended December 31, 2019
Revenues	$	—		$	—
Gross Profit	—			—
Loss from Operations	(178.5		)	(790.3		)
Net earnings	20.7			16.8

Other Commitments

~~We are~~The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, tax proceedings and litigation matters, both in the U.S. and abroad, that arise from time to time, some of which could result in ~~financial~~ losses, including damages, fines and/or ~~other~~civil penalties, and/or criminal charges ~~(civil and criminal)~~ against the ~~Company, including the possibility of not being able~~Company. These matters are often complex and have outcomes that are difficult to conduct business in a specific jurisdiction. While it is not possible to predict the outcome of such proceedings, an adverse outcome in any of these proceedings could materially affect our business, financial condition, results of operations, and cash flows and could cause the market value of our ordinary shares to decline. We have approximately $402 million accrued for legal contingencies at September 30, 2017. In October, we paid approximately $217.5 million related to the Medicaid Drug Rebate Program Settlement.predict. The Company is also party to certain proceedings and litigation matters for which it may be entitled to indemnification under the respective sale and purchase agreements relating to the acquisitions of the former Merck Generics business, Agila Specialties Private Limited, Abbott Laboratories’ non-U.S. developed markets specialty and ~~the EPD Business,~~branded generics business, and certain other acquisitions. ~~The~~We have approximately $54.8 million accrued for legal contingencies at March 31, 2020.

While the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter. It is possible that an unfavorable resolution of any of the ongoing matters or the inability or denial of Merck KGaA, Strides Arcolab Limited, Abbott Laboratories, or another indemnitor or insurer to pay on an indemnified claim, could have a material adverse effect on ~~our~~the Company’s business, financial condition, results of operations, cash flows and/or ordinary share price.

In the normal course of business, Mylan periodically enters into employment, legal settlement and other agreements which incorporate indemnification provisions. While the maximum amount to which Mylan may be exposed under such agreements cannot be reasonably estimated, the Company maintains insurance coverage, which management believes will effectively mitigate the Company’s obligations under these indemnification provisions. No amounts have been recorded in the condensed consolidated financial statements with respect to the Company’s obligations under such agreements.

The Company has also entered into employment and other agreements with certain executives and other employees that provide for compensation and certain other benefits. These agreements provide for severance payments under certain circumstances. Additionally, the Company has split-dollar life insurance agreements with certain retired executives.

On July 29, 2019, Newco and certain financial institutions executed a 364-day bridge commitment letter pursuant to which such financial institutions have committed to provide bridge financing (the “Bridge Facility”) to Newco to fund the amount of the cash payment from Newco to Pfizer and to pay fees and expenses related to the transactions contemplated by the Business Combination Agreement. Mylan N.V. and Mylan Inc. will be guarantors of the Bridge Facility from and after the consummation of the Combination.

We are continuously evaluating the potential acquisition of products, as well as companies, as a strategic part of our future growth. Consequently, we may utilize current cash reserves or incur additional indebtedness to finance any such acquisitions, which could impact future liquidity. In addition, on an ongoing basis, we review our operations including the evaluation of potential divestitures of products and businesses as part of our future strategy. Any divestitures could impact future liquidity.

Application of Critical Accounting Policies

There have been no changes to the Critical Accounting Policies disclosed in our 2019 Annual Report on Form 10-K, as amended. The following discussion supplements our Critical Accounting Policy for Acquisitions, Intangible Assets, Goodwill and Contingent Consideration as it relates to the goodwill impairment test performed as of March 31, 2020.

The Company has performed its interim goodwill impairment test on a quantitative basis for its four reporting units, North America Generics, North America Brands, Europe and Rest of World. In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing both income and market-based approaches, except for the North America Brands reporting unit where the fair value was estimated utilizing the income approach. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are not limited to, market multiples, control premiums, the discount rate, terminal growth rates, operating income before depreciation and amortization, and capital expenditures forecasts.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of the Company’s market risk, see “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in Mylan N.V.’s Annual Report filed on Form 10-K for the year ended December 31, ~~2016,~~2019, as amended.


ITEM 4.	CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of ~~September 30, 2017.~~March 31, 2020. Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

Management has not identified ~~the following change~~any changes in the Company’s internal control over financial reporting ~~(“ICFR”)~~ that occurred during the first quarter of 2020 that ~~has~~have materially affected, or isare reasonably likely to materially affect, the Company’s ICFR. During the quarter ended September 30, 2017, the Company continued to implement and utilize a new Enterprise Resource Planning (“ERP”) system in certain countries, which, when completed, will handle the business,internal control over financial and administrative processes for the Company. The Company has modified and will continue to modify its internal controls relating to its business and financial processes throughout the entire ERP system implementation, which is expected to progress through the end of 2017. While the Company believes that this new system and the related changes to internal controls will ultimately strengthen its ICFR, there are inherent risks in implementing any new ERP system and the Company will continue to evaluate and test control changes in order to provide certification as of its fiscal year ending December 31, 2017 on the effectiveness of its ICFR.reporting.

PART II — OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

For information regarding legal proceedings, refer to Note 19 18 Litigation, in the accompanying Notes to interim financial statements in this ~~Quarterly Report.~~Form 10-Q.


ITEM 1A.	RISK FACTORS

~~There~~Except as set forth below, there have been no material changes in the Company’s risk factors from those disclosed in Mylan’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2019, as amended.


~~ITEM 5.~~	~~OTHER INFORMATION~~

The COVID-19 pandemic could have a material adverse effect on our business operations, results of operations, cash flows and financial position.

A novel strain of coronavirus (COVID-19) was first reported in December 2019 and has since spread to over 200 countries and territories, including every state in the United States. On ~~November 3, 2017,~~March 11, 2020 the ~~Company entered into an amendment (the “Revolving Loan Amendment”)~~World Health Organization declared COVID-19 a pandemic, and on March 13, 2020 the United States declared a national emergency with respect to COVID-19. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including its impact on our workforce, suppliers, vendors, business partners, distribution channels, customers and patients. As the rate of infection continues to accelerate in many countries, attempts are being made to reduce the spread of COVID-19, including quarantines, government restrictions on movement, business closures and suspensions, canceled events and activities, self-isolation, and other voluntary and/or mandated changes in behavior. Both the outbreak of the disease and actions to slow its spread have created significant uncertainty and economic volatility and disruption, which have impacted our business operations and may materially adversely affect our workforce and business operations as well as our results of operations, cash flows and financial performance.

While our business operations are considered essential based on current government guidelines throughout the world due to the ~~2016 Revolving Facility.~~important role pharmaceutical manufacturers play within the global healthcare system, many of our administrative offices have been operating under work from home protocols. Additionally, we have taken extra precautions at our manufacturing facilities to aid in the protection of site personnel and operations, including the implementation of social distancing guidelines, daily health assessments of on-site personnel and split shifts where feasible. In many countries, we have suspended in-person interactions by customer-facing (field) personnel in healthcare settings. We have also taken steps to protect the safety of study participants, employees and staff at clinical trial sites while continuing to ensure regulatory compliance and scientific integrity of trial data. However, if illnesses are reported at any of our facilities, including critical manufacturing sites, it is possible that such facilities may need to close for an extended period of time, which could negatively affect our ability to produce, ship, and supply products to our customers and would impact our business and financial results. In addition, extended changes in work conditions, including work from home protocols, could strain our business continuity plans, introduce operational risk, including but not limited to increased cybersecurity risk, and reduce productivity.

COVID-19 and related responsive measures have also made, and may continue to make, it difficult for us, our partners or suppliers to source and manufacture products in, and to export our products from, certain affected areas. In addition, we have faced, and may continue to face, delays or difficulty sourcing certain products or raw materials, including active pharmaceutical ingredients, which could negatively affect our ability to produce, ship, and supply products to our customers and would impact our business and financial results. Even if we are able to find alternate sources for such products or raw materials, they may cost more and shipping costs may increase, which could adversely impact our results of operations and financial condition. In addition, unpredictable increases in demand for certain of our products could exceed our capacity to meet such demand, which could adversely affect our results of operations and customer relationships and result in negative publicity and reputational harm.

Health regulatory agencies globally may also experience disruptions in their operations as a result of the coronavirus pandemic. For instance, the FDA has announced its intention to temporarily postpone certain inspections of domestic and foreign manufacturing facilities. The FDA and comparable foreign regulatory agencies may have slower response times or reduced resources and, as a result, review of regulatory submissions, inspections, approval of new products and other timelines important to our business may be materially impacted, which could delay our new product launches and have a material adverse effect on ~~November 3, 2017,~~our business.

In addition, our continued access to external sources of liquidity depends on multiple factors, including the ~~Company entered into an amendment (the “Term Loan Amendment”)~~condition of debt capital markets, our operating performance, and maintaining strong credit ratings. Also, the continuing impact of the

pandemic could lead to our customers or suppliers having liquidity problems that could negatively impact our ability to collect cash on our receivables and/or negatively impact our ability to get inventory and materials. If the impacts of the pandemic create further disruptions or turmoil in the financial markets or customer or supplier liquidity issues, or if rating agencies lower our credit ratings, it could adversely affect our ability to access the debt markets, our cost of funds, and other terms for new debt, which could negatively impact our results of operations and financial position.

In addition, the ongoing challenges posed by the COVID-19 pandemic have already delayed the anticipated timing for completion of the Combination and may create additional uncertainties with respect to the ~~2016 Term Facility. The Revolving Loan Amendment and~~expected timetable for completion of the ~~Term Loan Amendment increased the maximum consolidated leverage ratio from 3.75 to 1.00 to 4.25 to 1.00 through the December 31, 2018 reporting period~~Combination. Any delay in the ~~maximum consolidated leverage ratio financial covenant, which requires maintenance of a maximum ratio of consolidated total indebtedness as~~completion of the ~~end~~Combination could diminish the anticipated benefits of ~~any quarter~~the Combination to ~~consolidated EBITDA~~the combined company or result in additional transaction costs, loss of revenue or opportunities for Mylan or the ~~trailing four quarters (as defined in~~combined company, or have other negative effects associated with uncertainty about the ~~2016 Revolving Facility and 2016 Term Facility). The Company is in compliance with this covenant at September 30, 2017, and expects to remain in compliance for the next twelve months.~~Combination.

The ~~foregoing description does~~extent to which the COVID-19 pandemic impacts us will depend on numerous evolving factors and future developments that we are not ~~purport~~currently able to ~~be complete~~predict and ~~its qualified~~may also exacerbate other risks discussed in ~~its entirety by reference to the Revolving Loan Amendment~~Item 1A. Risk Factors in our Annual Report on Form 10-K, any of which could have a material adverse effect on us, our business operations, results of operations, cash flows and ~~Term Loan Amendment, which are attached hereto as Exhibit 10.3 and Exhibit 10.4, respectively, and which are incorporated herein by reference.~~financial position.



ITEM 6. EXHIBITS

2.1	Amendment No. 1 to the Separation and Distribution Agreement, dated as of February 18, 2020, by and between Pfizer Inc. and Upjohn Inc.

10.1	~~Settlement~~Form of Restricted Stock Unit Award Agreement ~~with~~under the ~~U.S. Department of Justice and two relators finalizing the Medicaid drug rebate settlement, dated August 16, 2017, filed as Exhibit 10.1 to the Report~~2003 Long-Term Incentive Plan for independent directors for awards granted on ~~Form 8-K filed with the SEC on August 21, 2017, and incorporated herein by reference~~.or after March 2, 2020.*

10.2	~~Corporate Integrity~~Form of Stock Option Agreement ~~between~~under the ~~Office of Inspector General of the Department of Health and Human Services and Mylan Inc. and Mylan Specialty L.P., dated August 16, 2017, filed as Exhibit 10.2 to the Report~~2003 Long-Term Incentive Plan for independent directors for awards granted on ~~Form 8-K filed with the SEC on August 21, 2017, and incorporated herein by reference~~.or after March 2, 2020.*

10.3	~~Amendment, dated as of September 30, 2017, to the revolving credit facility dated as of November 22, 2016, among the Company, certain affiliates~~Executive Employment Agreement, entered into on April 15, 2020, by and ~~subsidiaries of the Company from time to time party thereto as guarantors, each lender from time to time party thereto~~between Mylan N.V., Mylan Inc. and ~~Bank of America, N.A., as administrative agent.~~Robert J. Coury.*

~~10.4~~22	~~Amendment, dated as~~ List of ~~September 30, 2017, to the term loan credit facility dated as~~Subsidiary Guarantors and Issuers of November 22, 2016, among the Company, certain affiliates and subsidiaries of the Company from time to time party thereto as guarantors, each lender from time to time party thereto and Goldman Sachs Bank USA, as administrative agent.Guaranteed Securities.

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document

101.SCH	Inline XBRL Taxonomy Extension Schema

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF	Inline XBRL Taxonomy Definition Linkbase

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase

104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101).

*	Denotes management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Mylan N.V. (Registrant)

	By:	/s/ HEATHER BRESCH
		Heather Bresch
		Chief Executive Officer
		(Principal Executive Officer)

~~November 6, 2017~~May 11, 2020



		/s/ KENNETH S. PARKS
		Kenneth S. Parks
		Chief Financial Officer
		(Principal Financial Officer)

~~November 6, 2017~~May 11, 2020

8567



	September 30, 2017			December 31, 2016
ASSETS
Assets
Current assets:
Cash and cash equivalents	$	614.9		$	998.8
Accounts receivable, net	3,220.2			3,310.9
Inventories	2,548.1			2,456.4
Prepaid expenses and other current assets	883.4			756.4
Total current assets	7,266.6			7,522.5
Property, plant and equipment, net	2,310.0			2,322.2
Intangible assets, net	15,270.5			14,447.8
Goodwill	9,984.7			9,231.9
Deferred income tax benefit	559.8			633.2
Other assets	427.3			568.6
Total assets	$	35,818.9		$	34,726.2

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Trade accounts payable	$	1,276.1		$	1,348.1
Short-term borrowings	—			46.4
Income taxes payable	14.8			97.7
Current portion of long-term debt and other long-term obligations	793.0			290.0
Other current liabilities	2,900.1			3,258.5
Total current liabilities	4,984.0			5,040.7
Long-term debt	13,992.4			15,202.9
Deferred income tax liability	2,138.4			2,006.4
Other long-term obligations	1,412.5			1,358.6
Total liabilities	22,527.3			23,608.6
Equity
Mylan N.V. shareholders’ equity
Ordinary shares — nominal value €0.01 per ordinary share
Shares authorized: 1,200,000,000
Shares issued: 537,660,870 and 536,639,291 as of September 30, 2017 and December 31, 2016	6.0			6.0
Additional paid-in capital	8,570.5			8,499.3
Retained earnings	5,393.8			4,942.1
Accumulated other comprehensive loss	(611.2		)	(2,263.7		)
	13,359.1			11,183.7
Noncontrolling interest	—			1.4
Less: Treasury stock — at cost
Ordinary shares: 1,311,193 as of September 30, 2017 and December 31, 2016	67.5			67.5
Total equity	13,291.6			11,117.6
Total liabilities and equity	$	35,818.9		$	34,726.2



(In millions)	Preliminary Purchase Price Allocation as of December 31, 2016^(a)			Measurement Period Adjustments ^(b)			Purchase Price Allocation as of September 30, 2017 (as adjusted)
Current assets (excluding inventories and net of cash acquired)	$	482.5		$	(9.2	)	$	473.3
Inventories	463.1			5.0			468.1
Property, plant and equipment	177.5			—			177.5
Identified intangible assets	8,060.7			—			8,060.7
Goodwill	3,676.9			7.7			3,684.6
Other assets	9.5			(0.7		)	8.8
Total assets acquired	12,870.2			2.8			12,873.0
Current liabilities	(1,105.9		)	(4.9		)	(1,110.8		)
Long-term debt, including current portion	(2,864.6		)	—			(2,864.6		)
Deferred tax liabilities	(1,613.9		)	0.7			(1,613.2		)
Pension and other postretirement benefits	(322.3		)	—			(322.3		)
Other noncurrent liabilities	(42.4		)	1.4			(41.0		)
Net assets acquired	$	6,921.1		$	—		$	6,921.1



(In millions)
Current assets (excluding inventories)	$	57.7
Inventories	74.2
Property, plant and equipment	54.8
Identified intangible assets	467.0
In-process research and development	275.0
Goodwill	318.6
Other assets	0.1
Total assets acquired	1,247.4
Current liabilities	(74.2		)
Deferred tax liabilities	(194.6		)
Other noncurrent liabilities	(5.9		)
Net assets acquired	$	972.7



	Number of Shares Under Stock Awards		Weighted Average Exercise Price per Share
Outstanding at December 31, 2016	7,699,441		$	33.38
Granted	905,521		42.93
Exercised	(659,621	)	19.62
Forfeited	(381,659	)	49.16
Outstanding at September 30, 2017	7,563,682		$	34.92
Vested and expected to vest at September 30, 2017	7,314,174		$	34.53
Exercisable at September 30, 2017	5,707,402		$	31.37



	Number of Restricted Stock Awards		Weighted Average Grant-Date Fair Value per Share
Nonvested at December 31, 2016	5,667,830		$	42.46
Granted	1,402,907		44.04
Released	(500,854	)	52.29
Forfeited	(274,034	)	45.96
Nonvested at September 30, 2017	6,295,849		$	41.88



Diluted earnings (numerator):
Net earnings (loss)	$	88.3	$	(119.8	)	$	451.7	$	62.5
Shares (denominator):
Weighted average ordinary shares outstanding	535.2		523.6			534.9		505.9
Share-based awards and warrants	1.8		—			2.1		9.3
Total dilutive shares outstanding	537.0		523.6			537.0		515.2
Diluted earnings (loss) per ordinary share	$	0.16	$	(0.23	)	$	0.84	$	0.12



	Location of Gain (Loss) Excluded from the Assessment of Hedge Effectiveness	Amount of Gain (Loss) Excluded from the Assessment of Hedge Effectiveness
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In millions)		2017		2016		2017		2016
Foreign currency forward contracts	Other expense, net	$	3.3	$	8.9	$	6.9	$	26.0
Total		$	3.3	$	8.9	$	6.9	$	26.0



(In millions)	Interest Rate as of September 30, 2017		September 30, 2017			December 31, 2016
Current portion of long-term debt:
Meda 2.0kr billion Term Loan			$	—		$	219.6
2018 Senior Notes ^*	2.600	%	649.8			—
Meda Medium Term Notes due 2018	2.356	%	72.2			—
Other			2.2			3.7
Deferred financing fees			(1.4		)	—
Current portion of long-term debt			$	722.8		$	223.3

Non-current portion of long-term debt:
2016 Term Loans due 2019^{(a) **}	2.610	%	$	100.0		$	1,600.0
Meda Medium Term Notes due 2019	1.173	%	91.4			146.4
2018 Floating Rate Euro Notes^{(b) **}	0.541	%	590.7			526.0
2018 Senior Notes ^*	2.600	%	—			649.6
2018 Senior Notes ^**	3.000	%	499.7			499.6
2019 Senior Notes ^**	2.500	%	999.4			999.1
2019 Senior Notes ^*	2.550	%	499.6			499.5
2020 Floating Rate Euro Notes^(c) ^**	0.172	%	590.7			—
2020 Euro Senior Notes ^**	1.250	%	883.1			785.7
2020 Senior Notes ^**	3.750	%	499.9			499.9
2021 Senior Notes ^**	3.150	%	2,248.0			2,247.7
2023 Senior Notes ^*	3.125	%	774.4			775.3
2023 Senior Notes ^*	4.200	%	498.7			498.6
2024 Euro Senior Notes ^**	2.250	%	1,178.6			1,049.2
2026 Senior Notes ^**	3.950	%	2,234.6			2,233.5
2028 Euro Senior Notes ^**	3.125	%	877.7			781.1
2043 Senior Notes ^*	5.400	%	497.1			497.0
2046 Senior Notes ^**	5.250	%	999.8			999.8
Other			7.2			7.1
Deferred financing fees			(78.2		)	(92.2		)
Long-term debt			$	13,992.4		$	15,202.9



	Three Months Ended September 30, 2016
	Gains and Losses on Derivatives in Cash Flow Hedging Relationships					Gains and Losses on Net Investment Hedges			Gains and Losses on Marketable Securities		Defined Pension Plan Items			Foreign Currency Translation Adjustment			Totals
(In millions)	Foreign Currency Forward Contracts	Interest Rate Swaps	Total
Balance at June 30, 2016, net of tax			$	(46.7	)	$	—		$	6.0	$	(15.2	)	$	(1,375.4	)	$	(1,431.3	)
Other comprehensive earnings (loss) before reclassifications, before tax			9.8			(10.4		)	21.5		(0.2		)	290.6			311.3
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales	10.7		10.7														10.7
Gain on interest rate swaps classified as cash flow hedges, included in interest expense		2.3	2.3														2.3
Amortization of prior service costs included in SG&A											—						—
Amortization of actuarial gain included in SG&A											0.3						0.3
Net other comprehensive earnings (loss), before tax			22.8			(10.4		)	21.5		0.1			290.6			324.6
Income tax provision (benefit)			8.0			(2.3		)	8.0		—			—			13.7
Balance at September 30, 2016, net of tax			$	(31.9	)	$	(8.1	)	$	19.5	$	(15.1	)	$	(1,084.8	)	$	(1,120.4	)



	Nine Months Ended September 30, 2016
	Gains and Losses on Derivatives in Cash Flow Hedging Relationships					Gains and Losses on Net Investment Hedges			Gains and Losses on Marketable Securities			Defined Pension Plan Items			Foreign Currency Translation Adjustment			Totals
(In millions)	Foreign Currency Forward Contracts	Interest Rate Swaps	Total
Balance at December 31, 2015, net of tax			$	(18.1	)	$	—		$	(1.0	)	$	(14.9	)	$	(1,730.3	)	$	(1,764.3	)
Other comprehensive (loss) earnings before reclassifications, before tax			(63.7		)	(10.4		)	32.5			(1.2		)	645.5			602.7
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales	34.2		34.2															34.2
Gain on interest rate swaps classified as cash flow hedges, included in interest expense		6.6	6.6															6.6
Amortization of prior service costs included in SG&A												0.2						0.2
Amortization of actuarial gain included in SG&A												0.7						0.7
Net other comprehensive (loss) earnings, before tax			(22.9		)	(10.4		)	32.5			(0.3		)	645.5			644.4
Income tax (benefit) provision			(9.1		)	(2.3		)	12.0			(0.1		)	—			0.5
Balance at September 30, 2016, net of tax			$	(31.9	)	$	(8.1	)	$	19.5		$	(15.1	)	$	(1,084.8	)	$	(1,120.4	)



(In millions)	Total Mylan N.V. Shareholders' Equity			Noncontrolling Interest			Total
December 31, 2016	$	11,116.2		$	1.4		$	11,117.6
Net earnings	451.7			—			451.7
Other comprehensive earnings, net of tax	1,652.5			—			1,652.5
Stock option activity	12.8			—			12.8
Share-based compensation expense	64.2			—			64.2
Issuance of restricted stock, net of shares withheld	(5.8		)	—			(5.8		)
Other	—			(1.4		)	(1.4		)
September 30, 2017	$	13,291.6		$	—		$	13,291.6



(In millions)	Mylan N.V.			Mylan Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Net sales	$	—		$	—		$	—	$	2,956.3		$	—		$	2,956.3
Other revenues	—			—			—		30.8			—			30.8
Total revenues	—			—			—		2,987.1			—			2,987.1
Cost of sales	—			—			—		1,809.0			—			1,809.0
Gross profit	—			—			—		1,178.1			—			1,178.1
Operating expenses:
Research and development	—			—			—		182.3			—			182.3
Selling, general and administrative	6.5			184.3			—		473.8			—			664.6
Litigation settlements and other contingencies, net	—			17.0			—		(1.8		)	—			15.2
Total operating expenses	6.5			201.3			—		654.3			—			862.1
(Loss) earnings from operations	(6.5		)	(201.3		)	—		523.8			—			316.0
Interest expense	93.3			26.7			—		11.8			—			131.8
Other (income) expense, net	(122.3		)	(44.7		)	—		171.6			—			4.6
Earnings (loss) before income taxes	22.5			(183.3		)	—		340.4			—			179.6
Income tax provision (benefit)	2.4			(0.6		)	—		89.5			—			91.3
Earnings of equity interest subsidiaries	68.2			129.9			—		—			(198.1		)	—
Net earnings (loss)	$	88.3		$	(52.8	)	$	—	$	250.9		$	(198.1	)	$	88.3



	Three Months Ended September 30,
(In millions)	2017			2016
Losses from equity affiliates, primarily clean energy investments	$	22.4		$	29.7
Foreign exchange (gains)/losses, net	(14.9		)	27.8
Other gains, net	(2.9		)	(7.3		)
Other expense, net	$	4.6		$	50.2



	Three Months Ended September 30,											Nine Months Ended September 30,
(In millions, except per share amounts)	2017					2016						2017					2016
U.S. GAAP net earnings and U.S. GAAP EPS	$	88.3		$	0.16	$	(119.8	)	$	(0.23	)	$	451.7		$	0.84	$	62.5		$	0.12
Purchase accounting related amortization (primarily included in cost of sales) ^(a)	370.7					427.1						1,074.9					931.8
Litigation settlements, net ^(b)	15.2					468.0						52.5					466.4
Interest expense (primarily related to clean energy investment financing)	5.5					5.5						19.5					18.9
Accretion of contingent consideration liability and other fair value adjustments ^(c)	4.9					100.4						(57.6		)			120.7
Clean energy investments pre-tax loss	22.4					23.8						66.4					69.4
Acquisition related costs (primarily included in SG&A and cost of sales) ^(d)	15.2					110.5						60.1					346.7
Restructuring related costs ^(e)	73.4					24.2						112.7					45.1
Other special items included in:
Cost of sales	12.3					12.0						39.2					34.1
Research and development expense^(f)	15.2					22.0						90.1					98.4
Selling, general and administrative expense	4.0					(2.0		)				12.7					0.3
Other expense, net	(3.3		)			(1.4		)				1.8					1.3
Tax effect of the above items and other income tax related items	(34.1		)			(343.9		)				(244.5		)			(490.5		)
Adjusted net earnings and adjusted EPS	$	589.7		$	1.10	$	726.4		$	1.38		$	1,679.5		$	3.13	$	1,705.1		$	3.31
Weighted average diluted ordinary shares outstanding	537.0					523.6						537.0					515.2