Document_And_Entity_Informatio
Document And Entity Information (USD $) | 6 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Jul. 31, 2014 | Jun. 28, 2013 |
Document Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'ALLERGAN INC. | ' | ' |
Entity Central Index Key | '0000850693 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $24,964 |
Entity Common Stock, Shares Outstanding | ' | 307,605,860 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q2 | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
UNAUDITED_CONDENSED_CONSOLIDAT
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Product net sales | $1,827.30 | $1,577 | $3,446.40 | $3,009.50 |
Other revenues | 36.9 | 20.7 | 63.9 | 47.8 |
Total revenues | 1,864.20 | 1,597.70 | 3,510.30 | 3,057.30 |
Operating costs and expenses: | ' | ' | ' | ' |
Cost of sales (excludes amortization of intangible assets) | 222.2 | 199.1 | 426.7 | 399 |
Selling, general and administrative | 718.9 | 609.9 | 1,377.50 | 1,214.70 |
Research and development | 288.7 | 266.5 | 637.7 | 515.3 |
Amortization of intangible assets | 28 | 29 | 55.8 | 59.7 |
Restructuring charges (reversal) | -1.5 | 0 | 22.8 | 4.3 |
Operating income | 607.9 | 493.2 | 989.8 | 864.3 |
Non-operating income (expense): | ' | ' | ' | ' |
Interest income | 2.4 | 2 | 4.2 | 3.6 |
Interest expense | -19.7 | -20 | -35.4 | -37.4 |
Other, net | -16.2 | 11.2 | -22.6 | 2.5 |
Total non-operating income (expense) | -33.5 | -6.8 | -53.8 | -31.3 |
Earnings from continuing operations before income taxes | 574.4 | 486.4 | 936 | 833 |
Provision for income taxes | 156 | 132.4 | 259.1 | 206 |
Earnings from continuing operations | 418.4 | 354 | 676.9 | 627 |
Discontinued operations: | ' | ' | ' | ' |
Earnings from discontinued operation, net of applicable income tax expense of $3.7 million for the three and six months ended June 30, 2013, respectively | 0 | 7.2 | 0 | 7.6 |
Loss on sale of discontinued operations, net of applicable income tax benefit of $0.3 million and $87.2 million for the six months ended June 30, 2014 and 2013, respectively | 0 | 0 | -0.6 | -259 |
Discontinued operations | 0 | 7.2 | -0.6 | -251.4 |
Net earnings | 418.4 | 361.2 | 676.3 | 375.6 |
Net earnings attributable to noncontrolling interest | 1.2 | 1.3 | 1.8 | 3.2 |
Net earnings attributable to Allergan, Inc. | $417.20 | $359.90 | $674.50 | $372.40 |
Basic earnings per share attibutable to Allergan, Inc. stockholders: | ' | ' | ' | ' |
Continuing operations (in dollars per share) | $1.40 | $1.19 | $2.27 | $2.10 |
Discontinued operations (in dollars per share) | $0 | $0.03 | $0 | ($0.85) |
Net basic earnings per share attributable to Allergan, Inc. stockholders (in dollars per share) | $1.40 | $1.22 | $2.27 | $1.25 |
Diluted earnings per share attributable to Allergan, Inc. stockholders: | ' | ' | ' | ' |
Continuing operations (in dollars per share) | $1.37 | $1.17 | $2.22 | $2.06 |
Discontinued operations (in dollars per share) | $0 | $0.02 | $0 | ($0.83) |
Net diluted earnings per share attributable to Allergan, Inc. stockholders (in dollars per share) | $1.37 | $1.19 | $2.22 | $1.23 |
UNAUDITED_CONDENSED_CONSOLIDAT1
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings from discontinued operations, applicable income tax expense | $3.70 | ' | $3.70 |
Loss on sale of discontinued operations, applicable income tax benefit | ' | $0.30 | $87.20 |
UNAUDITED_CONDENSED_CONSOLIDAT2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ' | ' | ' | ' |
Net earnings | $418.40 | $361.20 | $676.30 | $375.60 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | 8 | -17.2 | 11 | -39.1 |
Amortization of deferred holding gains on derivatives designated as cash flow hedges included in net earnings, net of income tax benefit of $0.1 million for the three months ended June 30, 2014 and 2013, respectively, and $0.3 million for the six months ended June 30, 2014 and 2013, respectively | -0.2 | -0.2 | -0.4 | -0.4 |
Other comprehensive income (loss) | 7.8 | -17.4 | 10.6 | -39.5 |
Total comprehensive income | 426.2 | 343.8 | 686.9 | 336.1 |
Comprehensive income attributable to noncontrolling interest | 1.2 | 0 | 2 | 1.2 |
Comprehensive income attributable to Allergan, Inc. | $425 | $343.80 | $684.90 | $334.90 |
UNAUDITED_CONDENSED_CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Other Comprehensive Income (Loss), Tax [Abstract] | ' | ' | ' | ' |
Amortization of deferred holding gains on derivatives designated as cash flow hedges included in net earnings, tax benefit | $0.10 | $0.10 | $0.30 | $0.30 |
UNAUDITED_CONDENSED_CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and equivalents | $3,189.90 | $3,046.10 |
Short-term investments | 525.6 | 603 |
Trade receivables, net | 1,055 | 883.3 |
Inventories | 299.9 | 285.3 |
Other current assets | 631.3 | 493 |
Assets of discontinued operations | 1.2 | 9 |
Total current assets | 5,702.90 | 5,319.70 |
Investments and other assets | 238.7 | 213.2 |
Deferred tax assets | 121.5 | 128.8 |
Property, plant and equipment, net | 977.9 | 923.2 |
Goodwill | 2,340.60 | 2,339.40 |
Intangibles, net | 1,609.20 | 1,650 |
Total assets | 10,990.80 | 10,574.30 |
Current liabilities: | ' | ' |
Notes payable | 60.9 | 55.6 |
Accounts payable | 300 | 283.2 |
Accrued compensation | 211.6 | 269.1 |
Other accrued expenses | 833.9 | 597.5 |
Income taxes | 0 | 38.9 |
Total current liabilities | 1,406.40 | 1,244.30 |
Long-term debt | 2,091.80 | 2,098.30 |
Other liabilities | 698.3 | 762.2 |
Commitments and contingencies | ' | ' |
Allergan, Inc. stockholders' equity: | ' | ' |
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued | 0 | 0 |
Common stock, $.01 par value; authorized 500,000,000 shares; issued 307,605,860 shares as of June 30, 2014 and 307,554,060 shares as of December 31, 2013 | 3.1 | 3.1 |
Additional paid-in capital | 3,193.40 | 3,032.80 |
Accumulated other comprehensive loss | -216.1 | -226.6 |
Retained earnings | 5,138.80 | 4,646.70 |
Stockholders' equity subtotal before treasury stock | 8,119.20 | 7,456 |
Less treasury stock, at cost (10,695,411 shares as of June 30, 2014 and 9,947,345 shares as of December 31, 2013) | -1,333.20 | -992.8 |
Total stockholders' equity | 6,786 | 6,463.20 |
Noncontrolling interest | 8.3 | 6.3 |
Total equity | 6,794.30 | 6,469.50 |
Total liabilities and equity | $10,990.80 | $10,574.30 |
UNAUDITED_CONDENSED_CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Allergan, Inc. stockholders' equity: | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, authorized shares (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 307,605,860 | 307,554,060 |
Treasury stock, shares (in shares) | 10,695,411 | 9,947,345 |
UNAUDITED_CONDENSED_CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net earnings | $676.30 | $375.60 |
Non-cash items included in net earnings: | ' | ' |
Depreciation and amortization | 121 | 134.4 |
Amortization of original issue discount and debt issuance costs | 1.4 | 1.2 |
Amortization of net realized gain on interest rate swaps | -7.4 | -7.2 |
Deferred income tax provision (benefit) | 3.9 | -101.3 |
Loss on disposal and impairment of assets | 0.7 | 1.2 |
Unrealized loss (gain) on derivative instruments | 15.1 | -11.9 |
Expense of share-based compensation plans | 66.1 | 56.8 |
Loss on sale of discontinued operations | 0 | 346.2 |
Expense from changes in fair value of contingent consideration | 3.4 | 3.3 |
Restructuring charges | 22.8 | 4.3 |
Loss on investment | 0 | 3.7 |
Changes in operating assets and liabilities: | ' | ' |
Trade receivables | -158.5 | -193 |
Inventories | -10.8 | -19.6 |
Other current assets | 4.2 | 28.7 |
Other non-current assets | -16.8 | -8.6 |
Accounts payable | 16 | -6.4 |
Accrued expenses | 35.6 | -18.8 |
Income taxes | -114.4 | -14.1 |
Other liabilities | -19.5 | 26.6 |
Net cash provided by operating activities | 639.1 | 601.1 |
Cash flows from investing activities: | ' | ' |
Purchases of short-term investments | -1,109.90 | -184.8 |
Purchase of non-marketable equity investment | -10 | 0 |
Acquisitions, net of cash acquired | 0 | -892.1 |
Additions to property, plant and equipment | -109.9 | -62.4 |
Additions to capitalized software | -8.6 | -5.6 |
Additions to intangible assets | -10 | -0.3 |
Proceeds from maturities of short-term investments | 1,185.40 | 260.6 |
Proceeds from sale of business | 1.8 | 0 |
Proceeds from sale of property, plant and equipment | 0.2 | 0.1 |
Net cash used in investing activities | -61 | -884.5 |
Cash flows from financing activities: | ' | ' |
Dividends to stockholders | -29.8 | -29.7 |
Payments to acquire treasury stock | -834 | -649.1 |
Payments of contingent consideration | -10.2 | -11.1 |
Net borrowings of notes payable | 5.3 | 2.8 |
Sale of stock to employees | 335.8 | 140.6 |
Excess tax benefits from share-based compensation | 97.9 | 31.8 |
Debt issuance costs | 0 | -4.8 |
Proceeds from issuance of senior notes, net of discount | 0 | 598.5 |
Net cash (used in) provided by financing activities | -435 | 79 |
Effect of exchange rate changes on cash and equivalents | 0.7 | -13.4 |
Net increase (decrease) in cash and equivalents | 143.8 | -217.8 |
Cash and equivalents at beginning of period | 3,046.10 | 2,701.80 |
Cash and equivalents at end of period | 3,189.90 | 2,484 |
Cash paid for: | ' | ' |
Interest, net of amount capitalized | 41.9 | 36.2 |
Income taxes, net of refunds | $291.30 | $191.60 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Note 1: Basis of Presentation | |
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary (consisting only of normal recurring accruals) to present fairly the financial information contained therein. These statements do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP) for annual periods and should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2013. The Company prepared the unaudited condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. The results of operations for the three and six month periods ended June 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or any other period(s). | |
Recently Adopted Accounting Standards | |
In July 2013, the Financial Accounting Standards Board (FASB) issued an accounting standards update that requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. This guidance became effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company adopted the provisions of the guidance in the first quarter of 2014. The adoption did not have a material impact on the Company’s consolidated financial statements. | |
In March 2013, the FASB issued an accounting standards update that provides guidance on the accounting for the cumulative translation adjustment (CTA) upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. Under this guidance, an entity should recognize the CTA in earnings based on meeting certain criteria, including when it ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity or upon a sale or transfer that results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets resides. This guidance became effective for fiscal years beginning on or after December 15, 2013, with early adoption permitted. The Company adopted the provisions of the guidance in the first quarter of 2014. The adoption did not have a material impact on the Company’s consolidated financial statements. | |
New Accounting Standards Not Yet Adopted | |
In June 2014, the FASB issued an accounting standards update that requires a performance target that affects vesting of a share-based payment award and that could be achieved after the requisite service period to be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized over the required service period, if it is probable that the performance target will be achieved. This guidance will be effective for fiscal years beginning after December 15, 2015, which will be the Company's fiscal year 2016, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's consolidated financial statements. | |
In May 2014, the FASB issued an accounting standards update that creates a single source of revenue guidance for companies in all industries. The new standard provides guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers, unless the contracts are within the scope of other accounting standards. It also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets. This guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach and will be effective for fiscal years beginning after December 15, 2016, which will be the Company's fiscal year 2017. The Company has not yet evaluated the potential impact of adopting the guidance on the Company's consolidated financial statements. | |
In April 2014, the FASB issued an accounting standards update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operation. It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance will be effective for fiscal years beginning after December 15, 2014, which will be the Company's fiscal year 2015, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's consolidated financial statements. | |
Stockholder Rights Plan | |
On April 22, 2014, Allergan’s Board of Directors adopted a one-year stockholder rights plan (the Plan) and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company’s common stock. The Plan is not intended to prevent an acquisition of the Company on terms that the Board of Directors considers favorable to, and in the best interests of, all stockholders. Rather, the Plan aims to provide the Board with adequate time to fully assess any proposal. The Plan is scheduled to expire on April 22, 2015. | |
Under the terms of the Plan, stockholders of record at the close of business on May 8, 2014 received one right to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01, at a price of $500.00 for each share of Allergan common stock held on that date. Subject to limited exceptions, the rights will become exercisable if a person or group acquires a beneficial ownership of 10% or more of Allergan’s common stock. In that situation, each holder of a right, other than the person or group with beneficial ownership of 10% or more of Allergan’s common stock, will be effectively entitled to purchase a number of Allergan’s common shares for $500.00 that have a market value of twice the exercise price of the right. |
Acquisitions_and_Collaboration
Acquisitions and Collaborations | 6 Months Ended |
Jun. 30, 2014 | |
Acquisitions and Collaborations [Abstract] | ' |
Acquisitions and Collaborations | ' |
Note 2: Acquisitions and Collaborations | |
MAP Acquisition | |
On March 1, 2013, the Company completed the acquisition of MAP Pharmaceuticals, Inc. (MAP), a biopharmaceutical company based in the United States focused on developing and commercializing new therapies in neurology, including SempranaTM, formerly referred to as Levadex®, an orally inhaled drug for the potential acute treatment of migraine in adults, for an aggregate purchase price of approximately $871.7 million, net of cash acquired. The acquisition was funded from a combination of current cash and equivalents and short-term investments. | |
The Company recognized tangible and intangible assets acquired and liabilities assumed in connection with the MAP acquisition based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recognized as goodwill. The goodwill acquired in the MAP acquisition is not deductible for federal income tax purposes. In connection with the acquisition, the Company acquired assets with a fair value of $1,233.6 million, consisting of current assets of $2.3 million, property, plant and equipment of $7.7 million, other non-current assets of $0.3 million, deferred tax assets of $132.7 million, intangible assets of $915.6 million and goodwill of $175.0 million, and assumed liabilities of $361.9 million, consisting of current liabilities of $27.3 million and deferred tax liabilities of $334.6 million. | |
The intangible assets consist of an in-process research and development asset of $683.5 million associated with SempranaTM and a core technology asset of $232.1 million associated with MAP's proprietary Tempo® delivery system that has an estimated useful life of 15 years. | |
Goodwill represents the excess of the MAP purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. The MAP acquisition broadens the Company's product offering for the treatment of migraine headaches and MAP's proprietary drug particle and inhalation technology provides the potential for new product development opportunities, which the Company believes support the amount of goodwill recognized as a result of the purchase price paid for MAP, in relation to other acquired tangible and intangible assets. | |
Exemplar Acquisition | |
On April 12, 2013, the Company completed the acquisition of Exemplar Pharma, LLC (Exemplar), a third party contract manufacturer for MAP's Tempo® delivery system, for an aggregate purchase price of approximately $16.1 million, net of cash acquired. Prior to the acquisition, the Company also had a $1.9 million payable to Exemplar, which was effectively settled upon the acquisition. In connection with the acquisition, the Company acquired assets with a fair value of $16.6 million, consisting of current assets of $0.5 million, property, plant and equipment of $2.1 million and goodwill of $14.0 million, and assumed current liabilities of $0.5 million. The goodwill acquired in the Exemplar acquisition is deductible for federal income tax purposes. | |
The Company believes that the fair values assigned to the assets acquired and liabilities assumed were based on reasonable assumptions. | |
Medytox Collaboration | |
On September 25, 2013, the Company announced that it had entered into a license agreement with Medytox, Inc. (Medytox), contingent on obtaining certain government approvals. In January 2014, the Company closed the transaction. Under the terms of the agreement, the Company made an upfront payment to Medytox of $65.0 million in January 2014 and Medytox granted the Company exclusive rights, worldwide outside of Korea with co-exclusive rights in Japan, to develop and, if approved, commercialize certain neurotoxin product candidates currently in development, including a potential liquid-injectable product. The upfront payment of $65.0 million was recorded as research and development (R&D) expense in the first quarter of 2014 because the technology has not yet achieved regulatory approval. The terms of the agreement also include potential future development milestone payments of up to $116.5 million and potential future sales milestone payments of up to $180.5 million, as well as potential future royalty payments. | |
Other Acquisitions and Collaborations | |
In March 2014, the Company completed the acquisition of certain assets from Aline Aesthetics, LLC and Tautona Group, L.P. for an upfront payment of $10.0 million and potential future payments for certain milestone events. The Company accounted for the acquisition as a purchase of net assets. The acquired assets primarily consist of intellectual property related to technology under development for use as a dermal filler that has not achieved regulatory approval. The upfront payment was accrued and recorded as R&D expense in the first quarter of 2014 and was paid in the second quarter of 2014. | |
In November 2013, the Company purchased a noncontrolling interest in a subsidiary from a minority shareholder for $18.0 million. The Company accounted for the purchase as an equity transaction and recorded the difference between the cash consideration and the carrying amount of the noncontrolling interest, including its share of accumulated other comprehensive income, as a decrease in additional paid-in capital of $1.3 million. | |
On September 10, 2013, the Company entered into a license and collaboration agreement with a third party pursuant to which the Company obtained exclusive global rights to research, manufacture and commercialize certain technologies for the treatment of ocular disease. Under the terms of the agreement, the Company made a $6.5 million upfront payment, which was recorded as R&D expense in the third quarter of 2013 because the technology has not yet achieved regulatory approval. The terms of the agreement also include potential future payments to the third party related to the Company’s achievement of development, regulatory and sales milestone events, as well as potential future royalty payments. | |
In connection with various business development transactions where the Company has outlicensed its technology to third parties, the Company has aggregate potential future milestone receipts of approximately $45.9 million as of June 30, 2014, none of which are individually significant. Of that amount, approximately $3.5 million relates to achievement of certain development milestones, approximately $17.0 million relates to achievement of certain regulatory milestones, and approximately $25.4 million relates to achievement of certain commercial sales milestones. Due to the challenges associated with developing and obtaining approval for pharmaceutical products, there is substantial uncertainty whether any of the future milestones will be achieved. The Company evaluates whether milestone payments are substantive based on the facts and circumstances associated with each milestone payment. |
Discontinued_Operations
Discontinued Operations | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||
Discontinued Operations | ' | |||||||
Note 3: Discontinued Operations | ||||||||
On February 1, 2013, the Company formally committed to pursue a sale of its obesity intervention business unit, including the assets related to the Lap-Band® gastric band system and the Orbera™ intra-gastric balloon system. Accordingly, beginning in the first quarter of 2013, the Company has reported the financial results from that business unit as discontinued operations in the consolidated statements of earnings. In the first quarter of 2013, the Company reported an estimated pre-tax disposal loss of $346.2 million ($259.0 million after tax) related to the obesity intervention business unit from the write-down of the net assets held for sale to their estimated fair value less costs to sell. | ||||||||
On December 2, 2013, the Company completed the sale of its obesity intervention business to Apollo Endosurgery, Inc. (Apollo) for cash consideration of $75.0 million, subject to certain adjustments, and certain additional consideration, including a minority equity interest in Apollo with an estimated fair value of $15.0 million and contingent consideration of up to $20.0 million to be paid by Apollo upon the achievement of certain regulatory and sales milestones. | ||||||||
At the closing date, the cash consideration was reduced by the amount of inventories held outside of the United States of $7.6 million and net trade accounts receivable and payable of $19.4 million, which the Company retained pursuant to the sale and transition services agreements with Apollo. The Company expects to realize the value of these retained assets in the normal course of business within one year from the closing date. | ||||||||
For the year ended December 31, 2013, the Company reported a total pre-tax loss of $408.2 million ($297.9 million after tax) on the disposal of the obesity intervention business unit net assets. The pre-tax loss includes transaction costs of approximately $2.6 million, consisting primarily of investment banking fees. In the first quarter of 2014, the Company recognized an additional pre-tax loss of $0.9 million ($0.6 million after tax) on the disposal of the obesity intervention business unit net assets. | ||||||||
The assets of discontinued operations of $1.2 million and $9.0 million as of June 30, 2014 and December 31, 2013, respectively, consist of net trade receivables. The remaining balance of retained inventories at June 30, 2014 was included in continuing operations and will be sold to Apollo pursuant to the transition services agreements. | ||||||||
In connection with the sale of the obesity intervention business, the Company also entered into certain transitional service agreements designed to facilitate the orderly transfer of business operations to Apollo. These agreements primarily relate to administrative services in the United States and distribution services outside of the United States, all of which are generally to be provided for a period of up to 12 months. The Company will also manufacture and supply products to Apollo for a transitional period not to exceed 24 months in order to allow Apollo adequate time to obtain regulatory approval for licenses and manufacturing facilities. The continuing cash flows from these agreements are not significant. Net sales made pursuant to the manufacturing and distribution agreements are recorded as product net sales in the Company's consolidated statements of earnings and are reflected as other medical devices product net sales. | ||||||||
The results of operations from discontinued operations presented below include certain allocations that management believes fairly reflect the utilization of services provided to the obesity intervention business. The allocations do not include amounts related to general corporate administrative expenses or interest expense. Therefore, the results of operations from the obesity intervention business unit do not necessarily reflect what the results of operations would have been had the business operated as a stand-alone entity. | ||||||||
The following table summarizes the results of operations from discontinued operations for the three and six month periods ended June 30, 2013: | ||||||||
30-Jun-13 | ||||||||
Three Months | Six Months | |||||||
(in millions) | ||||||||
Product net sales | $ | 31.9 | $ | 65.2 | ||||
Operating costs and expenses: | ||||||||
Cost of sales (excludes amortization of intangible assets) | 5.2 | 10.5 | ||||||
Selling, general and administrative | 14.6 | 30.4 | ||||||
Research and development | 1.2 | 2.7 | ||||||
Amortization of intangible assets | — | 10.3 | ||||||
Earnings from discontinued operations before income taxes | $ | 10.9 | $ | 11.3 | ||||
Earnings from discontinued operations, net of income taxes | $ | 7.2 | $ | 7.6 | ||||
Restructuring_Charges_and_Inte
Restructuring Charges and Integration Costs | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Charges and Integration Costs | ' | ||||||||||||
Note 4: Restructuring Charges and Integration Costs | |||||||||||||
January 2014 Restructuring Plan | |||||||||||||
In January 2014, the Company initiated a restructuring plan that includes certain sales force realignments and position eliminations, certain facility relocations and closures in the United States and Europe and the realignment of certain other business support functions, which affected approximately 250 employees. The Company currently estimates that the total costs related to this restructuring plan will be between $40 million and $45 million, which includes severance and other one-time termination benefits, lease exit and contract termination costs, accelerated depreciation and share-based compensation expenses, and relocation and duplicate operating expenses. | |||||||||||||
The Company began to record costs associated with the January 2014 restructuring plan in the first quarter of 2014 and expects that the majority of the expenses will be incurred in 2014 with the exception of certain expenses related to the relocation of a minor manufacturing facility to be incurred in 2015. The restructuring charges primarily consist of employee severance, one-time termination benefits and contract termination costs associated with the restructuring plan. In the first quarter of 2014, the Company recorded restructuring charges of $24.0 million and recognized additional costs of $6.5 million related to accelerated depreciation and share-based compensation expenses and duplicate operating expenses, consisting of $0.8 million of cost of sales, $4.3 million in selling, general and administrative (SG&A) expenses and $1.4 million in R&D expenses. In the second quarter of 2014, the Company recorded a $2.3 million restructuring charge reversal and recognized additional costs of $2.3 million related to accelerated depreciation and share-based compensation expenses and duplicate operating expenses, consisting of $0.9 million of cost of sales, $0.9 million in SG&A expenses and $0.5 million in R&D expenses. | |||||||||||||
The following table presents the restructuring charges related to the January 2014 restructuring plan during the six month period ended June 30, 2014: | |||||||||||||
Employee Severance | Other | Total | |||||||||||
(in millions) | |||||||||||||
Restructuring charges during the six month period ended June 30, 2014 | $ | 19.4 | $ | 2.3 | $ | 21.7 | |||||||
Spending | (11.4 | ) | (1.3 | ) | (12.7 | ) | |||||||
Balance at June 30, 2014 (included in "Other accrued expenses") | $ | 8 | $ | 1 | $ | 9 | |||||||
Other Restructuring Activities and Integration Costs | |||||||||||||
In connection with the March 2013 acquisition of MAP, the April 2013 acquisition of Exemplar and the December 2012 acquisition of SkinMedica, Inc., the Company initiated restructuring activities in 2013 to integrate the operations of the acquired businesses with the Company's operations and to capture synergies through the centralization of certain research and development, manufacturing, general and administrative and commercial functions. For the year ended December 31, 2013, the Company recorded $4.5 million of restructuring charges, including $4.3 million in the first quarter of 2013 and a $0.9 million restructuring charge reversal in the second quarter of 2013, primarily consisting of employee severance and other one-time termination benefits for approximately 111 people. In the first quarter of 2014, the Company recorded an additional $0.4 million of restructuring charges. | |||||||||||||
Included in the three month period ended June 30, 2014 are $0.8 million of restructuring charges for lease terminations, $0.1 million of SG&A expenses and $0.1 million of R&D expenses, and in the six month period ended June 30, 2014 are $0.7 million of restructuring charges for lease terminations and employee severance and other one-time termination benefits, $0.1 million of SG&A expenses and $0.5 million of R&D expenses related to the realignment of various business functions initiated in prior years. Included in the three month period ended June 30, 2013 are $0.9 million of restructuring charges for employee severance and other one-time termination benefits, $0.1 million of SG&A expenses and $0.7 million of R&D expenses, and in the six month period ended June 30, 2013 are $0.9 million of restructuring charges for employee severance and other one-time termination benefits, $0.2 million of SG&A expenses and $0.7 million of R&D expenses related to the realignment of various business functions initiated in prior years. | |||||||||||||
Included in the three month period ended June 30, 2014 are $0.2 million of SG&A expenses and in the six month period ended June 30, 2014 are $1.0 million of SG&A expenses and $0.4 million of R&D expenses related to transaction and integration costs associated with the purchase of various businesses and collaboration agreements. Included in the three month period ended June 30, 2013 are $0.1 million of cost of sales and $3.7 million of SG&A expenses and in the six month period ended June 30, 2013 are $0.1 million of cost of sales and $15.1 million of SG&A expenses related to transaction and integration costs associated with the purchase of various businesses and collaboration agreements. The SG&A expenses for the six month period ended June 30, 2013 primarily consist of investment banking and legal fees. |
Intangibles_and_Goodwill
Intangibles and Goodwill | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Intangibles and Goodwill | ' | |||||||||||||||||||
Note 5: Intangibles and Goodwill | ||||||||||||||||||||
Intangibles | ||||||||||||||||||||
At June 30, 2014 and December 31, 2013, the components of intangibles and certain other related information were as follows: | ||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||
Gross | Accumulated | Weighted | Gross | Accumulated | Weighted | |||||||||||||||
Amount | Amortization | Average | Amount | Amortization | Average | |||||||||||||||
Amortization | Amortization | |||||||||||||||||||
Period | Period | |||||||||||||||||||
(in millions) | (in years) | (in millions) | (in years) | |||||||||||||||||
Amortizable Intangible Assets: | ||||||||||||||||||||
Developed technology | $ | 657.3 | $ | (372.5 | ) | 11.1 | $ | 647.7 | $ | (343.8 | ) | 11.1 | ||||||||
Customer relationships | 54.7 | (32.1 | ) | 2.7 | 54.7 | (21.8 | ) | 2.7 | ||||||||||||
Licensing | 191 | (166.5 | ) | 9.3 | 185.8 | (164.8 | ) | 9.3 | ||||||||||||
Trademarks | 89.7 | (32.0 | ) | 12.3 | 89.6 | (29.7 | ) | 12.4 | ||||||||||||
Core technology | 327.4 | (77.8 | ) | 14.8 | 327.5 | (66.9 | ) | 14.8 | ||||||||||||
Other | 31 | (14.8 | ) | 7.6 | 30.7 | (12.8 | ) | 7.6 | ||||||||||||
1,351.10 | (695.7 | ) | 11.4 | 1,336.00 | (639.8 | ) | 11.4 | |||||||||||||
Unamortizable Intangible Assets: | ||||||||||||||||||||
In-process research and development | 953.8 | — | 953.8 | — | ||||||||||||||||
$ | 2,304.90 | $ | (695.7 | ) | $ | 2,289.80 | $ | (639.8 | ) | |||||||||||
Developed technology consists primarily of current product offerings, primarily breast aesthetics products, dermal fillers, skin care products and eye care products acquired in connection with business combinations, asset acquisitions and initial licensing transactions for products previously approved for marketing. Customer relationship assets consist of the estimated value of relationships with customers acquired in connection with business combinations. Licensing assets consist primarily of capitalized payments to third party licensors related to the achievement of regulatory approvals to commercialize products in specified markets and up-front payments associated with royalty obligations for products that have achieved regulatory approval for marketing. Core technology consists of a drug delivery technology acquired in connection with the Company's 2013 acquisition of MAP, proprietary technology associated with silicone gel breast implants acquired in connection with the Company's 2006 acquisition of Inamed Corporation, dermal filler technology acquired in connection with the Company’s 2007 acquisition of Groupe Cornéal Laboratoires and a drug delivery technology acquired in connection with the Company’s 2003 acquisition of Oculex Pharmaceuticals, Inc. Other intangible assets consist primarily of acquired product registration rights, distributor relationships, distribution rights, government permits, non-compete agreements and a defensive asset associated with developed technology that has been commercialized. The in-process research and development assets consist primarily of an orally inhaled drug for the potential acute treatment of migraine in adults acquired in connection with the Company's 2013 acquisition of MAP and a novel compound to treat erythema associated with rosacea acquired in connection with the Company’s 2011 acquisition of Vicept Therapeutics, Inc. that is currently under development. | ||||||||||||||||||||
The following table provides amortization expense by major categories of intangible assets for the three and six month periods ended June 30, 2014 and 2013, respectively: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
(in millions) | ||||||||||||||||||||
Developed technology | $ | 14.6 | $ | 14.3 | $ | 29 | $ | 28.6 | ||||||||||||
Customer relationships | 5.1 | 5.1 | 10.2 | 10.2 | ||||||||||||||||
Licensing | 0.8 | 0.8 | 1.5 | 6 | ||||||||||||||||
Trademarks | 1.1 | 1.1 | 2.2 | 2.2 | ||||||||||||||||
Core technology | 5.6 | 5.5 | 11.1 | 8.4 | ||||||||||||||||
Other | 0.8 | 2.2 | 1.8 | 4.3 | ||||||||||||||||
$ | 28 | $ | 29 | $ | 55.8 | $ | 59.7 | |||||||||||||
Amortization expense related to acquired intangible assets generally benefits multiple business functions within the Company, such as the Company’s ability to sell, manufacture, research, market and distribute products, compounds and intellectual property. The amount of amortization expense excluded from cost of sales consists primarily of amounts amortized with respect to developed technology and licensing intangible assets. | ||||||||||||||||||||
Estimated amortization expense is $111.4 million for 2014, $98.2 million for 2015, $77.9 million for 2016, $59.4 million for 2017 and $57.4 million for 2018. | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Changes in the carrying amount of goodwill by operating segment through June 30, 2014 were as follows: | ||||||||||||||||||||
Specialty | Medical | Total | ||||||||||||||||||
Pharmaceuticals | Devices | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 501.2 | $ | 1,838.20 | $ | 2,339.40 | ||||||||||||||
Foreign exchange translation effects | 1.6 | (0.4 | ) | 1.2 | ||||||||||||||||
Balance at June 30, 2014 | $ | 502.8 | $ | 1,837.80 | $ | 2,340.60 | ||||||||||||||
Inventories
Inventories | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventories | ' | |||||||
Note 6: Inventories | ||||||||
Components of inventories were: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Finished products | $ | 192.7 | $ | 180 | ||||
Work in process | 45.3 | 44.1 | ||||||
Raw materials | 61.9 | 61.2 | ||||||
Total | $ | 299.9 | $ | 285.3 | ||||
At June 30, 2014 and December 31, 2013, approximately $12.6 million and $11.7 million, respectively, of the Company’s finished goods inventories, primarily breast implants, were held on consignment at a large number of doctors’ offices, clinics and hospitals worldwide. The value and quantity at any one location are not significant. |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Note 7: Income Taxes | |
The provision for income taxes is determined using an estimated annual effective tax rate, which is generally less than the U.S. federal statutory rate, primarily because of lower tax rates in certain non-U.S. jurisdictions, R&D tax credits available in California and other foreign jurisdictions and deductions available in the United States for domestic production activities. The Company currently expects the U.S. R&D tax credit to be renewed in the fourth quarter of 2014, with retroactive effect to January 1, 2014; however, until appropriate legislation is enacted in the United States to renew the R&D tax credit, the estimated annual effective tax rate for fiscal year 2014 must exclude any potential benefit for this credit. The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of pre-tax earnings in the various tax jurisdictions in which the Company operates, valuation allowances against deferred tax assets, the recognition or derecognition of tax benefits related to uncertain tax positions, expected utilization of R&D tax credits and acquired net operating losses, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities along with net operating loss and tax credit carryovers. | |
The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. The valuation allowance against deferred tax assets was $48.9 million at June 30, 2014 and December 31, 2013. | |
The total amount of unrecognized tax benefits was $51.3 million and $77.3 million as of June 30, 2014 and December 31, 2013, respectively. The decrease in unrecognized tax benefits is primarily attributable to changes in estimates of certain transfer-pricing positions related to prior year filings and provision to return adjustments. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $45.8 million and $70.5 million as of June 30, 2014 and December 31, 2013, respectively. The Company expects that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities will decrease by approximately $14.0 million to $15.0 million due to the settlement of income tax audits, Appeals proceedings and Competent Authority negotiations in the United States and certain foreign jurisdictions. | |
During the third quarter of 2013, the Company reached a preliminary settlement for the Company’s acquired subsidiary, Inamed, for tax year 2005 with the IRS that was pending final review and approval by the U.S. Tax Court. The U.S. Tax Court approved the settlement in the first quarter of 2014. The impact of this settlement is not considered material. | |
Total interest accrued related to uncertain tax positions included in the Company's unaudited condensed consolidated balance sheets was $7.1 million and $9.8 million as of June 30, 2014 and December 31, 2013, respectively. | |
The Company has not provided for withholding and U.S. taxes for the unremitted earnings of certain non-U.S. subsidiaries because it has currently reinvested these earnings indefinitely in these foreign operations. At December 31, 2013, the Company had approximately $3,828.0 million in unremitted earnings outside the United States for which withholding and U.S. taxes were not provided. Income tax expense would be incurred if these earnings were remitted to the United States. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against the Company's U.S. tax liability, if any. The Company annually updates its estimate of unremitted earnings outside the United States after the completion of each fiscal year. |
ShareBased_Compensation
Share-Based Compensation | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Share-Based Compensation | ' | |||||||||||||||
Note 8: Share-Based Compensation | ||||||||||||||||
The Company recognizes compensation expense for all share-based awards made to employees and directors. The fair value of share-based awards is estimated at the grant date and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. | ||||||||||||||||
The fair value of stock option awards that vest based solely on a service condition is estimated using the Black-Scholes option-pricing model. The fair value of share-based awards that contain a market condition is generally estimated using a Monte Carlo simulation model, and the fair value of modifications to share-based awards is generally estimated using a lattice model. | ||||||||||||||||
The determination of fair value using the Black-Scholes, Monte Carlo simulation and lattice models is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. The Company currently estimates stock price volatility based upon an equal weighting of the historical average over the expected life of the award and the average implied volatility of at-the-money options traded in the open market. The Company estimates employee stock option exercise behavior based on actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. | ||||||||||||||||
Share-based compensation expense is recognized only for those awards that are ultimately expected to vest, and the Company has applied an estimated forfeiture rate to unvested awards for the purpose of calculating compensation cost. These estimates will be revised in future periods if actual forfeitures differ from the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs. Compensation expense for share-based awards based on a service condition is recognized using the straight-line single option method. | ||||||||||||||||
For the three and six month periods ended June 30, 2014 and 2013, share-based compensation expense was as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Cost of sales | $ | 1.8 | $ | 1.8 | $ | 3.7 | $ | 3.6 | ||||||||
Selling, general and administrative | 20.8 | 18 | 44 | 37.4 | ||||||||||||
Research and development | 8.8 | 7.5 | 18.4 | 14.8 | ||||||||||||
Pre-tax share-based compensation expense | 31.4 | 27.3 | 66.1 | 55.8 | ||||||||||||
Income tax benefit | 10.3 | 8.7 | 21 | 18.1 | ||||||||||||
Net share-based compensation expense | $ | 21.1 | $ | 18.6 | $ | 45.1 | $ | 37.7 | ||||||||
As of June 30, 2014, total compensation cost related to non-vested stock options and restricted stock not yet recognized was approximately $253.4 million, which is expected to be recognized over the next 46 months (34 months on a weighted-average basis). The Company has not capitalized as part of inventory any share-based compensation costs because such costs were negligible as of June 30, 2014. |
Employee_Retirement_and_Other_
Employee Retirement and Other Benefit Plans | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
Employee Retirement and Other Benefit Plans | ' | |||||||||||||||
Note 9: Employee Retirement and Other Benefit Plans | ||||||||||||||||
The Company sponsors various qualified defined benefit pension plans covering a substantial portion of its employees. In addition, the Company sponsors two supplemental nonqualified plans covering certain management employees and officers and one retiree health plan covering U.S. retirees and dependents. | ||||||||||||||||
Components of net periodic benefit cost for the three and six month periods ended June 30, 2014 and 2013, respectively, were as follows: | ||||||||||||||||
Three Months Ended | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Service cost | $ | 6.9 | $ | 7.1 | $ | 0.4 | $ | 0.5 | ||||||||
Interest cost | 13.3 | 11.5 | 0.6 | 0.5 | ||||||||||||
Expected return on plan assets | (13.2 | ) | (11.2 | ) | — | — | ||||||||||
Amortization of prior service costs | (0.1 | ) | — | (0.7 | ) | (0.6 | ) | |||||||||
Recognized net actuarial losses | 4.8 | 7.7 | 0.2 | 0.3 | ||||||||||||
Net periodic benefit cost | $ | 11.7 | $ | 15.1 | $ | 0.5 | $ | 0.7 | ||||||||
Six Months Ended | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Service cost | $ | 13.8 | $ | 14.2 | $ | 0.8 | $ | 0.9 | ||||||||
Interest cost | 26.6 | 23.1 | 1.2 | 1 | ||||||||||||
Expected return on plan assets | (26.3 | ) | (22.5 | ) | — | — | ||||||||||
Amortization of prior service costs | (0.1 | ) | — | (1.4 | ) | (1.3 | ) | |||||||||
Recognized net actuarial losses | 9.5 | 15.5 | 0.4 | 0.7 | ||||||||||||
Net periodic benefit cost | $ | 23.5 | $ | 30.3 | $ | 1 | $ | 1.3 | ||||||||
In 2014, the Company expects to pay contributions of between $30.0 million and $40.0 million for its U.S. and non-U.S. pension plans and between $1.0 million and $2.0 million for its other postretirement plan. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
Note 10: Contingencies | |
Legal Proceedings | |
In the ordinary course of business, the Company is involved in various legal actions, government investigations and environmental proceedings, and we anticipate that additional actions will be brought against us in the future. The most significant of these actions, proceedings and investigations are described below. The following supplements the discussion set forth in Note 13 “Commitments and Contingencies - Legal Proceedings” in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and Note 10 “Contingencies - Legal Proceedings” in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014 and is limited to certain recent developments concerning the Company's legal proceedings. | |
The Company's legal proceedings range from cases brought by a single plaintiff to a class action with thousands of putative class members. These legal proceedings, as well as other matters, involve various aspects of the Company's business and a variety of claims (including but not limited to patent infringement, marketing, product liability, pricing and trade practices and securities law), some of which present novel factual allegations and/or unique legal theories. Complex legal proceedings frequently extend for several years, and a number of the matters pending against the Company are at very early stages of the legal process. As a result, some pending matters have not yet progressed sufficiently through discovery and/or development of important factual information and legal issues to enable the Company to determine whether the proceeding is material to the Company or to estimate a range of possible loss, if any. Unless otherwise disclosed, the Company is unable to estimate the possible loss or range of loss for the legal proceedings described below. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on the Company's consolidated results of operations, financial position or cash flows. | |
Stockholder Derivative Litigation | |
Botox® Settlement-Related Actions | |
In June 2014, the U.S. Court of Appeals for the Ninth Circuit heard oral argument on plaintiffs’ appeal regarding the U.S. District Court for the Central District of California’s granting of the Company’s and the individual defendants’ motion to dismiss and took the matter under submission. | |
2011 Incentive Award Plan Action | |
In May 2014, the U.S. District Court for the District of Delaware dismissed this matter with prejudice. | |
Patent Litigation | |
We are involved in patent litigation matters, including certain paragraph 4 invalidity and non-infringement claims brought under the Hatch-Waxman Act in the United States described below. | |
Latisse® | |
In June 2014, the U.S. Court of Appeals for the Federal Circuit reversed the finding of the U.S. District Court for the Middle District of North Carolina and held that U.S. Patent Numbers 7,351,404 and 7,388,029 are invalid. | |
In June 2014, Apotex Corp. (Apotex) filed an ANDA seeking approval of a generic form of Latisse® 0.03% bimatoprost ophthalmic solution. The Company subsequently received a paragraph 4 invalidity and noninfringement certification from Apotex contending that U.S. Patent Numbers 8,632,760 (‘760 Patent) and 8,541,466 (‘466 Patent) are invalid or not infringed by Apotex’s proposed generic product. | |
In June 2014, Sandoz, Inc. (Sandoz) filed an ANDA seeking approval of a generic form of Latisse® 0.03% bimatoprost ophthalmic solution. The Company subsequently received a paragraph 4 invalidity and noninfringement certification from Sandoz contending that U.S. Patent Numbers 8,038,988, 8,101,161, 8,263,054, ‘760 Patent, and ‘466 Patent are invalid or not infringed by Sandoz’s proposed generic product. | |
Restasis® | |
In April 2014, the Company received a purported paragraph 4 certification from Watson Laboratories, Inc., a subsidiary of Actavis plc (Watson), contending that it had filed an ANDA seeking approval of a generic form of Restasis® (cyclosporine) ophthalmic emulsion, 0.05%, and that U.S. Patent Numbers 8,633,162, 8,642,556, 8,648,048, and 8,685,930 (Restasis Patents) are invalid, unenforceable and/or not infringed. In May 2014, the Company filed a complaint against Watson in the U.S. District Court for the Eastern District of Texas alleging that Watson sent a premature, improper, null and void paragraph 4 certification and, in the alternative, that its proposed product infringes the Restasis Patents. In April 2014, Watson filed a motion to dismiss for lack of personal jurisdiction. In June 2014, the Company filed a motion for summary judgment on its false paragraph 4 notification claims and a motion to dismiss its patent infringement claims. | |
Other Litigation | |
Allergan, Inc. v. Cayman Chemical Company, et al. | |
In May 2014, Athena Cosmetics, Inc. filed a Petition for Writ of Certiorari to the U.S. Supreme Court. | |
Valeant and Pershing Square Insider Trading Action | |
In August 2014, the Company filed a complaint in the U.S. District Court for the Central District of California against Valeant Pharmaceuticals International, Inc. (Valeant), Pershing Square Capital Management, L.P. (Pershing Square) and its principal, William A. Ackman, alleging that Valeant, Pershing Square and Mr. Ackman violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices, and failed to disclose legally required information. The complaint alleges that Valeant, Pershing Square and Mr. Ackman, violated Sections 13(d), 14(a), and 14(e) of the Securities Exchange Act of 1934, as amended (Exchange Act), which prohibit insider trading and require full and fair disclosure for stockholders in the context of proxy solicitations and tender offers, and the rules promulgated by the U.S. Securities and Exchange Commission under those Sections, including Rule 14e-3. In its complaint, the Company is seeking, among other remedies, a declaration from the court that Pershing Square and Valeant violated insider trading and disclosure laws, and an order rescinding Pershing Square’s purchase of the Company shares it acquired illegally. | |
Contingencies | |
The Company is largely self-insured for future product liability losses related to all of its products. The Company has historically been and continues to be self-insured for any product liability losses related to its breast implant products. Future product liability losses are, by their nature, uncertain and are based upon complex judgments and probabilities. The Company accrues for certain potential product liability losses estimated to be incurred, but not reported, to the extent they can be reasonably estimated. The Company estimates these accruals for potential losses based primarily on historical claims experience and data regarding product usage. The total value of self-insured product liability claims settled in the second quarter and the first six months of 2014 and 2013, respectively, and the value of known and reasonably estimable incurred but unreported self-insured product liability claims pending as of June 30, 2014 are not material. | |
The Company has provided reserves for contingencies related to various lawsuits, claims and contractual disputes that management believes are probable and reasonably estimable. The amounts reserved for these contingencies as of June 30, 2014 are not material. |
Guarantees
Guarantees | 6 Months Ended |
Jun. 30, 2014 | |
Guarantees [Abstract] | ' |
Guarantees | ' |
Note 11: Guarantees | |
The Company’s Amended and Restated Certificate of Incorporation provides that the Company will indemnify, to the fullest extent permitted by the Delaware General Corporation Law, each person that is involved in or is, or is threatened to be, made a party to any action, suit or proceeding by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Company or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. The Company has also entered into contractual indemnity agreements with each of its directors and executive officers pursuant to which, among other things, the Company has agreed to indemnify such directors and executive officers against any payments they are required to make as a result of a claim brought against such executive officer or director in such capacity, excluding claims (i) relating to the action or inaction of a director or executive officer that resulted in such director or executive officer gaining illegal personal profit or advantage, (ii) for an accounting of profits made from the purchase or sale of securities of the Company within the meaning of Section 16(b) of the Exchange Act, or similar provisions of any state law or (iii) that are based upon or arise out of such director’s or executive officer’s knowingly fraudulent, deliberately dishonest or willful misconduct. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies intended to reduce the Company’s monetary exposure and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions, but makes no assurance that such amounts will not be paid in the future. The Company currently believes the estimated fair value of these indemnification arrangements is minimal. | |
The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trials investigators in its drug, biologics and medical device development programs, in sponsored research agreements with academic and not-for-profit institutions, in various comparable agreements involving parties performing services for the Company in the ordinary course of business, in agreements with financial advisors, and in its real estate leases. The Company also customarily agrees to certain indemnification provisions in its acquisition agreements and discovery and development collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s products, compounds or drug candidates. With respect to financial advisor agreements, the indemnification provisions typically apply to any claim asserted against the advisors relating to their scope of work for the Company, including claims related to acquisition or merger transactions. With respect to real estate lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s acquisition agreements and collaboration agreements are similar, but in addition often provide indemnification for the collaborator in the event of third party claims alleging infringement of intellectual property rights. In each of the above cases, the terms of these indemnification provisions generally survive the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability intended to reduce the Company’s exposure for indemnification and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal. |
Product_Warranties
Product Warranties | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Product Warranties Disclosures [Abstract] | ' | |||
Product Warranties | ' | |||
Note 12: Product Warranties | ||||
The Company provides warranty programs for breast implant sales primarily in the United States, Europe and certain other countries. Management estimates the amount of potential future claims from these warranty programs based on actuarial analyses. Expected future obligations are determined based on the history of product shipments and claims and are discounted to a current value. The liability is included in both current and long-term liabilities in the Company’s consolidated balance sheets. The U.S. programs include the ConfidencePlus® and ConfidencePlus® Premier warranty programs. The ConfidencePlus® program, which is limited to saline breast implants, currently provides lifetime product replacement, $1,200 of financial assistance for surgical procedures within ten years of implantation and contralateral implant replacement. The ConfidencePlus® Premier program, which is standard for silicone gel implants and requires a low enrollment fee for saline breast implants, generally provides lifetime product replacement, $2,400 of financial assistance for saline breast implants and $3,500 of financial assistance for silicone gel breast implants for surgical procedures within ten years of implantation and contralateral implant replacement. The warranty programs in non-U.S. markets have similar terms and conditions to the U.S. programs. The Company does not warrant any level of aesthetic result and, as required by government regulation, makes extensive disclosures concerning the risks of the use of its products and breast implant surgery. Changes to actual warranty claims incurred and interest rates could have a material impact on the actuarial analysis and the Company’s estimated liabilities. A large majority of the product warranty liability arises from the U.S. warranty programs. The Company does not currently offer any similar warranty program on any other product. | ||||
The following table provides a reconciliation of the change in estimated product warranty liabilities through June 30, 2014: | ||||
(in millions) | ||||
Balance at December 31, 2013 | $ | 33.6 | ||
Provision for warranties issued during the period | 5.4 | |||
Settlements made during the period | (5.0 | ) | ||
Balance at June 30, 2014 | $ | 34 | ||
Current portion | $ | 7.6 | ||
Non-current portion | 26.4 | |||
Total | $ | 34 | ||
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings Per Share | ' | |||||||||||||||
Note 13: Earnings Per Share | ||||||||||||||||
The table below presents the computation of basic and diluted earnings per share: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Net earnings attributable to Allergan, Inc.: | ||||||||||||||||
Earnings from continuing operations attributable to Allergan, Inc.: | ||||||||||||||||
Earnings from continuing operations | $ | 418.4 | $ | 354 | $ | 676.9 | $ | 627 | ||||||||
Less net earnings attributable to noncontrolling interest | 1.2 | 1.3 | 1.8 | 3.2 | ||||||||||||
Earnings from continuing operations attributable to Allergan, Inc. | 417.2 | 352.7 | 675.1 | 623.8 | ||||||||||||
Earnings (loss) from discontinued operations | — | 7.2 | (0.6 | ) | (251.4 | ) | ||||||||||
Net earnings attributable to Allergan, Inc. | $ | 417.2 | $ | 359.9 | $ | 674.5 | $ | 372.4 | ||||||||
Weighted average number of shares outstanding | 297.6 | 296 | 297.7 | 296.9 | ||||||||||||
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price | 6.3 | 5.3 | 6 | 5.6 | ||||||||||||
Diluted shares | 303.9 | 301.3 | 303.7 | 302.5 | ||||||||||||
Basic earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||||||
Continuing operations | $ | 1.4 | $ | 1.19 | $ | 2.27 | $ | 2.1 | ||||||||
Discontinued operations | — | 0.03 | — | (0.85 | ) | |||||||||||
Net basic earnings per share attributable to Allergan, Inc. stockholders | $ | 1.4 | $ | 1.22 | $ | 2.27 | $ | 1.25 | ||||||||
Diluted earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||||||
Continuing operations | $ | 1.37 | $ | 1.17 | $ | 2.22 | $ | 2.06 | ||||||||
Discontinued operations | — | 0.02 | — | (0.83 | ) | |||||||||||
Net diluted earnings per share attributable to Allergan, Inc. stockholders | $ | 1.37 | $ | 1.19 | $ | 2.22 | $ | 1.23 | ||||||||
For the three and six month periods ended June 30, 2014, options to purchase 3.6 million and 5.5 million shares of common stock at exercise prices ranging from $125.07 to $166.32 and $104.77 to $166.32 per share, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. | ||||||||||||||||
For the three and six month periods ended June 30, 2013, options to purchase 4.4 million and 4.3 million shares of common stock at exercise prices ranging from $90.78 to $105.87 per share, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. |
Financial_Instruments
Financial Instruments | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
Financial Instruments | ' | |||||||||||||||
Note 14: Financial Instruments | ||||||||||||||||
In the normal course of business, operations of the Company are exposed to risks associated with fluctuations in interest rates and foreign currency exchange rates. The Company addresses these risks through controlled risk management that includes the use of derivative financial instruments to economically hedge or reduce these exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes. | ||||||||||||||||
The Company has not experienced any losses to date on its derivative financial instruments due to counterparty credit risk. | ||||||||||||||||
The Company assesses the adequacy and effectiveness of its interest rate and foreign exchange hedge positions by continually monitoring its interest rate swap and foreign exchange forward and option positions both on a stand-alone basis and in conjunction with its underlying interest rate and foreign currency exposures, from an accounting and economic perspective. | ||||||||||||||||
However, given the inherent limitations of forecasting and the anticipatory nature of the exposures intended to be hedged, the Company cannot assure that such programs will offset more than a portion of the adverse financial impact resulting from unfavorable movements in either interest or foreign exchange rates. In addition, the timing of the accounting for recognition of gains and losses related to mark-to-market instruments for any given period may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Company’s consolidated operating results and financial position. | ||||||||||||||||
Interest Rate Risk Management | ||||||||||||||||
The Company’s interest income and expense are more sensitive to fluctuations in the general level of U.S. interest rates than to changes in rates in other markets. Changes in U.S. interest rates affect the interest earned on cash and equivalents and short-term investments and interest expense on debt, as well as costs associated with foreign currency contracts. | ||||||||||||||||
On January 31, 2007, the Company entered into a nine-year, two month interest rate swap with a $300.0 million notional amount. The swap received interest at a fixed rate of 5.75% and paid interest at a variable interest rate equal to 3-month LIBOR plus 0.368%, and effectively converted $300.0 million of the Company’s $800.0 million in aggregate principal amount of 5.75% Senior Notes due 2016 (2016 Notes) to a variable interest rate. Based on the structure of the hedging relationship, the hedge met the criteria for using the short-cut method for a fair value hedge. In September 2012, the Company terminated the interest rate swap and received $54.7 million, which included accrued interest of $3.7 million. Upon termination of the interest rate swap, the Company added the net fair value received of $51.0 million to the carrying value of the 2016 Notes. The amount received for the termination of the interest rate swap is being amortized as a reduction to interest expense over the remaining life of the debt, which effectively fixes the interest rate for the remaining term of the 2016 Notes at 3.94%. During the three and six month periods ended June 30, 2014, the Company recognized $3.4 million and $6.8 million, respectively, as a reduction of interest expense due to the effect of the interest rate swap. During the three and six month periods ended June 30, 2013, the Company recognized $3.3 million and $6.5 million, respectively, as a reduction of interest expense due to the effect of the interest rate swap. | ||||||||||||||||
In February 2006, the Company entered into interest rate swap contracts based on 3-month LIBOR with an aggregate notional amount of $800.0 million, a swap period of 10 years and a starting swap rate of 5.198%. The Company entered into these swap contracts as a cash flow hedge to effectively fix the future interest rate for the 2016 Notes. In April 2006, the Company terminated the interest rate swap contracts and received approximately $13.0 million. The total gain was recorded to accumulated other comprehensive loss and is being amortized as a reduction to interest expense over a 10 year period to match the term of the 2016 Notes. During the three and six month periods ended June 30, 2014 and 2013, the Company recognized $0.3 million and $0.7 million, respectively, as a reduction of interest expense due to the amortization of deferred holding gains on derivatives designated as cash flow hedges. These amounts were reclassified from accumulated other comprehensive loss. As of June 30, 2014, the remaining unrecognized gain of $2.3 million ($1.4 million, net of tax) is recorded as a component of accumulated other comprehensive loss. The Company expects to reclassify an estimated pre-tax amount of $1.3 million from accumulated other comprehensive loss as a reduction in interest expense during fiscal year 2014 due to the amortization of deferred holding gains on derivatives designated as cash flow hedges. | ||||||||||||||||
Foreign Exchange Risk Management | ||||||||||||||||
Overall, the Company is a net recipient of currencies other than the U.S. dollar and, as such, benefits from a weaker dollar and is adversely affected by a stronger dollar relative to major currencies worldwide. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may negatively affect the Company’s consolidated revenues or operating costs and expenses as expressed in U.S. dollars. | ||||||||||||||||
From time to time, the Company enters into foreign currency option and forward contracts to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on its core business issues. Accordingly, the Company enters into various contracts which change in value as foreign exchange rates change to economically offset the effect of changes in the value of foreign currency assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. The Company enters into foreign currency option and forward contracts in amounts between minimum and maximum anticipated foreign exchange exposures. The Company does not designate these derivative instruments as accounting hedges. | ||||||||||||||||
The Company uses foreign currency option contracts, which provide for the sale or purchase of foreign currencies, to economically hedge the currency exchange risks associated with probable but not firmly committed transactions that arise in the normal course of the Company’s business. Probable but not firmly committed transactions are comprised primarily of sales of products and purchases of raw material in currencies other than the U.S. dollar. The foreign currency option contracts are entered into to reduce the volatility of earnings generated in currencies other than the U.S. dollar. While these instruments are subject to fluctuations in value, such fluctuations are anticipated to offset changes in the value of the underlying exposures. | ||||||||||||||||
Changes in the fair value of open foreign currency option contracts and any realized gains (losses) on settled contracts are recorded through earnings as “Other, net” in the accompanying unaudited condensed consolidated statements of earnings. During the three and six month periods ended June 30, 2014, the Company recognized realized gains on settled foreign currency option contracts of $2.2 million and $6.2 million, respectively, and net unrealized losses on open foreign currency option contracts of $10.9 million and $15.1 million, respectively. During the three and six month periods ended June 30, 2013, the Company recognized realized gains on settled foreign currency option contracts of $0.6 million and $1.6 million, respectively, and net unrealized gains on open foreign currency option contracts of $10.6 million and $11.9 million, respectively. The premium costs of purchased foreign exchange option contracts are recorded in “Other current assets” and amortized to “Other, net” over the life of the options. | ||||||||||||||||
All of the Company’s outstanding foreign exchange forward contracts are entered into to offset the change in value of certain intercompany receivables or payables that are subject to fluctuations in foreign currency exchange rates. The realized and unrealized gains and losses from foreign currency forward contracts and the revaluation of the foreign denominated intercompany receivables or payables are recorded through “Other, net” in the accompanying unaudited condensed consolidated statements of earnings. During the three and six month periods ended June 30, 2014, the Company recognized total realized and unrealized losses from foreign exchange forward contracts of $0.8 million and $0.7 million, respectively. During the three and six month periods ended June 30, 2013, the Company recognized total realized and unrealized gains from foreign exchange forward contracts of $3.8 million and $3.2 million, respectively. | ||||||||||||||||
The fair value of outstanding foreign exchange option and forward contracts, collectively referred to as foreign currency derivative financial instruments, are recorded in “Other current assets” and “Accounts payable.” At June 30, 2014 and December 31, 2013, foreign currency derivative assets associated with the foreign exchange option contracts of $25.5 million and $20.2 million, respectively, were included in “Other current assets.” At June 30, 2014 and December 31, 2013, net foreign currency derivative assets associated with the foreign exchange forward contracts of $1.2 million and $0.2 million, respectively, were included in “Other current assets.” | ||||||||||||||||
At June 30, 2014 and December 31, 2013, the notional principal and fair value of the Company’s outstanding foreign currency derivative financial instruments were as follows: | ||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||
Notional | Fair | Notional | Fair | |||||||||||||
Principal | Value | Principal | Value | |||||||||||||
(in millions) | ||||||||||||||||
Foreign currency forward exchange contracts | $ | 43.6 | $ | (0.7 | ) | $ | 35 | $ | 0.1 | |||||||
(Receive U.S. dollar/pay foreign currency) | ||||||||||||||||
Foreign currency forward exchange contracts | 162.5 | 1.9 | 41.3 | 0.1 | ||||||||||||
(Pay U.S. dollar/receive foreign currency) | ||||||||||||||||
Foreign currency sold — put options | 854 | 25.5 | 560.8 | 20.2 | ||||||||||||
The notional principal amounts provide one measure of the transaction volume outstanding as of June 30, 2014 and December 31, 2013, and do not represent the amount of the Company’s exposure to market loss. The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information as of June 30, 2014 and December 31, 2013. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments. | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
At June 30, 2014 and December 31, 2013, the Company’s other financial instruments included cash and equivalents, short-term investments, trade receivables, non-marketable equity investments, accounts payable and borrowings. The carrying amount of cash and equivalents, short-term investments, trade receivables and accounts payable approximates fair value due to the short-term maturities of these instruments. The fair value of non-marketable equity investments, which represent investments in start-up technology companies, are estimated based on information provided by these companies. The fair value of notes payable and long-term debt are estimated based on quoted market prices and interest rates. | ||||||||||||||||
The carrying amount and estimated fair value of the Company’s other financial instruments at June 30, 2014 and December 31, 2013 were as follows: | ||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(in millions) | ||||||||||||||||
Cash and equivalents | $ | 3,189.90 | $ | 3,189.90 | $ | 3,046.10 | $ | 3,046.10 | ||||||||
Short-term investments | 525.6 | 525.6 | 603 | 603 | ||||||||||||
Non-current non-marketable equity investments | 30.8 | 30.8 | 20.8 | 20.8 | ||||||||||||
Notes payable | 60.9 | 60.9 | 55.6 | 55.6 | ||||||||||||
Long-term debt | 2,091.80 | 2,112.30 | 2,098.30 | 2,163.80 | ||||||||||||
In the first quarter of 2013, the Company recorded an impairment charge of $3.7 million included in "Other, net" non-operating expense due to the other than temporary decline in value of a non-marketable equity investment. | ||||||||||||||||
Concentration of Credit Risk | ||||||||||||||||
Financial instruments that potentially subject the Company to credit risk principally consist of trade receivables. Wholesale distributors, major retail chains and managed care organizations account for a substantial portion of trade receivables. This risk is limited due to the number of customers comprising the Company’s customer base, and their geographic dispersion. At June 30, 2014, no single customer represented more than 10% of trade receivables, net. Ongoing credit evaluations of customers’ financial condition are performed and, generally, no collateral is required. The Company has purchased an insurance policy intended to reduce the Company’s exposure to potential credit risks associated with certain U.S. customers. To date, no claims have been made against the insurance policy. The Company maintains reserves for potential credit losses and such losses, in the aggregate, have not historically exceeded management’s estimates. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Note 15: Fair Value Measurements | ||||||||||||||||
The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||||||
As of June 30, 2014 and December 31, 2013, the Company has certain assets and liabilities that are required to be measured at fair value on a recurring basis. These include cash equivalents, short-term investments, foreign exchange derivatives, deferred executive compensation investments and liabilities and contingent consideration liabilities. These assets and liabilities are classified in the table below in one of the three categories of the fair value hierarchy described above. | ||||||||||||||||
June 30, 2014 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 2,108.30 | $ | — | $ | 2,108.30 | $ | — | ||||||||
Foreign time deposits | 334.4 | — | 334.4 | — | ||||||||||||
Other cash equivalents | 1,047.50 | — | 1,047.50 | — | ||||||||||||
Foreign exchange derivative assets | 26.7 | — | 26.7 | — | ||||||||||||
Deferred executive compensation investments | 108.7 | 88.3 | 20.4 | — | ||||||||||||
$ | 3,625.60 | $ | 88.3 | $ | 3,537.30 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred executive compensation liabilities | 101.3 | 80.9 | 20.4 | — | ||||||||||||
Contingent consideration liabilities | 218.8 | — | — | 218.8 | ||||||||||||
$ | 320.1 | $ | 80.9 | $ | 20.4 | $ | 218.8 | |||||||||
December 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 2,016.80 | $ | — | $ | 2,016.80 | $ | — | ||||||||
Foreign time deposits | 370.3 | — | 370.3 | — | ||||||||||||
Other cash equivalents | 1,080.40 | — | 1,080.40 | — | ||||||||||||
Foreign exchange derivative assets | 20.4 | — | 20.4 | — | ||||||||||||
Deferred executive compensation investments | 100.7 | 80.4 | 20.3 | — | ||||||||||||
$ | 3,588.60 | $ | 80.4 | $ | 3,508.20 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred executive compensation liabilities | $ | 93 | $ | 72.7 | $ | 20.3 | $ | — | ||||||||
Contingent consideration liabilities | 225.2 | — | — | 225.2 | ||||||||||||
$ | 318.2 | $ | 72.7 | $ | 20.3 | $ | 225.2 | |||||||||
Cash equivalents consist of commercial paper, foreign time deposits and other cash equivalents. Other cash equivalents consist primarily of money-market fund investments. Short-term investments consist of commercial paper and foreign time deposits. Cash equivalents and short-term investments are valued at cost, which approximates fair value due to the short-term maturities of these instruments. Foreign currency derivative assets and liabilities are valued using quoted forward foreign exchange prices and option volatility at the reporting date. The Company believes the fair values assigned to its derivative instruments as of June 30, 2014 and December 31, 2013 are based upon reasonable estimates and assumptions. Assets and liabilities related to deferred executive compensation consist of actively traded mutual funds classified as Level 1 and money-market funds classified as Level 2. | ||||||||||||||||
Contingent consideration liabilities represent future amounts the Company may be required to pay in conjunction with various business combinations. The ultimate amount of future payments is based on specified future criteria, such as sales performance and the achievement of certain future development, regulatory and sales milestones and other contractual performance conditions. The Company evaluates its estimates of the fair value of contingent consideration liabilities on a periodic basis. Any changes in the fair value of contingent consideration liabilities are recorded as SG&A expense. | ||||||||||||||||
The Company estimates the fair value of the contingent consideration liabilities related to sales performance using the income approach, which involves forecasting estimated future net cash flows and discounting the net cash flows to their present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities related to the achievement of future development and regulatory milestones by assigning an achievement probability to each potential milestone and discounting the associated cash payment to its present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities associated with sales milestones by employing Monte Carlo simulations to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. The fair value of other contractual performance conditions is measured by assigning an achievement probability to each payment and discounting the payment to its present value using the Company's estimated cost of borrowing. The unobservable inputs to the valuation models that have the most significant effect on the fair value of the Company's contingent consideration liabilities are the probabilities that certain in-process development projects will meet specified development milestones, including ultimate approval by the FDA. The Company currently estimates that the probabilities of success in meeting the specified development milestones are between 65% and 75%. | ||||||||||||||||
The following table provides a reconciliation of the change in the contingent consideration liabilities through June 30, 2014: | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at December 31, 2013 | $ | 225.2 | ||||||||||||||
Change in the estimated fair value of the contingent consideration liabilities | 3.4 | |||||||||||||||
Payments made during the period | (10.2 | ) | ||||||||||||||
Foreign exchange translation effects | 0.4 | |||||||||||||||
Balance at June 30, 2014 | $ | 218.8 | ||||||||||||||
Business_Segment_Information
Business Segment Information | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Business Segment Information | ' | |||||||||||||||
Note 16: Business Segment Information | ||||||||||||||||
The Company operates its business on the basis of two reportable segments — specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for dry eye, glaucoma, inflammation, infection, allergy and retinal disease; Botox® for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, eyelash growth and other prescription and physician-dispensed skin care products; and urologics products. The medical devices segment produces a broad range of medical devices, including: breast implants for augmentation, revision and reconstructive surgery and tissue expanders; and facial aesthetics products. The Company provides global marketing strategy teams to ensure development and execution of a consistent marketing strategy for its products in all geographic regions that share similar distribution channels and customers. | ||||||||||||||||
The Company evaluates segment performance on a product net sales and operating income basis exclusive of general and administrative expenses and other indirect costs, legal settlement expenses, impairment of intangible assets and related costs, restructuring charges, amortization of certain identifiable intangible assets related to business combinations, asset acquisitions and related capitalized licensing costs and certain other adjustments, which are not allocated to the Company’s segments for performance assessment by the Company’s chief operating decision maker. Other adjustments excluded from the Company’s segments for performance assessment represent income or expenses that do not reflect, according to established Company-defined criteria, operating income or expenses associated with the Company’s core business activities. Because operating segments are generally defined by the products they design and sell, they do not make sales to each other. The Company does not discretely allocate assets to its operating segments, nor does the Company’s chief operating decision maker evaluate operating segments using discrete asset information. | ||||||||||||||||
Operating Segments | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Product net sales: | ||||||||||||||||
Specialty pharmaceuticals | $ | 1,526.10 | $ | 1,347.70 | $ | 2,885.40 | $ | 2,579.50 | ||||||||
Medical devices | 301.2 | 229.3 | 561 | 430 | ||||||||||||
Total product net sales | 1,827.30 | 1,577.00 | 3,446.40 | 3,009.50 | ||||||||||||
Other revenues | 36.9 | 20.7 | 63.9 | 47.8 | ||||||||||||
Total revenues | $ | 1,864.20 | $ | 1,597.70 | $ | 3,510.30 | $ | 3,057.30 | ||||||||
Operating income: | ||||||||||||||||
Specialty pharmaceuticals | $ | 685.7 | $ | 569.4 | $ | 1,256.00 | $ | 1,059.40 | ||||||||
Medical devices | 100.2 | 75.1 | 175.9 | 129.7 | ||||||||||||
Total segments | 785.9 | 644.5 | 1,431.90 | 1,189.10 | ||||||||||||
General and administrative expenses, other indirect costs and other adjustments | 153.1 | 123.7 | 366.3 | 267.8 | ||||||||||||
Amortization of intangible assets (a) | 26.4 | 27.6 | 53 | 52.7 | ||||||||||||
Restructuring charges (reversal) | (1.5 | ) | — | 22.8 | 4.3 | |||||||||||
Total operating income | $ | 607.9 | $ | 493.2 | $ | 989.8 | $ | 864.3 | ||||||||
—————————— | ||||||||||||||||
(a) | Represents amortization of certain identifiable intangible assets related to business combinations and asset acquisitions and related capitalized licensing costs, as applicable. | |||||||||||||||
Product net sales for the Company’s various global product portfolios are presented below. The Company’s principal geographic markets are the United States, Europe, Latin America and Asia Pacific. The U.S. information is presented separately as it is the Company’s headquarters country. U.S. sales represented 61.9% and 61.1% of the Company’s total consolidated product net sales for the three month periods ended June 30, 2014 and 2013, respectively. U.S. sales represented 62.1% and 61.0% of the Company’s total consolidated product net sales for the six month periods ended June 30, 2014 and 2013, respectively. | ||||||||||||||||
Sales to three customers in the Company’s specialty pharmaceuticals segment each generated over 10% of the Company’s total consolidated product net sales. Sales to McKesson Drug Company for the three month periods ended June 30, 2014 and 2013 were 14.1% and 14.0%, respectively, of the Company’s total consolidated product net sales, and 13.9% and 14.1%, respectively, of the Company’s total consolidated product net sales for the six month periods ended June 30, 2014 and 2013. Sales to AmerisourceBergen Corporation for the three month period ended June 30, 2014 were 10.1% of the Company’s total consolidated product net sales. Sales to Cardinal Health, Inc. for the three month period ended June 30, 2013 were 14.2% of the Company’s total consolidated product net sales, and 10.1% and 14.3%, respectively, of the Company’s total consolidated product net sales for the six month periods ended June 30, 2014 and 2013. No other country or single customer generates over 10% of the Company’s total consolidated product net sales. Other medical devices product net sales represent sales made pursuant to certain transitional manufacturing and distribution service agreements with Apollo related to the sale of the Company's obesity intervention business unit. Net sales for the Europe region also include sales to customers in Africa and the Middle East, and net sales in the Asia Pacific region include sales to customers in Australia and New Zealand. | ||||||||||||||||
Product Net Sales by Product Line | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Specialty Pharmaceuticals: | ||||||||||||||||
Eye Care Pharmaceuticals | $ | 827 | $ | 722.4 | $ | 1,557.40 | $ | 1,391.00 | ||||||||
Botox®/Neuromodulators | 579.4 | 513 | 1,081.20 | 970.9 | ||||||||||||
Skin Care and Other | 119.7 | 112.3 | 246.8 | 217.6 | ||||||||||||
Total Specialty Pharmaceuticals | 1,526.10 | 1,347.70 | 2,885.40 | 2,579.50 | ||||||||||||
Medical Devices: | ||||||||||||||||
Breast Aesthetics | 110.2 | 106.8 | 209.7 | 196.4 | ||||||||||||
Facial Aesthetics | 178.3 | 122.5 | 326.2 | 233.6 | ||||||||||||
Core Medical Devices | 288.5 | 229.3 | 535.9 | 430 | ||||||||||||
Other | 12.7 | — | 25.1 | — | ||||||||||||
Total Medical Devices | 301.2 | 229.3 | 561 | 430 | ||||||||||||
Total product net sales | $ | 1,827.30 | $ | 1,577.00 | $ | 3,446.40 | $ | 3,009.50 | ||||||||
Geographic Information | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Product net sales: | ||||||||||||||||
United States | $ | 1,131.00 | $ | 963.3 | $ | 2,141.70 | $ | 1,836.30 | ||||||||
Europe | 382.8 | 323.7 | 730.3 | 626.9 | ||||||||||||
Latin America | 101.1 | 100.7 | 181.5 | 181.9 | ||||||||||||
Asia Pacific | 134.1 | 118.5 | 248.1 | 230.9 | ||||||||||||
Other | 78.3 | 70.8 | 144.8 | 133.5 | ||||||||||||
Total product net sales | $ | 1,827.30 | $ | 1,577.00 | $ | 3,446.40 | $ | 3,009.50 | ||||||||
June 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(in millions) | ||||||||||||||||
Long-lived assets: | ||||||||||||||||
United States | $ | 4,241.00 | $ | 4,274.70 | ||||||||||||
Europe | 618.1 | 569.9 | ||||||||||||||
Latin America | 52.1 | 52.2 | ||||||||||||||
Asia Pacific | 51.5 | 51.2 | ||||||||||||||
Other | 1.3 | 1.4 | ||||||||||||||
Total long-lived assets | $ | 4,964.00 | $ | 4,949.40 | ||||||||||||
Subsequent_Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Event | ' |
Note 17: Subsequent Event | |
In July 2014, the Company completed a global review of its structures and processes, portfolio of research and development projects and marketed products, and its geographies in an effort to prioritize the highest value investments. As a result of this review, the Company will execute a restructuring in the remainder of 2014 in an effort to improve efficiency and productivity. | |
The Company currently estimates that it will incur total non-recurring pre-tax charges of between $375 million and $425 million in connection with the restructuring and other costs, of which $65 million to $75 million will be a non-cash charge associated with the acceleration of previously unrecognized share-based compensation costs and certain other non-cash accounting adjustments. As part of the restructuring, the Company will reduce its workforce by approximately 1,500 employees, or approximately 13 percent of its current global headcount, and eliminate an additional approximately 250 vacant positions. The restructuring charges and other costs will primarily consist of employee severance and other one-time termination benefits, facility lease and other contract terminations, accelerated depreciation and asset write-downs, accelerated equity-based compensation, temporary labor and duplicate operating expenses. These non-recurring charges will be incurred beginning in the third quarter of 2014 and are expected to continue through the second quarter of 2015. |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||
Results of Operations from Discontinued Operations | ' | |||||||
The following table summarizes the results of operations from discontinued operations for the three and six month periods ended June 30, 2013: | ||||||||
30-Jun-13 | ||||||||
Three Months | Six Months | |||||||
(in millions) | ||||||||
Product net sales | $ | 31.9 | $ | 65.2 | ||||
Operating costs and expenses: | ||||||||
Cost of sales (excludes amortization of intangible assets) | 5.2 | 10.5 | ||||||
Selling, general and administrative | 14.6 | 30.4 | ||||||
Research and development | 1.2 | 2.7 | ||||||
Amortization of intangible assets | — | 10.3 | ||||||
Earnings from discontinued operations before income taxes | $ | 10.9 | $ | 11.3 | ||||
Earnings from discontinued operations, net of income taxes | $ | 7.2 | $ | 7.6 | ||||
Restructuring_Charges_and_Inte1
Restructuring Charges and Integration Costs (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Charges Related to the January 2014 Restructuring Plan | ' | ||||||||||||
The following table presents the restructuring charges related to the January 2014 restructuring plan during the six month period ended June 30, 2014: | |||||||||||||
Employee Severance | Other | Total | |||||||||||
(in millions) | |||||||||||||
Restructuring charges during the six month period ended June 30, 2014 | $ | 19.4 | $ | 2.3 | $ | 21.7 | |||||||
Spending | (11.4 | ) | (1.3 | ) | (12.7 | ) | |||||||
Balance at June 30, 2014 (included in "Other accrued expenses") | $ | 8 | $ | 1 | $ | 9 | |||||||
Intangibles_and_Goodwill_Table
Intangibles and Goodwill (Tables) | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Intangibles | ' | |||||||||||||||||||
At June 30, 2014 and December 31, 2013, the components of intangibles and certain other related information were as follows: | ||||||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||||||
Gross | Accumulated | Weighted | Gross | Accumulated | Weighted | |||||||||||||||
Amount | Amortization | Average | Amount | Amortization | Average | |||||||||||||||
Amortization | Amortization | |||||||||||||||||||
Period | Period | |||||||||||||||||||
(in millions) | (in years) | (in millions) | (in years) | |||||||||||||||||
Amortizable Intangible Assets: | ||||||||||||||||||||
Developed technology | $ | 657.3 | $ | (372.5 | ) | 11.1 | $ | 647.7 | $ | (343.8 | ) | 11.1 | ||||||||
Customer relationships | 54.7 | (32.1 | ) | 2.7 | 54.7 | (21.8 | ) | 2.7 | ||||||||||||
Licensing | 191 | (166.5 | ) | 9.3 | 185.8 | (164.8 | ) | 9.3 | ||||||||||||
Trademarks | 89.7 | (32.0 | ) | 12.3 | 89.6 | (29.7 | ) | 12.4 | ||||||||||||
Core technology | 327.4 | (77.8 | ) | 14.8 | 327.5 | (66.9 | ) | 14.8 | ||||||||||||
Other | 31 | (14.8 | ) | 7.6 | 30.7 | (12.8 | ) | 7.6 | ||||||||||||
1,351.10 | (695.7 | ) | 11.4 | 1,336.00 | (639.8 | ) | 11.4 | |||||||||||||
Unamortizable Intangible Assets: | ||||||||||||||||||||
In-process research and development | 953.8 | — | 953.8 | — | ||||||||||||||||
$ | 2,304.90 | $ | (695.7 | ) | $ | 2,289.80 | $ | (639.8 | ) | |||||||||||
Amortization Expense of Intangible Assets | ' | |||||||||||||||||||
The following table provides amortization expense by major categories of intangible assets for the three and six month periods ended June 30, 2014 and 2013, respectively: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
(in millions) | ||||||||||||||||||||
Developed technology | $ | 14.6 | $ | 14.3 | $ | 29 | $ | 28.6 | ||||||||||||
Customer relationships | 5.1 | 5.1 | 10.2 | 10.2 | ||||||||||||||||
Licensing | 0.8 | 0.8 | 1.5 | 6 | ||||||||||||||||
Trademarks | 1.1 | 1.1 | 2.2 | 2.2 | ||||||||||||||||
Core technology | 5.6 | 5.5 | 11.1 | 8.4 | ||||||||||||||||
Other | 0.8 | 2.2 | 1.8 | 4.3 | ||||||||||||||||
$ | 28 | $ | 29 | $ | 55.8 | $ | 59.7 | |||||||||||||
Goodwill | ' | |||||||||||||||||||
Changes in the carrying amount of goodwill by operating segment through June 30, 2014 were as follows: | ||||||||||||||||||||
Specialty | Medical | Total | ||||||||||||||||||
Pharmaceuticals | Devices | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Balance at December 31, 2013 | $ | 501.2 | $ | 1,838.20 | $ | 2,339.40 | ||||||||||||||
Foreign exchange translation effects | 1.6 | (0.4 | ) | 1.2 | ||||||||||||||||
Balance at June 30, 2014 | $ | 502.8 | $ | 1,837.80 | $ | 2,340.60 | ||||||||||||||
Inventories_Tables
Inventories (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Components of Inventories | ' | |||||||
Components of inventories were: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Finished products | $ | 192.7 | $ | 180 | ||||
Work in process | 45.3 | 44.1 | ||||||
Raw materials | 61.9 | 61.2 | ||||||
Total | $ | 299.9 | $ | 285.3 | ||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Share-Based Compensation Expense by Expense Category | ' | |||||||||||||||
For the three and six month periods ended June 30, 2014 and 2013, share-based compensation expense was as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Cost of sales | $ | 1.8 | $ | 1.8 | $ | 3.7 | $ | 3.6 | ||||||||
Selling, general and administrative | 20.8 | 18 | 44 | 37.4 | ||||||||||||
Research and development | 8.8 | 7.5 | 18.4 | 14.8 | ||||||||||||
Pre-tax share-based compensation expense | 31.4 | 27.3 | 66.1 | 55.8 | ||||||||||||
Income tax benefit | 10.3 | 8.7 | 21 | 18.1 | ||||||||||||
Net share-based compensation expense | $ | 21.1 | $ | 18.6 | $ | 45.1 | $ | 37.7 | ||||||||
Employee_Retirement_and_Other_1
Employee Retirement and Other Benefit Plans (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
Components of Net Periodic Benefit Cost | ' | |||||||||||||||
Components of net periodic benefit cost for the three and six month periods ended June 30, 2014 and 2013, respectively, were as follows: | ||||||||||||||||
Three Months Ended | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Service cost | $ | 6.9 | $ | 7.1 | $ | 0.4 | $ | 0.5 | ||||||||
Interest cost | 13.3 | 11.5 | 0.6 | 0.5 | ||||||||||||
Expected return on plan assets | (13.2 | ) | (11.2 | ) | — | — | ||||||||||
Amortization of prior service costs | (0.1 | ) | — | (0.7 | ) | (0.6 | ) | |||||||||
Recognized net actuarial losses | 4.8 | 7.7 | 0.2 | 0.3 | ||||||||||||
Net periodic benefit cost | $ | 11.7 | $ | 15.1 | $ | 0.5 | $ | 0.7 | ||||||||
Six Months Ended | ||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Service cost | $ | 13.8 | $ | 14.2 | $ | 0.8 | $ | 0.9 | ||||||||
Interest cost | 26.6 | 23.1 | 1.2 | 1 | ||||||||||||
Expected return on plan assets | (26.3 | ) | (22.5 | ) | — | — | ||||||||||
Amortization of prior service costs | (0.1 | ) | — | (1.4 | ) | (1.3 | ) | |||||||||
Recognized net actuarial losses | 9.5 | 15.5 | 0.4 | 0.7 | ||||||||||||
Net periodic benefit cost | $ | 23.5 | $ | 30.3 | $ | 1 | $ | 1.3 | ||||||||
Product_Warranties_Tables
Product Warranties (Tables) | 6 Months Ended | |||
Jun. 30, 2014 | ||||
Product Warranties Disclosures [Abstract] | ' | |||
Change in Estimated Product Warranty Liabilities | ' | |||
The following table provides a reconciliation of the change in estimated product warranty liabilities through June 30, 2014: | ||||
(in millions) | ||||
Balance at December 31, 2013 | $ | 33.6 | ||
Provision for warranties issued during the period | 5.4 | |||
Settlements made during the period | (5.0 | ) | ||
Balance at June 30, 2014 | $ | 34 | ||
Current portion | $ | 7.6 | ||
Non-current portion | 26.4 | |||
Total | $ | 34 | ||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation of Basic and Diluted Earnings Per Share | ' | |||||||||||||||
The table below presents the computation of basic and diluted earnings per share: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Net earnings attributable to Allergan, Inc.: | ||||||||||||||||
Earnings from continuing operations attributable to Allergan, Inc.: | ||||||||||||||||
Earnings from continuing operations | $ | 418.4 | $ | 354 | $ | 676.9 | $ | 627 | ||||||||
Less net earnings attributable to noncontrolling interest | 1.2 | 1.3 | 1.8 | 3.2 | ||||||||||||
Earnings from continuing operations attributable to Allergan, Inc. | 417.2 | 352.7 | 675.1 | 623.8 | ||||||||||||
Earnings (loss) from discontinued operations | — | 7.2 | (0.6 | ) | (251.4 | ) | ||||||||||
Net earnings attributable to Allergan, Inc. | $ | 417.2 | $ | 359.9 | $ | 674.5 | $ | 372.4 | ||||||||
Weighted average number of shares outstanding | 297.6 | 296 | 297.7 | 296.9 | ||||||||||||
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price | 6.3 | 5.3 | 6 | 5.6 | ||||||||||||
Diluted shares | 303.9 | 301.3 | 303.7 | 302.5 | ||||||||||||
Basic earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||||||
Continuing operations | $ | 1.4 | $ | 1.19 | $ | 2.27 | $ | 2.1 | ||||||||
Discontinued operations | — | 0.03 | — | (0.85 | ) | |||||||||||
Net basic earnings per share attributable to Allergan, Inc. stockholders | $ | 1.4 | $ | 1.22 | $ | 2.27 | $ | 1.25 | ||||||||
Diluted earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||||||
Continuing operations | $ | 1.37 | $ | 1.17 | $ | 2.22 | $ | 2.06 | ||||||||
Discontinued operations | — | 0.02 | — | (0.83 | ) | |||||||||||
Net diluted earnings per share attributable to Allergan, Inc. stockholders | $ | 1.37 | $ | 1.19 | $ | 2.22 | $ | 1.23 | ||||||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
Notional Principal and Fair Value of Foreign Currency Derivative Instruments | ' | |||||||||||||||
At June 30, 2014 and December 31, 2013, the notional principal and fair value of the Company’s outstanding foreign currency derivative financial instruments were as follows: | ||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||
Notional | Fair | Notional | Fair | |||||||||||||
Principal | Value | Principal | Value | |||||||||||||
(in millions) | ||||||||||||||||
Foreign currency forward exchange contracts | $ | 43.6 | $ | (0.7 | ) | $ | 35 | $ | 0.1 | |||||||
(Receive U.S. dollar/pay foreign currency) | ||||||||||||||||
Foreign currency forward exchange contracts | 162.5 | 1.9 | 41.3 | 0.1 | ||||||||||||
(Pay U.S. dollar/receive foreign currency) | ||||||||||||||||
Foreign currency sold — put options | 854 | 25.5 | 560.8 | 20.2 | ||||||||||||
Carrying Amount and Estimated Fair Value of Other Financial Instruments | ' | |||||||||||||||
The carrying amount and estimated fair value of the Company’s other financial instruments at June 30, 2014 and December 31, 2013 were as follows: | ||||||||||||||||
June 30, 2014 | December 31, 2013 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(in millions) | ||||||||||||||||
Cash and equivalents | $ | 3,189.90 | $ | 3,189.90 | $ | 3,046.10 | $ | 3,046.10 | ||||||||
Short-term investments | 525.6 | 525.6 | 603 | 603 | ||||||||||||
Non-current non-marketable equity investments | 30.8 | 30.8 | 20.8 | 20.8 | ||||||||||||
Notes payable | 60.9 | 60.9 | 55.6 | 55.6 | ||||||||||||
Long-term debt | 2,091.80 | 2,112.30 | 2,098.30 | 2,163.80 | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | |||||||||||||||
June 30, 2014 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 2,108.30 | $ | — | $ | 2,108.30 | $ | — | ||||||||
Foreign time deposits | 334.4 | — | 334.4 | — | ||||||||||||
Other cash equivalents | 1,047.50 | — | 1,047.50 | — | ||||||||||||
Foreign exchange derivative assets | 26.7 | — | 26.7 | — | ||||||||||||
Deferred executive compensation investments | 108.7 | 88.3 | 20.4 | — | ||||||||||||
$ | 3,625.60 | $ | 88.3 | $ | 3,537.30 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred executive compensation liabilities | 101.3 | 80.9 | 20.4 | — | ||||||||||||
Contingent consideration liabilities | 218.8 | — | — | 218.8 | ||||||||||||
$ | 320.1 | $ | 80.9 | $ | 20.4 | $ | 218.8 | |||||||||
December 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 2,016.80 | $ | — | $ | 2,016.80 | $ | — | ||||||||
Foreign time deposits | 370.3 | — | 370.3 | — | ||||||||||||
Other cash equivalents | 1,080.40 | — | 1,080.40 | — | ||||||||||||
Foreign exchange derivative assets | 20.4 | — | 20.4 | — | ||||||||||||
Deferred executive compensation investments | 100.7 | 80.4 | 20.3 | — | ||||||||||||
$ | 3,588.60 | $ | 80.4 | $ | 3,508.20 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred executive compensation liabilities | $ | 93 | $ | 72.7 | $ | 20.3 | $ | — | ||||||||
Contingent consideration liabilities | 225.2 | — | — | 225.2 | ||||||||||||
$ | 318.2 | $ | 72.7 | $ | 20.3 | $ | 225.2 | |||||||||
Reconciliation of the Change in the Contingent Consideraion Liabilites | ' | |||||||||||||||
The following table provides a reconciliation of the change in the contingent consideration liabilities through June 30, 2014: | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at December 31, 2013 | $ | 225.2 | ||||||||||||||
Change in the estimated fair value of the contingent consideration liabilities | 3.4 | |||||||||||||||
Payments made during the period | (10.2 | ) | ||||||||||||||
Foreign exchange translation effects | 0.4 | |||||||||||||||
Balance at June 30, 2014 | $ | 218.8 | ||||||||||||||
Business_Segment_Information_T
Business Segment Information (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Operating Segments | ' | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Product net sales: | ||||||||||||||||
Specialty pharmaceuticals | $ | 1,526.10 | $ | 1,347.70 | $ | 2,885.40 | $ | 2,579.50 | ||||||||
Medical devices | 301.2 | 229.3 | 561 | 430 | ||||||||||||
Total product net sales | 1,827.30 | 1,577.00 | 3,446.40 | 3,009.50 | ||||||||||||
Other revenues | 36.9 | 20.7 | 63.9 | 47.8 | ||||||||||||
Total revenues | $ | 1,864.20 | $ | 1,597.70 | $ | 3,510.30 | $ | 3,057.30 | ||||||||
Operating income: | ||||||||||||||||
Specialty pharmaceuticals | $ | 685.7 | $ | 569.4 | $ | 1,256.00 | $ | 1,059.40 | ||||||||
Medical devices | 100.2 | 75.1 | 175.9 | 129.7 | ||||||||||||
Total segments | 785.9 | 644.5 | 1,431.90 | 1,189.10 | ||||||||||||
General and administrative expenses, other indirect costs and other adjustments | 153.1 | 123.7 | 366.3 | 267.8 | ||||||||||||
Amortization of intangible assets (a) | 26.4 | 27.6 | 53 | 52.7 | ||||||||||||
Restructuring charges (reversal) | (1.5 | ) | — | 22.8 | 4.3 | |||||||||||
Total operating income | $ | 607.9 | $ | 493.2 | $ | 989.8 | $ | 864.3 | ||||||||
—————————— | ||||||||||||||||
(a) | Represents amortization of certain identifiable intangible assets related to business combinations and asset acquisitions and related capitalized licensing costs, as applicable. | |||||||||||||||
Product Net Sales by Product Line | ' | |||||||||||||||
Product Net Sales by Product Line | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Specialty Pharmaceuticals: | ||||||||||||||||
Eye Care Pharmaceuticals | $ | 827 | $ | 722.4 | $ | 1,557.40 | $ | 1,391.00 | ||||||||
Botox®/Neuromodulators | 579.4 | 513 | 1,081.20 | 970.9 | ||||||||||||
Skin Care and Other | 119.7 | 112.3 | 246.8 | 217.6 | ||||||||||||
Total Specialty Pharmaceuticals | 1,526.10 | 1,347.70 | 2,885.40 | 2,579.50 | ||||||||||||
Medical Devices: | ||||||||||||||||
Breast Aesthetics | 110.2 | 106.8 | 209.7 | 196.4 | ||||||||||||
Facial Aesthetics | 178.3 | 122.5 | 326.2 | 233.6 | ||||||||||||
Core Medical Devices | 288.5 | 229.3 | 535.9 | 430 | ||||||||||||
Other | 12.7 | — | 25.1 | — | ||||||||||||
Total Medical Devices | 301.2 | 229.3 | 561 | 430 | ||||||||||||
Total product net sales | $ | 1,827.30 | $ | 1,577.00 | $ | 3,446.40 | $ | 3,009.50 | ||||||||
Geographic Information | ' | |||||||||||||||
Geographic Information | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Product net sales: | ||||||||||||||||
United States | $ | 1,131.00 | $ | 963.3 | $ | 2,141.70 | $ | 1,836.30 | ||||||||
Europe | 382.8 | 323.7 | 730.3 | 626.9 | ||||||||||||
Latin America | 101.1 | 100.7 | 181.5 | 181.9 | ||||||||||||
Asia Pacific | 134.1 | 118.5 | 248.1 | 230.9 | ||||||||||||
Other | 78.3 | 70.8 | 144.8 | 133.5 | ||||||||||||
Total product net sales | $ | 1,827.30 | $ | 1,577.00 | $ | 3,446.40 | $ | 3,009.50 | ||||||||
June 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(in millions) | ||||||||||||||||
Long-lived assets: | ||||||||||||||||
United States | $ | 4,241.00 | $ | 4,274.70 | ||||||||||||
Europe | 618.1 | 569.9 | ||||||||||||||
Latin America | 52.1 | 52.2 | ||||||||||||||
Asia Pacific | 51.5 | 51.2 | ||||||||||||||
Other | 1.3 | 1.4 | ||||||||||||||
Total long-lived assets | $ | 4,964.00 | $ | 4,949.40 | ||||||||||||
Acquisitions_and_Collaboration1
Acquisitions and Collaborations (Details) (USD $) | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Mar. 01, 2013 | Mar. 01, 2013 | Jun. 30, 2014 | Mar. 01, 2013 | Jun. 30, 2013 | Apr. 12, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
MAP Acquisition [Member] | MAP Acquisition [Member] | MAP Acquisition [Member] | MAP Acquisition [Member] | MAP Acquisition [Member] | Exemplar Acquisition [Member] | Exemplar Acquisition [Member] | Aline Asset Acquisition [Member] | Aline Asset Acquisition [Member] | Purchase of Noncontrolling Interest in a Subsidiary [Member] | |||
In Process Research and Development [Member] | Core Technology [Member] | Core Technology [Member] | ||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Date of acquisition | ' | ' | 1-Mar-13 | ' | ' | ' | ' | 12-Apr-13 | ' | ' | 31-Mar-14 | ' |
Business combination, total consideration | ' | ' | $871.70 | ' | ' | ' | ' | $16.10 | ' | ' | ' | ' |
Pre-existing payable to Exemplar | ' | ' | ' | ' | ' | ' | ' | ' | 1.9 | ' | ' | ' |
Fair value of assets acquired | ' | ' | ' | 1,233.60 | ' | ' | ' | ' | 16.6 | ' | ' | ' |
Current assets | ' | ' | ' | 2.3 | ' | ' | ' | ' | 0.5 | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 7.7 | ' | ' | ' | ' | 2.1 | ' | ' | ' |
Other non-current assets | ' | ' | ' | 0.3 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets | ' | ' | ' | 132.7 | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | 915.6 | 683.5 | ' | 232.1 | ' | ' | ' | ' | ' |
Goodwill | 2,340.60 | 2,339.40 | ' | 175 | ' | ' | ' | ' | 14 | ' | ' | ' |
Liabilities assumed | ' | ' | ' | 361.9 | ' | ' | ' | ' | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | 27.3 | ' | ' | ' | ' | 0.5 | ' | ' | ' |
Deferred tax liabilities | ' | ' | ' | 334.6 | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life of the intangible asset | '11 years 5 months | '11 years 5 months | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' |
Upfront payment to acquire certain assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' |
Date of purchase of noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Nov-13 |
Purchase of noncontrolling Interest in a subsidiary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18 |
Decrease in APIC due to the purchase of noncontrolling interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.30 |
Acquisitions_and_Collaboration2
Acquisitions and Collaborations (Collaborations) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2014 |
Business Collaborations [Line Items] | ' | ' | ' |
Potential future milestone receipts | ' | ' | $45.90 |
Potential future development milestone receipts | ' | ' | 3.5 |
Potential future regulatory milestone receipts | ' | ' | 17 |
Potential future commercial sales milestone receipts | ' | ' | 25.4 |
Collaborative Arrangement with Medytox [Member] | ' | ' | ' |
Business Collaborations [Line Items] | ' | ' | ' |
Date of collaboration agreement | ' | 25-Sep-13 | ' |
Upfront payment | 65 | ' | ' |
Potential future development milestone payments | ' | ' | 116.5 |
Potential future sales milestone payments | ' | ' | 180.5 |
Collaborative Arrangement With A Third Party [Member] | ' | ' | ' |
Business Collaborations [Line Items] | ' | ' | ' |
Date of collaboration agreement | ' | 10-Sep-13 | ' |
Upfront payment | ' | 6.5 | ' |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 02, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of discontinued operations, cash consideration | ' | ' | ' | ' | ' | ' | ' | $75 |
Sale of discontinued operations, additional consideration - minority equity interest | ' | ' | ' | ' | ' | ' | ' | 15 |
Sale of discontinued operations, contingent consideration from the buyer | ' | ' | ' | ' | ' | ' | ' | 20 |
Inventories held outside of the United States that reduce the cash consideration | ' | ' | ' | ' | ' | ' | ' | 7.6 |
Net accounts receivable and payable that reduce the cash consideration | ' | ' | ' | ' | ' | ' | ' | 19.4 |
Loss on sale of discontinued operations, before income taxes | ' | -0.9 | ' | -346.2 | ' | ' | -408.2 | ' |
Loss on sale of discontinued operations, net of income taxes | 0 | -0.6 | 0 | -259 | -0.6 | -259 | -297.9 | ' |
Transaction costs related to the sale of discontinued operations | ' | ' | ' | ' | ' | ' | 2.6 | ' |
Assets of discontinued operations, net trade receivables | 1.2 | ' | ' | ' | 1.2 | ' | 9 | ' |
Transitional period to provide administrative and distribution services | ' | ' | ' | ' | '12 months | ' | ' | ' |
Transitional period to manufacture and supply products | ' | ' | ' | ' | '24 months | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Product net sales | ' | ' | 31.9 | ' | ' | 65.2 | ' | ' |
Costs of Sales (excludes amortization of intangible assets) | ' | ' | 5.2 | ' | ' | 10.5 | ' | ' |
Selling, general and administrative | ' | ' | 14.6 | ' | ' | 30.4 | ' | ' |
Research and development | ' | ' | 1.2 | ' | ' | 2.7 | ' | ' |
Amortization of intangible assets | ' | ' | 0 | ' | ' | 10.3 | ' | ' |
Earnings from discontinued operations before income taxes | ' | ' | 10.9 | ' | ' | 11.3 | ' | ' |
Earnings from discontinued operations, net of income taxes | $0 | ' | $7.20 | ' | $0 | $7.60 | ' | ' |
Restructuring_Charges_and_Inte2
Restructuring Charges and Integration Costs (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | MAP, SkinMedica And Exemplar Acquisitions Restructuring [Member] | MAP, SkinMedica And Exemplar Acquisitions Restructuring [Member] | MAP, SkinMedica And Exemplar Acquisitions Restructuring [Member] | MAP, SkinMedica And Exemplar Acquisitions Restructuring [Member] | Realignment Of Business Functions [Member] | Realignment Of Business Functions [Member] | Realignment Of Business Functions [Member] | Realignment Of Business Functions [Member] | |||||
employees | Cost of Sales [Member] | Cost of Sales [Member] | Selling, General and Administrative Expenses [Member] | Selling, General and Administrative Expenses [Member] | Research and Development Expense [Member] | Research and Development Expense [Member] | employees | ||||||||||||||
Restructuring and Related Costs [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of positions eliminated | ' | ' | ' | ' | ' | ' | 250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 111 | ' | ' | ' | ' |
Restructuring charges (reversal) | ($1.50) | $0 | $22.80 | $4.30 | ($2.30) | $24 | $21.70 | ' | ' | ' | ' | ' | ' | $0.40 | ($0.90) | $4.30 | $4.50 | $0.80 | $0.90 | $0.70 | $0.90 |
Estimated total costs, lower range | ' | ' | ' | ' | ' | ' | 40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated total costs, upper range | ' | ' | ' | ' | ' | ' | 45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional costs related to the restructuring plan | ' | ' | ' | ' | 2.3 | 6.5 | ' | 0.9 | 0.8 | 0.9 | 4.3 | 0.5 | 1.4 | ' | ' | ' | ' | ' | ' | ' | ' |
Realignment of business functions, SG&A expenses | 0.1 | 0.1 | 0.1 | 0.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Realignment of business functions, R&D expenses | 0.1 | 0.7 | 0.5 | 0.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Integration and transaction costs, cost of sales | ' | 0.1 | ' | 0.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Integration and transaction costs, SG&A expenses | 0.2 | 3.7 | 1 | 15.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Integration and transaction costs, R&D expense | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring_Charges_and_Inte3
Restructuring Charges and Integration Costs (Restructuring Reserve Rollforward) (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | January 2014 Restructuring Plan [Member] | |||||
Employee Severance [Member] | Other Restructuring [Member] | ||||||||
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring charges (reversal) | ($1.50) | $0 | $22.80 | $4.30 | ($2.30) | $24 | $21.70 | $19.40 | $2.30 |
Spending | ' | ' | ' | ' | ' | ' | -12.7 | -11.4 | -1.3 |
Balance, end of period | ' | ' | ' | ' | $9 | ' | $9 | $8 | $1 |
Intangibles_and_Goodwill_Detai
Intangibles and Goodwill (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | $1,351.10 | ' | $1,351.10 | ' | $1,336 |
Accumulated amortization | -695.7 | ' | -695.7 | ' | -639.8 |
Weighted average amortization period | ' | ' | '11 years 5 months | ' | '11 years 5 months |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | ' | ' | ' | ' |
Total intangible assets - gross | 2,304.90 | ' | 2,304.90 | ' | 2,289.80 |
Total intangible assets - accumulated amortization | -695.7 | ' | -695.7 | ' | -639.8 |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 28 | 29 | 55.8 | 59.7 | ' |
Estimated amortization expense [Abstract] | ' | ' | ' | ' | ' |
Estimated amortization expense, 2014 | 111.4 | ' | 111.4 | ' | ' |
Estimated amortization expense, 2015 | 98.2 | ' | 98.2 | ' | ' |
Estimated amortization expense, 2016 | 77.9 | ' | 77.9 | ' | ' |
Estimated amortization expense, 2017 | 59.4 | ' | 59.4 | ' | ' |
Estimated amortization expense, 2018 | 57.4 | ' | 57.4 | ' | ' |
Developed Technology [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | 657.3 | ' | 657.3 | ' | 647.7 |
Accumulated amortization | -372.5 | ' | -372.5 | ' | -343.8 |
Weighted average amortization period | ' | ' | '11 years 1 month | ' | '11 years 1 month |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 14.6 | 14.3 | 29 | 28.6 | ' |
Customer Relationships [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | 54.7 | ' | 54.7 | ' | 54.7 |
Accumulated amortization | -32.1 | ' | -32.1 | ' | -21.8 |
Weighted average amortization period | ' | ' | '2 years 8 months | ' | '2 years 8 months |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 5.1 | 5.1 | 10.2 | 10.2 | ' |
Licensing [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | 191 | ' | 191 | ' | 185.8 |
Accumulated amortization | -166.5 | ' | -166.5 | ' | -164.8 |
Weighted average amortization period | ' | ' | '9 years 4 months | ' | '9 years 4 months |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 0.8 | 0.8 | 1.5 | 6 | ' |
Trademarks [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | 89.7 | ' | 89.7 | ' | 89.6 |
Accumulated amortization | -32 | ' | -32 | ' | -29.7 |
Weighted average amortization period | ' | ' | '12 years 4 months | ' | '12 years 5 months |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 1.1 | 1.1 | 2.2 | 2.2 | ' |
Core Technology [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | 327.4 | ' | 327.4 | ' | 327.5 |
Accumulated amortization | -77.8 | ' | -77.8 | ' | -66.9 |
Weighted average amortization period | ' | ' | '14 years 10 months | ' | '14 years 10 months |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 5.6 | 5.5 | 11.1 | 8.4 | ' |
Other [Member] | ' | ' | ' | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' |
Gross amount | 31 | ' | 31 | ' | 30.7 |
Accumulated amortization | -14.8 | ' | -14.8 | ' | -12.8 |
Weighted average amortization period | ' | ' | '7 years 7 months | ' | '7 years 7 months |
Amortization expense [Abstract] | ' | ' | ' | ' | ' |
Amortization expense of intangible assets | 0.8 | 2.2 | 1.8 | 4.3 | ' |
In-Process Research and Development [Member] | ' | ' | ' | ' | ' |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ' | ' | ' | ' | ' |
Unamortizable intangible assets | $953.80 | ' | $953.80 | ' | $953.80 |
Intangibles_and_Goodwill_Goodw
Intangibles and Goodwill (Goodwill) (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Goodwill [Roll Forward] | ' |
Balance, beginning | $2,339.40 |
Foreign exchange translation effects and other | 1.2 |
Balance, ending | 2,340.60 |
Specialty Pharmaceuticals [Member] | ' |
Goodwill [Roll Forward] | ' |
Balance, beginning | 501.2 |
Foreign exchange translation effects and other | 1.6 |
Balance, ending | 502.8 |
Medical Devices [Member] | ' |
Goodwill [Roll Forward] | ' |
Balance, beginning | 1,838.20 |
Foreign exchange translation effects and other | -0.4 |
Balance, ending | $1,837.80 |
Inventories_Details
Inventories (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory, Net [Abstract] | ' | ' |
Finished products | $192.70 | $180 |
Work in process | 45.3 | 44.1 |
Raw materials | 61.9 | 61.2 |
Inventories | 299.9 | 285.3 |
Inventories under consignment | $12.60 | $11.70 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ' | ' |
Deferred tax assets valuation allowances | $48.90 | $48.90 |
Unrecognized tax benefits | 51.3 | 77.3 |
Unrecognized tax benefit that, if recognized, would affect the effective tax rate | 45.8 | 70.5 |
Reasonably possible decrease in unrecognized tax benefit liabilities during the next 12 months, lower range of change | 14 | ' |
Reasonably possible decrease in unrecognized tax benefit liabilities during the next 12 months, upper range of change | 15 | ' |
Interest accrued related to uncertain tax positions | 7.1 | 9.8 |
Unremitted earnings outside the United States | ' | $3,828 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Pre-tax share-based compensation expense | $31.40 | $27.30 | $66.10 | $55.80 |
Income tax benefit | 10.3 | 8.7 | 21 | 18.1 |
Net share-based compensation expense | 21.1 | 18.6 | 45.1 | 37.7 |
Total unrecognized compensation cost related to non-vested stock options and restricted stock | 253.4 | ' | 253.4 | ' |
Months to recognize compensation costs related to non-vested stock options and restricted stock | ' | ' | '46 months | ' |
Weighted average months to recognize compensation costs related to non-vested stock options and restricted stock | ' | ' | '34 months | ' |
Cost of Sales [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Pre-tax share-based compensation expense | 1.8 | 1.8 | 3.7 | 3.6 |
Selling, General and Administrative Expenses [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Pre-tax share-based compensation expense | 20.8 | 18 | 44 | 37.4 |
Research and Development Expense [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Pre-tax share-based compensation expense | $8.80 | $7.50 | $18.40 | $14.80 |
Employee_Retirement_and_Other_2
Employee Retirement and Other Benefit Plans (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Pension Plans [Member] | ' | ' | ' | ' |
Components of net periodic benefit cost (credit) [Abstract] | ' | ' | ' | ' |
Service cost | $6.90 | $7.10 | $13.80 | $14.20 |
Interest cost | 13.3 | 11.5 | 26.6 | 23.1 |
Expected return on plan assets | -13.2 | -11.2 | -26.3 | -22.5 |
Amortization of prior service costs (credits) | -0.1 | 0 | -0.1 | 0 |
Recognized net actuarial losses | 4.8 | 7.7 | 9.5 | 15.5 |
Net periodic benefit cost | 11.7 | 15.1 | 23.5 | 30.3 |
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, lower range | 30 | ' | 30 | ' |
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, upper range | 40 | ' | 40 | ' |
Retiree Health Plan [Member] | ' | ' | ' | ' |
Components of net periodic benefit cost (credit) [Abstract] | ' | ' | ' | ' |
Service cost | 0.4 | 0.5 | 0.8 | 0.9 |
Interest cost | 0.6 | 0.5 | 1.2 | 1 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service costs (credits) | -0.7 | -0.6 | -1.4 | -1.3 |
Recognized net actuarial losses | 0.2 | 0.3 | 0.4 | 0.7 |
Net periodic benefit cost | 0.5 | 0.7 | 1 | 1.3 |
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, lower range | 1 | ' | 1 | ' |
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, upper range | $2 | ' | $2 | ' |
Product_Warranties_Details
Product Warranties (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Reconciliation of the change in estimated product warranty liabilities [Roll Forward] | ' |
Balance, beginning of period | $33.60 |
Provision for warranties issued during the period | 5.4 |
Settlements made during the period | -5 |
Balance, end of period | 34 |
Product warranty accrual, balance sheet classification [Abstract] | ' |
Current portion | 7.6 |
Non-current portion | 26.4 |
Total | $34 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share Disclosure [Abstract] | ' | ' | ' | ' |
Earnings from continuing operations | $418.40 | $354 | $676.90 | $627 |
Less net earnings attributable to noncontrolling interest | 1.2 | 1.3 | 1.8 | 3.2 |
Earnings from continuing operations attributable to Allergan, Inc. | 417.2 | 352.7 | 675.1 | 623.8 |
Earnings (loss) from discontinued operations | 0 | 7.2 | -0.6 | -251.4 |
Net earnings attributable to Allergan, Inc. | $417.20 | $359.90 | $674.50 | $372.40 |
Weighted average number of shares outstanding (in shares millions) | 297.6 | 296 | 297.7 | 296.9 |
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price (in shares millions) | 6.3 | 5.3 | 6 | 5.6 |
Diluted shares (in shares millions) | 303.9 | 301.3 | 303.7 | 302.5 |
Basic earnings per share attibutable to Allergan, Inc. stockholders: | ' | ' | ' | ' |
Continuing operations (in dollars per share) | $1.40 | $1.19 | $2.27 | $2.10 |
Discontinued operations (in dollars per share) | $0 | $0.03 | $0 | ($0.85) |
Net basic earnings per share attributable to Allergan, Inc. stockholders (in dollars per share) | $1.40 | $1.22 | $2.27 | $1.25 |
Diluted earnings per share attributable to Allergan, Inc. stockholders: | ' | ' | ' | ' |
Continuing operations (in dollars per share) | $1.37 | $1.17 | $2.22 | $2.06 |
Discontinued operations (in dollars per share) | $0 | $0.02 | $0 | ($0.83) |
Net diluted earnings per share attributable to Allergan, Inc. stockholders (in dollars per share) | $1.37 | $1.19 | $2.22 | $1.23 |
Stock Options [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive securities excluded from earnings per share calculation (in shares millions) | 3.6 | 4.4 | 5.5 | 4.3 |
Stock option exercise price lower range (in dollars per share) | $125.07 | $90.78 | $104.77 | $90.78 |
Stock option exercise price upper range (in dollars per share) | $166.32 | $105.87 | $166.32 | $105.87 |
Financial_Instruments_Details
Financial Instruments (Details) (USD $) | Jun. 30, 2014 | Sep. 30, 2012 | Jun. 30, 2014 | Apr. 30, 2006 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
In Millions, unless otherwise specified | Three Hundred Million Notional Amount Interest Rate Swap [Member] | Three Hundred Million Notional Amount Interest Rate Swap [Member] | Eight Hundred Million Notional Amount Interest Rate Swap [Member] | Eight Hundred Million Notional Amount Interest Rate Swap [Member] | Eight Hundred Million Notional Amount Interest Rate Swap [Member] | Eight Hundred Million Notional Amount Interest Rate Swap [Member] | Eight Hundred Million Notional Amount Interest Rate Swap [Member] | |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate swap, inception date | ' | ' | 31-Jan-07 | ' | ' | ' | 28-Feb-06 | ' |
Derivative, termination date | ' | 30-Sep-12 | ' | 30-Apr-06 | ' | ' | ' | ' |
Interest rate swap term | ' | ' | ' | ' | ' | ' | '10 years | ' |
Derivative term | ' | ' | 'nine-year, two month | ' | ' | ' | ' | ' |
Interest rate derivative, notional amount | ' | ' | $300 | ' | $800 | ' | $800 | ' |
Interest rate swap, fixed interest rate (in hundredths) | ' | ' | 5.75% | ' | 5.20% | ' | 5.20% | ' |
Interest rate swap, variable interest rate basis | ' | ' | '3-month LIBOR | ' | ' | ' | ' | ' |
Interest rate swap, variable interest rate (in hundredths) | ' | ' | 0.37% | ' | ' | ' | ' | ' |
Debt instrument, face amount | 800 | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, interest rate, stated percentage (in hundredths) | 5.75% | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, interest rate, effective percentage (in hundredths) | 3.94% | ' | ' | ' | ' | ' | ' | ' |
Proceeds upon termination of an interest rate swap | ' | 54.7 | ' | ' | ' | ' | ' | ' |
Accrued interest received upon termination of an interest rate swap | ' | 3.7 | ' | ' | ' | ' | ' | ' |
Net proceeds upon termination of an interest rate swap | ' | 51 | ' | ' | ' | ' | ' | ' |
Amortization of deferred gains on derivatives designated as cash flow hedges from accumulated OCI | ' | ' | ' | ' | 0.3 | 0.3 | 0.7 | 0.7 |
Remaining unrecognized gain on interest rate swap cash flow hedge included in accumulated other comprehensive loss | ' | ' | ' | 13 | ' | ' | 2.3 | ' |
Remaining unrecognized gain on interest rate swap cash flow hedge included in accumulated other comprehensive loss, net of tax | ' | ' | ' | ' | 1.4 | ' | 1.4 | ' |
Interest rate cash flow hedge pretax gain to be reclassified as a reduction to interest expense during 2014 | ' | ' | ' | ' | $1.30 | ' | $1.30 | ' |
Financial_Instruments_Gain_Los
Financial Instruments (Gain Loss by Hedging Relationship) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Three Hundred Million Notional Amount Interest Rate Swap [Member] | Interest Expense [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gains (losses) recognized in income on derivative instruments | $3.40 | $3.30 | $6.80 | $6.50 |
Settled Foreign Exchange Option Contracts [Member] | Other, Net [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gains (losses) recognized in income on derivative instruments | 2.2 | 0.6 | 6.2 | 1.6 |
Open Foreign Exchange Option Contracts [Member] | Other, Net [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gains (losses) recognized in income on derivative instruments | -10.9 | 10.6 | -15.1 | 11.9 |
Foreign Exchange Forward Contracts [Member] | Other, Net [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gains (losses) recognized in income on derivative instruments | ($0.80) | $3.80 | ($0.70) | $3.20 |
Financial_Instruments_Fair_Val
Financial Instruments (Fair Values Derivatives, Balance Sheet Location) (Details) (Other Current Assets [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Foreign Exchange Option Contracts [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of derivative asset | $25.50 | $20.20 |
Foreign Exchange Forward Contracts [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Fair value of derivative asset | $1.20 | $0.20 |
Financial_Instruments_Foreign_
Financial Instruments (Foreign Currency Derivative Instruments Notional Principal and Fair Value) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Foreign Exchange Forward Contract Receive U.S. Dollar [Member] | ' | ' |
Foreign Currency Derivative Instruments Notional Principal And Fair Value [Line Items] | ' | ' |
Notional principal | $43.60 | $35 |
Fair value | -0.7 | 0.1 |
Foreign Exchange Forward Contract Pay U.S. Dollar [Member] | ' | ' |
Foreign Currency Derivative Instruments Notional Principal And Fair Value [Line Items] | ' | ' |
Notional principal | 162.5 | 41.3 |
Fair value | 1.9 | 0.1 |
Foreign Exchange Contract Put Option [Member] | ' | ' |
Foreign Currency Derivative Instruments Notional Principal And Fair Value [Line Items] | ' | ' |
Notional principal | 854 | 560.8 |
Fair value | $25.50 | $20.20 |
Financial_Instruments_Fair_Val1
Financial Instruments (Fair Value by Balance Sheet Grouping) (Details) (USD $) | 3 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 |
Carrying Amount [Member] | Carrying Amount [Member] | Fair Value [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' | ' |
Cash and equivalents | ' | $3,189.90 | $3,046.10 | $3,189.90 | $3,046.10 |
Short-term investments | ' | 525.6 | 603 | 525.6 | 603 |
Non-current non-marketable equity investments | ' | 30.8 | 20.8 | 30.8 | 20.8 |
Notes payable | ' | 60.9 | 55.6 | 60.9 | 55.6 |
Long-term debt | ' | 2,091.80 | 2,098.30 | 2,112.30 | 2,163.80 |
Other than temporary impairment losses, non-marketable equtiy investment | $3.70 | ' | ' | ' | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Assets [Abstract] | ' | ' |
Commercial paper | $2,108.30 | $2,016.80 |
Foreign time deposits | 334.4 | 370.3 |
Other cash equivalents | 1,047.50 | 1,080.40 |
Foreign exchange derivative assets | 26.7 | 20.4 |
Deferred executive compensation investments | 108.7 | 100.7 |
Assets measured at fair value on a recurring basis | 3,625.60 | 3,588.60 |
Liabilities [Abstract] | ' | ' |
Deferred executive compensation liabilities | 101.3 | 93 |
Contingent consideration liabilities | 218.8 | 225.2 |
Liabilities measured at fair value on a recurring basis | 320.1 | 318.2 |
Reconciliation of the change in the contingent consideration liabilities [Roll Forward] | ' | ' |
Balance, beginning of period | 225.2 | ' |
Change in the estimated fair value of the contingent consideration liabilities | 3.4 | ' |
Payments made during the period | -10.2 | ' |
Foreign exchange translation effects | 0.4 | ' |
Balance, end of period | 218.8 | ' |
Probability of success in meeting development milestones, lower range (in hundredths) | 65.00% | ' |
Probability of success in meeting development milestones, higher range (in hundredths) | 75.00% | ' |
Level 1 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Commercial paper | 0 | 0 |
Foreign time deposits | 0 | 0 |
Other cash equivalents | 0 | 0 |
Foreign exchange derivative assets | 0 | 0 |
Deferred executive compensation investments | 88.3 | 80.4 |
Assets measured at fair value on a recurring basis | 88.3 | 80.4 |
Liabilities [Abstract] | ' | ' |
Deferred executive compensation liabilities | 80.9 | 72.7 |
Contingent consideration liabilities | 0 | 0 |
Liabilities measured at fair value on a recurring basis | 80.9 | 72.7 |
Level 2 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Commercial paper | 2,108.30 | 2,016.80 |
Foreign time deposits | 334.4 | 370.3 |
Other cash equivalents | 1,047.50 | 1,080.40 |
Foreign exchange derivative assets | 26.7 | 20.4 |
Deferred executive compensation investments | 20.4 | 20.3 |
Assets measured at fair value on a recurring basis | 3,537.30 | 3,508.20 |
Liabilities [Abstract] | ' | ' |
Deferred executive compensation liabilities | 20.4 | 20.3 |
Contingent consideration liabilities | 0 | 0 |
Liabilities measured at fair value on a recurring basis | 20.4 | 20.3 |
Level 3 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Commercial paper | 0 | 0 |
Foreign time deposits | 0 | 0 |
Other cash equivalents | 0 | 0 |
Foreign exchange derivative assets | 0 | 0 |
Deferred executive compensation investments | 0 | 0 |
Assets measured at fair value on a recurring basis | 0 | 0 |
Liabilities [Abstract] | ' | ' |
Deferred executive compensation liabilities | 0 | 0 |
Contingent consideration liabilities | 218.8 | 225.2 |
Liabilities measured at fair value on a recurring basis | $218.80 | $225.20 |
Business_Segment_Information_D
Business Segment Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues [Abstract] | ' | ' | ' | ' |
Product net sales | $1,827.30 | $1,577 | $3,446.40 | $3,009.50 |
Other revenues | 36.9 | 20.7 | 63.9 | 47.8 |
Total revenues | 1,864.20 | 1,597.70 | 3,510.30 | 3,057.30 |
Operating income [Abstract] | ' | ' | ' | ' |
Total segments | 785.9 | 644.5 | 1,431.90 | 1,189.10 |
General and administrative expenses, other indirect costs and other adjustments | 153.1 | 123.7 | 366.3 | 267.8 |
Amortization of intangible assets | 26.4 | 27.6 | 53 | 52.7 |
Restructuring charges (reversal) | -1.5 | 0 | 22.8 | 4.3 |
Operating income | 607.9 | 493.2 | 989.8 | 864.3 |
U.S. sales as a percentage of total consolidated product net sales (in hundredths) | 61.90% | 61.10% | 62.10% | 61.00% |
Specialty Pharmaceuticals [Member] | ' | ' | ' | ' |
Revenues [Abstract] | ' | ' | ' | ' |
Product net sales | 1,526.10 | 1,347.70 | 2,885.40 | 2,579.50 |
Operating income [Abstract] | ' | ' | ' | ' |
Total segments | 685.7 | 569.4 | 1,256 | 1,059.40 |
Medical Devices [Member] | ' | ' | ' | ' |
Revenues [Abstract] | ' | ' | ' | ' |
Product net sales | 301.2 | 229.3 | 561 | 430 |
Operating income [Abstract] | ' | ' | ' | ' |
Total segments | $100.20 | $75.10 | $175.90 | $129.70 |
Business_Segment_Information_M
Business Segment Information (Major Customers) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Cardinal Health, Inc. [Member] | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Percentage of product net sales by major customer (in hundredths) | ' | 14.20% | 10.10% | 14.30% |
McKesson Drug Company [Member] | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Percentage of product net sales by major customer (in hundredths) | 14.10% | 14.00% | 13.90% | 14.10% |
AmerisourceBergen Corporation [Member] | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Percentage of product net sales by major customer (in hundredths) | 10.10% | ' | ' | ' |
Business_Segment_Information_P
Business Segment Information (Product Net Sales by Product Line) (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | $1,827.30 | $1,577 | $3,446.40 | $3,009.50 |
Specialty Pharmaceuticals [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 1,526.10 | 1,347.70 | 2,885.40 | 2,579.50 |
Specialty Pharmaceuticals [Member] | Eye Care Pharmaceuticals [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 827 | 722.4 | 1,557.40 | 1,391 |
Specialty Pharmaceuticals [Member] | Botox/Neuromodulators [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 579.4 | 513 | 1,081.20 | 970.9 |
Specialty Pharmaceuticals [Member] | Skin Care and Other [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 119.7 | 112.3 | 246.8 | 217.6 |
Medical Devices [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 301.2 | 229.3 | 561 | 430 |
Medical Devices [Member] | Breast Aesthetics [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 110.2 | 106.8 | 209.7 | 196.4 |
Medical Devices [Member] | Facial Aesthetics [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 178.3 | 122.5 | 326.2 | 233.6 |
Medical Devices [Member] | Core Medical Devices [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | 288.5 | 229.3 | 535.9 | 430 |
Medical Devices [Member] | Other [Member] | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product net sales | $12.70 | $0 | $25.10 | $0 |
Business_Segment_Information_G
Business Segment Information (Geographic Information) (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Product net sales | $1,827.30 | $1,577 | $3,446.40 | $3,009.50 | ' |
Long-lived assets | 4,964 | ' | 4,964 | ' | 4,949.40 |
United States [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Product net sales | 1,131 | 963.3 | 2,141.70 | 1,836.30 | ' |
Long-lived assets | 4,241 | ' | 4,241 | ' | 4,274.70 |
Europe [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Product net sales | 382.8 | 323.7 | 730.3 | 626.9 | ' |
Long-lived assets | 618.1 | ' | 618.1 | ' | 569.9 |
Latin America [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Product net sales | 101.1 | 100.7 | 181.5 | 181.9 | ' |
Long-lived assets | 52.1 | ' | 52.1 | ' | 52.2 |
Asia Pacific [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Product net sales | 134.1 | 118.5 | 248.1 | 230.9 | ' |
Long-lived assets | 51.5 | ' | 51.5 | ' | 51.2 |
Other [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Product net sales | 78.3 | 70.8 | 144.8 | 133.5 | ' |
Long-lived assets | $1.30 | ' | $1.30 | ' | $1.40 |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent Event [Member], Restructuring Plan 2014 [Member], USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Jul. 31, 2014 |
employees | |
Subsequent Event [Member] | Restructuring Plan 2014 [Member] | ' |
Subsequent Event [Line Items] | ' |
Expected total restructuring costs, lower range | $375 |
Expected total restructuring costs, upper range | 425 |
Estimated non-cash charge, lower range | 65 |
Estimated non-cash charge, upper range | $75 |
Expected number of positions eliminated | 1,500 |
Expected number of positions eliminated, as a percentage of global headcount | 13.00% |
Expected number of vacant positions eliminated | 250 |