Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 18, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | Valeant Pharmaceuticals International, Inc. | ||
Entity Central Index Key | 885590 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 336,202,718 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $37,219,586 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $322.60 | $600.30 |
Trade receivables, net | 2,075.80 | 1,676.40 |
Inventories, net | 950.6 | 883 |
Prepaid expenses and other current assets | 641.9 | 343.4 |
Assets held for sale | 8.9 | 15.9 |
Deferred tax assets, net | 193.3 | 366.9 |
Total current assets | 4,193.10 | 3,885.90 |
Property, plant and equipment, net | 1,310.50 | 1,234.20 |
Intangible assets, net | 11,255.90 | 12,848.20 |
Goodwill | 9,346.40 | 9,752.10 |
Deferred tax assets, net | 54 | 54.9 |
Other long-term assets, net | 193.1 | 195.5 |
Total assets | 26,353 | 27,970.80 |
Current liabilities: | ||
Accounts payable | 398 | 327 |
Accrued and other current liabilities | 2,179.40 | 1,800.20 |
Acquisition-related contingent consideration | 141.8 | 114.5 |
Current portion of long-term debt | 0.9 | 204.8 |
Deferred tax liabilities, net | 10.7 | 66 |
Total current liabilities | 2,730.80 | 2,512.50 |
Acquisition-related contingent consideration | 167 | 241.3 |
Long-term debt | 15,253.70 | 17,162.90 |
Pension and other benefit liabilities | 239.8 | 172 |
Liabilities for uncertain tax positions | 102.6 | 169.1 |
Deferred tax liabilities, net | 2,227.50 | 2,319.20 |
Other long-term liabilities | 197.1 | 160.5 |
Total liabilities | 20,918.50 | 22,737.50 |
Commitments and contingencies (Notes 20 and 21) | ||
Equity | ||
Common shares, no par value, unlimited shares authorized, 334,402,964 and 333,036,637 issued and outstanding at December 31, 2014 and 2013, respectively | 8,349.20 | 8,301.20 |
Additional paid-in capital | 243.9 | 228.8 |
Accumulated deficit | -2,365 | -3,278.50 |
Accumulated other comprehensive loss | -915.9 | -132.8 |
Total Valeant Pharmaceuticals International, Inc. shareholders’ equity | 5,312.20 | 5,118.70 |
Noncontrolling interest | 122.3 | 114.6 |
Total equity | 5,434.50 | 5,233.30 |
Total liabilities and equity | $26,353 | $27,970.80 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Common stock, no par value (in usd per share) | $0 | $0 |
Common stock, shares issued | 334,402,964 | 333,036,637 |
Common stock, shares outstanding | 334,402,964 | 333,036,637 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues | |||
Product sales | $8,103.60 | $5,640.30 | $3,288.60 |
Other revenues | 159.9 | 129.3 | 191.8 |
Total revenues | 8,263.50 | 5,769.60 | 3,480.40 |
Expenses | |||
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | 2,196.20 | 1,846.30 | 905.1 |
Cost of other revenues | 58.4 | 58.8 | 64.6 |
Selling, general and administrative | 2,026.30 | 1,305.20 | 756.1 |
Research and development | 246 | 156.8 | 79.1 |
Amortization and impairments of finite-lived intangible assets (see Note 10) | 1,550.70 | 1,902 | 928.9 |
Restructuring, integration and other costs | 381.7 | 462 | 267.1 |
In-process research and development impairments and other charges | 41 | 153.6 | 189.9 |
Acquisition-related costs | 6.3 | 36.4 | 78.6 |
Acquisition-related contingent consideration | -14.1 | -29.2 | -5.3 |
Other (income) expense (see Notes 3, 4, and 20) | -268.7 | 287.2 | 136.6 |
Total expenses | 6,223.80 | 6,179.10 | 3,400.70 |
Operating income (loss) | 2,039.70 | -409.5 | 79.7 |
Interest income | 5 | 8 | 6 |
Interest expense | -971 | -844.3 | -481.6 |
Loss on extinguishment of debt | -129.6 | -65 | -20.1 |
Foreign exchange and other | -144.1 | -9.4 | 19.7 |
Gain on investments, net (see Note 23) | 292.6 | 5.8 | 2.1 |
Income (loss) before provision for (recovery of) income taxes | 1,092.60 | -1,314.40 | -394.2 |
Provision for (recovery of) income taxes | 180.4 | -450.8 | -278.2 |
Net income (loss) | 912.2 | -863.6 | -116 |
Less: Net (loss) income attributable to noncontrolling interest | -1.3 | 2.5 | 0 |
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | $913.50 | ($866.10) | ($116) |
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||
Basic (in dollars per share) | $2.72 | ($2.70) | ($0.38) |
Diluted (in dollars per share) | $2.67 | ($2.70) | ($0.38) |
Weighted-average common shares (in millions) | |||
Basic (in shares) | 335.4 | 321 | 305.4 |
Diluted (in shares) | 341.5 | 321 | 305.4 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $912.20 | ($863.60) | ($116) |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment | -717.8 | -50.5 | 161 |
Unrealized gain on equity method investment, net of tax: | |||
Arising in period | 51.3 | 0 | 0 |
Reclassification to net income (loss) | -51.3 | 0 | 0 |
Net unrealized holding gain on available-for-sale equity securities: | |||
Arising in period | 1.8 | 3.6 | 0.4 |
Reclassification to net income (loss) | -1.8 | -4 | -1.6 |
Net unrealized holding loss on available-for-sale debt securities: | |||
Reclassification to net income (loss) | 0 | 0 | 0.2 |
Other comprehensive (loss) income | -717.8 | -50.9 | 160 |
Pension and postretirement benefit plan adjustments: | |||
Newly established prior service credit | 29.4 | 27.9 | 0 |
Net actuarial (loss) gain arising during the year | -127.3 | 24.5 | -0.5 |
Amortization of prior service credit | -2.5 | 0 | 0 |
Amortization or settlement recognition of net loss | 0.9 | 0.6 | 0.7 |
Income tax benefit (expense) | 27.4 | -15.4 | 0 |
Currency impact | 5.2 | 0.2 | 0 |
Total pension and postretirement benefit plan adjustments | -66.9 | 37.8 | 0.2 |
Other comprehensive (loss) income | -784.7 | -13.1 | 160.2 |
Comprehensive income (loss) | 127.5 | -876.7 | 44.2 |
Less: Comprehensive (loss) income attributable to noncontrolling interest | -2.9 | 2.8 | 0 |
Comprehensive income (loss) attributable to Valeant Pharmaceuticals International, Inc. | $130.40 | ($879.50) | $44.20 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Valeant Pharmaceuticals International, Inc. Shareholders' equity | Noncontrolling Interest | Comprehensive Loss |
In Millions, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2011 | $3,929.80 | $5,963.60 | $276.10 | ($2,030.30) | ($279.60) | $3,929.80 | $0 | |
Balance (in shares) at Dec. 31, 2011 | 306,400,000 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Settlement of 5.375% Convertible Notes | -43.8 | -0.2 | -43.6 | -43.8 | ||||
Repurchase of equity component of 5.375% Convertible Notes | -2.9 | -0.2 | -2.7 | -2.9 | ||||
Common shares issued under share-based compensation plans (in shares) | 2,800,000 | |||||||
Common shares issued under share-based compensation plans | 23.2 | 79.4 | -56.2 | 23.2 | ||||
Repurchase of common shares (in shares) | -5,300,000 | |||||||
Repurchase of common shares | -280.7 | -102.3 | -178.4 | -280.7 | ||||
Share-based compensation | 66.2 | 66.2 | 66.2 | |||||
Employee withholding taxes related to share-based awards | -31.1 | -31.1 | -31.1 | |||||
Tax benefits from stock options exercised | 12.5 | 12.5 | 12.5 | |||||
Total before comprehensive income (loss) (in shares) | 303,900,000 | |||||||
Total before comprehensive income (loss) | 3,673.20 | 5,940.70 | 267.1 | -2,255 | -279.6 | 3,673.20 | 0 | |
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | -116 | |||||||
Comprehensive income: | ||||||||
Net income (loss) | -116 | -116 | -116 | -116 | ||||
Less: Net (loss) income attributable to noncontrolling interest | 0 | |||||||
Other comprehensive income (loss) | 160.2 | 160.2 | 160.2 | |||||
Comprehensive income (loss) | 44.2 | 44.2 | 44.2 | |||||
Balance at Dec. 31, 2012 | 3,717.40 | 5,940.70 | 267.1 | -2,371 | -119.4 | 3,717.40 | 0 | |
Balance (in shares) at Dec. 31, 2012 | 303,900,000 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Issuance of common stock (in shares) | 27,600,000 | |||||||
Issuance of common stock | 2,306.90 | 2,306.90 | 2,306.90 | |||||
Common shares issued under share-based compensation plans (in shares) | 2,200,000 | |||||||
Common shares issued under share-based compensation plans | 6.4 | 67.8 | -61.4 | 6.4 | ||||
Repurchase of common shares (in shares) | -700,000 | |||||||
Repurchase of common shares | -55.6 | -14.2 | -41.4 | -55.6 | ||||
Share-based compensation | 45.5 | 45.5 | 45.5 | |||||
Employee withholding taxes related to share-based awards | -46.6 | -46.6 | -46.6 | |||||
Tax benefits from stock options exercised | 24.2 | 24.2 | 24.2 | |||||
Noncontrolling interest from business combinations | 113.9 | 113.9 | ||||||
Noncontrolling interest distributions | -2.1 | -2.1 | ||||||
Total before comprehensive income (loss) (in shares) | 333,000,000 | |||||||
Total before comprehensive income (loss) | 6,110 | 8,301.20 | 228.8 | -2,412.40 | -119.4 | 5,998.20 | 111.8 | |
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | -866.1 | |||||||
Comprehensive income: | ||||||||
Net income (loss) | -863.6 | -866.1 | -866.1 | 2.5 | -863.6 | |||
Less: Net (loss) income attributable to noncontrolling interest | 2.5 | |||||||
Other comprehensive income (loss) | -13.4 | -13.4 | 0.3 | -13.1 | ||||
Comprehensive income (loss) | -876.7 | -879.5 | 2.8 | -876.7 | ||||
Balance (including portion attributable to non-controlling interest) at Dec. 31, 2013 | 5,233.30 | 8,301.20 | 228.8 | -3,278.50 | -132.8 | 5,118.70 | 114.6 | |
Balance at Dec. 31, 2013 | 5,118.70 | |||||||
Balance (in shares) at Dec. 31, 2013 | 333,036,637 | 333,000,000 | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Common shares issued under share-based compensation plans (in shares) | 1,400,000 | |||||||
Common shares issued under share-based compensation plans | 16.1 | 48 | -31.9 | 16.1 | ||||
Settlement of stock options | -3.1 | -3.1 | -3.1 | |||||
Share-based compensation | 78.2 | 78.2 | 78.2 | |||||
Employee withholding taxes related to share-based awards | -44.1 | -44.1 | -44.1 | |||||
Tax benefits from stock options exercised | 17.1 | 17.1 | 17.1 | |||||
Noncontrolling interest from business combinations | 15 | 15 | ||||||
Acquisition of noncontrolling interest | -3.3 | -1.1 | -1.1 | -2.2 | ||||
Noncontrolling interest distributions | -2.2 | -2.2 | ||||||
Total before comprehensive income (loss) (in shares) | 334,400,000 | |||||||
Total before comprehensive income (loss) | 5,307 | 8,349.20 | 243.9 | -3,278.50 | -132.8 | 5,181.80 | 125.2 | |
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | 913.5 | 913.5 | ||||||
Comprehensive income: | ||||||||
Net income (loss) | 912.2 | 913.5 | -1.3 | 912.2 | ||||
Less: Net (loss) income attributable to noncontrolling interest | -1.3 | |||||||
Other comprehensive income (loss) | -783.1 | -783.1 | -1.6 | -784.7 | ||||
Comprehensive income (loss) | 127.5 | 130.4 | -2.9 | 127.5 | ||||
Balance (including portion attributable to non-controlling interest) at Dec. 31, 2014 | 5,434.50 | 8,349.20 | 243.9 | -2,365 | -915.9 | 5,312.20 | 122.3 | |
Balance at Dec. 31, 2014 | $5,312.20 | |||||||
Balance (in shares) at Dec. 31, 2014 | 334,402,964 | 334,400,000 |
CONSOLIDATED_STATEMENTS_OF_SHA1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (5.375% Convertible Notes due in August, 2014) | Dec. 31, 2012 |
5.375% Convertible Notes due in August, 2014 | |
Long-term debt [Line Items] | |
Interest rate on debt (percent) | 5.38% |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash Flows From Operating Activities | |||
Net income (loss) | $912.20 | ($863.60) | ($116) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization, including impairments of finite-lived intangible assets | 1,737.60 | 2,015.80 | 986.2 |
Amortization and write-off of debt discounts and debt issuance costs | 70 | 89.5 | 36.4 |
In-process research and development impairments | 21 | 151.9 | 167.7 |
Acquisition accounting adjustment on inventory sold | 27.3 | 372.4 | 78.8 |
Acquisition-related contingent consideration | -14.1 | -29.2 | -5.3 |
Allowances for losses on accounts receivable and inventories | 81.3 | 68.3 | 21.8 |
Deferred income taxes | 81.8 | -515.9 | -319.6 |
(Gain) loss on disposal of assets and businesses | -253.5 | 10.2 | 10.8 |
(Reduction) additions to accrued legal settlements | -44.7 | 220.5 | 56.8 |
Payments of accrued legal settlements | -3.2 | -180.8 | -41.8 |
Share-based compensation | 78.2 | 45.5 | 66.2 |
Tax benefits from stock options exercised | -17.1 | -24.2 | -12.5 |
Foreign exchange loss (gain) | 135.1 | 9.8 | -23.8 |
Loss on extinguishment of debt | 129.6 | 65 | 20.1 |
Payment of accreted interest on contingent consideration | -10.7 | -11.1 | -2.3 |
Other | 32.3 | -3.8 | -13.6 |
Changes in operating assets and liabilities: | |||
Trade receivables | -572.4 | -300.6 | -175.8 |
Inventories | -174.3 | -122.7 | -80.3 |
Prepaid expenses and other current assets | -110.3 | 121.5 | 11.2 |
Accounts payable, accrued and other liabilities | 188.6 | -76.5 | -8.4 |
Net cash provided by operating activities | 2,294.70 | 1,042 | 656.6 |
Cash Flows From Investing Activities | |||
Acquisition of businesses, net of cash acquired | -1,102.60 | -5,253.50 | -3,485.30 |
Acquisition of intangible assets and other assets | -179 | -69.6 | -73.5 |
Purchases of property, plant and equipment | -291.6 | -115.3 | -107.6 |
Proceeds from sale of assets and businesses, net of costs to sell | 1,492.30 | 41.1 | 92 |
Proceeds from sales and maturities of marketable securities and short-term investments | 53.2 | 35.2 | 624.8 |
Purchases of marketable securities and short-term investments | -72 | -18.2 | -7.2 |
Purchase of equity method investment | -75.9 | 0 | 0 |
Proceeds from sale of equity method investment | 75.9 | 0 | 0 |
Increase in restricted cash | 0 | 0 | -8.9 |
Net cash used in investing activities | -99.7 | -5,380.30 | -2,965.70 |
Cash Flows From Financing Activities | |||
Issuance of long-term debt, net of discount | 1,632.60 | 8,429.60 | 6,005.80 |
Repayments of long-term debt | -3,888 | -6,326.20 | -1,929.10 |
Short-term debt borrowings | 19.4 | 27.4 | 35.4 |
Short-term debt repayments | -28.4 | -75.1 | -31.1 |
Issuance of common stock, net | 0 | 2,307.40 | 0 |
Repurchases of common shares | 0 | -55.6 | -280.7 |
Proceeds from exercise of stock options | 17.2 | 10 | 23 |
Tax benefits from stock options exercised | 17.1 | 24.2 | 12.5 |
Cash settlement of convertible debt | 0 | 0 | -606.3 |
Payment of employee withholding tax upon vesting of share-based awards | -44.1 | -65.5 | -31.1 |
Payments of contingent consideration | -106.1 | -130.1 | -103.9 |
Payments of financing costs | -55.2 | -116.3 | -33.2 |
Other | -8.2 | -2.1 | -4 |
Net cash (used in) provided by financing activities | -2,443.70 | 4,027.70 | 3,057.30 |
Effect of exchange rate changes on cash and cash equivalents | -29 | -5.2 | 3.8 |
Net (decrease) increase in cash and cash equivalents | -277.7 | -315.8 | 752 |
Cash and cash equivalents, beginning of year | 600.3 | 916.1 | 164.1 |
Cash and cash equivalents, end of year | 322.6 | 600.3 | 916.1 |
Non-Cash Investing and Financing Activities | |||
Acquisition of businesses, contingent consideration at fair value | -93.8 | -76.1 | -145.7 |
Acquisition of businesses, debt assumed | ($11.20) | ($4,264.70) | ($825.20) |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS |
Valeant Pharmaceuticals International, Inc. (the “Company”) is a multinational, specialty pharmaceutical and medical device company that develops, manufactures, and markets a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (“OTC”) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices), which are marketed directly or indirectly in over 100 countries. Effective August 9, 2013, the Company continued from the federal jurisdiction of Canada to the Province of British Columbia, meaning that the Company became a company registered under the laws of the Province of British Columbia as if it had been incorporated under the laws of the Province of British Columbia. As a result of this continuance, the legal domicile of the Company became the Province of British Columbia, the Canada Business Corporations Act ceased to apply to the Company and the Company became subject to the British Columbia Business Corporations Act. | |
On August 5, 2013, the Company acquired Bausch & Lomb Holdings Incorporated (“B&L”), pursuant to an Agreement and Plan of Merger, as amended (the “Merger Agreement”) dated May 24, 2013, with B&L surviving as a wholly-owned subsidiary of Valeant Pharmaceuticals International (“Valeant”), a wholly-owned subsidiary of the Company (the “B&L Acquisition”). B&L is a global eye health company that focuses primarily on the development, manufacture and marketing of eye health products, including contact lenses, contact lens care solutions, ophthalmic pharmaceuticals and ophthalmic surgical products. | |
For further information regarding the B&L Acquisition, see note 3 titled “BUSINESS COMBINATIONS”. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | |||
The consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and in accordance with U.S. generally accepted accounting principles (“GAAP”), applied on a consistent basis. | |||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of the Company and those of its subsidiaries and any variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All significant intercompany transactions and balances have been eliminated. | |||
Reclassifications | |||
Certain reclassifications have been made to prior year amounts to conform with the current year presentation. Such amounts include a reclassification of (i) $52.8 million recognized in the third quarter of 2013 related to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees from Restructuring, integration and other costs to Other (income) expense on the consolidated statement of income (loss) and (ii) $77.3 million recognized in the fourth quarter of 2012 related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis Pharmaceutical Corporation (“Medicis”) employees that was triggered by the change in control from Restructuring, integration and other costs to Other (income) expense on the consolidated statement of income (loss). | |||
The reclassifications described above had no effect on the Company’s previously reported results of operations, financial position or cash flows. | |||
Acquisitions | |||
Acquired businesses are accounted for using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at fair value, with limited exceptions. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in our consolidated financial statements after the date of acquisition. Acquired in-process research and development (“IPR&D”) is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to expense at the acquisition date. | |||
Use of Estimates | |||
In preparing the Company’s consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include: provisions for product returns, rebates, chargebacks, discounts and allowances, and distribution fees paid to certain wholesalers; useful lives of amortizable intangible assets and property, plant and equipment; expected future cash flows used in evaluating intangible assets for impairment; reporting unit fair values in testing goodwill for impairment; provisions for loss contingencies; provisions for income taxes, uncertain tax positions and realizability of deferred tax assets; and the allocation of the purchase price for acquired assets and businesses, including the fair value of contingent consideration. Under certain product manufacturing and supply agreements, management relies on estimates for future returns, rebates and chargebacks made by the Company’s commercialization counterparties. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s consolidated financial statements could be materially impacted. | |||
Fair Value of Financial Instruments | |||
The estimated fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying values due to their short maturity periods. The fair value of acquisition-related contingent consideration is based on estimated discounted future cash flows and assessment of the probability of occurrence of potential future events. The fair values of marketable securities and long-term debt are based on quoted market prices, if available, or estimated discounted future cash flows. | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents include certificates of deposit, treasury bills, certain money-market funds and term deposits with maturities of three months or less when purchased. | |||
Concentrations of Credit Risk | |||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. | |||
The Company invests its excess cash in high-quality, money market instruments and term deposits with varying maturities, but typically less than three months. The Company maintains its cash and cash equivalents with major financial institutions. The Company has not experienced any significant losses on its cash or cash equivalents. | |||
The Company’s accounts receivable primarily represent amounts due from wholesale distributors, retail pharmacies, government entities and group purchasing organizations. Outside of the U.S., concentrations of credit risk with respect to trade receivables, which are typically unsecured, are limited due to the number of customers using the Company’s products, as well as their dispersion across many different geographic areas. The Company performs periodic credit evaluations of customers and does not require collateral. The Company monitors economic conditions, including volatility associated with international economies, and related impacts on the relevant financial markets and its business, especially in light of sovereign credit issues. The credit and economic conditions within Italy, Portugal, Spain and Greece, among other members of the European Union, have remained weak in recent years. These conditions have increased, and may continue to increase, the average length of time that it takes to collect on the Company’s accounts receivable outstanding in these countries. An allowance for doubtful accounts is maintained for potential credit losses based on the aging of accounts receivable, historical bad debts experience, and changes in customer payment patterns. Accounts receivables balances are written off against the allowance when it is probable that the receivable will not be collected. | |||
As of December 31, 2014, the Company’s three largest U.S. wholesaler customers accounted for approximately one-third of net trade receivables. In addition, as of December 31, 2014 and 2013, the Company’s net trade receivable balance from Greece, Spain, Italy and Portugal amounted to $81.6 million and $84.5 million, respectively, of which the majority has been outstanding for less than 90 days. The portion of the net trade receivable from these countries that is past due more than 90 days amounted to $10.8 million as of December 31, 2014 and is primarily comprised of public hospitals. Based on analysis of bad debts experience and assessment of historical payment patterns for such customers, the Company determined that the substantial majority of such balance was collectible and, as such, the reserve established on the balance was not significant. The Company has not experienced any significant losses from uncollectible accounts in the three-year period ended December 31, 2014. | |||
Inventories | |||
Inventories comprise raw materials, work in process, and finished goods, which are valued at the lower of cost or market, on a first-in, first-out basis. Cost for work in process and finished goods inventories includes materials, direct labor, and an allocation of overheads. Market for raw materials is replacement cost, and for work in process and finished goods is net realizable value. | |||
The Company evaluates the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand, the price the Company expects to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. | |||
Property, Plant and Equipment | |||
Property, plant and equipment are reported at cost, less accumulated depreciation. Costs incurred on assets under construction are capitalized as construction in progress. Depreciation is calculated using the straight-line method, commencing when the assets become available for productive use, based on the following estimated useful lives: | |||
Buildings | Up to 40 years | ||
Machinery and equipment | 3 - 20 years | ||
Other equipment | 3 - 10 years | ||
Equipment on operating lease | Up to 5 years | ||
Leasehold improvements and capital leases | Lesser of term of lease or 10 years | ||
Intangible Assets | |||
Intangible assets are reported at cost, less accumulated amortization. Intangible assets with finite lives are amortized over their estimated useful lives. Amortization is calculated using the straight-line method based on the following estimated useful lives: | |||
Product brands | 1 - 25 years | ||
Corporate brands(1) | 4 - 20 years | ||
Product rights | 1 - 15 years | ||
Partner relationships | 2 - 9 years | ||
Out-licensed technology and other | 1 - 10 years | ||
____________________________________ | |||
-1 | Corporate brands useful lives shown in the table above does not include the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See note 3 “BUSINESS COMBINATIONS” for further information. | ||
Divestitures of Non-core Products | |||
The Company nets the proceeds on the divestitures of non-core products with the carrying amount of the related assets and records a gain/loss on sale within Other (income) expense. Any contingent payments that are potentially due to the Company as a result of these divestitures are recorded when realizable. | |||
IPR&D | |||
The fair value of IPR&D acquired through a business combination is capitalized as an indefinite-lived intangible asset until the completion or abandonment of the related research and development activities. When the related research and development is completed, the asset will be assigned a useful life and amortized. | |||
The fair value of an IPR&D intangible asset is determined using an income approach. This approach starts with a forecast of the net cash flows expected to be generated by the asset over its estimated useful life. The net cash flows reflect the asset’s stage of completion, the probability of technical success, the projected costs to complete, expected market competition, and an assessment of the asset’s life-cycle. The net cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. | |||
Impairment of Long-Lived Assets | |||
Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted future cash flows. | |||
Indefinite-lived intangible assets, including acquired IPR&D, are tested for impairment annually or more frequently if events or changes in circumstances between annual tests indicate that the asset may be impaired. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of the asset to its carrying value, without consideration of any recoverability test. | |||
Goodwill | |||
Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at the reporting unit level. A reporting unit is the same as, or one level below, an operating segment. | |||
An interim goodwill impairment test in advance of the annual impairment assessment may be required if events occur that indicate an impairment might be present. For example, a substantial decline in the Company’s market capitalization, unexpected adverse business condition, economic factors and unanticipated competitive activities may signal that an interim impairment test is needed. Accordingly, among other factors, the Company monitors changes in its share price between annual impairment tests to ensure that its market capitalization continues to exceed the carrying value of its consolidated net assets. The Company considers a decline in its share price that corresponds to an overall deterioration in stock market conditions to be less of an indicator of goodwill impairment than a unilateral decline in its share price reflecting adverse changes in its underlying operating performance, cash flows, financial condition, and/or liquidity. In the event that the Company's market capitalization does decline below its book value, the Company would consider the length and severity of the decline and the reason for the decline when assessing whether potential goodwill impairment exists. The Company believes that short-term fluctuations in share prices may not necessarily reflect underlying values. | |||
During the fourth quarter of 2014, the Company performed its annual goodwill impairment test and determined that none of the goodwill associated with its reporting units was impaired. | |||
Deferred Financing Costs | |||
Deferred financing costs are reported at cost, less accumulated amortization, and are recorded in other long-term assets. Amortization expense is included in interest expense. | |||
Foreign Currency Translation | |||
The assets and liabilities of the Company’s foreign operations having a functional currency other than the U.S. dollar are translated into U.S. dollars at the exchange rate prevailing at the balance sheet date, and at the average exchange rate for the reporting period for revenue and expense accounts. The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income in shareholders’ equity. | |||
Foreign currency exchange gains and losses on transactions occurring in a currency other than an operation’s functional currency are recognized in net income. | |||
Revenue Recognition | |||
Revenue is realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the customer is fixed or determinable, and collectibility is reasonably assured. | |||
Product Sales | |||
Product sales revenue is recognized when title has transferred to the customer and the customer has assumed the risks and rewards of ownership, the timing of which is based on the specific contractual terms with each customer. In most instances, transfer of title as well as the risks and rewards of ownership occurs upon delivery of the product to the customer. Amounts received from customers as prepayments for products to be shipped in the future are recorded in deferred revenue. | |||
Revenue from product sales is recognized net of provisions for estimated discounts, allowances, returns, rebates, chargebacks and distribution fees paid to certain of our wholesale customers. The Company offers discounts for prompt payment and other incentive allowances to customers. Provisions for discounts and allowances are estimated based on contractual sales terms with customers and historical payment experience. The Company allows customers to return product within a specified period of time before and after its expiration date. Provisions for returns are estimated based on historical return levels, taking into account additional available information on competitive products and contract changes. The Company has data sharing agreements with the three largest wholesalers in the U.S. Where the Company does not have data sharing agreements, it uses third party data to estimate the level of product inventories and product demand at wholesalers and retail pharmacies. The Company reviews its methodology and adequacy of the provision for returns on a quarterly basis, adjusting for changes in assumptions, historical results and business practices, as necessary. The Company is subject to rebates on sales made under governmental and commercial rebate programs, and chargebacks on sales made to government agencies, retail pharmacies and group purchasing organizations. Provisions for rebates and chargebacks are estimated based on historical experience, relevant statutes with respect to governmental pricing programs, and contractual sales terms. | |||
The Company is party to manufacturing and supply agreements with a number of commercialization counterparties in the U.S. Under the terms of these agreements, the Company’s supply prices for its products are determined after taking into consideration estimates for future returns, rebates, and chargebacks provided by each counterparty. The Company makes adjustments as needed to state these estimates on a basis consistent with this policy and its methodology for estimating returns, rebates and chargebacks related to its own direct product sales. | |||
Research and Development Expenses | |||
Costs related to internal research and development programs, including costs associated with the development of acquired IPR&D, are expensed as goods are delivered or services are performed. Under certain research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments made to third parties are expensed when the milestone is achieved. Milestone payments made to third parties after regulatory approval is received are capitalized and amortized over the estimated useful life of the approved product. | |||
Amounts due from third parties as reimbursement of development activities conducted under certain research and development arrangements are recognized as a reduction of research and development expenses. | |||
Legal Costs | |||
Legal fees and other costs related to litigation and other legal proceedings are expensed as incurred and are included in Selling, general and administrative expenses. Certain legal costs associated with acquisitions are included in Acquisition-related costs, and certain legal costs associated with divestitures, legal settlements, and other business development activity are included in Other (income) expense or Gain on investments, net (see note 23 titled “PS FUND 1 INVESTMENT”), as appropriate. Legal costs expensed are reported net of expected insurance recoveries. A claim for insurance recovery is recognized when the claim becomes probable of realization. | |||
Advertising Costs | |||
Advertising costs comprise product samples, print media, promotional materials and television advertising. Advertising costs related to new product launches are expensed on the first use of the advertisement. Prepaid advertising costs are recorded in Prepaid expenses and other current assets in the consolidated balance sheet and were not material as of December 31, 2014 and 2013. | |||
Advertising costs expensed in 2014, 2013 and 2012 were $435.4 million, $277.3 million and $157.6 million, respectively. These costs are included in selling, general and administrative expenses. | |||
Share-Based Compensation | |||
The Company recognizes all share-based payments to employees, including grants of employee stock options and restricted share units (“RSUs”), at estimated fair value. The Company amortizes the fair value of stock option or RSU grants on a straight-line basis over the requisite service period of the individual stock option or RSU grant, which generally equals the vesting period. Stock option and RSU forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||
Share-based compensation is recorded in cost of goods sold, research and development expenses, selling, general and administrative expenses and restructuring, integration and other costs, as appropriate. | |||
Acquisition-Related Contingent Consideration | |||
Acquisition-related contingent consideration, which consists primarily of potential milestone payments and royalty obligations, is recorded in the consolidated balance sheets at its acquisition date estimated fair value, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of income (loss). The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in fair value measurement accounting. | |||
Interest Expense | |||
Interest expense includes standby fees and the amortization of debt discounts and deferred financing costs. Interest costs are expensed as incurred, except to the extent such interest is related to construction in progress, in which case interest is capitalized. The capitalized interest recorded in 2014, 2013, and 2012 was not material. | |||
Income Taxes | |||
Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the differences between the financial statement and income tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. A valuation allowance is provided for the portion of deferred tax assets that is more likely than not to remain unrealized. Deferred tax assets and liabilities are measured using enacted tax rates and laws. | |||
The tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority, based on the technical merits of the position. The tax benefits recognized from such position are measured based on the amount that is greater than 50% likely of being realized upon settlement. Liabilities associated with uncertain tax positions are classified as long-term unless expected to be paid within one year. Interest and penalties related to uncertain tax positions, if any, are recorded in the provision for income taxes and classified with the related liability on the consolidated balance sheets. | |||
Earnings Per Share | |||
Basic earnings per share attributable to Valeant Pharmaceuticals International, Inc. is calculated by dividing net income attributable to Valeant Pharmaceuticals International, Inc. by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated by dividing net income attributable to Valeant Pharmaceuticals International, Inc. by the weighted-average number of common shares outstanding during the reporting period after giving effect to dilutive potential common shares for stock options, RSUs and convertible debt, determined using the treasury stock method. | |||
Comprehensive Income | |||
Comprehensive income comprises net income and other comprehensive income. Other comprehensive income includes items such as foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale and other investments and certain pension and other postretirement benefit plan adjustments. Accumulated other comprehensive income is recorded as a component of shareholders’ equity. | |||
Contingencies | |||
In the normal course of business, the Company is subject to loss contingencies, such as claims and assessments arising from litigation and other legal proceedings, contractual indemnities, product and environmental liabilities, and tax matters. Accruals for loss contingencies are recorded when the Company determines that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. If the estimate of the amount of the loss is a range and some amount within the range appears to be a better estimate than any other amount within the range, that amount is accrued as a liability. If no amount within the range is a better estimate than any other amount, the minimum amount of the range is accrued as a liability. These accruals are adjusted periodically as assessments change or additional information becomes available. | |||
If no accrual is made for a loss contingency because the amount of loss cannot be reasonably estimated, the Company will disclose contingent liabilities when there is at least a reasonable possibility that a loss or an additional loss may have been incurred. | |||
Employee Benefit Plans | |||
The Company sponsors various retirement and pension plans, including defined benefit pension plans, defined contribution plans and a participatory defined benefit postretirement plan. The determination of defined benefit pension and postretirement plan obligations and their associated expenses requires the use of actuarial valuations to estimate the benefits employees earn while working, as well as the present value of those benefits. Net actuarial gains and losses that exceed 10 percent of the greater of the plan’s projected benefit obligations or the market-related value of assets are amortized to earnings over the shorter of the estimated average future service period of the plan participants (or the estimated average future lifetime of the plan participants if the majority of plan participants are inactive) or the period until any anticipated final plan settlements. | |||
Adoption of New Accounting Standards | |||
In July 2013, the Financial Accounting Standard Board (“FASB”) issued guidance to eliminate the diversity in practice in presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance 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. Under the new guidance, unrecognized tax benefits are netted against all available same-jurisdiction loss or other tax carryforward that would be utilized, rather than only against carryforwards that are created by the unrecognized tax benefits. The guidance was effective for reporting periods beginning after December 15, 2013. As this guidance relates to presentation only, the adoption of this guidance did not have a material impact on the Company’s financial position or results of operations. | |||
In April 2014, the FASB issued guidance which changes the criteria for reporting a discontinued operation while enhancing disclosures in this area. Under the new guidance, a disposal of a component of an entity or group of components of an entity that represents a strategic shift that has, or will have, a major effect on operations and financial results is a discontinued operation when any of the following occurs: (i) it meets the criteria to be classified as held for sale, (ii) it is disposed of by sale, or (iii) it is disposed of other than by sale. Also, a business that, on acquisition, meets the criteria to be classified as held for sale is reported in discontinued operations. Additionally, the new guidance requires expanded disclosures about discontinued operations, as well as disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation. The Company early adopted this guidance in the second quarter of 2014, and the Company applied this guidance to the divestitures described in note 4 titled “DIVESTITURES”. | |||
Recently Issued Accounting Standards, Not Adopted as of December 31, 2014 | |||
In May 2014, the FASB and the International Accounting Standards Board issued converged guidance on recognizing revenue from contracts with customers. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue model to contracts within its scope, an entity will: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition to these provisions, the new standard provides implementation guidance on several other topics, including the accounting for certain revenue-related costs, as well as enhanced disclosure requirements. The new guidance requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early application is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations. | |||
In August 2014, the FASB issued guidance which requires management to assess an entity’s ability to continue as a going concern and to provide related disclosures in certain circumstances. Under the new guidance, disclosures are required when conditions give rise to substantial doubt about an entity’s ability to continue as a going concern within one year from the financial statement issuance date. The guidance is effective for annual periods ending after December 15, 2016, and all annual and interim periods thereafter. Early application is permitted. The adoption of this guidance will not have any impact on the Company’s financial position and results of operations and, as this time, the Company does not expect any impact on its disclosures. | |||
In February 2015, the FASB issued guidance which amends certain consolidation requirements. The new guidance has the following stipulations, among others: (i) eliminates the presumption that a general partner should consolidate a limited partnership and eliminates the consolidation model specific to limited partnerships, (ii) clarifies when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (iii) amends the guidance for assessing how relationships of related parties affect the consolidation analysis of VIEs, and (iv) reduces the number of VIE consolidation models from two to one by eliminating the indefinite deferral for certain investment funds. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early application is permitted. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt the guidance. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations. |
BUSINESS_COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Business Combinations [Abstract] | |||||||||||||||
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS | ||||||||||||||
The Company’s business strategy involves selective acquisitions with a focus on core geographies and therapeutic classes. | |||||||||||||||
(a) Business combinations in 2014 included the following: | |||||||||||||||
In the year ended December 31, 2014, the Company completed business combinations, which included the acquisition of the following businesses, for an aggregate purchase price of $1.4 billion. The aggregate purchase price included contingent consideration payment obligations with an aggregate acquisition date fair value of $93.8 million. | |||||||||||||||
• | On July 7, 2014, the Company acquired all of the outstanding common stock of PreCision Dermatology, Inc. (“PreCision”) for an aggregate purchase price of $454.5 million. Under the terms of the merger agreement, the Company may also pay contingent consideration of $25.0 million upon the achievement of a sales-based milestone. The fair value of this contingent consideration was determined to be nominal as of the acquisition date, based on the sales forecast. As of December 31, 2014, the assumptions used for determining the fair value of contingent consideration have not changed significantly from those used at the acquisition date. The Company recognized a post-combination expense of $20.4 million within Other (income) expense in the third quarter of 2014 related to the acceleration of unvested stock options for PreCision employees. In connection with the acquisition of PreCision, the Company was required by the Federal Trade Commission (“FTC”) to divest the rights to PreCision’s Tretin-X® (tretinoin) cream product and PreCision’s generic tretinoin gel and cream products. For further details, see note 4 titled “DIVESTITURES”. PreCision develops and markets a range of medical dermatology products, treating a number of topical disease states such as acne and atopic dermatitis with products such as Locoid® and Clindagel®. | ||||||||||||||
• | On January 23, 2014, the Company acquired all of the outstanding common stock of Solta Medical, Inc. (“Solta Medical”) for $292.5 million, which includes $2.92 per share in cash and $44.2 million for the repayment of Solta Medical’s long-term debt, including accrued interest. In connection with the acquisition, the Company recognized a charge of $5.6 million in the first quarter of 2014 relating to a settlement of a pre-existing relationship with Solta Medical, which is included in Other (income) expense in the consolidated statements of income (loss). Solta Medical designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications. Solta Medical’s products include the Thermage CPT® system that provides non-invasive treatment options using radiofrequency energy for skin tightening, the Fraxel® repair system for use in dermatological procedures requiring ablation, coagulation, and resurfacing of soft tissue, the Clear + Brilliant® system to improve skin texture and help prevent the signs of aging skin, and the Liposonix® system that destroys unwanted fat cells resulting in waist circumference reduction. | ||||||||||||||
• | During the year ended December 31, 2014, the Company completed other smaller acquisitions, including the consolidation of variable interest entities, which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
These transactions have been accounted for as business combinations under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. The following recognized amounts related to the PreCision acquisition, as well as certain smaller acquisitions, are provisional and subject to change: | |||||||||||||||
• | amounts for intangible assets, property and equipment, inventories, receivables and other working capital adjustments pending finalization of the valuation; | ||||||||||||||
• | amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and | ||||||||||||||
• | amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed. | ||||||||||||||
The Company will finalize these amounts as it obtains the information necessary to complete the measurement processes. Any changes resulting from facts and circumstances that existed as of the acquisition dates may result in retrospective adjustments to the provisional amounts recognized at the acquisition dates. These changes could be significant. The Company will finalize these amounts no later than one year from the respective acquisition dates. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | 31-Dec-14 | |||||||||||||
(as adjusted) | |||||||||||||||
Cash and cash equivalents | $ | 33.6 | $ | (0.5 | ) | $ | 33.1 | ||||||||
Accounts receivable(b) | 87.7 | (5.7 | ) | 82 | |||||||||||
Assets held for sale(c) | 125.7 | — | 125.7 | ||||||||||||
Inventories | 170.4 | (14.8 | ) | 155.6 | |||||||||||
Other current assets | 19.1 | (1.0 | ) | 18.1 | |||||||||||
Property, plant and equipment, net | 58.5 | (1.5 | ) | 57 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 697.2 | 23.7 | 720.9 | ||||||||||||
Acquired IPR&D(e) | 65.8 | (2.7 | ) | 63.1 | |||||||||||
Other non-current assets | 4 | (2.0 | ) | 2 | |||||||||||
Current liabilities | (152.0 | ) | (11.8 | ) | (163.8 | ) | |||||||||
Long-term debt, including current portion | (11.2 | ) | — | (11.2 | ) | ||||||||||
Deferred income taxes, net | (116.0 | ) | 22.6 | (93.4 | ) | ||||||||||
Other non-current liabilities | (13.4 | ) | (0.1 | ) | (13.5 | ) | |||||||||
Total identifiable net assets | 969.4 | 6.2 | 975.6 | ||||||||||||
Noncontrolling interest | (15.0 | ) | — | (15.0 | ) | ||||||||||
Goodwill(f) | 410.4 | (14.1 | ) | 396.3 | |||||||||||
Total fair value of consideration transferred | $ | 1,364.80 | $ | (7.9 | ) | $ | 1,356.90 | ||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability primarily related to the PreCision and Solta Medical acquisitions, (ii) increases in the estimated fair value of intangible assets for the Solta Medical and other smaller acquisitions, and (iii) reductions in the estimated fair value of inventory for Solta Medical and other smaller acquisitions. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $82.0 million, with the gross contractual amount being $88.2 million, of which the Company expects that $6.2 million will be uncollectible. | ||||||||||||||
(c) | Assets held for sale relate to the divestitures of the Tretin-X® product rights and the product rights for the generic tretinoin gel and cream products acquired in the PreCision acquisition. See note 4 titled “DIVESTITURES” for further information. | ||||||||||||||
(d) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 10 | $ | 506 | $ | 22.8 | $ | 528.8 | ||||||||
Product rights | 8 | 95.2 | (0.9 | ) | 94.3 | ||||||||||
Corporate brand | 15 | 28.9 | 1.7 | 30.6 | |||||||||||
In-licensed products | 8 | 1.5 | 0.1 | 1.6 | |||||||||||
Partner relationships | 9 | 37.5 | — | 37.5 | |||||||||||
Other | 9 | 28.1 | — | 28.1 | |||||||||||
Total identifiable intangible assets acquired | 10 | $ | 697.2 | $ | 23.7 | $ | 720.9 | ||||||||
(e) | The acquired IPR&D assets primarily relate to programs from smaller acquisitions. In addition, the Solta Medical acquisition includes a program for the development of a next generation Thermage® product. | ||||||||||||||
(f) | The goodwill relates primarily to the PreCision and Solta Medical acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is not expected to be deductible for tax purposes. The goodwill recorded from the PreCision and Solta Medical acquisitions represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of PreCision and Solta Medical with those of the Company; | ||||||||||||||
• | the Company’s expectation to develop and market new products and technology; and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, PreCision’s and Solta Medical’s assembled workforce). | ||||||||||||||
The provisional amount of goodwill from the PreCision acquisition has been allocated to the Company’s Developed Markets segment ($170.5 million). The amount of goodwill from the Solta Medical acquisition has been allocated to both the Company’s Developed Markets segment ($56.4 million) and Emerging Markets segment ($37.8 million). | |||||||||||||||
Acquisition-Related Costs | |||||||||||||||
The Company has incurred to date $5.0 million, in the aggregate, of transaction costs directly related to business combinations which closed in 2014, which includes expenditures for advisory, legal, valuation, accounting and other similar services. These costs have been expensed as acquisition-related costs. | |||||||||||||||
Revenue and Net Income | |||||||||||||||
The revenues of these business combinations for the period from the respective acquisition dates to December 31, 2014 were $250.6 million, in the aggregate, and net income was $9.1 million, in the aggregate. The net income includes the effects of the acquisition accounting adjustments and acquisition-related costs. | |||||||||||||||
(b) Business combinations in 2013 included the following: | |||||||||||||||
B&L | |||||||||||||||
Description of the Transaction | |||||||||||||||
On August 5, 2013, the Company acquired B&L for an aggregate purchase price equal to $8.7 billion minus B&L’s existing indebtedness for borrowed money (which was paid off by Valeant in accordance with the terms of the Merger Agreement) and related fees and costs, minus certain of B&L’s transaction expenses, minus certain payments with respect to certain cancelled B&L performance-based options (which were not outstanding immediately prior to such effective time), plus the aggregate exercise price applicable to B&L’s outstanding options immediately prior to such effective time, and plus certain cash amounts, all as further described in the Merger Agreement. The B&L Acquisition was financed with debt and equity issuances (see note 12 titled “LONG-TERM DEBT” for additional information). Each B&L restricted share and stock option, whether vested or unvested, that was outstanding immediately prior to such effective time, was cancelled and converted into the right to receive the per share merger consideration in the case of restricted shares or, in the case of stock options, the excess, if any, of the per share merger consideration over the exercise price of such stock option. | |||||||||||||||
Fair Value of Consideration Transferred | |||||||||||||||
The following table indicates the consideration transferred to effect the B&L Acquisition: | |||||||||||||||
Fair Value | |||||||||||||||
Enterprise value | $ | 8,700.00 | |||||||||||||
Adjusted for the following: | |||||||||||||||
B&L’s outstanding debt, including accrued interest | (4,248.3 | ) | |||||||||||||
B&L’s company expenses | (6.4 | ) | |||||||||||||
Payment in B&L’s performance-based option(a) | (48.5 | ) | |||||||||||||
Payment for B&L’s cash balance(b) | 149 | ||||||||||||||
Additional cash payment(b) | 75 | ||||||||||||||
Other | (3.2 | ) | |||||||||||||
Equity purchase price | 4,617.60 | ||||||||||||||
Less: Cash consideration paid for B&L’s unvested stock options(c) | (4.3 | ) | |||||||||||||
Total fair value of consideration transferred | $ | 4,613.30 | |||||||||||||
_________________________________ | |||||||||||||||
(a) | The cash consideration paid for previously cancelled B&L’s performance-based options was recognized as a post-combination expense within Other (income) expense in the third quarter of 2013. | ||||||||||||||
(b) | As defined in the Merger Agreement. | ||||||||||||||
(c) | The cash consideration paid for B&L stock options and restricted stock attributable to pre-combination services has been included as a component of purchase price. The remaining $4.3 million balance related to the acceleration of unvested stock options for B&L employees was recognized as a post-combination expense within Other (income) expense in the third quarter of 2013. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
The transaction has been accounted for as a business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of acquisition date. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Date | Adjustments(a) | 31-Dec-14 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 209.5 | $ | (31.4 | ) | $ | 178.1 | ||||||||
Accounts receivable(b) | 547.9 | (7.2 | ) | 540.7 | |||||||||||
Inventories(c) | 675.8 | (34.0 | ) | 641.8 | |||||||||||
Other current assets | 146.6 | 0.3 | 146.9 | ||||||||||||
Property, plant and equipment, net(d) | 761.4 | 33.2 | 794.6 | ||||||||||||
Identifiable intangible assets, excluding acquired IPR&D(e) | 4,316.10 | 17.3 | 4,333.40 | ||||||||||||
Acquired IPR&D(f) | 398.1 | 17 | 415.1 | ||||||||||||
Other non-current assets | 58.8 | (1.9 | ) | 56.9 | |||||||||||
Current liabilities | (885.6 | ) | 2.1 | (883.5 | ) | ||||||||||
Long-term debt, including current portion(g) | (4,209.9 | ) | — | (4,209.9 | ) | ||||||||||
Deferred income taxes, net(h) | (1,410.9 | ) | 36 | (1,374.9 | ) | ||||||||||
Other non-current liabilities(i) | (280.2 | ) | (1.0 | ) | (281.2 | ) | |||||||||
Total identifiable net assets | 327.6 | 30.4 | 358 | ||||||||||||
Noncontrolling interest(j) | (102.3 | ) | (0.4 | ) | (102.7 | ) | |||||||||
Goodwill(k) | 4,388.00 | (30.0 | ) | 4,358.00 | |||||||||||
Total fair value of consideration transferred | $ | 4,613.30 | $ | — | $ | 4,613.30 | |||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability, (ii) a reduction in the estimated fair value of inventory, (iii) an increase in the estimated fair value of property, plant and equipment mainly related to certain machinery and equipment in Western Europe and the U.S., partially offset by a reduction in the estimated fair value related to certain manufacturing facilities and an office building, (iv) an adjustment between cash and accounts payable, and (v) increases in the estimated fair value of intangible assets, which included a net increase to IPR&D assets driven by a higher fair value for the next generation silicone hydrogel lens (Bausch + Lomb Ultra®). The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $540.7 million, with the gross contractual amount being $555.6 million, of which the Company expects that $14.9 million will be uncollectible. | ||||||||||||||
(c) | Includes an estimated fair value adjustment to inventory of $269.1 million. | ||||||||||||||
(d) | The following table summarizes the amounts and useful lives assigned to property, plant and equipment: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Land | NA | $ | 47.4 | $ | (12.6 | ) | $ | 34.8 | |||||||
Buildings | 24 | 273.1 | (23.8 | ) | 249.3 | ||||||||||
Machinery and equipment | 5 | 273.5 | 76.3 | 349.8 | |||||||||||
Leasehold improvements | 5 | 22.5 | (0.3 | ) | 22.2 | ||||||||||
Equipment on operating lease | 3 | 13.8 | (0.2 | ) | 13.6 | ||||||||||
Construction in progress | NA | 131.1 | (6.2 | ) | 124.9 | ||||||||||
Total property, plant and equipment acquired | $ | 761.4 | $ | 33.2 | $ | 794.6 | |||||||||
The Company sold an office building in Rochester, New York, with an adjusted carrying amount of $14.2 million, in the third quarter of 2014. There was no gain or loss associated with the sale. | |||||||||||||||
(e) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 10 | $ | 1,770.20 | $ | 4.6 | $ | 1,774.80 | ||||||||
Product rights | 8 | 855.4 | 5.7 | 861.1 | |||||||||||
Corporate brand | Indefinite | 1,690.50 | 7 | 1,697.50 | |||||||||||
Total identifiable intangible assets acquired | 9 | $ | 4,316.10 | $ | 17.3 | $ | 4,333.40 | ||||||||
The corporate brand represents the B&L corporate trademark and has an indefinite useful life as there are no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of this intangible asset. The estimated fair value was determined using the relief from royalty method. | |||||||||||||||
(f) | The significant components of the acquired IPR&D assets primarily relate to the development of (i) various vision care products ($223.4 million in the aggregate), such as the next generation silicone hydrogel lens (Bausch + Lomb Ultra®), (ii) various pharmaceutical products ($170.9 million, in the aggregate), such as latanoprostene bunod, a nitric oxide-donating prostaglandin for reduction of elevated intraocular pressure in patients with glaucoma or ocular hypertension, and (iii) various surgical products ($20.8 million, in the aggregate). See note 21 titled “COMMITMENTS AND CONTINGENCIES” for further information related to the worldwide licensing agreement with NicOx, S.A. (“NicOx”) for latanoprostene bunod. A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and a risk-adjusted discount rate of 10% was used to present value the projected cash flows. In determining fair value for latanoprostene bunod and Bausch + Lomb Ultra®, the Company assumed, as of the acquisition date, that material cash inflows for these products would commence in 2016 and 2014, respectively. In September 2013, the U.S. Food and Drug Administration (“FDA”) approved Bausch + Lomb Ultra®, and the product was launched in February 2014. As of December 31, 2014, the Company estimated that it will incur remaining development costs, including certain milestone payments, of approximately $80 million, in the aggregate, to complete the development of the IPR&D assets. | ||||||||||||||
(g) | In 2013, the Company repaid in full the amounts outstanding, with the exception of certain debentures. In connection with the redemption of the assumed 9.875% senior notes, the Company recognized a loss on extinguishment of debt of $8.2 million in the third quarter of 2013. As of December 31, 2014 and 2013, the debentures have an outstanding balance of $11.8 million, in the aggregate. | ||||||||||||||
(h) | Comprises current net deferred tax assets ($61.6 million) and non-current net deferred tax liabilities ($1,436.5 million). | ||||||||||||||
(i) | Includes $224.2 million related to the estimated fair value of pension and other benefits liabilities. | ||||||||||||||
(j) | Represents the estimated fair value of B&L’s noncontrolling interest related primarily to Chinese joint ventures. A discounted cash flow methodology was used to determine the estimated fair values as of the acquisition date. | ||||||||||||||
(k) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: | ||||||||||||||
• | the Company’s expectation to develop and market new product brands, product lines and technology; | ||||||||||||||
• | cost savings and operating synergies expected to result from combining the operations of B&L with those of the Company; | ||||||||||||||
• | the value of the continuing operations of B&L’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, B&L’s assembled workforce). | ||||||||||||||
The amount of goodwill has been allocated to the Company’s Developed Markets segment ($3.3 billion) and Emerging Markets segment ($1.1 billion). | |||||||||||||||
Other Business Combinations | |||||||||||||||
Description of the Transactions | |||||||||||||||
In the year ended December 31, 2013, the Company completed other business combinations, which included the acquisition of the following businesses, for an aggregate purchase price of $898.1 million. The aggregate purchase price included contingent consideration payment obligations with an aggregate acquisition date fair value of $59.1 million. | |||||||||||||||
• | On April 25, 2013, the Company acquired all of the outstanding shares of Obagi Medical Products, Inc. (“Obagi”) at a price of $24.00 per share in cash. The aggregate purchase price paid by the Company was approximately $437.1 million. Obagi is a specialty pharmaceutical company that develops, markets, and sells topical aesthetic and therapeutic skin-health systems with a product portfolio of dermatology brands including Obagi Nu-Derm®, Condition & Enhance®, Obagi-C® Rx, ELASTIDerm® and Obagi CLENZIDerm®. | ||||||||||||||
• | On February 1, 2013, the Company acquired Natur Produkt International, JSC (“Natur Produkt”), a specialty pharmaceutical company in Russia, for a purchase price of $149.9 million, including a $20.0 million contingent refund of purchase price relating to the outcome of certain litigation involving AntiGrippin® that commenced prior to the acquisition. Subsequent to the acquisition, during the three-month period ended March 31, 2013, the litigation was resolved, and the $20.0 million was refunded back to the Company. Natur Produkt’s key brand products include AntiGrippin®, Anti-Angin®, Sage™ and Eucalyptus MA™. | ||||||||||||||
• | During the year ended December 31, 2013, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
These transactions have been accounted for as business combinations under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | December 31, 2014 | |||||||||||||
(as adjusted) | |||||||||||||||
Cash | $ | 43.1 | $ | — | $ | 43.1 | |||||||||
Accounts receivable(b) | 64 | 0.5 | 64.5 | ||||||||||||
Inventories | 33.6 | 1.9 | 35.5 | ||||||||||||
Other current assets | 14 | — | 14 | ||||||||||||
Property, plant and equipment | 13.9 | (3.3 | ) | 10.6 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(c) | 722.9 | 3.9 | 726.8 | ||||||||||||
Acquired IPR&D(d) | 18.7 | 0.2 | 18.9 | ||||||||||||
Indemnification assets | 3.2 | (0.7 | ) | 2.5 | |||||||||||
Other non-current assets | 0.2 | 3.7 | 3.9 | ||||||||||||
Current liabilities | (36.2 | ) | (0.4 | ) | (36.6 | ) | |||||||||
Short-term borrowings(e) | (33.3 | ) | 0.5 | (32.8 | ) | ||||||||||
Long-term debt(e) | (24.0 | ) | — | (24.0 | ) | ||||||||||
Deferred tax liability, net | (147.8 | ) | (1.1 | ) | (148.9 | ) | |||||||||
Other non-current liabilities | (1.5 | ) | — | (1.5 | ) | ||||||||||
Total identifiable net assets | 670.8 | 5.2 | 676 | ||||||||||||
Noncontrolling interest(f) | (11.2 | ) | — | (11.2 | ) | ||||||||||
Goodwill(g) | 224.3 | 9 | 233.3 | ||||||||||||
Total fair value of consideration transferred | $ | 883.9 | $ | 14.2 | $ | 898.1 | |||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect an increase in the total fair value of consideration transferred with respect to the Natur Produkt acquisition pursuant to a purchase price adjustment. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $64.5 million, with the gross contractual amount being $68.2 million, of which the Company expects that $3.7 million will be uncollectible. | ||||||||||||||
(c) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 7 | $ | 517.2 | $ | 3.1 | $ | 520.3 | ||||||||
Corporate brand | 13 | 86.1 | 0.8 | 86.9 | |||||||||||
Patents | 3 | 71.7 | — | 71.7 | |||||||||||
Royalty Agreement | 5 | 26.5 | — | 26.5 | |||||||||||
Partner relationships | 5 | 16 | — | 16 | |||||||||||
Technology | 10 | 5.4 | — | 5.4 | |||||||||||
Total identifiable intangible assets acquired | 8 | $ | 722.9 | $ | 3.9 | $ | 726.8 | ||||||||
(d) | The acquired IPR&D assets relate to the Obagi and Natur Produkt acquisitions. Obagi’s acquired IPR&D assets primarily relate to the development of dermatology products for anti-aging and suncare. Natur Produkt’s acquired IPR&D assets include a product indicated for the prevention of viral diseases, specifically cold and flu, and a product indicated for the treatment of inflammation and muscular disorders. | ||||||||||||||
(e) | Short-term borrowings and long-term debt primarily relate to the Natur Produkt acquisition. In March 2013, the Company settled all of Natur Produkt’s outstanding third party short-term borrowings and long-term debt. | ||||||||||||||
(f) | Represents the estimated fair value of noncontrolling interest related to a smaller acquisition completed in the third quarter of 2013. | ||||||||||||||
(g) | The goodwill relates primarily to the Obagi and Natur Produkt acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of Obagi’s and Natur Produkt’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the Obagi and the Natur Produkt acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. | ||||||||||||||
The amount of goodwill from the Obagi acquisition has been allocated primarily to the Company’s Developed Markets segment. The amount of goodwill from the Natur Produkt acquisition has been allocated to the Company’s Emerging Markets segment. | |||||||||||||||
(c) Business combinations in 2012 included the following: | |||||||||||||||
Medicis | |||||||||||||||
Description of the Transaction | |||||||||||||||
On December 11, 2012, the Company acquired all of the outstanding common stock of Medicis for $44.00 per share (“Medicis Per Share Consideration”) for cash. Pursuant to the Agreement and Plan of Merger, dated September 2, 2012, among the Company, the Company’s subsidiary Valeant, Merlin Merger Sub, Inc. (“Merlin Merger Sub”), a Delaware corporation and wholly-owned subsidiary of Valeant, and Medicis, on December 11, 2012, Merlin Merger Sub merged with and into Medicis, with Medicis continuing as the surviving entity and wholly-owned subsidiary of Valeant (the “Medicis acquisition”). | |||||||||||||||
Medicis offers a broad range of products addressing various conditions or aesthetics improvements, including acne, actinic keratosis, facial wrinkles, glabellar lines, fungal infections, hyperpigmentation, photoaging, psoriasis, bronchospasms, external genital and perianal warts/condyloma acuminate, seborrheic dermatitis and cosmesis (improvement in the texture and appearance of skin). Medicis’ primary brands are Solodyn®, Ziana®, and Zyclara®. | |||||||||||||||
Fair Value of Consideration Transferred | |||||||||||||||
The following table indicates the consideration transferred to effect the acquisition of Medicis: | |||||||||||||||
(Number of shares, stock options and restricted | Conversion | Fair | |||||||||||||
share units in millions) | Calculation | Value | |||||||||||||
Number of common shares of Medicis outstanding as of acquisition date | 57.1 | ||||||||||||||
Multiplied by Medicis Per Share Consideration | $ | 44 | $ | 2,513.90 | |||||||||||
Number of stock options of Medicis cancelled and exchanged for cash(a) | 3.2 | 33.1 | |||||||||||||
Number of outstanding restricted shares cancelled and exchanged for cash(a) | 2 | 31.9 | |||||||||||||
Total fair value of consideration transferred | $ | 2,578.90 | |||||||||||||
____________________________________ | |||||||||||||||
(a) | The cash consideration paid for Medicis stock options and restricted shares attributable to pre-combination services has been included as a component of purchase price. The remaining $77.3 million balance related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control was recognized as a post-combination expense within Other (income) expense in the fourth quarter of 2012. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
The transaction has been accounted for as business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Date | Adjustments(a) | December 31, 2013 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 169.6 | $ | — | $ | 169.6 | |||||||||
Accounts receivable(b) | 81.1 | 9.1 | 90.2 | ||||||||||||
Inventories(c) | 145.1 | (7.6 | ) | 137.5 | |||||||||||
Short-term and long-term investments(d) | 626.6 | — | 626.6 | ||||||||||||
Income taxes receivable | 40.4 | — | 40.4 | ||||||||||||
Other current assets | 74.6 | — | 74.6 | ||||||||||||
Property and equipment, net | 8.2 | (5.6 | ) | 2.6 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(e) | 1,390.70 | (21.8 | ) | 1,368.90 | |||||||||||
Acquired IPR&D(f) | 153.8 | 6 | 159.8 | ||||||||||||
Other non-current assets | 0.6 | — | 0.6 | ||||||||||||
Current liabilities | (453.8 | ) | (12.5 | ) | (466.3 | ) | |||||||||
Long-term debt, including current portion(g) | (778.0 | ) | — | (778.0 | ) | ||||||||||
Deferred income taxes, net | (205.0 | ) | 12.2 | (192.8 | ) | ||||||||||
Other non-current liabilities | (8.8 | ) | — | (8.8 | ) | ||||||||||
Total identifiable net assets | 1,245.10 | (20.2 | ) | 1,224.90 | |||||||||||
Goodwill(h) | 1,333.80 | 20.2 | 1,354.00 | ||||||||||||
Total fair value of consideration transferred | $ | 2,578.90 | $ | — | $ | 2,578.90 | |||||||||
______________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) reductions in the estimated fair value of a product brand intangible asset and property and equipment; (ii) changes in estimated inventory reserves; (iii) changes in certain assumptions impacting the fair value of acquired IPR&D; (iv) additional information obtained with respect to the valuation of certain pre-acquisition contingent assets, as well as legal and milestone obligations; and (v) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $90.2 million, with the gross contractual amount being $90.3 million, of which the Company expects that $0.1 million will be uncollectible. | ||||||||||||||
(c) | Includes an estimated fair value adjustment to inventory of $104.6 million. | ||||||||||||||
(d) | Short-term and long-term investments consist of corporate and various government agency and municipal debt securities, investments in auction rate floating securities (student loans), and investments in equity securities. Subsequent to the acquisition date, the Company liquidated these investments for proceeds of $615.4 million, $9.0 million and $8.0 million in the fourth quarter of 2012, the first quarter of 2013, and the second quarter of 2013, respectively. | ||||||||||||||
(e) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
In-licensed products | 11 | $ | 633.4 | $ | 2.3 | $ | 635.7 | ||||||||
Product brands | 8 | 491.6 | (24.8 | ) | 466.8 | ||||||||||
Patents | 5 | 225 | 1.1 | 226.1 | |||||||||||
Corporate brands | 14 | 40.7 | (0.4 | ) | 40.3 | ||||||||||
Total identifiable intangible assets acquired | 9 | $ | 1,390.70 | $ | (21.8 | ) | $ | 1,368.90 | |||||||
(f) | The significant components of the acquired IPR&D assets relate to the development of dermatology products, such as Luliconazole, a new imidazole, antimycotic cream for the treatment of tinea cruris, pedis and corporis, and Metronidazole 1.3%, a topical antibiotic for the treatment of bacterial vaginosis ($136.9 million, in the aggregate), and the development of aesthetics programs ($22.9 million). In November 2013, the FDA approved a New Drug Application (“NDA”) for Luliconazole, which triggered the commencement of amortization. A multi-period excess earnings methodology (income approach) was primarily used to determine the estimated fair values of the acquired IPR&D assets. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project. Risk-adjusted discount rates of 10% - 11% were used to present value the projected cash flows. On July 1, 2014, the Company sold the worldwide rights in its Metronidazole 1.3% Vaginal Gel antibiotic development product to Actavis Specialty Brands. For further details, see note 4 titled “DIVESTITURES”. | ||||||||||||||
(g) | During the period from the acquisition date to December 31, 2013, the Company settled a significant portion of Medicis’ outstanding long-term debt. As of December 31, 2014 and 2013, Medicis’ outstanding long-term debt includes 1.375% Convertible Senior Notes, with an outstanding principal amount of $0.2 million. | ||||||||||||||
(h) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of Medicis with those of the Company; | ||||||||||||||
• | the value of the continuing operations of Medicis’ existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, Medicis’ assembled workforce). | ||||||||||||||
The goodwill has been allocated to the Company’s Developed Markets segment. | |||||||||||||||
Other Business Combinations | |||||||||||||||
Description of the Transactions | |||||||||||||||
In the year ended December 31, 2012, the Company completed other business combinations, which included the following businesses, as well as other smaller acquisitions, for an aggregate purchase price of $1.2 billion. The aggregate purchase price included contingent consideration obligations with an aggregate acquisition date fair value of $145.7 million. | |||||||||||||||
• | On June 18, 2012, the Company acquired all of the outstanding common stock and preferred stock of OraPharma Topco Holdings, Inc. (“OraPharma”), a specialty oral health company located in the U.S. that develops and commercializes products that improve and maintain oral health. Pursuant to the Agreement and Plan of Merger, dated June 14, 2012, by and among Valeant, Orange Acquisition, Inc. (“Orange Merger Sub”), a Delaware corporation and wholly-owned subsidiary of Valeant, OraPharma and a representative of the shareholder of Orapharma, Orange Merger Sub merged with and into OraPharma with OraPharma continuing as the surviving entity and wholly-owned subsidiary of Valeant. The Company made an up-front payment of $289.3 million, and the Company agreed to pay a series of contingent consideration payments of up to $114.0 million based on certain milestones, including certain revenue targets. The fair value of the contingent consideration was determined to be $99.2 million as of the acquisition date. As of December 31, 2014, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. During each year ended December 31, 2014 and 2013, the Company made contingent consideration payments of $40.0 million per year, and therefore the remaining potential contingent consideration that may be paid is $34.0 million. OraPharma’s lead product is Arestin®, a locally administered antibiotic for the treatment of periodontitis that utilizes an advanced controlled-release delivery system and is indicated for use in conjunction with scaling and root planing for the treatment of adult periodontitis. | ||||||||||||||
• | On March 13, 2012, the Company acquired certain assets from Gerot Lannach, a branded generics pharmaceutical company based in Austria. The Company made an up-front payment of $164.0 million, and the Company agreed to pay a series of contingent consideration payments if certain net sales milestones were achieved. The fair value of the contingent consideration was determined to be $16.8 million as of the acquisition date. During the year ended December 31, 2013, the Company made contingent consideration payments of $20.1 million, in the aggregate. There are no remaining contingent consideration payments under this arrangement. As part of the transaction, the Company also entered into a ten-year exclusive supply agreement with Gerot Lannach for the acquired products. Approximately 90% of sales relating to the acquired assets are in Russia, with sales also made in certain Commonwealth of Independent States (CIS) countries including Kazakhstan and Uzbekistan. Gerot Lannach’s largest product is acetylsalicylic acid, a low dose aspirin. | ||||||||||||||
• | During the year ended December 31, 2012, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
These transactions have been accounted for as business combinations under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the other business combinations, in the aggregate, as of the acquisition dates. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | 31-Dec-13 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 21.4 | $ | (0.3 | ) | $ | 21.1 | ||||||||
Accounts receivable(b) | 40.2 | — | 40.2 | ||||||||||||
Assets held for sale(c) | 15.6 | — | 15.6 | ||||||||||||
Inventories | 68 | (8.8 | ) | 59.2 | |||||||||||
Other current assets | 6.6 | — | 6.6 | ||||||||||||
Property, plant and equipment | 17.2 | — | 17.2 | ||||||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 1,133.00 | (62.6 | ) | 1,070.40 | |||||||||||
Acquired IPR&D(e) | 16.7 | 13.1 | 29.8 | ||||||||||||
Indemnification assets | 27.9 | — | 27.9 | ||||||||||||
Other non-current assets | 1.9 | — | 1.9 | ||||||||||||
Current liabilities | (41.8 | ) | (0.7 | ) | (42.5 | ) | |||||||||
Long-term debt(f) | (38.8 | ) | — | (38.8 | ) | ||||||||||
Liability for uncertain tax position | (6.7 | ) | 6.7 | — | |||||||||||
Other non-current liabilities | (28.7 | ) | — | (28.7 | ) | ||||||||||
Deferred income taxes, net | (184.8 | ) | 18.8 | (166.0 | ) | ||||||||||
Total identifiable net assets | 1,047.70 | (33.8 | ) | 1,013.90 | |||||||||||
Goodwill(g) | 157.4 | 24.7 | 182.1 | ||||||||||||
Total fair value of consideration transferred | $ | 1,205.10 | $ | (9.1 | ) | $ | 1,196.00 | ||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily relate to the OraPharma acquisition and primarily reflect: (i) changes in the estimated fair value of the Arestin® product brand; (ii) the reclassification of intangible assets from product brands to IPR&D; (iii) a decrease in the total fair value of consideration transferred due to a working capital adjustment; and (iv) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $40.2 million, with the gross contractual amount being $41.5 million, of which the Company expects that $1.3 million will be uncollectible. | ||||||||||||||
(c) | Assets held for sale relate to a product brand acquired in the other smaller acquisition. Subsequent to that acquisition, the plan of sale changed, and the Company no longer intends to sell the asset. Consequently, the product brand was not classified as an asset held for sale as of December 31, 2012. | ||||||||||||||
(d) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 11 | $ | 903.7 | $ | (63.8 | ) | $ | 839.9 | |||||||
Corporate brands | 13 | 51.4 | 2.1 | 53.5 | |||||||||||
Product rights | 10 | 109.3 | (0.9 | ) | 108.4 | ||||||||||
Royalty agreement | 9 | 36.2 | — | 36.2 | |||||||||||
Partner relationships | 5 | 32.4 | — | 32.4 | |||||||||||
Total identifiable intangible assets acquired | 11 | $ | 1,133.00 | $ | (62.6 | ) | $ | 1,070.40 | |||||||
(e) | The IPR&D assets primarily relate to the OraPharma acquisition. OraPharma’s acquired IPR&D assets primarily relate to the development of Arestin® ER, which is indicated for oral hygiene use and Arestin® Peri-Implantitis, which is indicated for anti-inflammatory and anti-bacterial use. | ||||||||||||||
(f) | Primarily relates to the OraPharma acquisition. Effective June 18, 2012, the Company terminated the OraPharma’s credit facility agreement, repaid the assumed debt outstanding ($37.9 million) and cancelled the undrawn credit facilities. | ||||||||||||||
(g) | The goodwill relates primarily to the OraPharma acquisition. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of OraPharma’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the OraPharma acquisition represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of OraPharma with those of the Company; | ||||||||||||||
• | the value of the continuing operations of OraPharma’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, OraPharma’s assembled workforce). | ||||||||||||||
The amount of goodwill from OraPharma acquisition has been allocated to the Company’s Developed Markets segment. The amount of goodwill from the Gerot Lannach acquisition has been allocated to the Company’s Emerging Markets segment. | |||||||||||||||
Pro Forma Impact of Business Combinations | |||||||||||||||
The following table presents unaudited pro forma consolidated results of operations for the years ended December 31, 2014, 2013 and 2012, as if the 2014 acquisitions had occurred as of January 1, 2013, the 2013 acquisitions had occurred as of January 1, 2012, and the 2012 acquisitions occurred as of January 1, 2011. | |||||||||||||||
Unaudited | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
Revenues | $ | 8,348.90 | $ | 7,929.90 | $ | 7,700.60 | |||||||||
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | 909.3 | (801.9 | ) | (709.6 | ) | ||||||||||
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||||||||||||||
Basic | $ | 2.71 | $ | (2.43 | ) | $ | (2.14 | ) | |||||||
Diluted | $ | 2.66 | $ | (2.43 | ) | $ | (2.14 | ) | |||||||
The increase in pro forma revenues in the year ended December 31, 2014 as compared to the year ended December 31, 2013 was primarily due to higher B&L revenues and growth from the remaining business, including the launches of Jublia®, Luzu®, and Retin-A Micro® Microsphere 0.08% (“RAM 0.08%”). These increases were partially offset by (i) lower sales of the Vanos®, Retin-A Micro® (excluding RAM 0.08%), and Zovirax® franchises and Wellbutrin® XL (Canada) due to generic competition, (ii) lower sales of facial aesthetic fillers and toxins assets due to the July 2014 divestiture of these assets, and (iii) a negative foreign currency exchange impact. | |||||||||||||||
The unaudited pro forma consolidated results of operations were prepared using the acquisition method of accounting and are based on the historical financial information of the Company and the acquired businesses described above. Except to the extent realized in the year ended December 31, 2014, the unaudited pro forma information does not reflect any cost savings, operating synergies and other benefits that the Company may achieve as a result of these acquisitions, or the costs necessary to achieve these cost savings, operating synergies and other benefits. In addition, except to the extent recognized in the year ended December 31, 2014, the unaudited pro forma information does not reflect the costs to integrate the operations of the Company with those of the acquired businesses. | |||||||||||||||
The unaudited pro forma information is not necessarily indicative of what the Company’s consolidated results of operations actually would have been had the 2014 acquisitions, the 2013 acquisitions, and the 2012 acquisitions been completed on January 1, 2013, January 1, 2012, and January 1, 2011, respectively. In addition, the unaudited pro forma information does not purport to project the future results of operations of the Company. The unaudited pro forma information reflects primarily the following adjustments: | |||||||||||||||
• | elimination of historical intangible asset amortization expense of these acquisitions; | ||||||||||||||
• | additional amortization expense related to the fair value of identifiable intangible assets acquired; | ||||||||||||||
• | additional depreciation expense related to fair value adjustment to property, plant and equipment acquired; | ||||||||||||||
• | additional interest expense associated with the financing obtained by the Company in connection with the various acquisitions; and | ||||||||||||||
• | the exclusion from pro forma earnings in the year ended December 31, 2014, 2013 and 2012 of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of $20.2 million, $369.9 million and $58.1 million, in the aggregate, respectively, and the acquisition-related costs of $2.0 million, $25.3 million and $72.1 million, in the aggregate, respectively, incurred for these acquisitions in the year ended December 31, 2014, 2013 and 2012 and the inclusion of those amounts in pro forma earnings for the corresponding comparative periods. | ||||||||||||||
In addition, all of the above adjustments were adjusted for the applicable tax impact. |
DIVESTITURES
DIVESTITURES | 12 Months Ended |
Dec. 31, 2014 | |
ACQUISITIONS AND DISPOSITIONS | |
DIVESTITURES | DIVESTITURES |
Divestiture of Facial Aesthetic Fillers and Toxins | |
On July 10, 2014, the Company sold all rights to Restylane®, Perlane®, Emervel®, Sculptra®, and Dysport® owned or held by the Company to Galderma S.A. (“Galderma”) for approximately $1.4 billion in cash. These assets were included primarily in the Company’s Developed Markets segment. As a result of this transaction, the Company recognized a net gain on sale of $323.9 million in the third quarter of 2014 within Other (income) expense in the consolidated statement of income (loss). The costs to sell for this divestiture of approximately $43 million were recognized in the third quarter of 2014 and included as part of the net gain on sale (netted against the proceeds in the consolidated statement of cash flows). As this divestiture does not represent a strategic shift that has, or will have, a major effect on operations and financial results, a discontinued operations presentation was not appropriate. | |
Sale of Metronidazole 1.3% | |
On July 1, 2014, the Company sold the worldwide rights in its Metronidazole 1.3% Vaginal Gel antibiotic product, a topical antibiotic for the treatment of bacterial vaginosis, to Actavis Specialty Brands for upfront and certain milestone payments of $10.0 million, in the aggregate, and minimum royalties for the first three years of commercialization. This asset was included in the Company’s Developed Markets segment. In addition, royalties are payable to the Company beyond the initial three-year commercialization period. In the event of generic competition on Metronidazole 1.3%, should Actavis Specialty Brands choose to launch an authorized generic product, Actavis Specialty Brands would share the gross profits of the authorized generic with the Company. The FDA approved the NDA for Metronidazole 1.3% in March 2014. In connection with the sale of the Metronidazole 1.3%, the Company recognized a loss on sale of $58.5 million in the third quarter of 2014, as the Company’s accounting policy is to not recognize contingent payments until such amounts are realizable. The loss on sale was included within Other (income) expense in the consolidated statement of income (loss). As this divestiture does not represent a strategic shift that has, or will have, a major effect on operations and financial results, a discontinued operations presentation was not appropriate. | |
Divestiture of Tretin-X® and Generic Tretinoin | |
In connection with the acquisition of PreCision, the Company was required by the FTC to divest the rights to PreCision’s Tretin-X® (tretinoin) cream product and PreCision’s generic tretinoin gel and cream products. In July 2014, the Tretin-X product rights were sold to Watson Laboratories, Inc. for an up-front purchase price of $70 million, and the generic tretinoin products rights were sold to Matawan Pharmaceuticals, LLC (“Matawan”) for an up-front purchase price of $45 million plus additional contingent payments. In connection with the sale of the generic tretinoin product rights to Matawan, the Company recognized a loss on sale of $8.8 million in the third quarter of 2014 within Other (income) expense in the consolidated statement of income (loss), as the Company’s accounting policy is to not recognize contingent payments until such amounts are realizable. There was no gain or loss associated with the sale of the Tretin-X product rights. As these divestitures do not represent strategic shifts that have or will have, a major effect on operations and financial results, a discontinued operations presentation was not appropriate. | |
Divestiture of certain skincare products sold in Australia | |
In October 2013, the Company divested certain skincare products, sold primarily in Australia, for up-front proceeds of $13.7 million, plus potential additional earn-out payments based on sales and margin performance during the twelve-month period following the sale transaction. In connection with the sale of these products, the Company realized $13.7 million of cash proceeds in the fourth quarter of 2013. The Company recognized a loss on sale of $10.2 million in the fourth quarter of 2013, which was included in Other (income) expense in the consolidated statements of income (loss), since the Company will not recognize income from the potential earn-out payments until realizable. For further information regarding this transaction, see note 6 titled “FAIR VALUE MEASUREMENTS”. | |
Divestitures of IDP-111 and 5-FU | |
In connection with the acquisition of the Dermik in 2011, the Company was required by the FTC to divest IDP-111, a generic version of BenzaClin®, and 5-FU, an authorized generic of Efudex®. In February 2012, the Company sold the IDP-111 and 5-FU products and realized $66.3 million of cash proceeds, which resulted in an immaterial loss on sale. |
RESTRUCTURING_INTEGRATION_AND_
RESTRUCTURING, INTEGRATION AND OTHER CHARGES | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||
RESTRUCTURING, INTEGRATION AND OTHER CHARGES | RESTRUCTURING, INTEGRATION AND OTHER CHARGES | ||||||||||||||||||||
In connection with the B&L and Medicis acquisitions as well as other smaller acquisitions, the Company has implemented cost-rationalization and integration initiatives to capture operating synergies and generate cost savings across the Company. These measures included: | |||||||||||||||||||||
• | workforce reductions across the Company and other organizational changes; | ||||||||||||||||||||
• | closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities; | ||||||||||||||||||||
• | leveraging research and development spend; and | ||||||||||||||||||||
• | procurement savings. | ||||||||||||||||||||
B&L Acquisition-Related Cost-Rationalization and Integration Initiatives | |||||||||||||||||||||
The Company estimates that it will incur total costs of approximately $600 million (excluding charges of $52.8 million described below) in connection with these cost-rationalization and integration initiatives, which were substantially completed by the end of 2014. Since the acquisition date, total costs of $569.1 million (including $55.9 million related to cost-rationalization measures at a contact lens manufacturing plant in Waterford, Ireland as described below) have been incurred through December 31, 2014, including (i) $306.9 million of restructuring expenses, (ii) $248.8 million of integration expenses, and (iii) $13.4 million of acquisition-related costs. The estimate of total costs to be incurred primarily includes: employee termination costs payable to approximately 3,000 employees of the Company and B&L who have been or will be terminated as a result of the B&L Acquisition; IPR&D termination costs related to the transfer to other parties of product-development programs that did not align with our research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs. The costs described above do not include charges of $52.8 million, in the aggregate, recognized and paid in the third quarter of 2013 related to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees as a result of the B&L Acquisition. As described in note 2 titled “SIGNIFICANT ACCOUNTING POLICIES”, the charges of $52.8 million were reclassified to Other (income) expense to conform to the current year presentation. | |||||||||||||||||||||
B&L Restructuring Costs | |||||||||||||||||||||
The following table summarizes the major components of the restructuring costs incurred in connection with the B&L Acquisition since the acquisition date through December 31, 2014: | |||||||||||||||||||||
Employee Termination Costs | IPR&D | Contract | |||||||||||||||||||
Termination | Termination, | ||||||||||||||||||||
Costs | Facility Closure | ||||||||||||||||||||
Severance and | Share-Based | and Other Costs | Total | ||||||||||||||||||
Related Benefits | Compensation(1) | ||||||||||||||||||||
Balance, January 1, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Costs incurred and/or charged to expense | 155.7 | 52.8 | — | 25.6 | 234.1 | ||||||||||||||||
Cash payments | (77.8 | ) | (52.8 | ) | — | (7.8 | ) | (138.4 | ) | ||||||||||||
Non-cash adjustments | 11.4 | — | — | (6.8 | ) | 4.6 | |||||||||||||||
Balance, December 31, 2013 | $ | 89.3 | $ | — | $ | — | $ | 11 | $ | 100.3 | |||||||||||
Costs incurred and charged to expense | 46 | — | — | 23.7 | 69.7 | ||||||||||||||||
Cash payments | (110.7 | ) | — | — | (24.9 | ) | (135.6 | ) | |||||||||||||
Non-cash adjustments | (5.7 | ) | — | — | (5.4 | ) | (11.1 | ) | |||||||||||||
Balance, December 31, 2014 | $ | 18.9 | $ | — | $ | — | $ | 4.4 | $ | 23.3 | |||||||||||
___________________________________ | |||||||||||||||||||||
-1 | Relates to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees as a result of the B&L Acquisition. These charges were reclassified to Other (income) expense to conform to the current year presentation. | ||||||||||||||||||||
B&L Integration Costs | |||||||||||||||||||||
As mentioned above, the Company has incurred $248.8 million of integration costs related to the B&L Acquisition since the acquisition date. In the years ended December 31, 2014 and 2013, the Company incurred $132.8 million and $116.0 million, respectively, of integration costs related to the B&L Acquisition, which related primarily to integration consulting and manufacturing, duplicate labor, transition service, and other costs. The Company made payments of $144.1 million and $102.2 million related to B&L integration costs for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
In addition to the restructuring and integration costs described above, the Company incurred $55.9 million of restructuring costs in the year ended December 31, 2014 related to employee termination costs with respect to cost-rationalization measures at a contact lens manufacturing plant in Waterford, Ireland (the plant was acquired as part of the B&L Acquisition). The Company made payments of $24.0 million in the year ended December 31, 2014 with respect to this initiative. | |||||||||||||||||||||
Medicis Acquisition-Related Cost-Rationalization and Integration Initiatives | |||||||||||||||||||||
The Company estimates that it will incur total costs of approximately $200 million in connection with these cost-rationalization and integration initiatives, which were substantially completed by the end of 2013. However, additional costs have been incurred in 2014, and the Company expects to incur certain costs during the next three months. Since the acquisition date, total costs of $193.2 million (excluding the charge of $77.3 million described below), including (i) $109.2 million of restructuring expenses, (ii) $51.8 million of integration expenses, and (iii) $32.2 million of acquisition-related costs, which excludes $24.2 million of acquisition-related costs recognized in the fourth quarter of 2012 related to royalties to be paid to Galderma on sales of Sculptra®, have been incurred through December 31, 2014. In connection with the divestiture of Sculptra® and certain other products to Galderma in July 2014, the royalty obligation owed to Galderma on sales of Sculptra® was relieved in the third quarter of 2014 and included as part of the gain on sale. See note 4 “DIVESTITURES” for additional information regarding this divestiture. The estimated costs primarily include: employee termination costs payable to approximately 750 employees of the Company and Medicis who have been terminated as a result of the Medicis acquisition; IPR&D termination costs related to the transfer to other parties of product-development programs that did not align with our research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs. The estimate of total costs to be incurred of approximately $200 million does not include a charge of $77.3 million recognized within Other (income) expense and paid in the fourth quarter of 2012 related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control. | |||||||||||||||||||||
Medicis Restructuring Costs | |||||||||||||||||||||
The following table summarizes the major components of the $109.2 million of restructuring costs incurred in connection with the Medicis acquisition since the acquisition date through December 31, 2014: | |||||||||||||||||||||
Employee Termination Costs | IPR&D | Contract | |||||||||||||||||||
Termination | Termination, | ||||||||||||||||||||
Costs | Facility Closure | ||||||||||||||||||||
Severance and | Share-Based | and Other Costs | Total | ||||||||||||||||||
Related Benefits | Compensation(1) | ||||||||||||||||||||
Balance, January 1, 2012 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Costs incurred and/or charged to expense | 85.3 | 77.3 | — | 0.4 | 163 | ||||||||||||||||
Cash payments | (78.0 | ) | (77.3 | ) | — | — | (155.3 | ) | |||||||||||||
Non-cash adjustments | 4.1 | — | — | (0.2 | ) | 3.9 | |||||||||||||||
Balance, December 31, 2012 | 11.4 | — | — | 0.2 | 11.6 | ||||||||||||||||
Costs incurred and/or charged to expense | 20 | — | — | 3.5 | 23.5 | ||||||||||||||||
Cash payments | (31.4 | ) | — | — | (3.6 | ) | (35.0 | ) | |||||||||||||
Non-cash adjustments | 0.3 | — | — | (0.1 | ) | 0.2 | |||||||||||||||
Balance, December 31, 2013(2) | $ | 0.3 | $ | — | $ | — | $ | — | $ | 0.3 | |||||||||||
____________________________________ | |||||||||||||||||||||
-1 | Relates to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control. These charges were reclassified to Other (income) expense to conform to the current year presentation. | ||||||||||||||||||||
-2 | The Company has not recognized any restructuring charges, and made a payment of $0.1 million, in the year ended December 31, 2014 with respect to the Medicis acquisition-related initiatives. | ||||||||||||||||||||
Medicis Integration Costs | |||||||||||||||||||||
As mentioned above, the Company has incurred $51.8 million of integration costs related to the Medicis acquisition since the acquisition date. For the years ended December 31, 2014, 2013 and 2012, the Company incurred $11.9 million, $38.4 million and $1.5 million, respectively, of integration costs related to the Medicis acquisition. The costs incurred in 2014 related primarily to an R&D collaboration inherited from Medicis which does not align with the Company’s research and development model. The costs incurred in 2013 related primarily to integration consulting, duplicate labor, transition service, and other costs. The Company made payments of $12.0 million, $38.5 million and $0.5 million related to Medicis integration costs for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Other Restructuring and Integration-Related Costs (Excluding B&L and Medicis) | |||||||||||||||||||||
In the year ended December 31, 2014, in addition to the restructuring and integration costs associated with the B&L and Medicis acquisitions described above, the Company incurred an additional $111.4 million of other restructuring, integration-related and other costs. These costs included (i) $67.8 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $25.0 million of severance costs, (iii) $11.7 million of facility closure costs, and (iv) $6.9 million of other costs. These costs primarily related to (i) integration and restructuring costs for Solta Medical, PreCision and other smaller acquisitions and (ii) intellectual property migration and the global consolidation of the Company’s manufacturing facilities. The Company made payments of $104.4 million during the year ended December 31, 2014 (in addition to the payments related to the B&L and Medicis acquisitions described above). | |||||||||||||||||||||
In the year ended December 31, 2013, in addition to the restructuring and integration costs associated with the B&L and Medicis acquisitions described above, the Company incurred an additional $102.8 million of other restructuring, integration-related and other costs. These costs included (i) $39.1 million of facility closure costs, (ii) $35.8 million of integration consulting, duplicate labor, transition service, and other costs, (iii) $15.1 million of severance costs, and (iv) $12.8 million of other costs, including non-personnel manufacturing integration costs. These costs primarily related to (i) integration and restructuring costs for other smaller acquisitions, (ii) intellectual property migration and the global consolidation of the Company’s manufacturing facilities, and (iii) systems integration initiatives. The Company made payments of $103.3 million during the year ended December 31, 2013 (in addition to the payments related to B&L and Medicis acquisitions described above). | |||||||||||||||||||||
In the year ended December 31, 2012, in addition to the restructuring and integration costs associated with the Medicis acquisition described above, the Company incurred an additional $179.9 million of other restructuring, integration-related and other costs, in the aggregate, including (i) $72.0 million of integration consulting, duplicate labor, transition service, and other, (ii) $59.2 million of severance costs, (iii) $30.4 million of facility closure costs, and (iv) $18.3 million of other costs, including non-personnel manufacturing integration costs. The Company also made payments of $173.6 million during the year ended December 31, 2012 (in addition to the payments related to the Medicis acquisition described above). | |||||||||||||||||||||
As described in note 22 titled “SEGMENT INFORMATION”, restructuring costs are not recorded in the Company’s reportable segments. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | ||||||||||||||||||||||||||||||||
Fair value measurements are estimated based on valuation techniques and inputs categorized as follows: | |||||||||||||||||||||||||||||||||
• | Level 1 — Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||||||||||||||||||||
• | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | ||||||||||||||||||||||||||||||||
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. | ||||||||||||||||||||||||||||||||
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. | |||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||||||||||||||
The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value as of December 31, 2014 and 2013: | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Carrying | Quoted | Significant | Significant | Carrying | Quoted | Significant | Significant | ||||||||||||||||||||||||||
Value | Prices | Other | Unobservable | Value | Prices | Other | Unobservable | ||||||||||||||||||||||||||
in Active | Observable | Inputs | in Active | Observable | Inputs | ||||||||||||||||||||||||||||
Markets for | Inputs | (Level 3) | Markets for | Inputs | (Level 3) | ||||||||||||||||||||||||||||
Identical | (Level 2) | Identical | (Level 2) | ||||||||||||||||||||||||||||||
Assets | Assets | ||||||||||||||||||||||||||||||||
(Level 1) | (Level 1) | ||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Cash equivalents(1) | $ | 4.6 | $ | 2.8 | $ | 1.8 | $ | — | $ | 171.3 | $ | 171.3 | $ | — | $ | — | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Acquisition-related contingent consideration | $ | (308.8 | ) | $ | — | $ | — | $ | (308.8 | ) | $ | (355.8 | ) | $ | — | $ | — | $ | (355.8 | ) | |||||||||||||
___________________________________ | |||||||||||||||||||||||||||||||||
-1 | Cash equivalents include highly liquid investments with an original maturity of three months or less at acquisition, primarily including money market funds, reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. | ||||||||||||||||||||||||||||||||
In addition to the cash equivalents (described under the table above), the Company has time deposits valued at cost, which approximates fair value due to their short-term maturities. The carrying value of $42.6 million and $25.2 million as of December 31, 2014 and 2013, respectively, related to these investments is classified within Prepaid expenses and other current assets in the consolidated balance sheets. These investments are Level 2. | |||||||||||||||||||||||||||||||||
There were no transfers between Level 1 and Level 2 during the year ended December 31, 2014. | |||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||||||||||
The fair value measurement of contingent consideration obligations arising from business combinations is determined using unobservable (Level 3) inputs. These inputs include (i) the estimated amount and timing of projected cash flows; (ii) the probability of the achievement of the factor(s) on which the contingency is based; and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement. | |||||||||||||||||||||||||||||||||
The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013: | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | (355.8 | ) | $ | (455.1 | ) | |||||||||||||||||||||||||||
Included in net income (loss): | |||||||||||||||||||||||||||||||||
Arising during the year(1) | 14.1 | 29.2 | |||||||||||||||||||||||||||||||
Included in other comprehensive (loss) income: | |||||||||||||||||||||||||||||||||
Arising during the year | 4.1 | 5 | |||||||||||||||||||||||||||||||
Issuances(2) | (93.8 | ) | (76.1 | ) | |||||||||||||||||||||||||||||
Payments(3) | 116.8 | 141.2 | |||||||||||||||||||||||||||||||
Release from restricted cash | 5.8 | — | |||||||||||||||||||||||||||||||
Balance, end of year | $ | (308.8 | ) | $ | (355.8 | ) | |||||||||||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||||||||||
-1 | For the year ended December 31, 2014, a net gain of $14.1 million was recognized as Acquisition-related contingent consideration in the consolidated statements of income (loss). The acquisition-related contingent consideration net gain was primarily driven by net fair value adjustments of $19.0 million related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL in June 2011 (the “Elidel®/Xerese®/Zovirax® agreement”), as a result of continued assessment of the impact from generic competition on performance trends and future revenue forecasts for Zovirax®. | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2013, a net gain of $29.2 million was recognized as Acquisition-related contingent consideration in the consolidated statements of income (loss). The acquisition-related contingent consideration net gain was primarily driven by a net gain related to the Elidel®/Xerese®/Zovirax® agreement. As a result of analysis in the third quarter of 2013 of performance trends since the launch of a generic Zovirax® ointment in April 2013, the Company adjusted the projected revenue forecast, resulting in an acquisition-related contingent consideration net gain of $20.0 million in the year ended December 31, 2013. Also contributing to the acquisition-related contingent consideration net gain was a net gain of $6.9 million which resulted from the termination, in the third quarter of 2013, of the A007 (Lacrisert®) development program, which impacted the probability associated with potential milestone payments. The termination of this program also resulted in an IPR&D impairment charge in the third quarter of 2013, as described in note 10 titled “INTANGIBLE ASSETS AND GOODWILL”. | |||||||||||||||||||||||||||||||||
-2 | 2014 issuances relate primarily to the Solta Medical acquisition and other smaller acquisitions, and the 2013 issuances relate to smaller acquisitions. | ||||||||||||||||||||||||||||||||
-3 | The 2014 payments of acquisition-related contingent consideration relate to the OraPharma acquisition, the Elidel®/Xerese®/Zovirax® agreement, and other smaller acquisitions. The 2013 payments of acquisition-related contingent consideration related primarily to the Elidel®/Xerese®/Zovirax® agreement and the OraPharma and the Gerot Lannach acquisitions. See note 3 titled “BUSINESS COMBINATIONS”. | ||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | |||||||||||||||||||||||||||||||||
As of December 31, 2013, the Company’s assets measured at fair value on a non-recurring basis subsequent to initial recognition included: | |||||||||||||||||||||||||||||||||
(i) an intangible asset within the Company’s Developed Markets segment, related to ezogabine/retigabine (immediate-release formulation) which is co-developed and marketed under a collaboration agreement with GlaxoSmithKline (“GSK”). The Company recognized an impairment charge of $551.6 million in the third quarter of 2013 in Amortization and impairments of finite-lived intangible assets in the consolidated statements of income (loss). In addition, the Company fully impaired an IPR&D asset, within the Company’s Developed Markets segment, relating to a modified-release formulation of ezogabine/retigabine, which resulted in a charge of $93.8 million. The $93.8 million write-off was recognized in the third quarter of 2013 in In-process research and development impairments and other charges in the consolidated statements of income (loss). These impairment charges were driven by analysis of expected future cash flows based on the communication received from the FDA in September 2013 regarding labeling changes and a required modification of the approved risk evaluation and mitigation strategy (REMS), which includes restrictions on distribution and additional patient monitoring. Further, as a result of this feedback received from the FDA, GSK decided that all sales force promotion for the product will be eliminated in the U.S., and they will not launch the product in certain other planned territories. Per the terms of the collaboration agreement, GSK controls all sales force promotion for the product. Such changes are expected to have a significant impact on future cash flows of ezogabine/retigabine. The adjusted carrying amount of the ezogabine/retigabine (immediate-release formulation) of $45.1 million as of the third quarter of 2013 was equal to its estimated fair value, which was determined using discounted cash flows and represents Level 3 inputs. As a result of the events noted above, the Company believes that the value of the modified-release formulation of ezogabine/retigabine to a market participant would be zero. | |||||||||||||||||||||||||||||||||
(ii) assets held for sale within the Company’s Developed Markets segment, related to certain suncare and skincare brands, including inventory on hand, sold primarily in Australia. The Company recognized additional impairment charges of $31.5 million in 2013 for these brands in Amortization and impairments of finite-lived intangible assets in the consolidated statements of income (loss). The additional impairment charges, which were recognized primarily in the first quarter of 2013, were driven by assessment of offers received and analysis of updated market data. During the fourth quarter of 2013, the Company sold the skincare brands that were classified as held for sale. With respect to the remaining suncare brands, the plan of sale changed in the fourth quarter of 2013, and the Company no longer intends to sell these assets. | |||||||||||||||||||||||||||||||||
For further information regarding asset impairment charges, see note 10 titled “INTANGIBLE ASSETS AND GOODWILL”. |
TRADE_RECEIVABLES_NET
TRADE RECEIVABLES, NET | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
TRADE RECEIVABLES, NET | TRADE RECEIVABLES, NET | ||||||||
The components of trade receivables, net as of December 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
Trade | $ | 2,111.70 | $ | 1,704.00 | |||||
Less allowance for doubtful accounts | (35.9 | ) | (27.6 | ) | |||||
$ | 2,075.80 | $ | 1,676.40 | ||||||
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
INVENTORIES | INVENTORIES | ||||||||
The components of inventories as of December 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 232.8 | $ | 221.8 | |||||
Work in process | 98 | 104.7 | |||||||
Finished goods | 732.7 | 656.3 | |||||||
1,063.50 | 982.8 | ||||||||
Less allowance for obsolescence | (112.9 | ) | (99.8 | ) | |||||
$ | 950.6 | $ | 883 | ||||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT | ||||||||
The major components of property, plant and equipment as of December 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
Land | $ | 79.6 | $ | 76.9 | |||||
Buildings | 602.8 | 607.1 | |||||||
Machinery and equipment | 1,081.30 | 1,062.70 | |||||||
Other equipment and leasehold improvements | 278 | 108.2 | |||||||
Equipment on operating lease | 32.7 | 28.6 | |||||||
Construction in progress | 214 | 189.5 | |||||||
2,288.40 | 2,073.00 | ||||||||
Less accumulated depreciation | (977.9 | ) | (838.8 | ) | |||||
$ | 1,310.50 | $ | 1,234.20 | ||||||
Depreciation expense amounted to $186.9 million, $113.8 million, and $54.8 million in the years ended December 31, 2014, 2013 and 2012, respectively. |
INTANGIBLE_ASSETS_AND_GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL | |||||||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||||
The major components of intangible assets as of December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||
Weighted- | 2014 | 2013 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Useful | ||||||||||||||||||||||||||
Lives | ||||||||||||||||||||||||||
(Years) | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization, | Carrying | Carrying | Amortization, | Carrying | |||||||||||||||||||||
Amount | Including | Amount | Amount | Including | Amount | |||||||||||||||||||||
Impairments | Impairments | |||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||||
Product brands | 9 | $ | 10,320.20 | $ | (3,579.8 | ) | $ | 6,740.40 | $ | 10,554.20 | $ | (2,729.1 | ) | $ | 7,825.10 | |||||||||||
Corporate brands | 14 | 364.2 | (65.2 | ) | 299 | 365.6 | (44.4 | ) | 321.2 | |||||||||||||||||
Product rights | 7 | 3,225.90 | (1,263.8 | ) | 1,962.10 | 3,021.00 | (876.9 | ) | 2,144.10 | |||||||||||||||||
Partner relationships | 4 | 223.1 | (107.5 | ) | 115.6 | 194 | (83.2 | ) | 110.8 | |||||||||||||||||
Out-licensed technology and other | 5 | 275.5 | (124.3 | ) | 151.2 | 264 | (93.8 | ) | 170.2 | |||||||||||||||||
Total finite-lived intangible assets(1) | 7 | 14,408.90 | (5,140.6 | ) | 9,268.30 | 14,398.80 | (3,827.4 | ) | 10,571.40 | |||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||||
Acquired IPR&D(2) | NA | 290.1 | — | 290.1 | 579.3 | — | 579.3 | |||||||||||||||||||
Corporate brand(3) | NA | 1,697.50 | — | 1,697.50 | 1,697.50 | — | 1,697.50 | |||||||||||||||||||
$ | 16,396.50 | $ | (5,140.6 | ) | $ | 11,255.90 | $ | 16,675.60 | $ | (3,827.4 | ) | $ | 12,848.20 | |||||||||||||
____________________________________ | ||||||||||||||||||||||||||
-1 | In the fourth quarter of 2014, the Company recognized a write-off of $55.2 million related to the Kinerase® product within the Developed Market segment. The write-off was driven by the discontinuation of the product. | |||||||||||||||||||||||||
In the third quarter of 2014, the Company recognized a write-off of $32.4 million related to Grifulvin®, an anti-fungal product within the Developed Markets segment. The write-off was driven by withdrawal of the supplemental Abbreviated New Drug Application, which resulted from assessment of extended timelines and increased costs associated with a change in the supplier and the manufacturing process, based on feedback received from the FDA. | ||||||||||||||||||||||||||
In the third quarter of 2013, the Company recognized an impairment charge of $551.6 million related to ezogabine/retigabine (immediate-release formulation), which is included within the Developed Markets segment. This product is co-developed and marketed under a collaboration agreement with GSK. For further information regarding this asset impairment charge, see note 6 titled “FAIR VALUE MEASUREMENTS”. | ||||||||||||||||||||||||||
In the first quarter of 2013, the Company recognized a write-off of $22.2 million related to Opana®, a pain relief medication approved in Canada (included in the Company’s Developed Markets segment), due to production issues arising in the first quarter of 2013. These production issues resulted in higher spending projections and delayed commercialization timelines which, in turn, triggered the Company’s decision to suspend its launch plans. The Company does not believe this program has value to a market participant. | ||||||||||||||||||||||||||
These impairment charges were recognized in Amortization and impairments of finite-lived intangible assets in the consolidated statements of income (loss). | ||||||||||||||||||||||||||
-2 | In the fourth quarter of 2013, the Company wrote-off an IPR&D asset of $14.4 million related to the termination of the Mapracorat development program (included in both the Emerging Markets and Developed Markets segments), acquired by the Company as part of B&L Acquisition, resulting from analysis of Phase 3 study results. | |||||||||||||||||||||||||
In the third quarter of 2013, the Company wrote off an IPR&D asset of $93.8 million relating to a modified-release formulation of ezogabine/retigabine. For further information regarding this write-off, see note 6 titled “FAIR VALUE MEASUREMENTS”. | ||||||||||||||||||||||||||
In addition, in the third quarter of 2013, the Company wrote-off IPR&D assets of $27.3 million, in the aggregate, due to the write-off of IPR&D assets mainly related to the termination of the A007 (Lacrisert®) development program (Developed Markets segment) in the third quarter of 2013. The Company does not believe these programs have value to a market participant. | ||||||||||||||||||||||||||
The write offs of the IPR&D assets were recognized in In-process research and development impairments and other charges in the consolidated statements of income (loss). | ||||||||||||||||||||||||||
-3 | Represents the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See note 3 “BUSINESS COMBINATIONS” for further information. | |||||||||||||||||||||||||
The reduction in Acquired IPR&D is largely driven by the reclassification to finite-lived intangible assets with respect to Jublia®, which received regulatory approval in the first half of 2014. | ||||||||||||||||||||||||||
Estimated aggregate amortization expense for each of the five succeeding years ending December 31 is as follows: | ||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||||
Amortization expense(1) | $ | 1,376.10 | $ | 1,280.10 | $ | 1,216.30 | $ | 1,093.60 | $ | 949.8 | ||||||||||||||||
____________________________________ | ||||||||||||||||||||||||||
-1 | Estimated amortization expense shown in the table above does not include potential future impairments of finite-lived intangible assets, if any. | |||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for years ended December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||
Developed | Emerging | Total | ||||||||||||||||||||||||
Markets | Markets | |||||||||||||||||||||||||
Balance, December 31, 2012 | $ | 3,993.00 | $ | 1,148.40 | $ | 5,141.40 | ||||||||||||||||||||
Additions(1) | 3,395.70 | 1,199.50 | 4,595.20 | |||||||||||||||||||||||
Adjustments(2) | 28.4 | (0.3 | ) | 28.1 | ||||||||||||||||||||||
Foreign exchange and other | 11.6 | (24.2 | ) | (12.6 | ) | |||||||||||||||||||||
Balance, December 31, 2013 | 7,428.70 | 2,323.40 | 9,752.10 | |||||||||||||||||||||||
Additions(3) | 317.4 | 78.9 | 396.3 | |||||||||||||||||||||||
Adjustments(4) | (19.6 | ) | (4.3 | ) | (23.9 | ) | ||||||||||||||||||||
Divestitures(5) | (428.9 | ) | — | (428.9 | ) | |||||||||||||||||||||
Foreign exchange and other | (182.6 | ) | (166.6 | ) | (349.2 | ) | ||||||||||||||||||||
Balance, December 31, 2014 | $ | 7,115.00 | $ | 2,231.40 | $ | 9,346.40 | ||||||||||||||||||||
____________________________________ | ||||||||||||||||||||||||||
-1 | Primarily relates to the B&L, Obagi and Natur Produkt acquisitions. | |||||||||||||||||||||||||
-2 | Primarily reflects the impact of measurement period adjustments related to the Medicis acquisition. | |||||||||||||||||||||||||
-3 | Primarily relates to the PreCision and Solta Medical acquisitions. | |||||||||||||||||||||||||
-4 | Primarily reflects the impact of measurement period adjustments related to the B&L Acquisition. | |||||||||||||||||||||||||
-5 | See note 4, titled “DIVESTITURES” for additional information. | |||||||||||||||||||||||||
As describe in note 3 titled “BUSINESS COMBINATIONS”, the allocation of the goodwill balance associated with the PreCision acquisition is provisional and subject to the completion of the valuation of the assets acquired and liabilities assumed. |
ACCRUED_AND_OTHER_CURRENT_LIAB
ACCRUED AND OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Liabilities, Current [Abstract] | |||||||||
ACCRUED AND OTHER CURRENT LIABILITIES | ACCRUED AND OTHER CURRENT LIABILITIES | ||||||||
The major components of accrued and other current liabilities as of December 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
Product returns | $ | 380.3 | $ | 225.5 | |||||
Product rebates | 714.9 | 566.6 | |||||||
Interest | 196.7 | 231.3 | |||||||
Employee costs | 204.9 | 201.2 | |||||||
Accrued milestones(1) | 62 | — | |||||||
Professional fees | 55.6 | 46.3 | |||||||
Restructuring, integration and other costs (see note 5) | 66.6 | 112 | |||||||
Royalties | 41.4 | 37.6 | |||||||
Legal settlements and related fees (see note 20) | 8 | 55.9 | |||||||
Liabilities for uncertain tax positions | 6.8 | 8.7 | |||||||
Value added tax | 24.7 | 25.9 | |||||||
Short-term borrowings | 6.2 | 12.1 | |||||||
Deferred income | 18.8 | 19.5 | |||||||
Income taxes payable | 122.9 | 39.1 | |||||||
Capital expenditures | 25.6 | 27.2 | |||||||
Advertising and promotion | 33.3 | 19.3 | |||||||
Other | 210.7 | 172 | |||||||
$ | 2,179.40 | $ | 1,800.20 | ||||||
____________________________________ | |||||||||
-1 | Primarily relates to milestones associated with the agreements with Spear Dermatology Products Inc. (“Spear”). See note 21 titled "Commitments and Contingencies" for additional information. |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
LONG-TERM DEBT | LONG-TERM DEBT | ||||||||||
A summary of the Company’s consolidated long-term debt as of December 31, 2014 and 2013, respectively, is outlined in the table below: | |||||||||||
Maturity Date | 2014 | 2013 | |||||||||
Revolving Credit Facility(1) | April 2018 | $ | 165 | $ | — | ||||||
Series A-1 Tranche A Term Loan Facility, net of unamortized debt discount (2014 — $1.4; 2013 — $3.6)(1) | April 2016 | 139.6 | 259 | ||||||||
Series A-2 Tranche A Term Loan Facility, net of unamortized debt discount (2014 — $2.5; 2013 — $6.2)(1) | Apr-16 | 135.7 | 228.1 | ||||||||
Series A-3 Tranche A Term Loan Facility, net of unamortized debt discount (2014 — $22.4; 2013 - $35.4)(1) | Oct-18 | 1,637.90 | 1,935.70 | ||||||||
Series D-2 Tranche B Term Loan Facility, net of unamortized debt discount of (2014 — $18.9; 2013 — $27.0)(1) | Feb-19 | 1,089.70 | 1,256.70 | ||||||||
Series C-2 Tranche B Term Loan Facility, net of unamortized debt discount of (2014 — $14.5; 2013 — $20.7)(1) | Dec-19 | 838.3 | 966.8 | ||||||||
Series E-1 Tranche B Term Loan Facility, net of unamortized debt discount (2014 — $2.9; 2013 — $85.5)(1) | Aug-20 | 2,544.90 | 3,090.50 | ||||||||
Senior Notes: | |||||||||||
6.75%, net of unamortized debt discount (2013 — $1.3) | October 2017 | — | 498.7 | ||||||||
6.875%, net of unamortized debt discount (2014 — $1.9; 2013 — $4.4)(2) | December 2018 | 497.7 | 940.2 | ||||||||
7.00%, net of unamortized debt discount (2014 — $2.5; 2013 — $2.9) | October 2020 | 687.5 | 687.1 | ||||||||
6.75% | August 2021 | 650 | 650 | ||||||||
7.25%, net of unamortized debt discount (2014 — $6.8; 2013 — $7.8) | July 2022 | 543.2 | 542.2 | ||||||||
6.375%, net of unamortized discount (2014 — $24.4; 2013 — $28.6) | Oct-20 | 2,225.60 | 2,221.40 | ||||||||
6.75%, net of unamortized discount (2014 — $14.2; 2013 — $18.2) | Aug-18 | 1,585.80 | 1,581.90 | ||||||||
7.50%, net of unamortized discount (2014 — $16.6; 2013 — $19.1) | Jul-21 | 1,608.40 | 1,605.90 | ||||||||
5.625%, net of unamortized discount (2014 — $7.4; 2013 — $8.5) | Dec-21 | 892.6 | 891.5 | ||||||||
Other(3) | Various | 12.7 | 12 | ||||||||
15,254.60 | 17,367.70 | ||||||||||
Less current portion | (0.9 | ) | (204.8 | ) | |||||||
Total long-term debt | $ | 15,253.70 | $ | 17,162.90 | |||||||
____________________________________ | |||||||||||
-1 | Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement, as amended (the “Credit Agreement”). | ||||||||||
-2 | On February 17, 2015, Valeant redeemed all of the outstanding $499.6 million aggregate principal amount of its 6.875% senior notes due December 2018 (the “December 2018 Notes”) with a portion of the net proceeds from the issuance of the 5.50% senior notes due 2023 (the “2023 Notes”) on January 30, 2015. See note 24 titled “SUBSEQUENT EVENTS” for further information. | ||||||||||
-3 | Relates primarily to the debentures assumed in the B&L Acquisition, as described in note 3 titled “BUSINESS COMBINATIONS”. | ||||||||||
The Company’s Senior Secured Credit Facilities and indentures related to its senior notes contain customary covenants, including, among other things, and subject to certain qualifications and exceptions, covenants that restrict or limit the Company’s ability and the ability of its subsidiaries to: incur or guarantee additional indebtedness; create or permit liens on assets; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; make certain investments and other restricted payments; engage in mergers, acquisitions, consolidations and amalgamations; transfer and sell certain assets; and engage in transactions with affiliates. | |||||||||||
The Company’s Senior Secured Credit Facilities also contain specified financial covenants (consisting of a secured leverage ratio and an interest coverage ratio), various customary affirmative covenants and specified events of default. The Company’s indentures also contain certain customary affirmative covenants and specified events of default. | |||||||||||
As of December 31, 2014, the Company was in compliance with all covenants associated with the Company’s outstanding debt. | |||||||||||
The total fair value of the Company’s long-term debt, with carrying values of $15.3 billion and $17.4 billion at December 31, 2014 and 2013, was $15.8 billion and $18.4 billion, respectively. The fair value of the Company’s long-term debt is estimated using the quoted market prices for the same or similar debt issuances (Level 2). | |||||||||||
Aggregate maturities of our long-term debt for each of the five succeeding years ending December 31 and thereafter are as follows: | |||||||||||
2015 | $ | 0.9 | |||||||||
2016 | 639.3 | ||||||||||
2017 | 360.2 | ||||||||||
2018 | 3,204.50 | ||||||||||
2019 | 1,961.40 | ||||||||||
Thereafter | 9,224.70 | ||||||||||
Total gross maturities | 15,391.00 | ||||||||||
Unamortized discounts | (136.4 | ) | |||||||||
Total long-term debt | $ | 15,254.60 | |||||||||
Senior Secured Credit Facilities | |||||||||||
On February 13, 2012, the Company and certain of its subsidiaries as guarantors entered into the Credit Agreement with a syndicate of financial institutions and investors. In 2012, the Company and certain of its subsidiaries as guarantors entered into a series of joinder agreements to, among other things, (i) increase the existing tranche B term loan facility (the “Tranche B Term Loan Facility”) through new incremental term loans, (ii) reprice and refinance the Tranche B Term Loan Facility (such repriced Tranche B Term Loan Facility, the “Series D Tranche B Term Loan Facility”), and (iii) increase the amount of commitments under the revolving credit facility provided under the Credit Agreement (the “Revolving Credit Facility”). In connection with the repricing and refinancing of the Tranche B Term Loan Facility, the Company recognized a loss on extinguishment of debt of $17.6 million in the three-month period ended December 31, 2012. In addition, in connection with the Medicis acquisition on December 11, 2012, the Company issued $1.0 billion in a new Series C of the Tranche B Term Loans (the “Series C Tranche B Term Loan Facility”). | |||||||||||
In 2013, the Company and certain of its subsidiaries as guarantors entered into a series of amendments to, among other things, (i) reprice and refinance the existing tranche A term loan facility (as so amended, the “Series A-1 Tranche A Term Loan Facility”), (ii) effectuate two repricings of the Series D Tranche B Term Loan Facility and Series C Tranche B Term Loan Facility (as so amended in the second repricing, the “Series D-2 Tranche B Term Loan Facility” and “Series C-2 Tranche B Term Loan Facility”, respectively), and (iii) increase the amount of commitments under the Revolving Credit Facility to $1.0 billion and extend its maturity. In connection with the repricing of the Series D Tranche B Term Loan Facility and the Series C Tranche B Term Loan Facility, the Company recognized a loss on extinguishment of debt of $21.4 million in the three-month period ended March 31, 2013. In addition, in connection with the B&L Acquisition, the Company issued $850.0 million of tranche A term loans (the “Series A-2 Tranche A Term Loan Facility”) and $3.2 billion of tranche B term loans (the “Series E Tranche B Term Loan Facility”). Furthermore, on December 20, 2013, the Company entered into Amendment No. 8 to the Credit Agreement to allow for the extension of the maturity of all or a portion of the Series A-1 Tranche A Term Loans and Series A-2 Tranche A Term Loans outstanding from April 20, 2016 to October 20, 2018 (as extended, the “Series A-3 Tranche A Term Loan Facility”). | |||||||||||
On February 6, 2014, the Company and certain of its subsidiaries as guarantors entered into a joinder agreement to reprice and refinance the Series E Tranche B Term Loan Facility by the issuance of $2.95 billion in new term loans (the “Series E-1 Tranche B Term Loan Facility”). Term loans under the Series E Tranche B Term Loan Facility were either exchanged for, or repaid with the proceeds of, the Series E-1 Tranche B Term Loan Facility and proceeds of the additional Series A-3 Tranche A Term Loan Facility described below. The Series E-1 Tranche B Term Loan Facility has terms consistent with the Series E Tranche B Term Loan Facility. In connection with this transaction, the Company recognized a loss on extinguishment of debt of $93.7 million in the three-month period ended March 31, 2014. | |||||||||||
Concurrently, on February 6, 2014, the Company and certain of its subsidiaries as guarantors entered into a joinder agreement for the issuance of $225.6 million in incremental term loans under the Series A-3 Tranche A Term Loan Facility. Proceeds from this transaction were used to repay part of the term loans outstanding under the Series E Tranche B Term Loan Facility. | |||||||||||
In July 2014, the Company made principal payments of $1.0 billion, in the aggregate, related to the Senior Secured Credit Facilities, resulting in a principal reduction as follows: (i) $380.0 million under the Series E-1 Tranche B Term Loan Facility, (ii) $274.5 million under the Series A-3 Tranche A Term Loan Facility, (iii) $165.4 million under the Series D-2 Tranche B Term Loan Facility, (iv) $127.2 million under the Series C-2 Tranche B Term Loan Facility, and (v) $27.5 million and $25.4 million under the Series A-1 Tranche A Term Loan Facility and the Series A-2 Tranche A Term Loan Facility, respectively. Following these July 2014 principal payments, quarterly amortization payments for the Senior Secured Credit Facilities are as follows: $10.9 million for the Series A-1 Tranche A Term Loans, $7.9 million for the Series A-2 Tranche A Term Loans and $45.0 million for the Series A-3 Tranche A Term Loans. There are no remaining quarterly amortization payments for the Series D-2 Tranche B Term Loan Facility, Series C-2 Tranche B Term Loan Facility and the Series E-1 Tranche B Term Loan Facility. In December 2014, the Company voluntarily prepaid the scheduled 2015 amortization payments applicable to the Senior Secured Credit Facilities, resulting in an aggregate principal reduction of $255.3 million. | |||||||||||
For the year ended December 31, 2014, the effective rate of interest on the Company’s borrowings was as follows: (i) 2.45% per annum under the Revolving Credit Facility, (ii) 2.41% per annum under the Series A-1 Tranche A Term Loan Facility, the Series A-2 Tranche A Term Loan Facility, and the Series A-3 Tranche A Term Loan Facility, (iii) 3.71% per annum under both the Series D-2 Tranche B Term Loan Facility and the Series C-2 Tranche B Term Loan Facility, and (iv) 3.80% under the Series E-1 Tranche B Term Loan Facility. As of December 31, 2014, the applicable margins on the Company’s borrowings were as follows: (i) 1.25% with respect to base rate borrowings and 2.25% with respect to LIBO rate borrowings under the Revolving Credit Facility, Series A-1, A-2 and A-3 Tranche A Term Loan Facilities, and (ii) 1.75% with respect to base rate borrowings and 2.75% with respect to LIBO rate borrowings, subject to a 1.75% base rate floor and a 0.75% LIBO rate floor, under the Series D-2, C-2 and E-1 Tranche B Term Loan Facilities. | |||||||||||
The loans under the Senior Secured Credit Facilities may be made to, and the letters of credit under the Revolving Credit Facility may be issued on behalf of, the Company. All borrowings under the Senior Secured Credit Facilities are subject to the satisfaction of customary conditions, including the absence of a default or an event of default and the accuracy in all material respects of representations and warranties. | |||||||||||
In addition to paying interest on outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay commitment fees of 0.50% per annum in respect of the unutilized commitments under the Revolving Credit Facility, payable quarterly in arrears. The Company also is required to pay letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on LIBO rate borrowings under the Revolving Credit Facility on a per annum basis, payable quarterly in arrears, as well as customary fronting fees for the issuance of letters of credit and agency fees. | |||||||||||
Subject to certain exceptions and customary baskets set forth in the Credit Agreement, the Company is required to make mandatory prepayments of the loans under the Senior Secured Credit Facilities under certain circumstances, including from (a) 100% of net cash proceeds from asset sales outside the ordinary course of business (subject to reinvestment rights), (b) 100% of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights and net proceeds threshold), (c) 50% of the net cash proceeds from the issuance of equity securities subject to decrease based on leverage ratios, (d) 100% of the net cash proceeds from the incurrence of debt (other than permitted debt as defined in the Credit Agreement) and (e) 50% of Consolidated Excess Cash Flow (as defined in the Credit Agreement) subject to decrease based on leverage ratios. | |||||||||||
The Company is permitted to voluntarily reduce the unutilized portion of the revolving commitment amount and repay outstanding loans under the Revolving Credit Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBO rate loans. As of December 31, 2014, the Company is permitted to voluntarily repay outstanding loans under the Tranche A Term Loan Facility and Tranche B Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBO rate loans. | |||||||||||
The Company’s obligations and the obligations of the guarantors under the Senior Secured Credit Facilities and certain hedging arrangements and cash management arrangements entered into with lenders under the Senior Secured Credit Facilities (or affiliates thereof) are secured by first-priority security interests in substantially all tangible and intangible assets of the Company and the guarantors, including 100% of the capital stock of Valeant and each material subsidiary of the Company (other than Valeant’s foreign subsidiaries) and 65% of the capital stock of each foreign subsidiary of Valeant that is directly owned by Valeant or owned by a guarantor that is a domestic subsidiary of Valeant, in each case subject to certain exclusions set forth in the credit documentation governing the Senior Secured Credit Facilities. | |||||||||||
Senior Notes | |||||||||||
The senior notes issued by the Company are the Company’s senior unsecured obligations and are jointly and severally guaranteed on a senior unsecured basis by each of its subsidiaries that is a guarantor under our Senior Secured Credit Facilities. The senior notes issued by the Company’s subsidiary Valeant are senior unsecured obligations of Valeant and are jointly and severally guaranteed on a senior unsecured basis by the Company and each of its subsidiaries (other than Valeant) that is a guarantor under our Senior Secured Credit Facilities. Certain of the future subsidiaries of the Company and Valeant may be required to guarantee the senior notes. | |||||||||||
If the Company experiences a change in control, the Company may be required to repurchase each of the senior notes issuances discussed below, as applicable, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount of the senior notes repurchased, plus accrued and unpaid interest to, but excluding the applicable purchase date of the senior notes. | |||||||||||
6.50% Senior Notes due 2016 and 7.25% Senior Notes due 2022 | |||||||||||
On March 8, 2011, Valeant issued $950.0 million aggregate principal amount of 6.50% senior notes due 2016 (the “2016 Notes”) and $550.0 million aggregate principal amount of 7.25% senior notes due 2022 (the “2022 Notes”) in a private placement. The 2022 Notes will mature on July 15, 2022 and accrue interest at the rate of 7.25% per year, payable semi-annually in arrears, which commenced on July 15, 2011. The 2022 Notes were issued at 98.125% of par for an effective annual yield of 7.50%. | |||||||||||
In the fourth quarter of 2011, Valeant redeemed $34.5 million of principal amount of the 2016 Notes. In the fourth quarter of 2013, Valeant redeemed all $915.5 million of the outstanding principal amount of the 2016 Notes for $945.3 million, including a call premium of $29.8 million, plus accrued and unpaid interest, and satisfied and discharged the 2016 Notes indenture, solely with respect to the 2016 Notes. In connection with this transaction, the Company recognized a loss on extinguishment of debt of $32.5 million in the three-month period ended December 31, 2013. | |||||||||||
Valeant may redeem the 2022 Notes at any time prior to July 15, 2016 at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium. On or after July 15, 2016, Valeant may redeem all or a portion of the 2022 Notes, at the redemption prices applicable to the 2022 Notes, as set forth in the 2022 Notes indenture, plus accrued and unpaid interest to the date of redemption of the 2022 Notes, as applicable. | |||||||||||
6.75% Senior Notes due 2017 and 7.00% Senior Notes due 2020 | |||||||||||
On September 28, 2010, Valeant issued $500.0 million aggregate principal amount of 6.75% senior notes due 2017 (the “2017 Notes”) and $700.0 million aggregate principal amount of 7.00% senior notes due 2020 (the “October 2020 Notes”) in a private placement. On October 15, 2014, Valeant redeemed all of the outstanding $500.0 million aggregate principal amount of the 2017 Notes for $518.2 million, including a call premium of $16.9 million, plus accrued and unpaid interest, and satisfied and discharged the 2017 Notes indenture, solely with respect to the 2017 Notes. In connection with the redemption of the 2017 Notes, the Company recognized a loss on the extinguishment of debt of $17.9 million in the three-month period ended December 31, 2014. The October 2020 Notes mature on October 1, 2020. Interest on the October 2020 Notes accrues at the rate of 7.00% and is payable semi-annually in arrears, which commenced on April 1, 2011. The October 2020 Notes were issued at a discount of 99.375% for an effective annual yield of 7.09%. | |||||||||||
Valeant may redeem all or a portion of the October 2020 Notes at any time prior to October 1, 2015, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium, as set forth in the October 2020 Notes indenture. In the fourth quarter of 2011, Valeant redeemed $10.0 million of principal amount of the October 2020 Notes. On or after October 1, 2015, Valeant may redeem all or a portion of the October 2020 Notes, in each case at the redemption prices applicable to the October 2020 Notes, as set forth in the October 2020 Notes indenture, plus accrued and unpaid interest to the date of redemption. | |||||||||||
6.875% Senior Notes due 2018 | |||||||||||
On November 23, 2010, Valeant issued $1.0 billion aggregate principal amount of the December 2018 Notes in a private placement. The December 2018 Notes mature on December 1, 2018. Interest on the December 2018 Notes accrues at a rate of 6.875% and is payable semi-annually in arrears, which commenced on June 1, 2011. The December 2018 Notes were issued at a discount of 99.24% for an effective annual yield of 7.0%. | |||||||||||
In the fourth quarter of 2011, Valeant redeemed $55.4 million of principal amount of the December 2018 Notes. On December 29, 2014, Valeant redeemed $445.0 million aggregate principal amount of the December 2018 Notes for $462.7 million, including a call premium of $15.3 million, plus accrued and unpaid interest. In connection with the redemption of the December 2018 Notes, the Company recognized a loss on the extinguishment of debt of $17.9 million in the three-month period ended December 31, 2014. | |||||||||||
6.75% Senior Notes due 2021 | |||||||||||
On February 8, 2011, Valeant issued at par $650.0 million aggregate principal amount of 6.75% senior notes due 2021 (the “August 2021 Notes”) in a private placement. Interest on the August 2021 Notes accrues at the rate of 6.75% per year and is payable semi-annually in arrears, which commenced on August 15, 2011. The August 2021 Notes mature on August 15, 2021. | |||||||||||
Valeant may redeem all or a portion of the August 2021 Notes at any time prior to February 15, 2016, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium. On or after February 15, 2016, Valeant may redeem all or a portion of the August 2021 Notes at the redemption prices applicable to the August 2021 Notes as set forth in the August 2021 Notes indenture, plus accrued and unpaid interest to the date of redemption of the August 2021 Notes. | |||||||||||
6.375% Senior Notes due 2020 | |||||||||||
On October 4, 2012, VPI Escrow Corp. (the “VPI Escrow Issuer”), a newly formed wholly owned subsidiary of Valeant, issued $1.75 billion aggregate principal amount of 6.375% senior notes due 2020 (the “6.375% Notes”) in a private placement. The 6.375% Notes mature on October 15, 2020. The 6.375% Notes accrue interest at the rate of 6.375% per year, which is payable semi-annually in arrears, which commenced on April 15, 2013. In connection with the issuance of the 6.375% Notes, the Company incurred approximately $26.3 million in underwriting fees, which are recognized as debt issue discount, which resulted in the net proceeds of $1,723.7 million. At the time of the closing of the Medicis acquisition, (1) the VPI Escrow Issuer merged with and into Valeant, with Valeant continuing as the surviving corporation, (2) Valeant assumed all of the VPI Escrow Issuer’s obligations under the 6.375% Notes and the related indenture and (3) the funds previously held in escrow were released to the Company and were used to finance the Medicis acquisition. | |||||||||||
The indenture governing the terms of the 6.375% Notes provides that the 6.375% Notes are redeemable at the option of Valeant, in whole or in part, at any time on or after October 15, 2016, at the specified redemption prices, plus accrued and unpaid interest, if any, to the redemption date. In addition, Valeant may redeem some or all of the 6.375% Notes prior to October 15, 2016, in each case at a price equal to 100% of the principal amount thereof, plus a make-whole premium. Prior to October 15, 2015, Valeant may also redeem up to 35% of the aggregate principal amount of the 6.375% Notes using the proceeds from certain equity offerings at a redemption price equal to 106.375% of the principal amount of the 6.375% Notes, plus accrued and unpaid interest to the date of redemption. | |||||||||||
Concurrently with the offering of the 6.375% Notes on October 4, 2012, Valeant issued $500.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “Exchangeable Notes”) in a private placement, the form and terms of such notes being substantially identical to the form and terms of the 6.375% Notes, as described above. In connection with the issuance of the Exchangeable Notes, the Company incurred approximately $7.5 million in underwriting fees, which are recognized as debt issue discount, which resulted in the net proceeds of $492.5 million. | |||||||||||
On March 29, 2013, the Company announced that Valeant commenced an offer to exchange (the “Exchange Offer”) any and all of its Exchangeable Notes into the previously outstanding 6.375% Notes. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Exchangeable Notes with the anticipated result being that some or all of such notes would be part of a single series of 6.375% senior notes under one indenture. The Exchange Offer, which did not result in any changes to existing terms or to the total amount of the Company’s debt outstanding, expired on April 26, 2013. | |||||||||||
6.75% Senior Notes due 2018 and 7.50% Senior Notes due 2021 | |||||||||||
On July 12, 2013, VPII Escrow Corp. (the “VPII Escrow Issuer”), a newly formed wholly-owned subsidiary of the Company, issued $1.6 billion aggregate principal amount of the 6.75% senior notes due 2018 (the “August 2018 Notes”) and $1.625 billion aggregate principal amount of the 7.50% senior notes due 2021 (the “July 2021 Notes”) in a private placement. The August 2018 Notes mature on August 15, 2018 and bear interest at the rate of 6.75% per annum, payable semi-annually in arrears, which commenced on February 15, 2014. The July 2021 Notes mature on July 15, 2021 and bear interest at the rate of 7.50% per annum, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2014. In connection with the issuances of the August 2018 Notes and the July 2021 Notes, the Company incurred approximately $20.0 million and $20.3 million in underwriting fees, respectively, which are recognized as debt issue discount and which resulted in net proceeds of $1,580.0 million and $1,604.7 million, respectively. At the time of the closing of the B&L Acquisition, (1) the VPII Escrow Issuer was voluntarily liquidated and all of its obligations were assumed by, and all of its assets were distributed to the Company, (2) the Company assumed all of the VPII Escrow Issuer’s obligations under the August 2018 Notes and July 2021 Notes and the related indenture and (3) the funds previously held in escrow were released to the Company and were used to finance the B&L Acquisition. | |||||||||||
The indenture governing the terms of the August 2018 Notes and July 2021 Notes provides that the August 2018 Notes and the July 2021 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after August 15, 2015 and July 15, 2016, respectively, plus accrued and unpaid interest, if any, to the applicable redemption date. In addition, the Company may redeem some or all of the August 2018 Notes prior to August 15, 2015 and some or all of the July 2021 Notes prior to July 15, 2016, in each case at a price equal to 100% of the principal amount thereof, plus a make-whole premium. Prior to August 15, 2015, the Company may redeem up to 35% of the aggregate principal amount of the August 2018 Notes and prior to July 15, 2016, the Company may redeem up to 35% of the aggregate principal amount of the July 2021 Notes, in each case using the proceeds of certain equity offerings at the respective redemption price equal to 106.75% and 107.50% of the principal amount of the August 2018 Notes and July 2021 Notes, respectively, plus accrued and unpaid interest to the applicable date of redemption. | |||||||||||
5.625% Senior Notes due 2021 | |||||||||||
On December 2, 2013, the Company issued $900.0 million aggregate principal amount of the 5.625% senior notes due 2021 (the “December 2021 Notes”) in a private placement. The December 2021 Notes mature on December 1, 2021 and bear interest at the rate of 5.625% per annum, payable semi-annually, which commenced on June 1, 2014. In connection with the issuances of the December 2021 Notes, the Company incurred approximately $8.5 million in underwriting fees, respectively, which are recognized as debt issue discount and which resulted in net proceeds of $891.5 million. | |||||||||||
The indenture governing the terms of the December 2021 Notes provides that the December 2021 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after December 1, 2016, plus accrued and unpaid interest, if any, to the applicable redemption date. In addition, the Company may redeem some or all of the December 2021 Notes prior to December 1, 2016, in each case at a price equal to 100% of the principal amount thereof, plus a make-whole premium. Prior to December 1, 2016, the Company may redeem up to 35% of the aggregate principal amount of the December 2021 Notes using the proceeds of certain equity offerings at the redemption price equal to 105.625% of the principal amount of the December 2021 Notes, plus accrued and unpaid interest to the redemption date. | |||||||||||
Commitment Letters | |||||||||||
In connection with the B&L Acquisition, the Company and its subsidiary, Valeant, entered into a commitment letter dated as of May 24, 2013 (as amended and restated as of June 4, 2013, the “Commitment Letter”), with various financial institutions to provide up to $9.275 billion of unsecured bridge loans. Subsequently, the Company obtained $9.575 billion in financing through a syndication of the Incremental Term Loan Facilities under the Company’s existing Senior Secured Credit Facilities of $4.05 billion, the issuance of the August 2018 Notes in an aggregate principal amount of $1.6 billion, the issuance of the July 2021 Notes in an aggregate principal amount of $1.625 billion, and the issuance of new equity of approximately $2.3 billion. The proceeds from the issuance of the Incremental Term Loan Facilities, the August 2018 Notes, the July 2021 Notes and the equity were utilized to fund the B&L Acquisition. In connection with the Commitment Letter, the Company incurred approximately $37.3 million in fees, which were recognized as deferred financing costs. In the second quarter of 2013, the Company expensed $24.2 million of deferred financing costs associated with the Commitment Letter to Interest expense in the consolidated statements of income (loss). The remaining $13.1 million of deferred financing costs was expensed to Interest expense in the third quarter of 2013 upon closing of the August 2018 Notes and July 2021 Notes on July 12, 2013. |
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS | ||||||||||||||||||||||||
In connection with the B&L Acquisition completed on August 5, 2013, the Company assumed all of B&L’s benefit obligations and related plan assets. This includes defined benefit plans and a participatory defined benefit postretirement medical and life insurance plan, which covers a closed grandfathered group of legacy B&L U.S. employees and employees in certain other countries. The U.S. defined benefit accruals were frozen as of December 31, 2004 and benefits that were earned up to December 31, 2004 were preserved. Participants continue to earn interest credits on their cash balance. The most significant non-U.S. plans are two defined benefit plans in Ireland. In 2011, both Ireland plans were closed to future service benefit accruals; however additional accruals related to annual salary increases continued. In December 2014, one of the Ireland plans was amended effective August 2014 to eliminate future benefit accruals related to salary increases. All of the pension benefits accrued through the plan amendment date were preserved. As a result of the recent plan amendment, there are no active plan participants accruing benefits under the amended Ireland plan. The postretirement benefit plan was amended effective January 1, 2005 to eliminate employer contributions after age 65 for participants who did not meet the minimum requirements of age and service on that date. The employer contributions for medical and prescription drug benefits for participants retiring after March 1, 1989 were frozen effective January 1, 2010. Effective January 1, 2014, the Company no longer offers medical and life insurance coverage to new retirees. | |||||||||||||||||||||||||
In addition, outside of the U.S., a limited group of Valeant employees are covered by defined benefit pension plans. | |||||||||||||||||||||||||
The Company uses December 31 as the year-end measurement date for all of its defined benefit pension plans and the postretirement benefit plan. | |||||||||||||||||||||||||
Accounting for Pension Benefit Plans and Postretirement Benefit Plan | |||||||||||||||||||||||||
The Company recognizes on its balance sheet an asset or liability equal to the over- or under-funded benefit obligation of each defined benefit pension plans and other postretirement benefit plan. Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost are recognized, net of tax, as a component of other comprehensive income. | |||||||||||||||||||||||||
The table below presents the amounts recognized in accumulated other comprehensive loss as of December 31, 2014 and 2013: | |||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Unrecognized actuarial (losses) gains | $ | (18.2 | ) | $ | 11.2 | $ | (72.9 | ) | $ | 12.7 | $ | (3.8 | ) | $ | 1 | ||||||||||
Unrecognized prior service credits(1) | — | — | 26.8 | — | 25.5 | 27.9 | |||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Relate to negative plan amendments, as described below. | ||||||||||||||||||||||||
Of the December 31, 2014 amounts, the Company expects to recognize $2.5 million and $0.6 million of unrecognized prior service credits related to the U.S. postretirement benefit plan and the non-U.S. pension benefit plans, respectively, in net periodic (benefit) cost during 2015. In addition, the Company expects to recognize $1.4 million of unrecognized net loss related to the non-U.S. pension benefit plans in net periodic (benefit) cost during 2015. | |||||||||||||||||||||||||
Net Periodic (Benefit) Cost | |||||||||||||||||||||||||
The following table provides the components of net periodic (benefit) cost for the Company’s defined benefit pension plans and postretirement benefit plan for the year ended December 31, 2014 and 2013: | |||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Service cost | $ | 0.4 | $ | 0.1 | $ | 3.9 | $ | 2.2 | $ | 1.7 | $ | 0.9 | |||||||||||||
Interest cost | 10.8 | 4.5 | 8.3 | 3.7 | 2.3 | 1.6 | |||||||||||||||||||
Expected return on plan assets | (14.7 | ) | (5.9 | ) | (7.7 | ) | (3.1 | ) | (0.5 | ) | (0.3 | ) | |||||||||||||
Amortization of net gain | — | — | (0.2 | ) | — | — | — | ||||||||||||||||||
Curtailment gain recognized | — | — | (1.6 | ) | — | — | — | ||||||||||||||||||
Amortization of prior service credit | — | — | — | — | (2.5 | ) | — | ||||||||||||||||||
Settlement loss (gain) recognized | 0.9 | (0.1 | ) | 0.2 | 0.6 | — | — | ||||||||||||||||||
Other | — | — | 0.2 | — | — | — | |||||||||||||||||||
Net periodic (benefit) cost | $ | (2.6 | ) | $ | (1.4 | ) | $ | 3.1 | $ | 3.4 | $ | 1 | $ | 2.2 | |||||||||||
For the year ended December 31, 2012, the net periodic cost, which relates to the legacy Valeant defined benefit plans in Mexico, was not material to the Company’s results of operations. | |||||||||||||||||||||||||
Benefit Obligation, Change in Plan Assets and Funded Status | |||||||||||||||||||||||||
The table below presents components of the change in projected benefit obligation, change in plan assets and funded status at December 31, 2014 and 2013: | |||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan(1) | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Change in Projected benefit Obligation | |||||||||||||||||||||||||
Projected benefit obligation, beginning of year | $ | 234.6 | $ | — | $ | 229.7 | $ | 7 | $ | 59.2 | $ | — | |||||||||||||
Service cost | 0.4 | 0.1 | 3.9 | 2.2 | 1.7 | 0.9 | |||||||||||||||||||
Interest cost | 10.8 | 4.5 | 8.3 | 3.7 | 2.3 | 1.6 | |||||||||||||||||||
Acquisition of B&L | — | 244.2 | — | 224 | — | 87.6 | |||||||||||||||||||
Employee contributions | — | — | — | — | 1.2 | 0.3 | |||||||||||||||||||
Plan amendments(2) | — | — | (29.4 | ) | — | — | (27.9 | ) | |||||||||||||||||
Plan curtailments | — | — | (1.6 | ) | — | — | — | ||||||||||||||||||
Settlements(3) | (13.0 | ) | (5.3 | ) | (0.4 | ) | (0.1 | ) | — | — | |||||||||||||||
Benefits paid | (10.4 | ) | (4.3 | ) | (6.2 | ) | (3.6 | ) | (8.1 | ) | (3.0 | ) | |||||||||||||
Actuarial losses (gains) | 29.4 | (4.6 | ) | 101.9 | (10.1 | ) | 5.9 | (0.3 | ) | ||||||||||||||||
Currency translation adjustments | — | — | (33.8 | ) | 6.6 | — | — | ||||||||||||||||||
Other | — | — | 0.2 | — | — | — | |||||||||||||||||||
Projected benefit obligation, end of year | 251.8 | 234.6 | 272.6 | 229.7 | 62.2 | 59.2 | |||||||||||||||||||
Change in Plan Assets | |||||||||||||||||||||||||
Fair value of plan assets, beginning of year | $ | 197.3 | $ | — | $ | 139.1 | $ | 1.3 | $ | 14.5 | $ | — | |||||||||||||
Actual return on plan assets | 13.8 | 12.7 | 17.5 | 5.1 | 1.5 | 1.1 | |||||||||||||||||||
Employee contributions | — | — | — | — | 1.2 | 0.3 | |||||||||||||||||||
Company contributions | 8.9 | 3.3 | 8.4 | 7 | — | — | |||||||||||||||||||
Acquisition of B&L | — | 190.9 | — | 125.6 | — | 16.1 | |||||||||||||||||||
Settlements(3) | (13.0 | ) | (5.3 | ) | (0.4 | ) | (0.1 | ) | — | — | |||||||||||||||
Benefits paid | (10.4 | ) | (4.3 | ) | (6.2 | ) | (3.6 | ) | (8.1 | ) | (3.0 | ) | |||||||||||||
Currency translation adjustments | — | — | (17.9 | ) | 3.8 | — | — | ||||||||||||||||||
Fair value of plan assets, end of year | 196.6 | 197.3 | 140.5 | 139.1 | 9.1 | 14.5 | |||||||||||||||||||
Funded Status at end of year | $ | (55.2 | ) | $ | (37.3 | ) | $ | (132.1 | ) | $ | (90.6 | ) | $ | (53.1 | ) | $ | (44.7 | ) | |||||||
Recognized as: | |||||||||||||||||||||||||
Other long-term assets, net | $ | — | $ | — | $ | 1.4 | $ | 1.5 | $ | — | $ | — | |||||||||||||
Accrued and other current liabilities | — | — | (2.0 | ) | (2.1 | ) | — | — | |||||||||||||||||
Pension and other benefit liabilities | (55.2 | ) | (37.3 | ) | (131.5 | ) | (90.0 | ) | (53.1 | ) | (44.7 | ) | |||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Assumed in connection with the B&L Acquisition, as described above. | ||||||||||||||||||||||||
-2 | In December 2014, one of the Ireland plans was amended effective August 2014 to eliminate future benefit accruals related to salary increases. The reduction in accruing benefits was accounted for as a negative plan amendment resulting in an accumulated benefit obligation reduction that was recognized as a component of accumulated other comprehensive loss and is being amortized into income over approximately 42.5 years. In the fourth quarter of 2013, the Company announced that effective January 1, 2014, B&L will no longer offer medical and life insurance coverage to new retirees. The reduction in medical benefits was accounted for as a negative plan amendment resulting in an accumulated postretirement benefit obligation reduction that was recognized as a component of accumulated other comprehensive loss and is being amortized into income over approximately 11.3 years. | ||||||||||||||||||||||||
-3 | The 2014 and 2013 plan settlements primarily reflect lump sum benefit payments made to terminating employees of the U.S. pension benefit plan. | ||||||||||||||||||||||||
A number of the Company’s pension benefit plans were underfunded at December 31, 2014 and 2013, having accumulated benefit obligations exceeding the fair value of plan assets. Information for the underfunded plans is presented in the following table: | |||||||||||||||||||||||||
Pension Benefit Plans | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Projected benefit obligation | $ | 251.8 | $ | 234.6 | $ | 266.4 | $ | 224.1 | |||||||||||||||||
Accumulated benefit obligation | 251.8 | 234.6 | 257.3 | 196.3 | |||||||||||||||||||||
Fair value of plan assets | 196.6 | 197.3 | 133.1 | 132.2 | |||||||||||||||||||||
Information for the pension benefit plans that are underfunded on a projected benefit obligation basis (versus underfunded on an accumulated benefit basis as in the table above) is presented in the following table: | |||||||||||||||||||||||||
Pension Benefit Plans | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Projected benefit obligation | $ | 251.8 | $ | 234.6 | $ | 267.9 | $ | 225.5 | |||||||||||||||||
Fair value of plan assets | 196.6 | 197.3 | 134.3 | 133.4 | |||||||||||||||||||||
The Non-U.S. Plans’ accumulated benefit obligation for both the funded and underfunded pension benefit plans was $263.1 million and $201.5 million at December 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||||
The Company’s policy for funding its pension benefit plans is to make contributions that meet or exceed the minimum statutory funding requirements. These contributions are determined based upon recommendations made by the actuary under accepted actuarial principles. In 2015, the Company expects to contribute $10.1 million and $7.4 million to the U.S. and Non-U.S. pension benefit plans, respectively. | |||||||||||||||||||||||||
The Company plans to use postretirement benefit plan assets and cash on hand, as necessary, to fund postretirement benefit plan benefit payments in 2015. | |||||||||||||||||||||||||
Estimated Future Benefit Payments | |||||||||||||||||||||||||
Future benefit payments over the next 10 years for the pension benefit plans and the postretirement benefit plan, which reflect expected future service, as appropriate, are expected to be paid as follows: | |||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan | |||||||||||||||||||||||
2015 | $ | 13.4 | $ | 5 | $ | 6.8 | |||||||||||||||||||
2016 | 18.9 | 3.9 | 6.4 | ||||||||||||||||||||||
2017 | 18.9 | 4.4 | 5.9 | ||||||||||||||||||||||
2018 | 18.2 | 4.4 | 5.4 | ||||||||||||||||||||||
2019 | 17.7 | 5.4 | 5 | ||||||||||||||||||||||
2020-2024 | 85.1 | 37.7 | 20.1 | ||||||||||||||||||||||
Assumptions | |||||||||||||||||||||||||
The weighted-average assumptions used to determine net periodic benefit costs and benefit obligations at December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
Pension Benefit | Postretirement | ||||||||||||||||||||||||
Plans | Benefit Plan(1) | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
For Determining Net Periodic Benefit Cost | |||||||||||||||||||||||||
U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 4.7 | % | 4.5 | % | 4.3 | % | (2) | 4.5 | % | ||||||||||||||||
Expected rate of return on plan assets | 7.5 | % | 7.5 | % | 5.5 | % | 5.5 | % | |||||||||||||||||
Rate of compensation increase | — | — | — | — | |||||||||||||||||||||
Non-U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 3.86 | % | 3.61 | % | |||||||||||||||||||||
Expected rate of return on plan assets | 5.63 | % | 5.59 | % | |||||||||||||||||||||
Rate of compensation increase | 2.88 | % | 2.8 | % | |||||||||||||||||||||
For Determining Benefit Obligation | |||||||||||||||||||||||||
U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 3.9 | % | 4.7 | % | 3.7 | % | 4.3 | % | |||||||||||||||||
Rate of compensation increase | — | — | — | — | |||||||||||||||||||||
Non-U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 2.41 | % | 3.85 | % | |||||||||||||||||||||
Rate of compensation increase | 2.86 | % | 2.88 | % | |||||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | The Company does not have non-U.S. postretirement benefit plans. | ||||||||||||||||||||||||
-2 | The discount rate for the postretirement benefit plan was impacted by the amendment described above which eliminated coverage for new retirees. | ||||||||||||||||||||||||
The expected long-term rate of return on plan assets was developed based on a capital markets model that uses expected asset class returns, variance and correlation assumptions. The expected asset class returns were developed starting with current Treasury (for the U.S. pension plan) or Eurozone (for the Ireland pension plans) government yields and then adding corporate bond spreads and equity risk premiums to develop the return expectations for each asset class. The expected asset class returns are forward-looking. The variance and correlation assumptions are also forward-looking. They take into account historical relationships, but are adjusted to reflect expected capital market trends. The expected return on plan assets for the Company’s U.S. pension plan for 2014 was 7.50% and for the postretirement benefit plan was 5.50%. The expected return for the postretirement plan is based on the expected return for the U.S. pension plan reduced by 2.0% to reflect an estimate of additional administrative expenses. The expected return on plan assets for the Company’s Ireland pension plans was 6.0% for 2014. | |||||||||||||||||||||||||
The discount rate used to determine benefit obligations represents the current rate at which the benefit plan liabilities could be effectively settled considering the timing of expected payments for plan participants. | |||||||||||||||||||||||||
The 2015 expected rate of return for the U.S. pension benefit plan and the U.S. postretirement benefit plan will remain at 7.50% percent and 5.50%, respectively. The 2015 expected rate of return for the Ireland pension benefit plans will also remain at 6.0%. | |||||||||||||||||||||||||
Plan Assets | |||||||||||||||||||||||||
Pension and postretirement benefit plan assets are invested in several asset categories. The following presents the actual asset allocation as of December 31, 2014 and 2013: | |||||||||||||||||||||||||
Pension Benefit | Postretirement | ||||||||||||||||||||||||
Plans | Benefit Plan | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
U.S. Plan | |||||||||||||||||||||||||
Equity securities | 60 | % | 60 | % | 45 | % | 63 | % | |||||||||||||||||
Fixed income securities | 40 | % | 40 | % | 16 | % | 24 | % | |||||||||||||||||
Cash | — | % | — | % | 39 | % | 13 | % | |||||||||||||||||
Non-U.S. Plans | |||||||||||||||||||||||||
Equity securities | 44 | % | 43 | % | |||||||||||||||||||||
Fixed income securities | 42 | % | 47 | % | |||||||||||||||||||||
Other | 14 | % | 10 | % | |||||||||||||||||||||
The investment strategy underlying pension plan asset allocation is to manage the assets of the plan to provide for the long-term liabilities while maintaining sufficient liquidity to pay current benefits. Pension plan assets are diversified to protect against large investment losses and to reduce the probability of excessive performance volatility. Diversification of assets is achieved by allocating funds to various asset classes and investment styles within asset classes, and retaining investment management firm(s) with complementary investment philosophies, styles and approaches. | |||||||||||||||||||||||||
The Company’s pension plan assets are managed by outside investment managers using a total return investment approach, whereby a mix of equity and debt securities investments are used to maximize the long-term rate of return on plan assets. A significant portion of the assets of the U.S. and Ireland pension plans have been invested in equity securities, as equity portfolios have historically provided higher returns than debt and other asset classes over extended time horizons. Correspondingly, equity investments also entail greater risks than other investments. Equity risks are balanced by investing a significant portion of plan assets in broadly diversified fixed income securities. | |||||||||||||||||||||||||
Fair Value of Plan Assets | |||||||||||||||||||||||||
The Company measured the fair value of plan assets 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 described in note 6 titled “FAIR VALUE MEASUREMENTS”. | |||||||||||||||||||||||||
The table below presents total plan assets by investment category as of December 31, 2014 and 2013 and the classification of each investment category within the fair value hierarchy with respect to the inputs used to measure fair value: | |||||||||||||||||||||||||
Pension Benefit Plans - U.S. Plans | |||||||||||||||||||||||||
Assets | Quoted | Significant | Significant | Total | |||||||||||||||||||||
Prices in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 1.3 | $ | — | $ | — | $ | 1.3 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
U.S. broad market | — | 74.9 | — | 74.9 | |||||||||||||||||||||
Emerging markets | — | 15.9 | — | 15.9 | |||||||||||||||||||||
Non-U.S. developed markets | — | 25.5 | — | 25.5 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 59.4 | — | 59.4 | |||||||||||||||||||||
Global high yield | — | 19.6 | — | 19.6 | |||||||||||||||||||||
$ | 1.3 | $ | 195.3 | $ | — | $ | 196.6 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 0.4 | $ | — | $ | — | $ | 0.4 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
U.S. broad market | — | 72.7 | — | 72.7 | |||||||||||||||||||||
Emerging markets | — | 16.5 | — | 16.5 | |||||||||||||||||||||
Non-U.S. developed markets | — | 27.9 | — | 27.9 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 59 | — | 59 | |||||||||||||||||||||
Global high yield | — | 20.8 | — | 20.8 | |||||||||||||||||||||
$ | 0.4 | $ | 196.9 | $ | — | $ | 197.3 | ||||||||||||||||||
Pension Benefit Plans - Non-U.S. Plans | |||||||||||||||||||||||||
Assets | Quoted | Significant | Significant | Total | |||||||||||||||||||||
Prices in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 14 | $ | — | $ | — | $ | 14 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Emerging markets | — | 1 | — | 1 | |||||||||||||||||||||
Worldwide developed markets | — | 61.5 | — | 61.5 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 11.2 | — | 11.2 | |||||||||||||||||||||
Global high yield | — | 1 | — | 1 | |||||||||||||||||||||
Government bond funds | — | 46.4 | — | 46.4 | |||||||||||||||||||||
Other assets | — | 5.4 | — | 5.4 | |||||||||||||||||||||
$ | 14 | $ | 126.5 | $ | — | $ | 140.5 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 9.3 | $ | — | $ | — | $ | 9.3 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Emerging markets | — | 0.9 | — | 0.9 | |||||||||||||||||||||
Worldwide developed markets | — | 59.2 | — | 59.2 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 21.3 | — | 21.3 | |||||||||||||||||||||
Global high yield | — | 0.7 | — | 0.7 | |||||||||||||||||||||
Government bond funds | — | 42.5 | — | 42.5 | |||||||||||||||||||||
Other assets | — | 5.2 | — | 5.2 | |||||||||||||||||||||
$ | 9.3 | $ | 129.8 | $ | — | $ | 139.1 | ||||||||||||||||||
Postretirement Benefit Plan | |||||||||||||||||||||||||
Assets | Quoted | Significant | Significant | Total | |||||||||||||||||||||
Prices in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Cash | $ | 3.5 | $ | — | $ | — | $ | 3.5 | |||||||||||||||||
Insurance policies(4) | — | 5.6 | — | 5.6 | |||||||||||||||||||||
$ | 3.5 | $ | 5.6 | $ | — | $ | 9.1 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Cash | $ | 1.8 | $ | — | $ | — | $ | 1.8 | |||||||||||||||||
Insurance policies(4) | — | 12.7 | — | 12.7 | |||||||||||||||||||||
$ | 1.8 | $ | 12.7 | $ | — | $ | 14.5 | ||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Cash equivalents consisted primarily of term deposits and money market instruments. The fair value of the term deposits approximates their carrying amounts due to their short term maturities. The money market instruments also have short maturities and are valued using a market approach based on the quoted market prices of identical instruments. | ||||||||||||||||||||||||
-2 | Commingled funds are not publicly traded. The underlying assets in these funds are publicly traded on the exchanges and have readily available price quotes. The Ireland pension plans held approximately 85% of the non-U.S. commingled funds in both 2014 and 2013. The commingled funds held by the U.S. and Ireland pension plans are primarily invested in index funds. | ||||||||||||||||||||||||
-3 | The underlying assets in the fixed income funds are generally valued using the net asset value per fund share, which is derived using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades. | ||||||||||||||||||||||||
-4 | The insurance policies held by the postretirement benefit plan consist of variable life insurance contracts whose fair value is their cash surrender value. Cash surrender value is the amount currently payable by the insurance company upon surrender of the policy and is based principally on the net asset values of the underlying trust funds. The trust funds are commingled funds that are not publicly traded. The underlying assets in these funds are primarily publicly traded on exchanges and have readily available price quotes. | ||||||||||||||||||||||||
There were no transfers between Level 1 and Level 2 during the year ended December 31, 2014. | |||||||||||||||||||||||||
Health Care Cost Trend Rate | |||||||||||||||||||||||||
The health care cost trend rate assumptions for the postretirement benefit plan are as follows: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Health care cost trend rate assumed for next year | 7.31 | % | 7.57 | % | |||||||||||||||||||||
Rate to which the cost trend rate is assumed to decline | 4.5 | % | 4.5 | % | |||||||||||||||||||||
Year that the rate reaches the ultimate trend rate | 2029 | 2029 | |||||||||||||||||||||||
A one percentage point change in health care cost trend rate would have had the following effects: | |||||||||||||||||||||||||
One Percentage Point | |||||||||||||||||||||||||
Increase | Decrease | ||||||||||||||||||||||||
Effect on benefit obligations | $ | 1 | $ | 0.9 | |||||||||||||||||||||
Defined Contribution Plans | |||||||||||||||||||||||||
The Company sponsors defined contribution plans in the U.S., Ireland and certain other countries. Under these plans, employees are allowed to contribute a portion of their salaries to the plans, and the Company matches a portion of the employee contributions. The Company contributed $20.5 million, $16.4 million and $2.8 million to these plans in the years ended December 31, 2014, 2013 and 2012, respectively. The increase in the Company’s costs associated with the defined contribution plans in 2013 as compared to 2012 was driven by the plans assumed as part of the B&L Acquisition in August 2013 and the Medicis acquisition in December 2012. |
SECURITIES_REPURCHASES_AND_SHA
SECURITIES REPURCHASES AND SHARE ISSUANCE | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
SECURITIES REPURCHASES AND SHARE ISSUANCE | SECURITIES REPURCHASES AND SHARE ISSUANCE |
Securities Repurchase Programs | |
On November 3, 2011, the Company announced that its Board of Directors had approved a new securities repurchase program (the “2011 Securities Repurchase Program”). Under the 2011 Securities Repurchase Program, which commenced on November 8, 2011, the Company could make purchases of up to $1.5 billion of its convertible notes, senior notes, common shares and/or other future debt or shares. The 2011 Securities Repurchase Program terminated on November 7, 2012. | |
On November 19, 2012, the Company announced that its Board of Directors had approved a new securities repurchase program (the “2012 Securities Repurchase Program”). Under the 2012 Securities Repurchase Program, which commenced on November 15, 2012, the Company could make purchases of up to $1.5 billion of senior notes, common shares and/or other future debt or shares. The 2012 Securities Repurchase Program terminated on November 14, 2013. | |
On November 21, 2013, the Company’s Board of Directors approved a new securities repurchase program (the “2013 Securities Repurchase Program”). Under the 2013 Securities Repurchase Program, which commenced on November 22, 2013, the Company could make purchases of up to $1.5 billion of its convertible notes, senior notes, common shares and/or other future debt or shares. The 2013 Securities Repurchase Program terminated on November 21, 2014. | |
On November 20, 2014, the Company’s Board of Directors approved a new securities repurchase program (the “2014 Securities Repurchase Program”). Under the 2014 Securities Repurchase Program, which commenced on November 21, 2014, the Company may make purchases of up to $2.0 billion of its senior notes, common shares and/or other securities prior to the completion of the program, subject to any restrictions in the Company’s financing agreements and applicable law. The 2014 Securities Repurchase Program will terminate on November 20, 2015 or at such time as the Company completes its purchases. The amount of securities to be purchased and the timing of purchases under the 2014 Securities Repurchase Program may be subject to various factors, which may include the price of the securities, general market conditions, corporate and regulatory requirements, alternate investment opportunities and restrictions under our financing agreements and applicable law. The securities to be repurchased will be funded using our cash resources. | |
The Board of Directors also approved a sub-limit under the 2014 Securities Repurchase Program for the repurchase of an amount of common shares equal to the greater of 10% of the Company’s public float or 5% of the Company’s issued and outstanding common shares, in each case calculated as of the date of the commencement of the 2014 Securities Repurchase Program. The Company may initially purchase up to 5% of the Company's issued and outstanding common shares, calculated as of the date of the commencement of the 2014 Securities Repurchase Program, through the facilities of the New York Stock Exchange (“NYSE”). Subject to completion of appropriate filings with and approval by the Toronto Stock Exchange (“TSX”), the Company may also make purchases of its common shares over the facilities of the TSX. Purchases of common shares will be made at prevailing market prices of such shares on the NYSE or the TSX, as the case may be, at the time of the acquisition and shall be made in accordance with the respective rules and guidelines of the NYSE and the TSX and applicable law. | |
Share Repurchases | |
In the year ended December 31, 2014 and 2013, no common shares were repurchased under the 2013 Securities Repurchase Program or the 2014 Securities Repurchase Program. | |
In the year ended December 31, 2013, under the 2012 Securities Repurchase Program, the Company repurchased 507,957 of its common shares for an aggregate purchase price of $35.7 million. The excess of the purchase price over the carrying value of the common shares repurchased of $25.8 million was charged to the accumulated deficit. These common shares were subsequently cancelled. | |
In the year ended December 31, 2012, under the 2011 Securities Repurchase Program, the Company repurchased 5,257,454 of its common shares for an aggregate purchase price of $280.7 million. The excess of the purchase price over the carrying value of the common shares repurchased of $178.4 million was charged to the accumulated deficit. These common shares were subsequently cancelled. | |
Additional Repurchases outside the 2012 Securities Repurchase Program | |
In addition to the repurchases made under the 2012 Securities Repurchase Program, during the second quarter of 2013, the Company repurchased an additional 217,294 of its common shares on behalf of certain members of the Company’s Board of Directors, in connection with the share settlement of certain deferred stock units and restricted stock units held by such directors following the termination of the applicable equity program. These common shares were subsequently transferred to such directors. These common shares were repurchased for an aggregate purchase price of $19.9 million. The excess of the purchase price over the carrying value of the common shares repurchased of $15.6 million was charged to the accumulated deficit. As the common shares were repurchased on behalf of certain of the Company’s directors, these repurchases were not made under the 2012 Securities Repurchase Program. | |
Issuance of Common Stock | |
On June 24, 2013, the Company completed, pursuant to an Underwriting Agreement with Goldman Sachs & Co. and Goldman Sachs Canada, Inc., a public offering for the sale of 27,058,824 of its common shares, no par value, at a price of $85.00 per share, or aggregate gross proceeds of approximately $2.3 billion. In connection with the issuance of these new common shares, the Company incurred approximately $30.7 million of issuance costs, which has been reflected as reduction to the gross proceeds from the equity issuance. |
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION | |||||||||||||
In May 2014, shareholders approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”) which replaced the Company’s 2011 Omnibus Incentive Plan (the “2011 Plan”) for future equity awards granted by the Company. The Company transferred the common shares available under the 2011 Plan to the 2014 Plan. The maximum number of common shares that may be issued to participants under the 2014 Plan is equal to 18,000,000 common shares, plus the number of common shares under the 2011 Plan reserved but unissued and not underlying outstanding awards and the number of common shares becoming available for reuse after awards are terminated, forfeited, cancelled, exchanged or surrendered under the 2011 Plan and the Company’s 2007 Equity Compensation Plan. The Company registered, in the aggregate, 20,000,000 common shares of common stock for issuance under the 2014 Plan. Approximately 17,505,663 shares were available for future grants as of December 31, 2014. The Company uses reserved and unissued common shares to satisfy its obligation under its share-based compensation plans. | ||||||||||||||
The following table summarizes the components and classification of share-based compensation expense related to stock options and RSUs: | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Stock options | $ | 18.2 | $ | 17.3 | $ | 21.7 | ||||||||
RSUs | 60 | 28.2 | 44.5 | |||||||||||
Share-based compensation expense | $ | 78.2 | $ | 45.5 | $ | 66.2 | ||||||||
Research and development expenses | $ | 5.6 | $ | — | $ | 0.7 | ||||||||
Selling, general and administrative expenses | 72.6 | 45.5 | 65.5 | |||||||||||
Share-based compensation expense | $ | 78.2 | $ | 45.5 | $ | 66.2 | ||||||||
The increase in share-based compensation expense for the year ended December 31, 2014 was driven primarily by (i) the incremental compensation expense related to the higher fair value for share-based awards granted in 2014 and (ii) the impact of the accelerated vesting in the first half of 2014 related to certain performance-based RSU awards. | ||||||||||||||
In addition, in the second quarter of 2013, certain equity awards held by current non-management directors were modified from units settled in common shares to units settled in cash, which changed the classification from equity awards to liability awards. The resulting reduction in share-based compensation expense of $5.8 million was more than offset by incremental compensation expense of $21.3 million recognized in the second quarter of 2013, which represents the fair value of the awards settled in cash. As the modified awards were fully vested and paid out, no additional compensation expense will be recognized in subsequent periods. The decrease in share-based compensation expense for the year ended December 31, 2013 was also driven by the impact of forfeitures and the accelerated vesting that was triggered in the prior year related to certain performance-based RSU awards. | ||||||||||||||
The Company recognized $17.1 million, $24.2 million, and $12.5 million of tax benefits from stock options exercised in the year ended December 31, 2014, 2013 and 2012 respectively. | ||||||||||||||
Stock Options | ||||||||||||||
All stock options granted by the Company under its 2007 Equity Compensation Plan expire on the fifth anniversary of the grant date and all stock options granted under the 2011 Plan and 2014 Plan expire on the tenth anniversary of the grant date. The exercise price of any stock option granted under its 2007 Equity Compensation Plan is not to be less than the volume-weighted average trading price of the Company’s common shares for the five trading days immediately preceding the date of grant (or, for participants subject to U.S. taxation, on the single trading day immediately preceding the date of grant, whichever is greater). The exercise price of any stock option granted under the 2011 Plan and 2014 Plan will not be less than the closing price per common share preceding the date of grant. Stock options generally vest 25% each year over a four-year period on the anniversary of the date of grant. | ||||||||||||||
The fair values of all stock options granted during the years ended December 31, 2014, 2013 and 2012 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Expected stock option life (years)(1) | 5.8 | 4 | 4 | |||||||||||
Expected volatility(2) | 43 | % | 40.1 | % | 44.9 | % | ||||||||
Risk-free interest rate(3) | 1.8 | % | 1 | % | 0.5 | % | ||||||||
Expected dividend yield(4) | — | % | — | % | — | % | ||||||||
____________________________________ | ||||||||||||||
-1 | Determined based on historical exercise and forfeiture patterns. | |||||||||||||
-2 | Determined based on implied volatility in the market traded options of the Company’s common stock. | |||||||||||||
-3 | Determined based on the rate at the time of grant for zero-coupon U.S. or Canadian government bonds with maturity dates equal to the expected life of the stock option. | |||||||||||||
-4 | Determined based on the stock option’s exercise price and expected annual dividend rate at the time of grant. | |||||||||||||
The Black-Scholes option-pricing model used by the Company to calculate stock option values was developed to estimate the fair value of freely tradeable, fully transferable stock options without vesting restrictions, which significantly differ from the Company’s stock option awards. This model also requires highly subjective assumptions, including future stock price volatility and expected time until exercise, which greatly affect the calculated values. | ||||||||||||||
The following table summarizes stock option activity during the year ended December 31, 2014: | ||||||||||||||
Options | Weighted- | Weighted- | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term | ||||||||||||||
(Years) | ||||||||||||||
Outstanding, January 1, 2014 | 8.6 | $ | 30.19 | |||||||||||
Granted | 0.3 | 117.82 | ||||||||||||
Exercised | (0.8 | ) | 21.78 | |||||||||||
Expired or forfeited | (0.4 | ) | 74.88 | |||||||||||
Outstanding, December 31, 2014 | 7.7 | $ | 31.44 | 4.8 | $ | 852.6 | ||||||||
Vested and exercisable, December 31, 2014 | 5.7 | $ | 17.75 | 4 | $ | 720.6 | ||||||||
The weighted-average fair values of all stock options granted in 2014, 2013 and 2012 were $62.15, $30.47 and $19.57, respectively. The total intrinsic values of stock options exercised in 2014, 2013 and 2012 were $87.4 million, $30.4 million and $25.1 million, respectively. Proceeds received on the exercise of stock options in 2014, 2013 and 2012 were $17.2 million, $10.0 million and $23.0 million, respectively. | ||||||||||||||
As of December 31, 2014, the total remaining unrecognized compensation expense related to non-vested stock options amounted to $42.2 million, which will be amortized over the weighted-average remaining requisite service period of approximately 3.4 years. The total fair value of stock options vested in 2014 was $36.3 million (2013 — $26.0 million; 2012 — $36.1 million). | ||||||||||||||
RSUs | ||||||||||||||
RSUs generally vest on the third anniversary date from the date of grant. Annual RSUs granted to non-management directors vest immediately prior to the next Annual Meeting of Shareholders. Pursuant to the applicable unit agreement, certain RSUs may be subject to the attainment of any applicable performance goals specified by the Board of Directors. If the vesting of the RSUs is conditional upon the attainment of performance goals, any RSUs that do not vest as a result of a determination that a holder of RSUs has failed to attain the prescribed performance goals will be forfeited immediately upon such determination. RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on the Company’s common shares. Such additional RSUs will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited. | ||||||||||||||
To the extent provided for in a RSU agreement, the Company may, in lieu of all or a portion of the common shares which would otherwise be provided to a holder, elect to pay a cash amount equivalent to the market price of the Company’s common shares on the vesting date for each vested RSU. The amount of cash payment will be determined based on the average market price of the Company’s common shares on the vesting date. The Company’s current intent is to settle vested RSUs through the issuance of common shares. | ||||||||||||||
Time-Based RSUs | ||||||||||||||
Each vested RSU without performance goals (“time-based RSU”) represents the right of a holder to receive one of the Company’s common shares. The fair value of each RSU granted is estimated based on the trading price of the Company’s common shares on the date of grant. | ||||||||||||||
The following table summarizes non-vested time-based RSU activity during the year ended December 31, 2014: | ||||||||||||||
Time-Based | Weighted- | |||||||||||||
RSUs | Average | |||||||||||||
Grant-Date | ||||||||||||||
Fair Value | ||||||||||||||
Non-vested, January 1, 2014 | 0.9 | $ | 39.11 | |||||||||||
Granted | 0.1 | 137.71 | ||||||||||||
Vested | (0.1 | ) | 54.6 | |||||||||||
Non-vested, December 31, 2014 | 0.9 | $ | 51.34 | |||||||||||
As of December 31, 2014, the total remaining unrecognized compensation expense related to non-vested time-based RSUs amounted to $18.5 million, which will be amortized over the weighted-average remaining requisite service period of approximately 2.8 years. The total fair value of time-based RSUs vested in 2014 was $8.1 million (2013 — $15.2 million; 2012 — $18.0 million). | ||||||||||||||
Performance-Based RSUs | ||||||||||||||
Each vested RSU with performance goals (“performance-based RSU”) represents the right of a holder to receive a number of the Company’s common shares up to a specified maximum. Performance-based RSUs vest upon achievement of certain share price appreciation conditions. If the Company’s performance is below a specified performance level, no common shares will be paid. | ||||||||||||||
The fair value of each performance-based RSU granted during the years ended December 31, 2014, 2013 and 2012 was estimated using a Monte Carlo simulation model, which utilizes multiple input variables to estimate the probability that the performance condition will be achieved. | ||||||||||||||
The fair values of performance-based RSUs granted during the years ended December 31, 2014, 2013 and 2012 were estimated with the following assumptions: | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Contractual term (years) | 2.6 - 6.3 | 2.8 - 4.3 | 2.9 - 4.3 | |||||||||||
Expected Company share volatility(1) | 38.7% - 45.4% | 36.1% - 44.4% | 42.5% - 52.3% | |||||||||||
Risk-free interest rate(2) | 0.8% - 2.3% | 0.5% - 1.3% | 0.6% - 1.0% | |||||||||||
____________________________________ | ||||||||||||||
-1 | Determined based on historical volatility over the contractual term of the performance-based RSU. | |||||||||||||
-2 | Determined based on the rate at the time of grant for zero-coupon U.S. government bonds with maturity dates equal to the contractual term of the performance-based RSUs. | |||||||||||||
The following table summarizes non-vested performance-based RSU activity during the year ended December 31, 2014: | ||||||||||||||
Performance- | Weighted- | |||||||||||||
Based RSUs | Average | |||||||||||||
Grant-Date | ||||||||||||||
Fair Value | ||||||||||||||
Non-vested, January 1, 2014 | 1 | $ | 102.22 | |||||||||||
Granted | 0.5 | 219.79 | ||||||||||||
Vested | (0.2 | ) | 61.8 | |||||||||||
Forfeited | (0.1 | ) | 136.59 | |||||||||||
Non-vested, December 31, 2014 | 1.2 | $ | 160.44 | |||||||||||
As of December 31, 2014, the total remaining unrecognized compensation expense related to the non-vested performance-based RSUs amounted to $128.9 million, which will be amortized over the weighted-average remaining requisite service period of approximately 3.1 years. A maximum of 3,065,374 common shares could be issued upon vesting of the performance-based RSUs outstanding as of December 31, 2014. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||||||||||||||||||
The components of accumulated other comprehensive loss income as of December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
Foreign | Unrealized | Net | Net | Pension | Total | ||||||||||||||||||||
Currency | Gain on | Unrealized | Unrealized | Adjustment | |||||||||||||||||||||
Translation | Equity | Holding | Holding | ||||||||||||||||||||||
Adjustment | Investment | Gain | Loss | ||||||||||||||||||||||
on Available- | on Available- | ||||||||||||||||||||||||
For-Sale | For-Sale | ||||||||||||||||||||||||
Equity | Debt | ||||||||||||||||||||||||
Securities | Securities | ||||||||||||||||||||||||
Balance, January 1, 2012 | $ | (280.5 | ) | $ | — | $ | 1.6 | $ | (0.2 | ) | $ | (0.5 | ) | $ | (279.6 | ) | |||||||||
Foreign currency translation adjustment | 161 | — | — | — | — | 161 | |||||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities | — | — | 0.4 | — | — | 0.4 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | — | (1.6 | ) | 0.2 | — | (1.4 | ) | |||||||||||||||||
Pension adjustment(2) | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||
Balance, December 31, 2012 | (119.5 | ) | — | 0.4 | — | (0.3 | ) | (119.4 | ) | ||||||||||||||||
Foreign currency translation adjustment | (50.8 | ) | — | — | — | — | (50.8 | ) | |||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities | — | — | 3.6 | — | — | 3.6 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | — | (4.0 | ) | — | — | (4.0 | ) | |||||||||||||||||
Pension adjustment, net of tax(2) | — | — | — | — | 37.8 | 37.8 | |||||||||||||||||||
Balance, December 31, 2013 | (170.3 | ) | — | — | — | 37.5 | (132.8 | ) | |||||||||||||||||
Foreign currency translation adjustment | (716.2 | ) | — | — | — | — | (716.2 | ) | |||||||||||||||||
Unrealized gain on equity method investment, net of tax | — | 51.3 | — | — | — | 51.3 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | (51.3 | ) | — | — | — | (51.3 | ) | |||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities, net of tax | — | — | 1.8 | — | — | 1.8 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | — | (1.8 | ) | — | — | (1.8 | ) | |||||||||||||||||
Pension adjustment, net of tax(2) | — | — | — | — | (66.9 | ) | (66.9 | ) | |||||||||||||||||
Balance, December 31, 2014 | $ | (886.5 | ) | $ | — | $ | — | $ | — | $ | (29.4 | ) | $ | (915.9 | ) | ||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Included in gain on investments, net. | ||||||||||||||||||||||||
-2 | Reflects changes in defined benefit obligations and related plan assets of the Company’s defined benefit pension plans and the U.S. postretirement benefit plan (as described in note 13). | ||||||||||||||||||||||||
Income taxes are not provided for foreign currency translation adjustments arising on the translation of the Company’s operations having a functional currency other than the U.S. dollar. Income taxes allocated to reclassification adjustments were not material. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
INCOME TAXES | INCOME TAXES | ||||||||||||
The components of income (loss) before provision for (recovery of) income taxes were as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Domestic | $ | (851.1 | ) | $ | (574.5 | ) | $ | (205.6 | ) | ||||
Foreign | 1,943.70 | (739.9 | ) | (188.6 | ) | ||||||||
$ | 1,092.60 | $ | (1,314.4 | ) | $ | (394.2 | ) | ||||||
The components of provision for (recovery of) income taxes were as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Domestic | $ | 0.6 | $ | 3.4 | $ | 7.2 | |||||||
Foreign | 150.1 | 80 | 56.3 | ||||||||||
150.7 | 83.4 | 63.5 | |||||||||||
Deferred: | |||||||||||||
Domestic | — | — | (11.9 | ) | |||||||||
Foreign | 29.7 | (534.2 | ) | (329.8 | ) | ||||||||
29.7 | (534.2 | ) | (341.7 | ) | |||||||||
$ | 180.4 | $ | (450.8 | ) | $ | (278.2 | ) | ||||||
The reported net book provision for (recovery of) income taxes differs from the expected amount calculated by applying the Company’s Canadian statutory rate to income (loss) before provision for (recovery of) income taxes. The reasons for this difference and the related tax effects are as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income (loss) before provision for (recovery of) income taxes | $ | 1,092.60 | $ | (1,314.4 | ) | $ | (394.2 | ) | |||||
Expected Canadian statutory rate | 26.9 | % | 26.9 | % | 26.9 | % | |||||||
Expected provision for (recovery) of income taxes | 293.9 | (353.6 | ) | (106.0 | ) | ||||||||
Non-deductible amounts: | |||||||||||||
Amortization | — | — | 6.2 | ||||||||||
Share-based compensation | 19.8 | 13.1 | 6.3 | ||||||||||
Merger and acquisition costs | — | 1.1 | 24.2 | ||||||||||
In-process research and development | — | — | 3.2 | ||||||||||
Non-taxable gain on disposal of investments | (50.1 | ) | — | (3.1 | ) | ||||||||
Changes in enacted income tax rates | 29.7 | 6.6 | (4.5 | ) | |||||||||
Canadian dollar foreign exchange gain for Canadian tax purposes | 22.8 | 0.6 | 9.1 | ||||||||||
Change in valuation allowance related to foreign tax credits and net operating losses | 17.4 | 70.2 | — | ||||||||||
Change in valuation allowance on Canadian deferred tax assets and | 255.2 | 143.9 | (34.2 | ) | |||||||||
tax rate changes | |||||||||||||
Change in uncertain tax positions | (1.8 | ) | — | 15.4 | |||||||||
Foreign tax rate differences | (502.8 | ) | (407.6 | ) | (226.8 | ) | |||||||
Unrecognized income tax benefit of losses | — | — | 32 | ||||||||||
Withholding taxes on foreign income | 3.7 | 3.4 | 8 | ||||||||||
Alternative minimum and other taxes | — | — | (4.5 | ) | |||||||||
Taxable foreign income | 269 | 55.4 | 10.7 | ||||||||||
Tax benefit on intra-entity transfers | (147.3 | ) | (5.7 | ) | (10.4 | ) | |||||||
Other | (29.1 | ) | 21.8 | (3.8 | ) | ||||||||
$ | 180.4 | $ | (450.8 | ) | $ | (278.2 | ) | ||||||
The tax effect of major items recorded as deferred tax assets and liabilities is as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Tax loss carryforwards | $ | 958.3 | $ | 957.7 | |||||||||
Tax credit carryforwards | 234.9 | 126.4 | |||||||||||
Scientific Research and Experimental Development pool | 58.2 | 62.9 | |||||||||||
Research and development tax credits | 90.5 | 83.7 | |||||||||||
Provisions | 369.9 | 577.5 | |||||||||||
Plant, equipment and technology | 2.8 | 38.3 | |||||||||||
Deferred revenue | 13.5 | 12.5 | |||||||||||
Deferred financing and share issue costs | 209.4 | — | |||||||||||
Share-based compensation | 49.8 | 43 | |||||||||||
Other | 38.2 | 76.5 | |||||||||||
Total deferred tax assets | 2,025.50 | 1,978.50 | |||||||||||
Less valuation allowance | (859.2 | ) | (477.6 | ) | |||||||||
Net deferred tax assets | 1,166.30 | 1,500.90 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Intangible assets | 520 | 2,884.30 | |||||||||||
Outside basis differences | 2,636.60 | 563.8 | |||||||||||
Deferred financing and share issue costs | — | 16.6 | |||||||||||
Prepaid expenses | 0.6 | (0.4 | ) | ||||||||||
Total deferred tax liabilities | 3,157.20 | 3,464.30 | |||||||||||
Net deferred income taxes | $ | (1,990.9 | ) | $ | (1,963.4 | ) | |||||||
The Company effected an internal reorganization in December 2013 to streamline and integrate certain aspects of its operations. As part of this internal reorganization, the Company migrated certain of its intellectual property to a foreign holding company operating in Ireland and Luxembourg. During 2014, the Company concluded certain additional steps relating to this internal reorganization. The 2014 steps required the Company to convert its existing basis differences in the contributed intellectual property to an outside basis difference. | |||||||||||||
The realization of deferred tax assets is dependent on the Company generating sufficient domestic and foreign taxable income in the years that the temporary differences become deductible. A valuation allowance has been provided for the portion of the deferred tax assets that the Company determined is more likely than not to remain unrealized based on estimated future taxable income and tax planning strategies. In 2014, the valuation allowance increased by $381.6 million. The net increase in valuation allowance resulted from an increase in losses in Canada and additional foreign tax credits generated by the Company’s U.S. subsidiaries. In 2013, the valuation allowance increased by $353.1 million. The net increase in valuation allowance resulted from an increase in valuation allowance associated with historic foreign tax credits generated by the Company’s U.S. subsidiaries and acquired valuation allowance from B&L. Given the Company’s history of pre-tax losses and expected future losses in Canada, the Company determined there was insufficient objective evidence to release the remaining valuation allowance against Canadian tax loss carryforwards, International Tax Credits (“ITC”) and pooled Scientific Research and Experimental Development Tax Incentive (“SR&ED”) expenditures. | |||||||||||||
As of December 31, 2014, the Company had accumulated losses of approximately $1,008.5 million (2013 - $717.9 million) available for federal and provincial tax purposes in Canada. As of December 31, 2014, the Company had approximately $39.2 million (2013 - $42.3 million) of unclaimed Canadian ITCs, which expire from 2017 to 2033. These losses and ITCs can be used to offset future years’ taxable income and federal tax, respectively. In addition, as of December 31, 2014, the Company had pooled SR&ED expenditures amounting to approximately $216.2 million (2013 - $232.1 million) available to offset against future years’ taxable income from its Canadian operations, which may be carried forward indefinitely. As in past years, a full valuation allowance has been maintained against the net Canadian deferred tax assets of $572.0 million (2013 - $253.6 million). | |||||||||||||
As of December 31, 2014, the Company has accumulated tax losses of approximately $2,380.3 million (2013 - $2,425.1 million) for U.S. federal income tax purposes which expire between 2021 and 2034. While the losses are subject to multiple annual loss limitations, the Company believes that the recoverability of the deferred tax assets associated with the losses is more likely than not to be realized. As of December 31, 2014, the Company had approximately $71.3 million (2013 - $64.7 million) of U.S. research and development credits, which expire between 2021 and 2034. As of December 31, 2014, the Company had approximately $167.2 million in foreign tax credits recognized on tax returns for which a full valuation allowance has been established as they are not expected to be utilized before their expiration. The Company’s accumulated losses are subject to annual limitations as a result of previous ownership changes that have occurred. Included in the $2,380.3 million of tax losses is approximately $95.5 million of losses related to the exercise of non-qualified stock options and restricted stock awards. | |||||||||||||
The Company accrues for U.S. tax on the unremitted earnings of the foreign subsidiaries owned by the Company’s U.S. subsidiaries. In addition, the Company provides for the tax on the unremitted earnings of its direct foreign affiliates except for its direct U.S. subsidiaries. The Company continues to assert that the unremitted earnings of its U.S. subsidiaries will be permanently reinvested and not repatriated to Canada. As of December 31, 2014 the Company estimates there will be no Canadian tax liability attributable to the permanently reinvested U.S. earnings. | |||||||||||||
As of December 31, 2014, the total amount of unrecognized tax benefits (including interest and penalties) was $345.0 million (2013 - $247.5 million), of which $108.7 million (2013 - $153.4 million) would affect the effective tax rate. The remaining approximately $236.3 million of unrecognized tax benefits would not impact the effective tax rate as the tax positions are offset against existing tax attributes with valuation allowances or are timing in nature. In the year ended December 31, 2014, the Company recognized a $143.0 million (2013 - $132.4 million) increase and a $45.5 million (2013 - $12.8 million) net decrease in the amount of unrecognized tax benefits related to tax positions taken in the current and prior years, respectively. | |||||||||||||
The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes. As of December 31, 2014, approximately $38.7 million (2013 - $46.4 million) was accrued for the payment of interest and penalties. In the year ended December 31, 2014, the Company recognized a reduction of approximately $7.7 million (2013 - $5.7 million) of interest and penalties. | |||||||||||||
The Company and one or more of its subsidiaries file federal income tax returns in Canada, the U.S., and other foreign jurisdictions, as well as various provinces and states in Canada and the U.S. The Company and its subsidiaries have open tax years primarily from 2005 to 2013 with significant taxing jurisdictions including Canada, and the U.S. These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations, and tax treaties, as they relate to the amount, timing, or inclusion of revenues and expenses, or the sustainability of income tax positions of the Company and its subsidiaries. Certain of these tax years are expected to remain open indefinitely. | |||||||||||||
Jurisdiction: | Open Years | ||||||||||||
United States - Federal | 2011 - 2013 | ||||||||||||
Canada | 2005 - 2013 | ||||||||||||
Brazil | 2009 - 2013 | ||||||||||||
Germany | 2011 - 2013 | ||||||||||||
France | 2011 - 2013 | ||||||||||||
China | 2009 -2013 | ||||||||||||
Ireland | 2009 - 2013 | ||||||||||||
Netherlands | 2011 - 2013 | ||||||||||||
Valeant’s U.S. consolidated federal income tax return for the 2011 and 2012 tax years is currently under exam by the Internal Revenue Service. Valeant remains under examination for various state tax audits in the U.S. for years 2002 to 2013. The Company is currently under examination by the Canada Revenue Agency for three separate cycles: (a) years 2005 to 2006, (b) 2007 - 2009, and (c) 2010 through 2012. In February 2013 the Company received a proposed audit adjustment for the years 2005 through 2007. The Company disagrees with the adjustments and has filed a Notice of Objection. The total proposed adjustment will result in a loss of tax attributes which are subject to a full valuation allowance and will not result in material change to the provision for income taxes. | |||||||||||||
In 2014, the Company’s subsidiaries in Australia were notified that the Australian Tax Office would conduct a risk review of the 2010 - 2011 tax years. | |||||||||||||
The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance, beginning of year | $ | 247.5 | $ | 128 | $ | 102.3 | |||||||
Acquisition of B&L | — | 52.2 | — | ||||||||||
Acquisition of Medicis | — | — | 6.6 | ||||||||||
Additions based on tax positions related to the current year | 143 | 60.7 | 3.5 | ||||||||||
Additions for tax positions of prior years | 12.8 | 19.4 | 19 | ||||||||||
Reductions for tax positions of prior years | (50.2 | ) | (10.8 | ) | (1.4 | ) | |||||||
Lapse of statute of limitations | (8.1 | ) | (2.0 | ) | (2.0 | ) | |||||||
Balance, end of year | $ | 345 | $ | 247.5 | $ | 128 | |||||||
The Company estimates approximately $4.7 million of the above unrecognized tax benefits will be realized during the next 12 months. |
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE | ||||||||||||
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc. for the years ended December 31, 2014, 2013 and 2012 were calculated as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | $ | 913.5 | $ | (866.1 | ) | $ | (116.0 | ) | |||||
Basic weighted-average number of common shares outstanding | 335.4 | 321 | 305.4 | ||||||||||
Dilutive effect of stock options and RSUs | 6.1 | — | — | ||||||||||
Diluted weighted-average number of common shares outstanding | 341.5 | 321 | 305.4 | ||||||||||
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||||||||||||
Basic | $ | 2.72 | $ | (2.70 | ) | $ | (0.38 | ) | |||||
Diluted | $ | 2.67 | $ | (2.70 | ) | $ | (0.38 | ) | |||||
In 2013 and 2012, all stock options, RSUs and convertible notes were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive. The dilutive effect of potential common shares issuable for stock options, RSUs and convertible notes on the weighted-average number of common shares outstanding would have been as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Basic weighted-average number of common shares outstanding | 321 | 305.4 | |||||||||||
Dilutive effect of stock options and RSUs | 6.5 | 7.2 | |||||||||||
Dilutive effect of convertible notes | — | 0.5 | |||||||||||
Diluted weighted-average number of common shares outstanding | 327.5 | 313.1 | |||||||||||
In 2014, 2013 and 2012, stock options to purchase approximately 877,000, 1,090,000 and 1,093,000 common shares of the Company, respectively, were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive under the treasury stock method. |
SUPPLEMENTAL_CASH_FLOW_DISCLOS
SUPPLEMENTAL CASH FLOW DISCLOSURES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES | ||||||||||||
Interest and income taxes paid during the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest paid | $ | 934 | $ | 652.9 | $ | 421 | |||||||
Income taxes paid | 98.7 | 65.1 | 41.4 | ||||||||||
As part of an acquisition completed in 2014, the Company effectively settled a pre-existing relationship with an acquiree. The impact was approximately $122 million, which was reflected as additional purchase price. There was no impact to the consolidated statement of income (loss) or the consolidated statement of cash flows. |
LEGAL_PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2014 | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
LEGAL PROCEEDINGS | LEGAL PROCEEDINGS |
From time to time, the Company becomes involved in various legal and administrative proceedings, which include product liability, intellectual property, commercial, antitrust, governmental and regulatory investigations, related private litigation and ordinary course employment-related issues. From time to time, the Company also initiates actions or files counterclaims. The Company could be subject to counterclaims or other suits in response to actions it may initiate. The Company believes that the prosecution of these actions and counterclaims is important to preserve and protect the Company, its reputation and its assets. Certain of these proceedings and actions are described below. | |
Unless otherwise indicated, the Company cannot reasonably predict the outcome of these legal proceedings, nor can it estimate the amount of loss, or range of loss, if any, that may result from these proceedings. An adverse outcome in certain of these proceedings could have a material adverse effect on the Company’s business, financial condition and results of operations, and could cause the market value of its common shares to decline. | |
Governmental and Regulatory Inquiries | |
Legacy Biovail Matters | |
On May 16, 2008, Biovail Pharmaceuticals, Inc. (“BPI”), the Company’s former subsidiary, entered into a written plea agreement with the U.S. Attorney’s Office (“USAO”) for the District of Massachusetts whereby it agreed to plead guilty to violating the U.S. Anti-Kickback Statute and pay a fine of $22.2 million. | |
In addition, on May 16, 2008, the Company entered into a non-prosecution agreement with the USAO whereby the USAO agreed to decline prosecution of Biovail Corporation (“Biovail”) in exchange for continuing cooperation and a civil settlement agreement and pay a civil penalty of $2.4 million. A hearing before the U.S. District Court in Boston took place on September 14, 2009 and the plea was approved. | |
In addition, as part of the overall settlement, Biovail entered into a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General and the Department of Health and Human Services on September 11, 2009. The CIA requires the Company to have a compliance program in place and to undertake a set of defined corporate integrity obligations for a five-year term. The CIA also includes requirements for an annual independent review of these obligations. Pursuant to the terms of the CIA, the Company expects the requirements contained in the CIA to terminate by the end of the second quarter of 2015. Failure to comply with the obligations under the CIA could result in financial penalties. | |
Civil Investigative Demand from the U.S. Federal Trade Commission | |
On May 2, 2012, Medicis received a civil investigative demand from the FTC requiring that Medicis provide to the FTC information and documents relating to various settlement and other agreements with makers of generic SOLODYN® products following patent infringement claims and litigation, each of which was previously filed with the FTC and the Antitrust Division of the Department of Justice, and other efforts principally relating to SOLODYN®. On June 7, 2013, Medicis received an additional civil investigative demand relating to such settlements, agreements and efforts. Medicis is cooperating with this investigative process. If, at the conclusion of this process, the FTC believes that any of the agreements or efforts violates antitrust laws, it could challenge Medicis through a civil administrative or judicial proceeding. If the FTC ultimately challenges the agreements, we would expect to vigorously defend any such action. | |
Subpoenas from the New York Office of Inspector General for the U.S. Department of Health and Human Services | |
On June 29, 2011, B&L received a subpoena from the New York Office of Inspector General for the U.S. Department of Health and Human Services regarding payments and communications between B&L and medical professionals related to its pharmaceutical products Lotemax® and Besivance®. The government has indicated that the subpoena was issued in connection with a civil investigation, and B&L is cooperating fully with the government’s investigation. B&L has heard of no additional activity at this time, and whether the government’s investigation is ongoing or will result in further requests for information is unknown. B&L and the Company will continue to work with the Office of Inspector General regarding the scope of the subpoena and any additional specific information that may be requested. | |
ISTA Settlement with Department of Justice | |
On or about May 24, 2013 (prior to the Company’s acquisition of B&L in August 2013), B&L’s subsidiary, ISTA Pharmaceuticals, Inc. (“ISTA”), reached agreement with the U.S. government to resolve and conclude civil and criminal allegations against ISTA. The settlement involved conduct by ISTA that occurred between January 2006 and March 2011, prior to B&L’s acquisition of ISTA in June 2012. B&L was aware of the government investigation prior to its acquisition, and fully cooperated with the government to resolve the matter. In connection with the settlement, ISTA pled guilty to certain charges and paid approximately $34 million in civil and criminal fines, including interest and attorney’s fees. In addition, B&L agreed to maintain a specified compliance and ethics program and to annually certify compliance with this requirement to the Department of Justice for a period of three years. Failure to comply with the requirements of the settlement could result in fines. | |
Securities | |
Medicis Shareholder Class Actions | |
Prior to the Company’s acquisition of Medicis, several purported holders of then public shares of Medicis filed putative class action lawsuits in the Delaware Court of Chancery and the Arizona Superior Court against Medicis and the members of its Board of Directors, as well as one or both of Valeant and Merlin Merger Sub (the wholly-owned subsidiary of Valeant formed in connection with the Medicis acquisition). The Delaware actions (which were instituted on September 11, 2012 and October 1, 2012, respectively) were consolidated for all purposes under the caption In re Medicis Pharmaceutical Corporation Stockholders Litigation, C.A. No. 7857-CS (Del. Ch.). The Arizona action (which was instituted on September 11, 2012) bears the caption Swint v. Medicis Pharmaceutical Corporation, et. al., Case No. CV2012-055635 (Ariz. Sup. Ct.). The actions all alleged, among other things, that the Medicis directors breached their fiduciary duties because they supposedly failed to properly value Medicis and caused materially misleading and incomplete information to be disseminated to Medicis’ public shareholders, and that Valeant and/or Merlin Merger Sub aided and abetted those alleged breaches of fiduciary duty. The actions also sought, among other things, injunctive and other equitable relief, and money damages. | |
The plaintiff in the Arizona action agreed to dismiss her complaint and, on January 15, 2013, the Arizona Superior Court issued an order granting the parties' joint stipulation to dismiss the Arizona action. | |
The parties agreed to settle the Delaware action and, on November 25, 2013, executed a Stipulation and Agreement of Compromise and Settlement, which provided, among other things, that Medicis and the other defendants would not oppose plaintiffs’ request for a fee award (subject to a capped amount). At the settlement hearing on February 26, 2014, the Delaware Court of Chancery declined to approve the settlement or award plaintiffs any attorneys’ fees and the matter was dismissed with prejudice to allow the plaintiff to revise their fee request, which they have subsequently decided not to bring. The Delaware action is now concluded. | |
Obagi Shareholder Class Actions | |
Prior to the acquisition of all of the outstanding common stock of Obagi, the following complaints were filed: (i) a complaint in the Court of Chancery of the State of Delaware, dated March 22, 2013, and amended on April 1, 2013 and on April 8, 2013, captioned Michael Rubin v. Obagi Medical Products, Inc., et al.; (ii) a complaint in the Superior Court of the State of California, County of Los Angeles, dated March 22, 2013, and amended on March 27, 2013, captioned Gary Haas v. Obagi Medical Products, Inc., et al.; and (iii) a complaint in the Superior Court of the State of California, County of Los Angeles, dated March 27, 2013, captioned Drew Leonard v. Obagi Medical Products, Inc., et al. Each complaint is a purported shareholder class action and names as defendants Obagi and the members of the Obagi Board of Directors. The two complaints filed in California also name Valeant and Odysseus Acquisition Corp. (the wholly-owned subsidiary of Valeant formed in connection with the Obagi acquisition) as defendants. The plaintiffs’ allegations in each action are substantially similar. The plaintiffs allege that the members of the Obagi Board of Directors breached their fiduciary duties to Obagi’s stockholders in connection with the sale of the company, and the California complaints further allege that Obagi, Valeant and Odysseus Acquisition Corp. aided and abetted the purported breaches of fiduciary duties. In support of their purported claims, the plaintiffs allege that the proposed transaction undervalued Obagi, involved an inadequate sales process and included preclusive deal protection devices. The plaintiffs in the Rubin case in Delaware and in the Haas case in California also filed amended complaints, which added allegations challenging the adequacy of the disclosures concerning the transaction. The plaintiffs sought damages and to enjoin the transaction, and also sought attorneys’ and expert fees and costs. | |
The parties executed a Stipulation and Agreement of Compromise, Settlement and Release on January 31, 2014, which set forth the terms for the settlement and dismissal of all of the lawsuits and provided, among other things, that Obagi and the other defendants would not oppose plaintiffs’ request for a fee award (subject to a capped amount). At a settlement hearing on April 30, 2014, the Delaware Court of Chancery declined to approve the settlement or award plaintiff any attorneys’ fees. The Delaware Court of Chancery entered the dismissal of the action with prejudice as to the named plaintiffs on October 8, 2014. | |
On October 15, 2014, plaintiffs in the California actions sought voluntary dismissal without prejudice of each of those actions without notice to the proposed class. On October 20, 2014, the court in the California actions granted the request for dismissal of both actions. | |
Solta Medical Shareholder Class Actions | |
Prior to the Company’s completion of the acquisition of Solta Medical, several purported holders of then public shares of Solta Medical filed putative class action lawsuits in the Delaware Court of Chancery and the Superior Court of the State of California, County of Alameda, against Solta Medical and the members of its board of directors, as well as the Company, Valeant, and Sapphire Subsidiary Corp. (the wholly-owned subsidiary of Valeant formed in connection with the Solta Medical acquisition). The Delaware actions were consolidated for all purposes under the caption In re Solta Medical, Inc. Stockholders Litigation, C.A. No. 9170-CS (Del. Ch.). The California actions were filed under the captions Lathrop v. Covert, et al., Case No. HG13-707363 (Cal. Super.); Walter, et al. v. Solta Medical, Inc., et al., Case No. RG13-707659 (Cal. Super.); and Bushansky v. Solta Medical, Inc., et al., Case No. RG13-707997 (Cal. Super.). The plaintiffs’ allegations in each action were substantially similar. The actions all alleged, among other things, that the directors of Solta Medical breached their fiduciary duties to the stockholders of Solta Medical in connection with the Company’s proposed acquisition of Solta Medical. In support of their purported claims, the plaintiffs alleged that the proposed transaction did not appropriately value Solta Medical, was the result of an inadequate process and included preclusive deal protection devices. The plaintiffs also alleged that the Schedule 14D-9 filed by Solta Medical on December 23, 2013, in connection with the proposed transaction contained material omissions and misstatements. The complaints claimed that Solta Medical, the Company, Valeant, and Sapphire Subsidiary Corp. aided and abetted the purported breaches of fiduciary duty. The actions sought, among other things, injunctive and other equitable relief, and money damages. The plaintiffs also sought attorneys’ and expert fees and costs. On July 10, 2014, the parties entered into a Stipulation and Agreement of Compromise, Settlement and Release, which provides for a release and settlement by Solta Medical’s stockholders of all claims against Solta Medical and the other defendants and their respective affiliates and agents in connection with the Company’s acquisition of Solta Medical. In connection with the proposed settlement, the plaintiffs sought an award of attorneys’ fees and expenses. Pursuant to the scheduling order, a settlement hearing was held on September 29, 2014 and the settlement was approved by the Court. | |
Allergan Securities Litigation | |
On August 1, 2014, Allergan commenced the federal securities litigation in the U.S. District Court for the Central District of California against the Company, Valeant, Valeant’s subsidiary AGMS Inc. (“AGMS”), Pershing Square, PS Management, GP, LLC, PS Fund 1, LLC (“PS Fund 1”) and William A. Ackman (Allergan, Inc. et al. v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-01214-DOC). The lawsuit alleges violations of Sections 13(d), 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections. The complaint seeks, among other relief, a declaration that the defendants violated Rule 14e-3 and Sections 13(d), 14(a) and 14(e); an order requiring rescission of the defendants’ purchases of Allergan securities; an order requiring the defendants to file corrective disclosures; preliminary and/or permanent injunctive relief as may be necessary to prevent the defendants from enjoying any rights or benefits from Allergan securities that were acquired unlawfully and to prevent irreparable injury to Allergan or its stockholders arising out of unlawful solicitations; damages under Section 20A of the Exchange Act; and costs and attorneys’ fees. On August 19, 2014, the Company, Valeant and AGMS filed an Answer to Complaint and Affirmative Defenses. The remaining defendants filed a separate answer on August 19, 2014. Also on August 19, 2014, the Company, Valeant, AGMS, PS Fund 1 and William A. Ackman filed Counterclaims against Allergan and the members of the Allergan Board of Directors. The Counterclaims allege violations of Sections 14(a), 14(e) and 20A of the Exchange Act and rules promulgated by the SEC under those Sections, and seek, among other relief, an injunction requiring Allergan to issue corrective disclosures; an order enjoining further violations of Sections 14(a) and 14(e) of the Exchange Act and SEC Rules 14a-9 and 14a-3, and costs and attorneys’ fees. On September 2, 2014, the counterclaim-defendants filed an Answer to the Counterclaims. On November 4, 2014, the Court denied in part and granted in part a motion filed by plaintiffs seeking a preliminary injunction. The Court directed the defendants to make certain additional disclosures, and otherwise denied the motion. On December 26, 2014, the defendants moved for summary judgment as to all of Allergan’s claims and all of plaintiff Parschauer’s claims except for certain of her Rule 14e-3 and Section 20A claims. A hearing on the motion is set for March 23, 2015. On January 28, 2015, the plaintiffs filed an amended complaint, alleging that all defendants violated Section 14(e) of the Exchange Act and SEC rules under that section. The amended complaint also asserts violations of Sections 13(d) and Schedule 13D thereunder and Section 20A of the Exchange Act against Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The amended complaint seeks substantially the same relief as the original complaint. Defendants have not yet responded to the amended complaint. Trial is set for June 28, 2016. The Company is vigorously defending this matter. | |
Allergan Shareholder Class Action | |
On December 16, 2014, Anthony Basile filed a putative class action lawsuit against the Company, Valeant, AGMS, Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman in the U.S. District Court for the Central District of California (Basile v. Valeant Pharmaceuticals International, Inc., et al., Case No. 14-cv-02004-DOC). The complaint alleges claims on behalf of a putative class of purchasers of Allergan securities between February 25, 2014 and April 21, 2014, against all defendants asserting violations of Sections 14(e) of the Exchange Act and rules promulgated by the SEC thereunder. The complaint also alleges violations of Section 20A of the Exchange Act against Pershing Square Capital Management, L.P., PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The complaint seeks, among other relief, money damages, equitable relief, and attorneys’ fees and costs. Defendants have not yet responded to the Complaint. The Company is vigorously defending this matter. | |
Antitrust | |
Solodyn® Antitrust Class Actions | |
On July 22, 2013, United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, filed a civil antitrust class action complaint in the United States District Court for the Eastern District of Pennsylvania, Case No. 2:13-CV-04235-JCJ, against Medicis, the Company and various manufacturers of generic forms of Solodyn®, alleging that the defendants engaged in an anticompetitive scheme to exclude competition from the market for minocycline hydrochloride extended release tablets, a prescription drug for the treatment of acne marketed by Medicis under the brand name, Solodyn®. The plaintiff further alleges that the defendants orchestrated a scheme to improperly restrain trade, and maintain, extend and abuse Medicis’ alleged monopoly power in the market for minocycline hydrochloride extended release tablets to the detriment of plaintiff and the putative class of end-payor purchasers it seeks to represent, causing them to pay overcharges. Plaintiff alleges violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and of various state antitrust and consumer protection laws, and further alleges that defendants have been unjustly enriched through their alleged conduct. Plaintiff seeks declaratory and injunctive relief and, where applicable, treble, multiple, punitive and/or other damages, including attorneys’ fees. Additional class action complaints making similar allegations against all defendants, including Medicis and the Company have been filed in various courts by other private plaintiffs purporting to represent certain classes of similarly-situated direct or end-payor purchasers of Solodyn® (Rochester Drug Co-Operative, Inc., Case No. 2:13-CV-04270-JCJ (E.D. Pa. filed July 23, 2013); Local 274 Health & Welfare Fund, Case No. 2:13-CV-4642-JCJ (E.D.Pa. filed Aug. 9, 2013); Sheet Metal Workers Local No. 25 Health & Welfare Fund, Case No. 2:13-CV-4659-JCJ (E.D. Pa. filed Aug. 8, 2013); Fraternal Order of Police, Fort Lauderdale Lodge 31, Insurance Trust Fund, Case No. 2:13-CV-5021-JCJ (E.D. Pa. filed Aug. 27, 2013); Heather Morgan, Case No. 2:13-CV-05097 (E.D. Pa. filed Aug. 29, 2013); Plumbers & Pipefitters Local 176 Health & Welfare Trust Fund, Case No. 2:13-CV-05105 (E.D. Pa. filed Aug. 30, 2013); Ahold USA, Inc., Case No. 1:13-cv-12225 (D. Mass. filed Sept. 9, 2013); City of Providence, Rhode Island, Case No. 2:13-cv-01952 (D. Ariz. filed Sept. 24, 2013); International Union of Operating Engineers Stationary Engineers Local 39 Health & Welfare Trust Fund, Case No. 1:13-cv-12435 (D. Mass. filed Oct. 2, 2013); Painters District Council No. 30 Health and Welfare Fund et al., Case No. 1:13-cv-12517 (D. Mass. filed Oct. 7, 2013); Man-U Service Contract Trust Fund, Case No. 13-cv-06266-JCJ (E.D. Pa. filed Oct. 25, 2013)). On August 29, 2013, International Union of Operating Engineers Local 132 Health and Welfare Fund voluntarily dismissed the class action complaint it had originally filed on August 1, 2013, in the United States District Court for the Northern District of California, and on August 30, 2013, re-filed its class action complaint in the United States District Court for the Eastern District of Pennsylvania (Case No. 2:13-cv-05108). The International Union of Operating Engineers Local 132 Health and Welfare Fund complaint makes similar allegations against all defendants, including Medicis and the Company, and seeks similar relief, to the other end-payor plaintiff complaints. On February 25, 2014, on a motion by Medicis and the Company, the Judicial Panel for Multidistrict Litigation (“JPML”) ordered that the cases pending outside the District of Massachusetts be transferred to the District of Massachusetts, with the consent of that court, for coordinated or consolidated pretrial proceedings with the actions already pending in that district. The Multi-District Litigation (“MDL”), captioned In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, Case No. 1:14-md-02503-DJC, is now pending before U.S. District Judge Denise Casper. Two additional end-payor actions have been filed in the District of Massachusetts since the February 25th centralization order: Allied Services Division Welfare Fund, Case No. 1:14-cv-10786 (D. Mass. filed Mar. 14, 2014); and NECA-IBEW Welfare Trust Fund, Case No. 1:14-cv-11015 (D. Mass. filed Mar. 19, 2014). These cases have been included in the pending MDL. On September 12, 2014, the Direct Purchaser Plaintiffs and the End-Payor Plaintiffs each filed a consolidated amended class action complaint. The Direct Purchaser Plaintiffs, with the Defendants’ consent, subsequently filed a corrected amended complaint on September 22, 2014. On November 24, 2014, the Defendants jointly moved to dismiss the Direct Purchaser Plaintiffs’ and the End Payor Plaintiffs’ complaints. Oral argument on the Defendants’ motion is scheduled for March 12, 2015. The Company is vigorously defending these actions. | |
Intellectual Property | |
Cobalt TIAZAC® XC Litigation | |
On or about August 17, 2012, Valeant International (Barbados) SRL (now Valeant International Bermuda) (“VIB”) and Valeant Canada received a Notice of Allegation from Cobalt Pharmaceuticals Company (“Cobalt”) with respect to diltiazem hydrochloride 180 mg, 240 mg, 300 mg and 360 mg tablets, marketed in Canada by Valeant Canada as TIAZAC® XC, alleging that Cobalt’s generic form of TIAZAC® XC does not infringe Canadian Patent Nos. 2,242,224, and 2,307,547 or, alternatively, that the patents are invalid. Following an evaluation of the allegations in the Notice of Allegation, an application for an order prohibiting the Minister of Health from issuing a Notice of Compliance to Cobalt was issued in the Federal Court of Canada on September 28, 2012 (Case No. T-1805-12) (the “Application”). On May 8, 2014, Valeant Canada, VIB and Cobalt entered into a settlement agreement, which resulted in an adjournment of the Application until certain events occur and a discontinuance of all remaining proceedings and appeals. | |
AntiGrippin® Litigation | |
Two suits have been brought against the Company’s subsidiary, Natur Produkt, seeking lost profits in connection with the registration by Natur Produkt of its AntiGrippin trademark. The plaintiffs in these matters allege that Natur Produkt violated Russian competition law by preventing plaintiffs from producing and marketing their products under certain brand names. The first matter (Case No. A-56-23056/2013, Arbitration Court of St. Petersburg) was accepted for proceedings on June 24, 2013 and a hearing was held on November 28, 2013. In a decision dated December 4, 2013, the court found in favor of the plaintiff (AnviLab) and awarded the plaintiff lost profits in the amount of approximately $50 million. The $50 million charge was recognized in the fourth quarter of 2013 in Other (income) expense in the consolidated statements of income (loss). Natur Produkt appealed this decision, and a hearing in the appeal proceeding was held on March 16, 2014. The appeal court found in favor of Natur Produkt and dismissed the plaintiff’s claim in full. Following this decision, the Company concluded that the potential loss was no longer probable, and therefore the $50 million reserve was reversed in the first quarter of 2014 in Other (income) expense in the consolidated statements of income (loss). Anvilab appealed the appeal court’s decision to the cassation court. On June 19, 2014, the cassation court resolved that the matter is within the jurisdiction of the Intellectual Property (IP) court in this instance. The hearing before the IP court was held on July 30, 2014 and August 1, 2014. The IP court found in favor of the plaintiff and ruled to send the case for the second review to the court of the first instance, indicating that the court of the first instance should decide on the amount of damages suffered by Anvilab. Natur Produkt appealed the decision of the IP Court to the Supreme Court on September 15, 2014, but, on October 22, 2014, the Supreme Court denied that appeal and the matter was sent back to the court of first instance for the second review. The first instance court appointed an expert to provide a report on the claimed lost profit amount. The parties are awaiting the expert’s report. The Company believes that the potential damages in this matter, if any, are not estimable at this time. Natur Produkt intends to continue to vigorously defend this matter. | |
Natur Produkt was served with a claim in the second matter (Case No. A-56-38592/2013, Arbitration Court of St. Petersburg) on July 16, 2013 by the plaintiff in that matter (ZAO Tsentr Vnedreniya PROTEK (“Protek”)). A hearing was held in this matter on September 29, 2013 and, on October 18, 2013, the court found in favor of Natur Produkt. Protek filed an appeal of the decision on November 26, 2013. A hearing in the appeal proceeding was held on January 30, 2014 and the appeal court also found in favor of Natur Produkt. Protek appealed that decision to the cassation court (Case No. A-56-38592/2013) and, on July 7, 2014, the cassation court also found in favor of Natur Produkt. Protek did not exercise its right to appeal the cassation court decision to the Supreme Court. | |
Watson ACANYA® Litigation | |
In response to two Notices of Paragraph IV Certification, dated September 9, 2013 and March 13, 2014, respectively, received from Watson Laboratories, Inc. (“Watson”), which asserted that U.S. Patent No. 8,288,434 (the “'434 Patent”) and 8,633,699 (the “699 Patent”), respectively, which are listed in the FDA’s Orange Book for Acanya® Gel, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Watson’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and the Company’s subsidiary, Valeant Pharmaceuticals North America LLC (“VPNA”), filed two suits against Watson, pursuant to the Hatch-Waxman Act, on October 24, 2013 in the U.S. District Court for the District of New Jersey (Case No. 13-cv-06401-SRC) and on April 25, 2014 in the U.S. District Court for the District of New Jersey (Case No. 14-cv-02661), thereby triggering a 30-month stay of the approval of Watson’s ANDA. In the suits, Dow and VPNA allege infringement by Watson of one or more claims of the ‘434 Patent and ‘699 Patent, respectively. | |
On May 6, 2014, Watson, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Watson’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Watson a royalty-bearing license to market its generic version of Acanya® Gel beginning in July 1, 2018 or earlier under certain circumstances. | |
Perrigo ACANYA® Litigation | |
In response to a Notice of Paragraph IV Certification dated October 2, 2013 received from Perrigo Israel Pharmaceuticals Ltd. (“Perrigo”), which asserted that the ‘434 Patent is either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Perrigo’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and its affiliate, VPNA, filed suit against Perrigo in the U.S. District Court for the District of New Jersey (Case No. 13-CV-06922-SRC) on November 15, 2013, pursuant to the Hatch-Waxman Act, alleging infringement by Perrigo of one or more claims of the ‘434 Patent, thereby triggering a 30-month stay of the approval of Perrigo’s ANDA. | |
On July 30, 2014, Perrigo, Perrigo Company, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Perrigo’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Perrigo a royalty-free license to market its generic version of Acanya® Gel beginning on December 29, 2018 or earlier under certain circumstances. | |
Taro ACANYA® Litigation | |
In response to a Notice of Paragraph IV Certification dated June 29, 2014 received from Taro Pharmaceutical Sciences Inc. (“Taro”), which asserted that that the ‘434 Patent and the ‘699 Patent are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Taro’s generic Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/2.5%, for which an ANDA had been filed, Dow and VPNA filed suit against Taro in the U.S. District Court for the District of New Jersey (Case No. 2:14-cv-05079-SRS-CLW) on August 13, 2014, pursuant to the Hatch-Waxman Act, alleging infringement by Perrigo of one or more claims of the ‘434 and ‘699 patents, thereby triggering a 30-month stay of the approval of Perrigo’s ANDA. | |
On September 11, 2014, Taro, Dow and VPNA entered into a settlement agreement to settle all outstanding patent litigation related to Taro’s generic version of Acanya® Gel. Under the terms of the settlement agreement, Dow and VPNA will grant Taro a royalty-free license to market its generic version of Acanya® Gel beginning on December 29, 2018 or earlier under certain circumstances. | |
Allergan Patent Infringement Proceeding - Restylane-L® and Perlane-L® | |
On September 13, 2013, Allergan USA, Inc. and Allergan Industrie, SAS (collectively, “Allergan”) filed a Complaint for Patent Infringement in the United States District Court for the Central District of California (Case No. SACV13-1436 AG (JPRX)) against the Company and certain of its affiliates, including Medicis. The complaint alleges that the Company and its affiliates named in the complaint have infringed Allergan’s U.S. Patent No. 8,450,475 (the “‘475 Patent”) by selling, offering to sell and importing in and into the United States the Company’s Restylane-L® and Perlane-L® dermal filler products. Allergan is seeking a permanent injunction and unspecified damages. The matter is proceeding in the ordinary course, with a proposed trial date of July 27, 2015. The products that are the subject of this proceeding were sold by the Company as part of the transaction with Galderma that was completed on July 10, 2014 (see note 4 “DIVESTITURES”); however, the Company and its applicable affiliates remain party to this proceeding. | |
Lupin PROLENSA® Litigation | |
In four Notices of Paragraph IV Certification dated December 19, 2013, May 13, 2014, July 3, 2014, and December 17, 2014, respectively, each received from Lupin, Ltd. (“Lupin”), Lupin asserted that U.S. Patent Nos. 8,129,431 (the “'431 Patent”), 8,669,290 (the “'290 Patent”), 8,754,131 (the “'131 Patent”), and 8,871,813 (the “’813 patent”), respectively, each of which is listed in the FDA’s Orange Book for Prolensa®, are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale or importation of Lupin’s generic bromfenac ophthalmic solution 0.07%, for which ANDAs had been filed by Lupin. B&L holds the NDA for Prolensa® and Bausch & Lomb Pharma Holdings is the exclusive licensee of Senju Pharmaceutical Co., Ltd. (“Senju”) of each of the four patents licensed above. B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed four separate suits against Lupin in the U.S. District of New Jersey, pursuant to the Hatch-Waxman Act, on January 31, 2014 (Case No. 1:14-cv-00667-JBS-KMW), June 26, 2014 (Case No. 1:14-cv-04149-JBS-KMW), on August 15, 2014 (Case No. 1:14-cv-00667-JBS-KMW) and on January 16, 2015 (Case No. 1:15-cv-00335-JBS-KMW), each relating to one of the above mentioned Notice of Paragraph IV Certifications and, in the case of the fourth suit, a fifth patent, U.S. No. 8,927,606 (the “’606 Patent”), which issued in January 2015. As a result of these suits, a 30-month stay of the approval of Lupin’s ANDA for its generic product has been triggered. In each of the suits, the Plaintiffs alleged infringement by Lupin of one or more claims of each of the ‘431 Patent, ‘290 Patent, ‘131 Patent, the ‘813 Patent and the ‘606 Patent, respectively. Each of the matters is proceeding in the ordinary course. | |
Metrics PROLENSA® Litigation | |
Metrics, Inc. (“Metrics”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed suit pursuant to the Hatch-Waxman Act against Metrics and certain of its affiliated entities, namely Coastal Pharmaceuticals, Inc. (“Coastal”), Mayne Pharma Group Limited and Mayne Pharma (USA), Inc. (collectively, with Metrics, the “Defendants”) on June 20, 2014, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-03962-JBS-KMW), thereby triggering a 30-month stay of the approval of Metrics’ ANDA. In the suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent and the ‘131 Patent. Subsequent to the filing of the suit, B&L received, on or about June 27, 2014, a Notice of Paragraph IV Certification dated June 26, 2014 from Coastal, related to the Metrics’ ANDA filing described above, asserting that the ‘431 Patent and the ‘290 Patent are either invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, importation, offer for sale or sale of Metrics’ generic product. On August 14, 2014, Metrics moved to dismiss the Plaintiffs’ action for an alleged lack of personal jurisdiction, and oral argument on this motion was held on October 3, 2014. A decision on this motion is pending. | |
In addition, the Plaintiffs described above filed two protective suits against the Defendants described above pursuant to the Hatch-Waxman Act against Metrics, on August 7, 2014 in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-04964-JBS-KMW) and on August 8, 2014 in the U.S. District Court for the District of North Carolina (Case No. 4:14-cv-141), respectively. In each suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent and the ‘131 Patent. These matters are proceeding in the ordinary course. | |
On July 22, 2014, two Notices of Filing Date Accorded papers were issued by the U.S. Patent & Trademark Office (“USPTO”) for petitions filed by Metrics for Inter Partes Reviews (“IPRs”) 2014-01041 and 2014-01043, which correspond to the ‘431 Patent and the ‘290 Patent, respectively. A petitioner for IPR may request the USPTO to cancel as unpatentable one or more claims of a patent on a ground that could be raised under 35 USC 102 or 35 USC 103 of the U.S. Patent Act and only on the basis of prior art consisting of patents or printed publications. A patent owner may file a preliminary response to an IPR petition to provide reasons why no such review should be instituted. A patent owner has three months to submit a preliminary response to an IPR, and a response in these proceedings was filed on November 20, 2014. On July 10, 2014, Plaintiffs, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-03962-JBS-KMW), moved to enjoin the Defendants from prosecuting these two IPRs, and oral argument on this motion was held on October 3, 2014. A decision on this motion is pending. | |
Innopharma PROLENSA® Litigation | |
Innopharma Licensing, Inc. (“Innopharma”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Innopharma’s Notice of Paragraph IV Certification dated September 19, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed suit pursuant to the Hatch-Waxman Act against Innopharma and certain of its affiliated entities, namely Innopharma Licensing, LLC, Innopharma, Inc., and Innopharma, LLC (collectively, the “Defendants”) on November 3, 2014, in the U.S. District Court for the District of New Jersey (Case No. 1:14-cv-06893-JBS-KMW), thereby triggering a 30-month stay of the approval of Innopharma’s ANDA. In the suit, the Plaintiffs allege infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, and the ‘813 patent. The matter is proceeding in the ordinary course. | |
Apotex PROLENSA® Litigation | |
Apotex, Inc. (“Apotex”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Apotex’s Notice of Paragraph IV Certification dated December 10, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed a suit pursuant to the Hatch-Waxman Act against Apotex and certain of its affiliated entities, namely Apotex Corp. (collectively, the “Defendants”) on January 16, 2015 in the U.S. District Court for the District of New Jersey (Case No.1:15-cv-00336-JBS-KMW), which triggered a 30-month stay of the approval of Apotex’s ANDA. In the suit, Plaintiffs alleges infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, the ‘813 patent, and the ‘606 patent. The matter is proceeding in the ordinary course. | |
Paddock PROLENSA® Litigation | |
Paddock Laboratories, LLC (“Paddock”) filed an ANDA with the FDA seeking approval to market generic bromfenac ophthalmic solution 0.07%, which corresponds to the Company’s Prolensa® product. In response to Paddock’s Notice of Paragraph IV Certification dated December 15, 2014, B&L, Bausch & Lomb Pharma Holdings and Senju (collectively, the “Plaintiffs”) filed two suits pursuant to the Hatch-Waxman Act against Paddock and certain of its affiliated entities, namely L. Perrigo Company, and Perrigo Company (collectively, the “Defendants”) on January 16, 2015 in the U.S. District Court for the District of New Jersey (Case No. 1:15-cv-00337-JBS-KMW) and on January 26, 2015 in the U.S. District Court for the District of Delaware (Case No. 1:15-cv-00087-SLR), which triggered a 30-month stay of the approval of Paddock’s ANDA. In the suit, Plaintiffs alleged infringement by the Defendants of one or more claims of each of the ‘431 Patent, the ‘290 Patent, the ‘131 Patent, the ‘813 patent, and the ‘606 patent. The matter is proceeding in the ordinary course. | |
General Civil Actions | |
Afexa Class Action | |
On March 9, 2012, a Notice of Civil Claim was filed in the Supreme Court of British Columbia which seeks an order certifying a proposed class proceeding against the Company and a predecessor, Afexa (Case No. NEW-S-S-140954). The proposed claim asserts that Afexa and the Company made false representations respecting Cold-FX® to residents of British Columbia who purchased the product during the applicable period and that the proposed class has suffered damages as a result. On November 8, 2013, the Plaintiff served an amended notice of civil claim which sought to re-characterize the representation claims and broaden them from what was originally claimed. On December 8, 2014, the Company filed a motion to strike certain elements of the Plaintiff’s claim for failure to state a cause of action. In response, the Plaintiff proposed further amendments to its claim. The hearing on the motion to strike and the Plaintiff’s amended claim was held on February 4, 2015 and a decision is pending. The Company denies the allegations being made and is vigorously defending this matter. | |
Employment Matters | |
Legacy Medicis Employment Matter | |
In September, 2011, Medicis received a demand letter from counsel purporting to represent a class of female sales employees alleging gender discrimination in, among others things, compensation and promotion as well as claims that the former management group maintained a work environment that was hostile and offensive to female sales employees. Related charges of discrimination were filed prior to the end of 2011 by six former female sales employees with the Equal Employment Opportunity Commission (the “EEOC”). Three of those charges have been dismissed by the EEOC and the EEOC has made no findings of discrimination. Medicis engaged in mediation with such former employees and the parties signed a definitive settlement agreement in this matter, settling the matter on a class-wide basis and resolving all claims with respect thereto, including all of the remaining related EEOC charges. In connection with the settlement, Medicis would pay a specified sum, would pay the costs of the claims administration up to an agreed-upon fixed amount and would also implement certain specified programmatic relief. On September 5, 2013, a putative class action was filed in U.S. District Court for the District of Columbia in the matter of Brown et al. v. Medicis Pharmaceutical Corporation (No. 1:13-cv-01345-RJL) based on the allegations described above. Simultaneously with the filing of the Complaint, the parties filed a motion for preliminary approval of the class action settlement. A hearing on such motion took place in September 2014 and the motion was denied. A hearing to address the Court’s concerns with the motion for preliminary approval took place on October 23, 2014 and November 12, 2014. A revised settlement agreement and related approval materials have now been submitted and the parties are awaiting a settlement approval hearing date. The Company has recognized a reserve in its consolidated financial statements covering the proposed settlement amount, and such amount is not material. | |
Product Liability Matters | |
MoistureLoc™ Product Liability Lawsuits | |
Currently, B&L has been served or is aware that it has been named as a defendant in approximately 321 currently active product liability lawsuits (some with multiple plaintiffs) pending in a New York State Consolidated Proceeding described below as well as certain other U.S. state courts on behalf of individuals who claim they suffered personal injury as a result of using a contact lens solution with MoistureLoc™. Two consolidated cases were established to handle MoistureLoc™ claims. First, on August 14, 2006, the Federal Judicial Panel on Multidistrict Litigation created a coordinated proceeding in the Federal District Court for the District of South Carolina. Second, on January 2, 2007, the New York State Litigation Coordinating Panel ordered the consolidation of cases filed in New York State, and assigned the coordination responsibilities to the Supreme Court of the State of New York, New York County. There are approximately 320 currently active non-fusarium cases pending in the New York Consolidated Proceeding. On July 15, 2009, the New York State Supreme Court overseeing the New York Consolidated Proceeding granted B&L’s motion to exclude plaintiffs’ general causation testimony with regard to non-fusarium infections, which effectively excluded plaintiffs from testifying that MoistureLoc™ caused non-fusarium infections. On September 15, 2011, the New York State Appellate Division, First Department, affirmed the Trial Court’s ruling. On February 7, 2012, the New York Court of Appeals denied plaintiffs’ additional appeal. Plaintiffs subsequently filed a motion to renew the trial court’s ruling, and B&L cross-filed a motion for summary judgment to dismiss all remaining claims. On May 31, 2013, the Trial Court denied Plaintiffs’ motion to renew, and granted B&L’s motion for summary judgment, dismissing all remaining non-fusarium claims. On June 28, 2013, Plaintiffs filed a Notice of Appeal to the Trial Court’s ruling. The appeal was argued January 20, 2015. The Court issued its decision on February 10, 2015, denying plaintiffs’ appeal to renew and affirming the lower court’s decision granting B&L’s motion for summary judgment regarding all remaining non-fusarium claims. Plaintiffs have 30 days from notice of entry of the order in which to move for leave to appeal. | |
All matters under jurisdiction of the coordinated proceedings in the Federal District Court for the District of South Carolina have been dismissed, including individual actions for personal injury and a class action purporting to represent a class of consumers who suffered economic claims as a result of purchasing a contact lens solution with MoistureLoc™. | |
Currently B&L has settled approximately 630 cases in connection with MoistureLoc™ product liability suits. All U.S. based fusarium claims have now been resolved and there are less than five active fusarium claims involving claimants outside of the United States that remain pending. The parties in these active matters are involved in settlement discussions. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||||||||
Lease Commitments | |||||||||||||||||||||||||||||
The Company leases certain facilities, vehicles and equipment principally under operating leases. Rental expense related to operating lease agreements amounted to $75.0 million, $51.9 million and $22.9 million in 2014, 2013 and 2012, respectively. The increase in rental expense for the year ended December 31, 2014 was driven primarily by incremental costs incurred from the full year impact of the B&L Acquisition (the acquisition was completed in August 2013). The increase in rental expense for the year ended December 31, 2013 was driven primarily by the B&L Acquisition. | |||||||||||||||||||||||||||||
Minimum future rental payments under non-cancelable operating leases for each of the five succeeding years ending December 31 and thereafter are as follows: | |||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Lease obligations | $ | 195.7 | $ | 44.2 | $ | 35.7 | $ | 28.8 | $ | 18 | $ | 15.7 | $ | 53.3 | |||||||||||||||
Other Commitments | |||||||||||||||||||||||||||||
The Company has commitments related to capital expenditures of approximately $70.0 million as of December 31, 2014, primarily related to new manufacturing lines to support the growth of the contact lens business. | |||||||||||||||||||||||||||||
Under certain agreements, the Company may be required to make payments contingent upon the achievement of specific developmental, regulatory, or commercial milestones. In connection with certain business combinations, the Company may make contingent consideration payments, as further described in note 3 and note 6. In addition to these contingent consideration payments, as of December 31, 2014, the Company estimates that it may pay potential milestone payments and license fees, including sale-based milestones, of up to approximately $1 billion over time, in the aggregate, to third-parties, primarily consisting of the following: | |||||||||||||||||||||||||||||
• | Under the terms of a July 2013 collaboration and option agreement with Mimetogen Pharmaceuticals Inc. (“Mimetogen”), the Company will have either the right or the obligation, depending on the results of clinical trials, to exercise an option to obtain a worldwide exclusive license to the MIM-D3 compound for development and commercialization of products for the treatment and/or prevention of ocular conditions, disorders and/or diseases. The exercise of the option would trigger an initial license fee payment by the Company of up to $95.0 million, plus potential regulatory, commercialization and sales-based milestones over time of up to $345.0 million, in the aggregate, and royalty payments on the future sales. | ||||||||||||||||||||||||||||
• | Under the terms of a March 2010 development and licensing agreement between B&L and NicOx, the Company has exclusive worldwide rights to develop and commercialize, for certain indications, products containing latanoprostene bunod, a nitric oxide donating compound for the treatment of glaucoma and ocular hypertension. The Company may be required to make potential regulatory, commercialization and sales-based milestones payments over time up to $162.5 million, in the aggregate, as well as royalties on future sales. | ||||||||||||||||||||||||||||
• | Under the terms of amendments entered into in August 2014 to the agreements with Spear with respect to the authorized generic for Retin-A® and the authorized generic for Carac®, respectively, the Company may be required to make uncapped sales-based milestones over time, which the Company currently estimates will not exceed $150 million, in the aggregate, within the next five years. | ||||||||||||||||||||||||||||
• | Under the terms of an October 2013 agreement with SMG Pharmaceuticals, LLC (“SMG”), the Company licensed the rights to commercialize, in specific fields in the U.S., Bensal HP®, a topical medication to treat skin irritations and infection. The Company may be required to make potential sales-based milestone payments over time up to $80.0 million, in the aggregate, as well as royalties on future sales. | ||||||||||||||||||||||||||||
Indemnification Provisions | |||||||||||||||||||||||||||||
In the normal course of business, the Company enters into agreements that include indemnification provisions for product liability and other matters. These provisions are generally subject to maximum amounts, specified claim periods, and other conditions and limits. As of December 31, 2014 or 2013, no material amounts were accrued for the Company’s obligations under these indemnification provisions. In addition, the Company is obligated to indemnify its officers and directors in respect of any legal claims or actions initiated against them in their capacity as officers and directors of the Company in accordance with applicable law. Pursuant to such indemnities, the Company is indemnifying certain former officers and directors in respect of certain litigation and regulatory matters. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION | ||||||||||||||||||||||||
Reportable Segments | |||||||||||||||||||||||||
The Company has two operating and reportable segments: (i) Developed Markets and (ii) Emerging Markets. The following is a brief description of the Company’s segments: | |||||||||||||||||||||||||
• | Developed Markets consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of eye health, dermatology and podiatry, aesthetics, and dentistry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products we developed or acquired, and (iii) pharmaceutical products, OTC products, and medical device products sold in Canada, Australia, New Zealand, Western Europe and Japan. | ||||||||||||||||||||||||
• | Emerging Markets consists of branded generic pharmaceutical products and branded pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East. | ||||||||||||||||||||||||
Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as restructuring and acquisition-related costs, other (income) expense, and in-process research and development impairments and other charges, are not included in the measure of segment profit, as management excludes these items in assessing financial performance. | |||||||||||||||||||||||||
Corporate includes the finance, treasury, tax and legal operations of the Company’s businesses and maintains and/or incurs certain assets, liabilities, expenses, gains and losses related to the overall management of the Company, which are not allocated to the other business segments. In addition, a portion of share-based compensation is considered a corporate cost, since the amount of such expense depends on Company-wide performance rather than the operating performance of any single segment. | |||||||||||||||||||||||||
Segment Revenues and Profit | |||||||||||||||||||||||||
Segment revenues and profit for the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Developed Markets(1) | $ | 6,167.10 | $ | 4,293.20 | $ | 2,502.30 | |||||||||||||||||||
Emerging Markets(1) | 2,096.40 | 1,476.40 | 978.1 | ||||||||||||||||||||||
Total revenues | 8,263.50 | 5,769.60 | 3,480.40 | ||||||||||||||||||||||
Segment profit: | |||||||||||||||||||||||||
Developed Markets(2) | 2,019.70 | 573.2 | 815.9 | ||||||||||||||||||||||
Emerging Markets(3) | 337.3 | 93 | 69 | ||||||||||||||||||||||
Total segment profit | 2,357.00 | 666.2 | 884.9 | ||||||||||||||||||||||
Corporate(4) | (171.1 | ) | (165.7 | ) | (138.3 | ) | |||||||||||||||||||
Restructuring, integration and other costs | (381.7 | ) | (462.0 | ) | (267.1 | ) | |||||||||||||||||||
In-process research and development impairments and other charges | (41.0 | ) | (153.6 | ) | (189.9 | ) | |||||||||||||||||||
Acquisition-related costs | (6.3 | ) | (36.4 | ) | (78.6 | ) | |||||||||||||||||||
Acquisition-related contingent consideration | 14.1 | 29.2 | 5.3 | ||||||||||||||||||||||
Other income (expense) | 268.7 | (287.2 | ) | (136.6 | ) | ||||||||||||||||||||
Operating income (loss) | 2,039.70 | (409.5 | ) | 79.7 | |||||||||||||||||||||
Interest income | 5 | 8 | 6 | ||||||||||||||||||||||
Interest expense | (971.0 | ) | (844.3 | ) | (481.6 | ) | |||||||||||||||||||
Loss on extinguishment of debt | (129.6 | ) | (65.0 | ) | (20.1 | ) | |||||||||||||||||||
Foreign exchange and other | (144.1 | ) | (9.4 | ) | 19.7 | ||||||||||||||||||||
Gain on investments, net | 292.6 | 5.8 | 2.1 | ||||||||||||||||||||||
Income (loss) before provision for (recovery of) income taxes | $ | 1,092.60 | $ | (1,314.4 | ) | $ | (394.2 | ) | |||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Developed Markets and Emerging Markets segment revenues reflect (i) incremental product sales revenue in 2014 from all 2013 and all 2014 acquisitions and (ii) incremental product sales revenue in 2013 from all 2012 and all 2013 acquisitions. For further information, see Item 7 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Revenues by Segment” of this Form 10-K. | ||||||||||||||||||||||||
-2 | Developed Markets segment profit in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets as follows: (i) $906.4 million in 2014, in the aggregate, (ii) $1,080.4 million in 2013, in the aggregate, and (iii) $506.4 million in 2012, in the aggregate. | ||||||||||||||||||||||||
Developed Markets segment profit in 2013 also reflects an impairment charge of $551.6 million related to ezogabine/retigabine in the third quarter of 2013 (see note 6 titled “FAIR VALUE MEASUREMENTS”). | |||||||||||||||||||||||||
-3 | Emerging Markets segment profit in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets as follows: (i) $323.9 million in 2014, in the aggregate, (ii) $320.5 million in 2013, in the aggregate, and (iii) $180.5 million in 2012, in the aggregate. | ||||||||||||||||||||||||
-4 | Corporate reflects non-restructuring-related share-based compensation expense of $40.3 million, $45.5 million and $66.2 million in 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||
Segment Assets | |||||||||||||||||||||||||
Total assets by segment as of December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Assets(1): | |||||||||||||||||||||||||
Developed Markets(2) | $ | 19,093.40 | $ | 20,007.20 | $ | 12,893.70 | |||||||||||||||||||
Emerging Markets(3) | 6,332.90 | 6,907.80 | 4,022.10 | ||||||||||||||||||||||
25,426.30 | 26,915.00 | 16,915.80 | |||||||||||||||||||||||
Corporate | 926.7 | 1,055.80 | 1,034.60 | ||||||||||||||||||||||
Total assets | $ | 26,353.00 | $ | 27,970.80 | $ | 17,950.40 | |||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | The segment assets as of December 31, 2013 and December 31, 2012 contain reclassifications between segments to conform to the current year presentation. | ||||||||||||||||||||||||
-2 | Developed Markets segment assets as of December 31, 2014 reflect (i) the divestiture of facial aesthetic fillers and toxins in July 2014 with the carrying values of the related assets of $1.0 billion, in the aggregate, (see note 4 titled “DIVESTITURES” for further information), (ii) the provisional amounts of identifiable intangible assets and goodwill of the PreCision acquisition of $257.7 million and $170.5 million, respectively, and (iii) the amounts of identifiable intangible assets and goodwill of the Solta Medical acquisition of $103.5 million and $56.4 million, respectively. Developed Markets segment assets as of December 31, 2013 reflect (i) the provisional amounts of identifiable intangible assets and goodwill of B&L of $3,977.9 million and $3,226.7 million, respectively, and (ii) the amounts of identifiable intangible assets and goodwill of Obagi of $335.5 million and $158.5 million, respectively. | ||||||||||||||||||||||||
-3 | Emerging Markets segment assets as of December 31, 2014 reflect the amounts of identifiable intangible assets and goodwill of the Solta Medical acquisition of $69.4 million and $37.8 million, respectively. Emerging Markets segment assets as of December 31, 2013 reflect (i) the provisional amounts of identifiable intangible assets and goodwill of B&L of $782.7 million and $1,135.7 million, respectively, and (ii) the amounts of identifiable intangible assets and goodwill of Natur Produkt of $104.8 million and $40.9 million, respectively. | ||||||||||||||||||||||||
Capital Expenditures, and Depreciation and Amortization, including Impairments of Finite-Lived Intangible Assets | |||||||||||||||||||||||||
Capital expenditures, and depreciation and amortization, including impairments of finite-lived intangible assets by segment for the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Capital expenditures: | |||||||||||||||||||||||||
Developed Markets | $ | 152.7 | $ | 54.1 | $ | 12.3 | |||||||||||||||||||
Emerging Markets | 29.3 | 51.9 | 61.6 | ||||||||||||||||||||||
182 | 106 | 73.9 | |||||||||||||||||||||||
Corporate | 109.6 | 9.3 | 33.7 | ||||||||||||||||||||||
Total capital expenditures | $ | 291.6 | $ | 115.3 | $ | 107.6 | |||||||||||||||||||
Depreciation and amortization, including impairments of finite-lived intangible assets(1): | |||||||||||||||||||||||||
Developed Markets | $ | 1,336.90 | $ | 1,687.70 | $ | 755.1 | |||||||||||||||||||
Emerging Markets | 385.7 | 313.7 | 224.6 | ||||||||||||||||||||||
1,722.60 | 2,001.40 | 979.7 | |||||||||||||||||||||||
Corporate | 15 | 14.4 | 6.5 | ||||||||||||||||||||||
Total depreciation and amortization, including impairments of finite-lived intangible assets | $ | 1,737.60 | $ | 2,015.80 | $ | 986.2 | |||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Depreciation and amortization, including impairments of finite-lived intangible assets in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustment to identifiable intangible assets as follows: (i) in 2014 - Developed Markets — $877.6 million; and Emerging Markets — $325.3 million, (ii) in 2013 - Developed Markets — $773.0 million; and Emerging Markets — $255.4 million, and (iii) in 2012 - Developed Markets — $430.5 million; and Emerging Markets — $177.5 million. | ||||||||||||||||||||||||
Depreciation and amortization, including impairments of finite-lived intangible assets in 2014, 2013 and 2012 also reflects the impairment charges and write-offs related to finite-lived intangible assets. For more information regarding asset impairment charges see note 10 titled “INTANGIBLE ASSETS AND GOODWILL”. | |||||||||||||||||||||||||
Revenues by Product Category | |||||||||||||||||||||||||
Revenues by product category for the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Pharmaceuticals | $ | 3,559.80 | $ | 2,707.80 | $ | 2,054.50 | |||||||||||||||||||
Devices | 1,629.40 | 845.3 | 77 | ||||||||||||||||||||||
OTC | 1,711.40 | 1,086.60 | 475.7 | ||||||||||||||||||||||
Branded and Other Generics | 1,203.00 | 1,000.60 | 681.4 | ||||||||||||||||||||||
Other revenues | 159.9 | 129.3 | 191.8 | ||||||||||||||||||||||
$ | 8,263.50 | $ | 5,769.60 | $ | 3,480.40 | ||||||||||||||||||||
Geographic Information | |||||||||||||||||||||||||
Revenues and long-lived assets by geographic region for the years ended and as of December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
Revenues(1) | Long-Lived Assets(2) | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
U.S. and Puerto Rico | $ | 4,473.00 | $ | 3,194.50 | $ | 1,885.80 | $ | 718.2 | $ | 592 | $ | 60.4 | |||||||||||||
Canada | 375.1 | 387.4 | 349.1 | 83.7 | 87.7 | 109.7 | |||||||||||||||||||
Poland | 276.2 | 268.8 | 199.3 | 99.4 | 110 | 110.9 | |||||||||||||||||||
Russia | 275.1 | 202.8 | 71.2 | 4.6 | 7 | 0.2 | |||||||||||||||||||
Japan | 248.7 | 104.9 | 12.2 | 1.2 | 1.3 | — | |||||||||||||||||||
China | 232 | 91 | 0.6 | 39.6 | 44.3 | — | |||||||||||||||||||
Mexico | 221.6 | 200.9 | 167.4 | 73.8 | 82.5 | 73.9 | |||||||||||||||||||
France | 204.7 | 86.9 | 2.5 | 36 | 40.5 | — | |||||||||||||||||||
Germany | 204.4 | 130.9 | 1.9 | 73.5 | 83.8 | — | |||||||||||||||||||
Australia | 196.3 | 178.2 | 184.1 | 4.4 | 3.4 | 4.4 | |||||||||||||||||||
Brazil | 161 | 155.6 | 135.1 | 31.4 | 41.4 | 46 | |||||||||||||||||||
U.K. | 114.2 | 47 | 19.2 | 11 | 12.2 | — | |||||||||||||||||||
Italy | 98 | 37.2 | 2.3 | 23.1 | 25.3 | — | |||||||||||||||||||
Other (3) | 1,183.20 | 683.5 | 449.7 | 110.6 | 102.8 | 57.2 | |||||||||||||||||||
$ | 8,263.50 | $ | 5,769.60 | $ | 3,480.40 | $ | 1,310.50 | $ | 1,234.20 | $ | 462.7 | ||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Revenues are attributed to countries based on the location of the customer. | ||||||||||||||||||||||||
-2 | Long-lived assets consist of property, plant and equipment, net of accumulated depreciation, which is attributed to countries based on the physical location of the assets. | ||||||||||||||||||||||||
-3 | Other consists primarily of countries in Europe, Asia, the Middle East, and Africa. | ||||||||||||||||||||||||
Major Customers | |||||||||||||||||||||||||
External customers that accounted for 10% or more of the Company’s total revenues for the years ended December 31, 2014, 2013 and 2012 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
McKesson Corporation | 17% | 19% | 20% | ||||||||||||||||||||||
AmerisourceBergen Corporation | 10% | 7% | 8% | ||||||||||||||||||||||
Cardinal Health, Inc. | 9% | 13% | 20% |
PS_FUND_1_INVESTMENT
PS FUND 1 INVESTMENT | 12 Months Ended |
Dec. 31, 2014 | |
Equity Method Investments and Joint Ventures [Abstract] | |
PS FUND 1 INVESTMENT | PS FUND 1 INVESTMENT |
In connection with the merger proposal (which has since been withdrawn as described below) to the Board of Directors of Allergan Inc. (“Allergan”), the Company and Pershing Square Capital Management, L.P. (“Pershing Square”) entered into an agreement pursuant to which, among other things, Valeant and Pershing Square became members of a newly formed jointly owned entity, PS Fund 1. In April 2014, the Company contributed $75.9 million to PS Fund 1, which was used by PS Fund 1, together with funds contributed by funds managed by Pershing Square, to purchase shares of Allergan common stock and derivative instruments referencing Allergan common stock. The investment in Allergan shares was considered an available-for-sale security. 597,431 of the 28,878,538 shares of Allergan common stock held for PS Fund 1 were allocable to the Company. Based on the Company’s degree of influence over such entity, the Company’s investment in PS Fund 1 was accounted for under the equity method of accounting. Accordingly, the Company recognized its share of any unrealized gains or losses on the Allergan shares held by PS Fund 1 as part of other comprehensive (loss) income. | |
On November 19, 2014, the Company withdrew its exchange offer to acquire all of the outstanding shares of Allergan. Consequently, the Company and Pershing Square amended their previous agreement, and, as a result, the Company is no longer a member of PS Fund 1. PS Fund 1 sold the shares of Allergan common stock and distributed to the Company proceeds of $473.4 million, in the aggregate, in the fourth quarter of 2014 which included (i) proceeds of $127.2 million from the 597,431 shares allocable to the Company plus (ii) proceeds of $346.2 million representing the Company’s right to 15% of the net profits on the sale of shares realized by Pershing Square. In connection with the sale, the Company recognized a net gain of $286.7 million in the fourth quarter of 2014 (which included the recognition of previously unrealized gains that had been recorded as part of other comprehensive (loss) income). | |
Also, in connection with the withdrawal of the exchange offer, the commitment letter which the Company had received for the purpose of financing the cash component of the consideration to be paid in the exchange offer, was terminated. As a result, in the fourth quarter of 2014, the Company expensed and paid $53.7 million of fees associated with the commitment letter. | |
The net gain of $286.7 million was recognized in Gain on investments, net in the consolidated statements of income (loss) and is net of expenses of approximately $110 million, in the aggregate, which includes the $53.7 million of commitment letter fees described in the preceding paragraph as well as legal, consulting, and other related expenses. | |
In the consolidated statement of cash flows, $75.9 million of the total proceeds was included as an investing activity as it represents a return of the Company's initial investment. The remaining portion of the proceeds of $397.5 million, representing the Company’s return on investment, was classified as an operating activity, as were the payments related to the commitment letter fees and legal, consulting, and other related expenses. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS |
Salix Merger Agreement | |
On February 20, 2015, the Company, Valeant, Sun Merger Sub, Inc., a wholly owned subsidiary of Valeant (“Sun Merger Sub”), and Salix Pharmaceuticals, Ltd. (“Salix”), entered into an Agreement and Plan of Merger (the “Salix Merger Agreement”). Salix is a gastrointestinal company with a portfolio of 22 total products, including Xifaxan, Uceris, Relistor, and Apriso. Pursuant to the Salix Merger Agreement, and upon the terms and subject to the conditions described thereof, Valeant has agreed to cause Sun Merger Sub to commence a tender offer (the “Offer”) for all of Salix’s outstanding shares of common stock, par value $0.001 per share (the “Salix Shares”), at a purchase price of $158.00 per Salix Share (the “Offer Price”), payable net to the holder in cash, without interest, subject to any withholding of taxes. As soon as practicable following the consummation of the Offer, if consummated, and subject to the satisfaction or waiver of certain conditions set forth in the Salix Merger Agreement, Sun Merger Sub will merge with and into Salix (the “Salix Merger”), with no stockholder vote required to consummate the Salix Merger. Salix will survive as a wholly owned subsidiary of Valeant, whereby any Salix Shares not purchased pursuant to the Offer (other than certain Salix Shares as set forth in the Salix Merger Agreement) will be converted into the right to receive cash in an amount equal to the Offer Price, payable net to the holder in cash, without interest, subject to any withholding of taxes. The transaction is subject to customary closing conditions, including the tender of a majority of the outstanding Salix Shares on a fully-diluted basis and the expiration or termination of the applicable waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Company currently expects the transaction to close in the second quarter of 2015. The total enterprise value of the transaction is approximately $14.5 billion. | |
Commitment Letter | |
The Company and Valeant have entered into a commitment letter (the “Commitment Letter”), dated as of February 20, 2015, with a syndicate of banks, led by Deutsche Bank and HSBC. Pursuant to the Commitment Letter, such banks have committed to provide (a) in the event certain amendments to the Credit Agreement are obtained within 30 days of the date of the Commitment Letter, (i) incremental term loans pursuant to the Credit Agreement of up to $5.55 billion, and (ii) senior unsecured increasing rate bridge loans under a new senior unsecured bridge facility of up to $9.6 billion, and (b) in the event such amendments are not obtained within 30 days of the date of the Commitment Letter, Valeant will refinance its existing facilities under its Credit Agreement and obtain (i) up to $11.2 billion in term loans, (ii) a revolving credit facility of up to $500 million, (iii) a new senior secured bridge facility of up to $1.05 billion, and (iv) a new senior unsecured bridge facility of up to $9.75 billion. The loans provided under the Commitment Letter will be used for the purposes of funding (i) the transactions contemplated by the Salix Merger Agreement, (ii) Salix’s obligation to repay all outstanding loans and termination of commitments under its (and its subsidiaries) existing credit facilities, (iii) the redemption of Salix’s 6.00% Senior Notes due 2021, (iv) the payment of cash consideration upon the conversion of Salix’s 1.50% Convertible Senior Notes due 2019 and 2.75% Convertible Senior Notes due 2015, (v) certain transaction expenses, and (vi) to the extent the Company does not obtain the amendments to the Credit Agreement referred to above, the refinancing of the Company’s existing facilities under its Credit Agreement. | |
Redemption of the December 2018 Notes | |
On February 17, 2015, Valeant redeemed the remaining $499.6 million of the outstanding principal amount of the December 2018 Notes for $524.0 million, including a call premium of $17.2 million, plus accrued and unpaid interest, and satisfied and discharged the December 2018 Notes indenture. | |
5.50% Senior Unsecured Notes due 2023 | |
On January 30, 2015, the Company issued $1.0 billion aggregate principal amount of the 2023 Notes in a private placement. The 2023 Notes mature on March 1, 2023 and bear interest at the rate of 5.50% per annum, payable semi-annually in arrears, commencing on September 1, 2015. In connection with the issuance of the 2023 Notes, the Company incurred approximately $8.5 million in underwriting fees, which are recognized as debt issue discount and which resulted in net proceeds of $991.5 million. The 2023 Notes are guaranteed by each of the Company’s subsidiaries that is a guarantor of the Company’s existing Senior Secured Credit Facilities. | |
The net proceeds of the 2023 Notes offering were used to (i) redeem all of the remaining December 2018 Notes on February 17, 2015, as described above, (ii) repay amounts drawn under the Revolving Credit Facility, and (iii) for general corporate purposes. | |
The indenture governing the terms of the 2023 Notes provide that at any time prior to March 1, 2018, the Company may redeem up to 40% of the aggregate principal amount of the 2023 Notes using the proceeds of certain equity offerings at a redemption price of 105.50% of the principal amount of the 2023 Notes, plus accrued and unpaid interest to the date of redemption. On or after March 1, 2018, the Company may redeem all or a portion of the 2023 Notes at the redemption prices applicable to the 2023 Notes, as set forth in the 2023 Notes indenture, plus accrued and unpaid interest to the date of redemption. | |
If the Company experiences a change in control, the Company may be required to repurchase the 2023 Notes, as applicable, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount of the 2023 Notes repurchased, plus accrued and unpaid interest to, but excluding the applicable purchase date of the 2023 Notes. | |
The 2023 Notes indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to, among other things: incur or guarantee additional indebtedness, make certain investments and other restricted payments, create liens, enter into transactions with affiliates, engage in merger, consolidations or amalgamations and transfer and sell assets. | |
Joinder Agreements | |
On January 22, 2015, the Company and certain of its subsidiaries, as guarantors, entered into joinder agreements to allow for an increase in commitments under the Revolving Credit Facility to $1.5 billion and the issuance of $250.0 million in incremental term loans under the Series A-3 Tranche A Term Loan Facility. Proceeds from this transaction were used to repay a portion of the amounts drawn under the Revolving Credit Facility outstanding. The Revolving Credit Facility and the Series A-3 Tranche A Term Loan Facility terms remained unchanged. | |
Bristol-Myers Collaboration and Option Agreements | |
On October 1, 2012, the Company entered into collaboration and option agreements with Bristol-Myers Squibb Company (“Bristol-Myers”) whereby Bristol-Myers granted the Company additional rights for approximately two years in several European countries to promote, market and sell a variety of products, including Monopril®, Cefzil®, Duracef® and Megace®. Prior to these agreements, the Company was selling many of these products in other territories. As consideration for the rights under the collaboration and option agreements, the Company made payments to Bristol-Myers in the fourth quarter of 2012 totaling $83.3 million. The collaboration agreement expired January 1, 2015, at which time the Company exercised its option to acquire all rights and associated intellectual property to the products. |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||||||
(All dollar amounts expressed in millions of U.S. dollars) | |||||||||||||||||||||
Balance at | Charged to | Charged to | Deductions | Balance at | |||||||||||||||||
Beginning | Costs and | Other | End of | ||||||||||||||||||
of Year | Expenses | Accounts | Year | ||||||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 27.6 | $ | 5.2 | $ | 7.9 | $ | (4.8 | ) | $ | 35.9 | ||||||||||
Deferred tax asset valuation allowance | $ | 477.6 | $ | 272.6 | $ | 109 | $ | — | $ | 859.2 | |||||||||||
Year ended December 31, 2013 | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 12.5 | $ | 5.8 | $ | 10.2 | $ | (0.9 | ) | $ | 27.6 | ||||||||||
Deferred tax asset valuation allowance | $ | 124.5 | $ | 214.1 | $ | 139 | $ | — | $ | 477.6 | |||||||||||
Year ended December 31, 2012 | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 12.3 | $ | 0.8 | $ | (0.5 | ) | $ | (0.1 | ) | $ | 12.5 | |||||||||
Deferred tax asset valuation allowance | $ | 128.7 | $ | (2.2 | ) | $ | (2.0 | ) | $ | — | $ | 124.5 | |||||||||
With respect to the deferred tax valuation allowance, the amount in 2014 charged to other accounts relates primarily to foreign currency fluctuations on debt. The amount in 2013 charged to other accounts relates primarily to valuation allowances assumed as part of acquisitions consummated during the year, with the most significant contributor being the B&L Acquisition. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
Basis of Presentation | Basis of Presentation | ||
The consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and in accordance with U.S. generally accepted accounting principles (“GAAP”), applied on a consistent basis. | |||
Principles of Consolidation | Principles of Consolidation | ||
The consolidated financial statements include the accounts of the Company and those of its subsidiaries and any variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All significant intercompany transactions and balances have been eliminated. | |||
Reclassifications | Reclassifications | ||
Certain reclassifications have been made to prior year amounts to conform with the current year presentation. Such amounts include a reclassification of (i) $52.8 million recognized in the third quarter of 2013 related to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees from Restructuring, integration and other costs to Other (income) expense on the consolidated statement of income (loss) and (ii) $77.3 million recognized in the fourth quarter of 2012 related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis Pharmaceutical Corporation (“Medicis”) employees that was triggered by the change in control from Restructuring, integration and other costs to Other (income) expense on the consolidated statement of income (loss). | |||
The reclassifications described above had no effect on the Company’s previously reported results of operations, financial position or cash flows. | |||
Acquisitions | Acquisitions | ||
Acquired businesses are accounted for using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at fair value, with limited exceptions. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in our consolidated financial statements after the date of acquisition. Acquired in-process research and development (“IPR&D”) is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to expense at the acquisition date. | |||
Use of Estimates | Use of Estimates | ||
In preparing the Company’s consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include: provisions for product returns, rebates, chargebacks, discounts and allowances, and distribution fees paid to certain wholesalers; useful lives of amortizable intangible assets and property, plant and equipment; expected future cash flows used in evaluating intangible assets for impairment; reporting unit fair values in testing goodwill for impairment; provisions for loss contingencies; provisions for income taxes, uncertain tax positions and realizability of deferred tax assets; and the allocation of the purchase price for acquired assets and businesses, including the fair value of contingent consideration. Under certain product manufacturing and supply agreements, management relies on estimates for future returns, rebates and chargebacks made by the Company’s commercialization counterparties. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s consolidated financial statements could be materially impacted. | |||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||
The estimated fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying values due to their short maturity periods. The fair value of acquisition-related contingent consideration is based on estimated discounted future cash flows and assessment of the probability of occurrence of potential future events. The fair values of marketable securities and long-term debt are based on quoted market prices, if available, or estimated discounted future cash flows. | |||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||
Cash and cash equivalents include certificates of deposit, treasury bills, certain money-market funds and term deposits with maturities of three months or less when purchased. | |||
Concentrations of Credit Risk | Concentrations of Credit Risk | ||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. | |||
The Company invests its excess cash in high-quality, money market instruments and term deposits with varying maturities, but typically less than three months. The Company maintains its cash and cash equivalents with major financial institutions. The Company has not experienced any significant losses on its cash or cash equivalents. | |||
The Company’s accounts receivable primarily represent amounts due from wholesale distributors, retail pharmacies, government entities and group purchasing organizations. Outside of the U.S., concentrations of credit risk with respect to trade receivables, which are typically unsecured, are limited due to the number of customers using the Company’s products, as well as their dispersion across many different geographic areas. The Company performs periodic credit evaluations of customers and does not require collateral. The Company monitors economic conditions, including volatility associated with international economies, and related impacts on the relevant financial markets and its business, especially in light of sovereign credit issues. The credit and economic conditions within Italy, Portugal, Spain and Greece, among other members of the European Union, have remained weak in recent years. These conditions have increased, and may continue to increase, the average length of time that it takes to collect on the Company’s accounts receivable outstanding in these countries. An allowance for doubtful accounts is maintained for potential credit losses based on the aging of accounts receivable, historical bad debts experience, and changes in customer payment patterns. Accounts receivables balances are written off against the allowance when it is probable that the receivable will not be collected. | |||
Inventories | Inventories | ||
Inventories comprise raw materials, work in process, and finished goods, which are valued at the lower of cost or market, on a first-in, first-out basis. Cost for work in process and finished goods inventories includes materials, direct labor, and an allocation of overheads. Market for raw materials is replacement cost, and for work in process and finished goods is net realizable value. | |||
The Company evaluates the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand, the price the Company expects to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. | |||
Property, Plant and Equipment | Property, Plant and Equipment | ||
Property, plant and equipment are reported at cost, less accumulated depreciation. Costs incurred on assets under construction are capitalized as construction in progress. Depreciation is calculated using the straight-line method, commencing when the assets become available for productive use, based on the following estimated useful lives: | |||
Buildings | Up to 40 years | ||
Machinery and equipment | 3 - 20 years | ||
Other equipment | 3 - 10 years | ||
Equipment on operating lease | Up to 5 years | ||
Leasehold improvements and capital leases | Lesser of term of lease or 10 years | ||
Intangible Assets | Intangible Assets | ||
Intangible assets are reported at cost, less accumulated amortization. Intangible assets with finite lives are amortized over their estimated useful lives. Amortization is calculated using the straight-line method based on the following estimated useful lives: | |||
Product brands | 1 - 25 years | ||
Corporate brands(1) | 4 - 20 years | ||
Product rights | 1 - 15 years | ||
Partner relationships | 2 - 9 years | ||
Out-licensed technology and other | 1 - 10 years | ||
____________________________________ | |||
-1 | Corporate brands useful lives shown in the table above does not include the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See note 3 “BUSINESS COMBINATIONS” for further information. | ||
Divestitures of Non-core Products | Divestitures of Non-core Products | ||
The Company nets the proceeds on the divestitures of non-core products with the carrying amount of the related assets and records a gain/loss on sale within Other (income) expense. Any contingent payments that are potentially due to the Company as a result of these divestitures are recorded when realizable. | |||
IPR&D | IPR&D | ||
The fair value of IPR&D acquired through a business combination is capitalized as an indefinite-lived intangible asset until the completion or abandonment of the related research and development activities. When the related research and development is completed, the asset will be assigned a useful life and amortized. | |||
The fair value of an IPR&D intangible asset is determined using an income approach. This approach starts with a forecast of the net cash flows expected to be generated by the asset over its estimated useful life. The net cash flows reflect the asset’s stage of completion, the probability of technical success, the projected costs to complete, expected market competition, and an assessment of the asset’s life-cycle. The net cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. | |||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||
Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted future cash flows. | |||
Indefinite-lived intangible assets, including acquired IPR&D, are tested for impairment annually or more frequently if events or changes in circumstances between annual tests indicate that the asset may be impaired. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of the asset to its carrying value, without consideration of any recoverability test. | |||
Goodwill | Goodwill | ||
Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually at the reporting unit level. A reporting unit is the same as, or one level below, an operating segment. | |||
An interim goodwill impairment test in advance of the annual impairment assessment may be required if events occur that indicate an impairment might be present. For example, a substantial decline in the Company’s market capitalization, unexpected adverse business condition, economic factors and unanticipated competitive activities may signal that an interim impairment test is needed. Accordingly, among other factors, the Company monitors changes in its share price between annual impairment tests to ensure that its market capitalization continues to exceed the carrying value of its consolidated net assets. The Company considers a decline in its share price that corresponds to an overall deterioration in stock market conditions to be less of an indicator of goodwill impairment than a unilateral decline in its share price reflecting adverse changes in its underlying operating performance, cash flows, financial condition, and/or liquidity. In the event that the Company's market capitalization does decline below its book value, the Company would consider the length and severity of the decline and the reason for the decline when assessing whether potential goodwill impairment exists. The Company believes that short-term fluctuations in share prices may not necessarily reflect underlying values. | |||
Deferred Financing Costs | Deferred Financing Costs | ||
Deferred financing costs are reported at cost, less accumulated amortization, and are recorded in other long-term assets. Amortization expense is included in interest expense. | |||
Foreign Currency Translation | Foreign Currency Translation | ||
The assets and liabilities of the Company’s foreign operations having a functional currency other than the U.S. dollar are translated into U.S. dollars at the exchange rate prevailing at the balance sheet date, and at the average exchange rate for the reporting period for revenue and expense accounts. The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income in shareholders’ equity. | |||
Foreign currency exchange gains and losses on transactions occurring in a currency other than an operation’s functional currency are recognized in net income. | |||
Revenue Recognition | Revenue Recognition | ||
Revenue is realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the customer is fixed or determinable, and collectibility is reasonably assured. | |||
Product Sales | Product Sales | ||
Product sales revenue is recognized when title has transferred to the customer and the customer has assumed the risks and rewards of ownership, the timing of which is based on the specific contractual terms with each customer. In most instances, transfer of title as well as the risks and rewards of ownership occurs upon delivery of the product to the customer. Amounts received from customers as prepayments for products to be shipped in the future are recorded in deferred revenue. | |||
Revenue from product sales is recognized net of provisions for estimated discounts, allowances, returns, rebates, chargebacks and distribution fees paid to certain of our wholesale customers. The Company offers discounts for prompt payment and other incentive allowances to customers. Provisions for discounts and allowances are estimated based on contractual sales terms with customers and historical payment experience. The Company allows customers to return product within a specified period of time before and after its expiration date. Provisions for returns are estimated based on historical return levels, taking into account additional available information on competitive products and contract changes. The Company has data sharing agreements with the three largest wholesalers in the U.S. Where the Company does not have data sharing agreements, it uses third party data to estimate the level of product inventories and product demand at wholesalers and retail pharmacies. The Company reviews its methodology and adequacy of the provision for returns on a quarterly basis, adjusting for changes in assumptions, historical results and business practices, as necessary. The Company is subject to rebates on sales made under governmental and commercial rebate programs, and chargebacks on sales made to government agencies, retail pharmacies and group purchasing organizations. Provisions for rebates and chargebacks are estimated based on historical experience, relevant statutes with respect to governmental pricing programs, and contractual sales terms. | |||
The Company is party to manufacturing and supply agreements with a number of commercialization counterparties in the U.S. Under the terms of these agreements, the Company’s supply prices for its products are determined after taking into consideration estimates for future returns, rebates, and chargebacks provided by each counterparty. The Company makes adjustments as needed to state these estimates on a basis consistent with this policy and its methodology for estimating returns, rebates and chargebacks related to its own direct product sales. | |||
Research and Development Expenses | Research and Development Expenses | ||
Costs related to internal research and development programs, including costs associated with the development of acquired IPR&D, are expensed as goods are delivered or services are performed. Under certain research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments made to third parties are expensed when the milestone is achieved. Milestone payments made to third parties after regulatory approval is received are capitalized and amortized over the estimated useful life of the approved product. | |||
Amounts due from third parties as reimbursement of development activities conducted under certain research and development arrangements are recognized as a reduction of research and development expenses. | |||
Legal Costs | Legal Costs | ||
Legal fees and other costs related to litigation and other legal proceedings are expensed as incurred and are included in Selling, general and administrative expenses. Certain legal costs associated with acquisitions are included in Acquisition-related costs, and certain legal costs associated with divestitures, legal settlements, and other business development activity are included in Other (income) expense or Gain on investments, net (see note 23 titled “PS FUND 1 INVESTMENT”), as appropriate. Legal costs expensed are reported net of expected insurance recoveries. A claim for insurance recovery is recognized when the claim becomes probable of realization. | |||
Advertising Costs | Advertising Costs | ||
Advertising costs comprise product samples, print media, promotional materials and television advertising. Advertising costs related to new product launches are expensed on the first use of the advertisement. | |||
Share-Based Compensation | Share-Based Compensation | ||
The Company recognizes all share-based payments to employees, including grants of employee stock options and restricted share units (“RSUs”), at estimated fair value. The Company amortizes the fair value of stock option or RSU grants on a straight-line basis over the requisite service period of the individual stock option or RSU grant, which generally equals the vesting period. Stock option and RSU forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||
Share-based compensation is recorded in cost of goods sold, research and development expenses, selling, general and administrative expenses and restructuring, integration and other costs, as appropriate. | |||
Acquisition-Related Contingent Consideration | Acquisition-Related Contingent Consideration | ||
Acquisition-related contingent consideration, which consists primarily of potential milestone payments and royalty obligations, is recorded in the consolidated balance sheets at its acquisition date estimated fair value, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of income (loss). The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in fair value measurement accounting. | |||
Interest Expense | Interest Expense | ||
Interest expense includes standby fees and the amortization of debt discounts and deferred financing costs. Interest costs are expensed as incurred, except to the extent such interest is related to construction in progress, in which case interest is capitalized. | |||
Income Taxes | Income Taxes | ||
Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the differences between the financial statement and income tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. A valuation allowance is provided for the portion of deferred tax assets that is more likely than not to remain unrealized. Deferred tax assets and liabilities are measured using enacted tax rates and laws. | |||
The tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority, based on the technical merits of the position. The tax benefits recognized from such position are measured based on the amount that is greater than 50% likely of being realized upon settlement. Liabilities associated with uncertain tax positions are classified as long-term unless expected to be paid within one year. Interest and penalties related to uncertain tax positions, if any, are recorded in the provision for income taxes and classified with the related liability on the consolidated balance sheets. | |||
Earnings Per Share | Earnings Per Share | ||
Basic earnings per share attributable to Valeant Pharmaceuticals International, Inc. is calculated by dividing net income attributable to Valeant Pharmaceuticals International, Inc. by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is calculated by dividing net income attributable to Valeant Pharmaceuticals International, Inc. by the weighted-average number of common shares outstanding during the reporting period after giving effect to dilutive potential common shares for stock options, RSUs and convertible debt, determined using the treasury stock method. | |||
Comprehensive Income | Comprehensive Income | ||
Comprehensive income comprises net income and other comprehensive income. Other comprehensive income includes items such as foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale and other investments and certain pension and other postretirement benefit plan adjustments. Accumulated other comprehensive income is recorded as a component of shareholders’ equity. | |||
Contingencies | Contingencies | ||
In the normal course of business, the Company is subject to loss contingencies, such as claims and assessments arising from litigation and other legal proceedings, contractual indemnities, product and environmental liabilities, and tax matters. Accruals for loss contingencies are recorded when the Company determines that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. If the estimate of the amount of the loss is a range and some amount within the range appears to be a better estimate than any other amount within the range, that amount is accrued as a liability. If no amount within the range is a better estimate than any other amount, the minimum amount of the range is accrued as a liability. These accruals are adjusted periodically as assessments change or additional information becomes available. | |||
If no accrual is made for a loss contingency because the amount of loss cannot be reasonably estimated, the Company will disclose contingent liabilities when there is at least a reasonable possibility that a loss or an additional loss may have been incurred. | |||
Employee Benefit Plans | Employee Benefit Plans | ||
The Company sponsors various retirement and pension plans, including defined benefit pension plans, defined contribution plans and a participatory defined benefit postretirement plan. The determination of defined benefit pension and postretirement plan obligations and their associated expenses requires the use of actuarial valuations to estimate the benefits employees earn while working, as well as the present value of those benefits. Net actuarial gains and losses that exceed 10 percent of the greater of the plan’s projected benefit obligations or the market-related value of assets are amortized to earnings over the shorter of the estimated average future service period of the plan participants (or the estimated average future lifetime of the plan participants if the majority of plan participants are inactive) or the period until any anticipated final plan settlements. | |||
Adoption of New Accounting Standards | Adoption of New Accounting Standards | ||
In July 2013, the Financial Accounting Standard Board (“FASB”) issued guidance to eliminate the diversity in practice in presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance 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. Under the new guidance, unrecognized tax benefits are netted against all available same-jurisdiction loss or other tax carryforward that would be utilized, rather than only against carryforwards that are created by the unrecognized tax benefits. The guidance was effective for reporting periods beginning after December 15, 2013. As this guidance relates to presentation only, the adoption of this guidance did not have a material impact on the Company’s financial position or results of operations. | |||
In April 2014, the FASB issued guidance which changes the criteria for reporting a discontinued operation while enhancing disclosures in this area. Under the new guidance, a disposal of a component of an entity or group of components of an entity that represents a strategic shift that has, or will have, a major effect on operations and financial results is a discontinued operation when any of the following occurs: (i) it meets the criteria to be classified as held for sale, (ii) it is disposed of by sale, or (iii) it is disposed of other than by sale. Also, a business that, on acquisition, meets the criteria to be classified as held for sale is reported in discontinued operations. Additionally, the new guidance requires expanded disclosures about discontinued operations, as well as disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation. The Company early adopted this guidance in the second quarter of 2014, and the Company applied this guidance to the divestitures described in note 4 titled “DIVESTITURES”. | |||
Recently Issued Accounting Standards, Not Adopted as of December 31, 2014 | |||
In May 2014, the FASB and the International Accounting Standards Board issued converged guidance on recognizing revenue from contracts with customers. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue model to contracts within its scope, an entity will: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition to these provisions, the new standard provides implementation guidance on several other topics, including the accounting for certain revenue-related costs, as well as enhanced disclosure requirements. The new guidance requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early application is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations. | |||
In August 2014, the FASB issued guidance which requires management to assess an entity’s ability to continue as a going concern and to provide related disclosures in certain circumstances. Under the new guidance, disclosures are required when conditions give rise to substantial doubt about an entity’s ability to continue as a going concern within one year from the financial statement issuance date. The guidance is effective for annual periods ending after December 15, 2016, and all annual and interim periods thereafter. Early application is permitted. The adoption of this guidance will not have any impact on the Company’s financial position and results of operations and, as this time, the Company does not expect any impact on its disclosures. | |||
In February 2015, the FASB issued guidance which amends certain consolidation requirements. The new guidance has the following stipulations, among others: (i) eliminates the presumption that a general partner should consolidate a limited partnership and eliminates the consolidation model specific to limited partnerships, (ii) clarifies when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (iii) amends the guidance for assessing how relationships of related parties affect the consolidation analysis of VIEs, and (iv) reduces the number of VIE consolidation models from two to one by eliminating the indefinite deferral for certain investment funds. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early application is permitted. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt the guidance. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations. |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
Schedule of estimated useful lives of property, plant and equipment | Depreciation is calculated using the straight-line method, commencing when the assets become available for productive use, based on the following estimated useful lives: | ||
Buildings | Up to 40 years | ||
Machinery and equipment | 3 - 20 years | ||
Other equipment | 3 - 10 years | ||
Equipment on operating lease | Up to 5 years | ||
Leasehold improvements and capital leases | Lesser of term of lease or 10 years | ||
Schedule of estimated useful lives of intangible assets | Amortization is calculated using the straight-line method based on the following estimated useful lives: | ||
Product brands | 1 - 25 years | ||
Corporate brands(1) | 4 - 20 years | ||
Product rights | 1 - 15 years | ||
Partner relationships | 2 - 9 years | ||
Out-licensed technology and other | 1 - 10 years | ||
____________________________________ | |||
-1 | Corporate brands useful lives shown in the table above does not include the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See note 3 “BUSINESS COMBINATIONS” for further information. |
BUSINESS_COMBINATIONS_Tables
BUSINESS COMBINATIONS (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Business Combinations | |||||||||||||||
Schedule of pro forma impact of merger and acquisition | The following table presents unaudited pro forma consolidated results of operations for the years ended December 31, 2014, 2013 and 2012, as if the 2014 acquisitions had occurred as of January 1, 2013, the 2013 acquisitions had occurred as of January 1, 2012, and the 2012 acquisitions occurred as of January 1, 2011. | ||||||||||||||
Unaudited | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
Revenues | $ | 8,348.90 | $ | 7,929.90 | $ | 7,700.60 | |||||||||
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | 909.3 | (801.9 | ) | (709.6 | ) | ||||||||||
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||||||||||||||
Basic | $ | 2.71 | $ | (2.43 | ) | $ | (2.14 | ) | |||||||
Diluted | $ | 2.66 | $ | (2.43 | ) | $ | (2.14 | ) | |||||||
2014 Other Business Combinations | |||||||||||||||
Business Combinations | |||||||||||||||
Schedule of acquisitions | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | 31-Dec-14 | |||||||||||||
(as adjusted) | |||||||||||||||
Cash and cash equivalents | $ | 33.6 | $ | (0.5 | ) | $ | 33.1 | ||||||||
Accounts receivable(b) | 87.7 | (5.7 | ) | 82 | |||||||||||
Assets held for sale(c) | 125.7 | — | 125.7 | ||||||||||||
Inventories | 170.4 | (14.8 | ) | 155.6 | |||||||||||
Other current assets | 19.1 | (1.0 | ) | 18.1 | |||||||||||
Property, plant and equipment, net | 58.5 | (1.5 | ) | 57 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 697.2 | 23.7 | 720.9 | ||||||||||||
Acquired IPR&D(e) | 65.8 | (2.7 | ) | 63.1 | |||||||||||
Other non-current assets | 4 | (2.0 | ) | 2 | |||||||||||
Current liabilities | (152.0 | ) | (11.8 | ) | (163.8 | ) | |||||||||
Long-term debt, including current portion | (11.2 | ) | — | (11.2 | ) | ||||||||||
Deferred income taxes, net | (116.0 | ) | 22.6 | (93.4 | ) | ||||||||||
Other non-current liabilities | (13.4 | ) | (0.1 | ) | (13.5 | ) | |||||||||
Total identifiable net assets | 969.4 | 6.2 | 975.6 | ||||||||||||
Noncontrolling interest | (15.0 | ) | — | (15.0 | ) | ||||||||||
Goodwill(f) | 410.4 | (14.1 | ) | 396.3 | |||||||||||
Total fair value of consideration transferred | $ | 1,364.80 | $ | (7.9 | ) | $ | 1,356.90 | ||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability primarily related to the PreCision and Solta Medical acquisitions, (ii) increases in the estimated fair value of intangible assets for the Solta Medical and other smaller acquisitions, and (iii) reductions in the estimated fair value of inventory for Solta Medical and other smaller acquisitions. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $82.0 million, with the gross contractual amount being $88.2 million, of which the Company expects that $6.2 million will be uncollectible. | ||||||||||||||
(c) | Assets held for sale relate to the divestitures of the Tretin-X® product rights and the product rights for the generic tretinoin gel and cream products acquired in the PreCision acquisition. See note 4 titled “DIVESTITURES” for further information. | ||||||||||||||
(d) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 10 | $ | 506 | $ | 22.8 | $ | 528.8 | ||||||||
Product rights | 8 | 95.2 | (0.9 | ) | 94.3 | ||||||||||
Corporate brand | 15 | 28.9 | 1.7 | 30.6 | |||||||||||
In-licensed products | 8 | 1.5 | 0.1 | 1.6 | |||||||||||
Partner relationships | 9 | 37.5 | — | 37.5 | |||||||||||
Other | 9 | 28.1 | — | 28.1 | |||||||||||
Total identifiable intangible assets acquired | 10 | $ | 697.2 | $ | 23.7 | $ | 720.9 | ||||||||
(e) | The acquired IPR&D assets primarily relate to programs from smaller acquisitions. In addition, the Solta Medical acquisition includes a program for the development of a next generation Thermage® product. | ||||||||||||||
(f) | The goodwill relates primarily to the PreCision and Solta Medical acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is not expected to be deductible for tax purposes. The goodwill recorded from the PreCision and Solta Medical acquisitions represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of PreCision and Solta Medical with those of the Company; | ||||||||||||||
• | the Company’s expectation to develop and market new products and technology; and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, PreCision’s and Solta Medical’s assembled workforce). | ||||||||||||||
The provisional amount of goodwill from the PreCision acquisition has been allocated to the Company’s Developed Markets segment ($170.5 million). The amount of goodwill from the Solta Medical acquisition has been allocated to both the Company’s Developed Markets segment ($56.4 million) and Emerging Markets segment ($37.8 million). | |||||||||||||||
Schedule of estimated fair value of assets acquired and liabilities assumed | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | 31-Dec-14 | |||||||||||||
(as adjusted) | |||||||||||||||
Cash and cash equivalents | $ | 33.6 | $ | (0.5 | ) | $ | 33.1 | ||||||||
Accounts receivable(b) | 87.7 | (5.7 | ) | 82 | |||||||||||
Assets held for sale(c) | 125.7 | — | 125.7 | ||||||||||||
Inventories | 170.4 | (14.8 | ) | 155.6 | |||||||||||
Other current assets | 19.1 | (1.0 | ) | 18.1 | |||||||||||
Property, plant and equipment, net | 58.5 | (1.5 | ) | 57 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 697.2 | 23.7 | 720.9 | ||||||||||||
Acquired IPR&D(e) | 65.8 | (2.7 | ) | 63.1 | |||||||||||
Other non-current assets | 4 | (2.0 | ) | 2 | |||||||||||
Current liabilities | (152.0 | ) | (11.8 | ) | (163.8 | ) | |||||||||
Long-term debt, including current portion | (11.2 | ) | — | (11.2 | ) | ||||||||||
Deferred income taxes, net | (116.0 | ) | 22.6 | (93.4 | ) | ||||||||||
Other non-current liabilities | (13.4 | ) | (0.1 | ) | (13.5 | ) | |||||||||
Total identifiable net assets | 969.4 | 6.2 | 975.6 | ||||||||||||
Noncontrolling interest | (15.0 | ) | — | (15.0 | ) | ||||||||||
Goodwill(f) | 410.4 | (14.1 | ) | 396.3 | |||||||||||
Total fair value of consideration transferred | $ | 1,364.80 | $ | (7.9 | ) | $ | 1,356.90 | ||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability primarily related to the PreCision and Solta Medical acquisitions, (ii) increases in the estimated fair value of intangible assets for the Solta Medical and other smaller acquisitions, and (iii) reductions in the estimated fair value of inventory for Solta Medical and other smaller acquisitions. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $82.0 million, with the gross contractual amount being $88.2 million, of which the Company expects that $6.2 million will be uncollectible. | ||||||||||||||
(c) | Assets held for sale relate to the divestitures of the Tretin-X® product rights and the product rights for the generic tretinoin gel and cream products acquired in the PreCision acquisition. See note 4 titled “DIVESTITURES” for further information. | ||||||||||||||
(d) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 10 | $ | 506 | $ | 22.8 | $ | 528.8 | ||||||||
Product rights | 8 | 95.2 | (0.9 | ) | 94.3 | ||||||||||
Corporate brand | 15 | 28.9 | 1.7 | 30.6 | |||||||||||
In-licensed products | 8 | 1.5 | 0.1 | 1.6 | |||||||||||
Partner relationships | 9 | 37.5 | — | 37.5 | |||||||||||
Other | 9 | 28.1 | — | 28.1 | |||||||||||
Total identifiable intangible assets acquired | 10 | $ | 697.2 | $ | 23.7 | $ | 720.9 | ||||||||
(e) | The acquired IPR&D assets primarily relate to programs from smaller acquisitions. In addition, the Solta Medical acquisition includes a program for the development of a next generation Thermage® product. | ||||||||||||||
(f) | The goodwill relates primarily to the PreCision and Solta Medical acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is not expected to be deductible for tax purposes. The goodwill recorded from the PreCision and Solta Medical acquisitions represents the following: | ||||||||||||||
Summary of amounts and useful lives assigned to identifiable intangible assets | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 10 | $ | 506 | $ | 22.8 | $ | 528.8 | ||||||||
Product rights | 8 | 95.2 | (0.9 | ) | 94.3 | ||||||||||
Corporate brand | 15 | 28.9 | 1.7 | 30.6 | |||||||||||
In-licensed products | 8 | 1.5 | 0.1 | 1.6 | |||||||||||
Partner relationships | 9 | 37.5 | — | 37.5 | |||||||||||
Other | 9 | 28.1 | — | 28.1 | |||||||||||
Total identifiable intangible assets acquired | 10 | $ | 697.2 | $ | 23.7 | $ | 720.9 | ||||||||
B&L | |||||||||||||||
Business Combinations | |||||||||||||||
Schedule of acquisitions | The following table indicates the consideration transferred to effect the B&L Acquisition: | ||||||||||||||
Fair Value | |||||||||||||||
Enterprise value | $ | 8,700.00 | |||||||||||||
Adjusted for the following: | |||||||||||||||
B&L’s outstanding debt, including accrued interest | (4,248.3 | ) | |||||||||||||
B&L’s company expenses | (6.4 | ) | |||||||||||||
Payment in B&L’s performance-based option(a) | (48.5 | ) | |||||||||||||
Payment for B&L’s cash balance(b) | 149 | ||||||||||||||
Additional cash payment(b) | 75 | ||||||||||||||
Other | (3.2 | ) | |||||||||||||
Equity purchase price | 4,617.60 | ||||||||||||||
Less: Cash consideration paid for B&L’s unvested stock options(c) | (4.3 | ) | |||||||||||||
Total fair value of consideration transferred | $ | 4,613.30 | |||||||||||||
_________________________________ | |||||||||||||||
(a) | The cash consideration paid for previously cancelled B&L’s performance-based options was recognized as a post-combination expense within Other (income) expense in the third quarter of 2013. | ||||||||||||||
(b) | As defined in the Merger Agreement. | ||||||||||||||
(c) | The cash consideration paid for B&L stock options and restricted stock attributable to pre-combination services has been included as a component of purchase price. The remaining $4.3 million balance related to the acceleration of unvested stock options for B&L employees was recognized as a post-combination expense within Other (income) expense in the third quarter of 2013. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
The transaction has been accounted for as a business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of acquisition date. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Date | Adjustments(a) | 31-Dec-14 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 209.5 | $ | (31.4 | ) | $ | 178.1 | ||||||||
Accounts receivable(b) | 547.9 | (7.2 | ) | 540.7 | |||||||||||
Inventories(c) | 675.8 | (34.0 | ) | 641.8 | |||||||||||
Other current assets | 146.6 | 0.3 | 146.9 | ||||||||||||
Property, plant and equipment, net(d) | 761.4 | 33.2 | 794.6 | ||||||||||||
Identifiable intangible assets, excluding acquired IPR&D(e) | 4,316.10 | 17.3 | 4,333.40 | ||||||||||||
Acquired IPR&D(f) | 398.1 | 17 | 415.1 | ||||||||||||
Other non-current assets | 58.8 | (1.9 | ) | 56.9 | |||||||||||
Current liabilities | (885.6 | ) | 2.1 | (883.5 | ) | ||||||||||
Long-term debt, including current portion(g) | (4,209.9 | ) | — | (4,209.9 | ) | ||||||||||
Deferred income taxes, net(h) | (1,410.9 | ) | 36 | (1,374.9 | ) | ||||||||||
Other non-current liabilities(i) | (280.2 | ) | (1.0 | ) | (281.2 | ) | |||||||||
Total identifiable net assets | 327.6 | 30.4 | 358 | ||||||||||||
Noncontrolling interest(j) | (102.3 | ) | (0.4 | ) | (102.7 | ) | |||||||||
Goodwill(k) | 4,388.00 | (30.0 | ) | 4,358.00 | |||||||||||
Total fair value of consideration transferred | $ | 4,613.30 | $ | — | $ | 4,613.30 | |||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability, (ii) a reduction in the estimated fair value of inventory, (iii) an increase in the estimated fair value of property, plant and equipment mainly related to certain machinery and equipment in Western Europe and the U.S., partially offset by a reduction in the estimated fair value related to certain manufacturing facilities and an office building, (iv) an adjustment between cash and accounts payable, and (v) increases in the estimated fair value of intangible assets, which included a net increase to IPR&D assets driven by a higher fair value for the next generation silicone hydrogel lens (Bausch + Lomb Ultra®). The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $540.7 million, with the gross contractual amount being $555.6 million, of which the Company expects that $14.9 million will be uncollectible. | ||||||||||||||
(c) | Includes an estimated fair value adjustment to inventory of $269.1 million. | ||||||||||||||
(d) | The following table summarizes the amounts and useful lives assigned to property, plant and equipment: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Land | NA | $ | 47.4 | $ | (12.6 | ) | $ | 34.8 | |||||||
Buildings | 24 | 273.1 | (23.8 | ) | 249.3 | ||||||||||
Machinery and equipment | 5 | 273.5 | 76.3 | 349.8 | |||||||||||
Leasehold improvements | 5 | 22.5 | (0.3 | ) | 22.2 | ||||||||||
Equipment on operating lease | 3 | 13.8 | (0.2 | ) | 13.6 | ||||||||||
Construction in progress | NA | 131.1 | (6.2 | ) | 124.9 | ||||||||||
Total property, plant and equipment acquired | $ | 761.4 | $ | 33.2 | $ | 794.6 | |||||||||
The Company sold an office building in Rochester, New York, with an adjusted carrying amount of $14.2 million, in the third quarter of 2014. There was no gain or loss associated with the sale. | |||||||||||||||
(e) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 10 | $ | 1,770.20 | $ | 4.6 | $ | 1,774.80 | ||||||||
Product rights | 8 | 855.4 | 5.7 | 861.1 | |||||||||||
Corporate brand | Indefinite | 1,690.50 | 7 | 1,697.50 | |||||||||||
Total identifiable intangible assets acquired | 9 | $ | 4,316.10 | $ | 17.3 | $ | 4,333.40 | ||||||||
The corporate brand represents the B&L corporate trademark and has an indefinite useful life as there are no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of this intangible asset. The estimated fair value was determined using the relief from royalty method. | |||||||||||||||
(f) | The significant components of the acquired IPR&D assets primarily relate to the development of (i) various vision care products ($223.4 million in the aggregate), such as the next generation silicone hydrogel lens (Bausch + Lomb Ultra®), (ii) various pharmaceutical products ($170.9 million, in the aggregate), such as latanoprostene bunod, a nitric oxide-donating prostaglandin for reduction of elevated intraocular pressure in patients with glaucoma or ocular hypertension, and (iii) various surgical products ($20.8 million, in the aggregate). See note 21 titled “COMMITMENTS AND CONTINGENCIES” for further information related to the worldwide licensing agreement with NicOx, S.A. (“NicOx”) for latanoprostene bunod. A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and a risk-adjusted discount rate of 10% was used to present value the projected cash flows. In determining fair value for latanoprostene bunod and Bausch + Lomb Ultra®, the Company assumed, as of the acquisition date, that material cash inflows for these products would commence in 2016 and 2014, respectively. In September 2013, the U.S. Food and Drug Administration (“FDA”) approved Bausch + Lomb Ultra®, and the product was launched in February 2014. As of December 31, 2014, the Company estimated that it will incur remaining development costs, including certain milestone payments, of approximately $80 million, in the aggregate, to complete the development of the IPR&D assets. | ||||||||||||||
(g) | In 2013, the Company repaid in full the amounts outstanding, with the exception of certain debentures. In connection with the redemption of the assumed 9.875% senior notes, the Company recognized a loss on extinguishment of debt of $8.2 million in the third quarter of 2013. As of December 31, 2014 and 2013, the debentures have an outstanding balance of $11.8 million, in the aggregate. | ||||||||||||||
(h) | Comprises current net deferred tax assets ($61.6 million) and non-current net deferred tax liabilities ($1,436.5 million). | ||||||||||||||
(i) | Includes $224.2 million related to the estimated fair value of pension and other benefits liabilities. | ||||||||||||||
(j) | Represents the estimated fair value of B&L’s noncontrolling interest related primarily to Chinese joint ventures. A discounted cash flow methodology was used to determine the estimated fair values as of the acquisition date. | ||||||||||||||
(k) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: | ||||||||||||||
• | the Company’s expectation to develop and market new product brands, product lines and technology; | ||||||||||||||
• | cost savings and operating synergies expected to result from combining the operations of B&L with those of the Company; | ||||||||||||||
• | the value of the continuing operations of B&L’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, B&L’s assembled workforce). | ||||||||||||||
The amount of goodwill has been allocated to the Company’s Developed Markets segment ($3.3 billion) and Emerging Markets segment ($1.1 billion). | |||||||||||||||
Schedule of estimated fair value of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of acquisition date. | ||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Date | Adjustments(a) | 31-Dec-14 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 209.5 | $ | (31.4 | ) | $ | 178.1 | ||||||||
Accounts receivable(b) | 547.9 | (7.2 | ) | 540.7 | |||||||||||
Inventories(c) | 675.8 | (34.0 | ) | 641.8 | |||||||||||
Other current assets | 146.6 | 0.3 | 146.9 | ||||||||||||
Property, plant and equipment, net(d) | 761.4 | 33.2 | 794.6 | ||||||||||||
Identifiable intangible assets, excluding acquired IPR&D(e) | 4,316.10 | 17.3 | 4,333.40 | ||||||||||||
Acquired IPR&D(f) | 398.1 | 17 | 415.1 | ||||||||||||
Other non-current assets | 58.8 | (1.9 | ) | 56.9 | |||||||||||
Current liabilities | (885.6 | ) | 2.1 | (883.5 | ) | ||||||||||
Long-term debt, including current portion(g) | (4,209.9 | ) | — | (4,209.9 | ) | ||||||||||
Deferred income taxes, net(h) | (1,410.9 | ) | 36 | (1,374.9 | ) | ||||||||||
Other non-current liabilities(i) | (280.2 | ) | (1.0 | ) | (281.2 | ) | |||||||||
Total identifiable net assets | 327.6 | 30.4 | 358 | ||||||||||||
Noncontrolling interest(j) | (102.3 | ) | (0.4 | ) | (102.7 | ) | |||||||||
Goodwill(k) | 4,388.00 | (30.0 | ) | 4,358.00 | |||||||||||
Total fair value of consideration transferred | $ | 4,613.30 | $ | — | $ | 4,613.30 | |||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability, (ii) a reduction in the estimated fair value of inventory, (iii) an increase in the estimated fair value of property, plant and equipment mainly related to certain machinery and equipment in Western Europe and the U.S., partially offset by a reduction in the estimated fair value related to certain manufacturing facilities and an office building, (iv) an adjustment between cash and accounts payable, and (v) increases in the estimated fair value of intangible assets, which included a net increase to IPR&D assets driven by a higher fair value for the next generation silicone hydrogel lens (Bausch + Lomb Ultra®). The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $540.7 million, with the gross contractual amount being $555.6 million, of which the Company expects that $14.9 million will be uncollectible. | ||||||||||||||
(c) | Includes an estimated fair value adjustment to inventory of $269.1 million. | ||||||||||||||
(d) | The following table summarizes the amounts and useful lives assigned to property, plant and equipment: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Land | NA | $ | 47.4 | $ | (12.6 | ) | $ | 34.8 | |||||||
Buildings | 24 | 273.1 | (23.8 | ) | 249.3 | ||||||||||
Machinery and equipment | 5 | 273.5 | 76.3 | 349.8 | |||||||||||
Leasehold improvements | 5 | 22.5 | (0.3 | ) | 22.2 | ||||||||||
Equipment on operating lease | 3 | 13.8 | (0.2 | ) | 13.6 | ||||||||||
Construction in progress | NA | 131.1 | (6.2 | ) | 124.9 | ||||||||||
Total property, plant and equipment acquired | $ | 761.4 | $ | 33.2 | $ | 794.6 | |||||||||
The Company sold an office building in Rochester, New York, with an adjusted carrying amount of $14.2 million, in the third quarter of 2014. There was no gain or loss associated with the sale. | |||||||||||||||
(e) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 10 | $ | 1,770.20 | $ | 4.6 | $ | 1,774.80 | ||||||||
Product rights | 8 | 855.4 | 5.7 | 861.1 | |||||||||||
Corporate brand | Indefinite | 1,690.50 | 7 | 1,697.50 | |||||||||||
Total identifiable intangible assets acquired | 9 | $ | 4,316.10 | $ | 17.3 | $ | 4,333.40 | ||||||||
The corporate brand represents the B&L corporate trademark and has an indefinite useful life as there are no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of this intangible asset. The estimated fair value was determined using the relief from royalty method. | |||||||||||||||
(f) | The significant components of the acquired IPR&D assets primarily relate to the development of (i) various vision care products ($223.4 million in the aggregate), such as the next generation silicone hydrogel lens (Bausch + Lomb Ultra®), (ii) various pharmaceutical products ($170.9 million, in the aggregate), such as latanoprostene bunod, a nitric oxide-donating prostaglandin for reduction of elevated intraocular pressure in patients with glaucoma or ocular hypertension, and (iii) various surgical products ($20.8 million, in the aggregate). See note 21 titled “COMMITMENTS AND CONTINGENCIES” for further information related to the worldwide licensing agreement with NicOx, S.A. (“NicOx”) for latanoprostene bunod. A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and a risk-adjusted discount rate of 10% was used to present value the projected cash flows. In determining fair value for latanoprostene bunod and Bausch + Lomb Ultra®, the Company assumed, as of the acquisition date, that material cash inflows for these products would commence in 2016 and 2014, respectively. In September 2013, the U.S. Food and Drug Administration (“FDA”) approved Bausch + Lomb Ultra®, and the product was launched in February 2014. As of December 31, 2014, the Company estimated that it will incur remaining development costs, including certain milestone payments, of approximately $80 million, in the aggregate, to complete the development of the IPR&D assets. | ||||||||||||||
(g) | In 2013, the Company repaid in full the amounts outstanding, with the exception of certain debentures. In connection with the redemption of the assumed 9.875% senior notes, the Company recognized a loss on extinguishment of debt of $8.2 million in the third quarter of 2013. As of December 31, 2014 and 2013, the debentures have an outstanding balance of $11.8 million, in the aggregate. | ||||||||||||||
(h) | Comprises current net deferred tax assets ($61.6 million) and non-current net deferred tax liabilities ($1,436.5 million). | ||||||||||||||
(i) | Includes $224.2 million related to the estimated fair value of pension and other benefits liabilities. | ||||||||||||||
(j) | Represents the estimated fair value of B&L’s noncontrolling interest related primarily to Chinese joint ventures. A discounted cash flow methodology was used to determine the estimated fair values as of the acquisition date. | ||||||||||||||
(k) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: | ||||||||||||||
• | the Company’s expectation to develop and market new product brands, product lines and technology; | ||||||||||||||
• | cost savings and operating synergies expected to result from combining the operations of B&L with those of the Company; | ||||||||||||||
• | the value of the continuing operations of B&L’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, B&L’s assembled workforce). | ||||||||||||||
The amount of goodwill has been allocated to the Company’s Developed Markets segment ($3.3 billion) and Emerging Markets segment ($1.1 billion). | |||||||||||||||
Summary of amounts and useful lives assigned to identifiable intangible assets | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 10 | $ | 1,770.20 | $ | 4.6 | $ | 1,774.80 | ||||||||
Product rights | 8 | 855.4 | 5.7 | 861.1 | |||||||||||
Corporate brand | Indefinite | 1,690.50 | 7 | 1,697.50 | |||||||||||
Total identifiable intangible assets acquired | 9 | $ | 4,316.10 | $ | 17.3 | $ | 4,333.40 | ||||||||
Schedule of fair value of consideration transferred | The following table indicates the consideration transferred to effect the B&L Acquisition: | ||||||||||||||
Fair Value | |||||||||||||||
Enterprise value | $ | 8,700.00 | |||||||||||||
Adjusted for the following: | |||||||||||||||
B&L’s outstanding debt, including accrued interest | (4,248.3 | ) | |||||||||||||
B&L’s company expenses | (6.4 | ) | |||||||||||||
Payment in B&L’s performance-based option(a) | (48.5 | ) | |||||||||||||
Payment for B&L’s cash balance(b) | 149 | ||||||||||||||
Additional cash payment(b) | 75 | ||||||||||||||
Other | (3.2 | ) | |||||||||||||
Equity purchase price | 4,617.60 | ||||||||||||||
Less: Cash consideration paid for B&L’s unvested stock options(c) | (4.3 | ) | |||||||||||||
Total fair value of consideration transferred | $ | 4,613.30 | |||||||||||||
_________________________________ | |||||||||||||||
(a) | The cash consideration paid for previously cancelled B&L’s performance-based options was recognized as a post-combination expense within Other (income) expense in the third quarter of 2013. | ||||||||||||||
(b) | As defined in the Merger Agreement. | ||||||||||||||
(c) | The cash consideration paid for B&L stock options and restricted stock attributable to pre-combination services has been included as a component of purchase price. The remaining $4.3 million balance related to the acceleration of unvested stock options for B&L employees was recognized as a post-combination expense within Other (income) expense in the third quarter of 2013. | ||||||||||||||
Summary of amounts and useful lives assigned to property, plant and equipment | The following table summarizes the amounts and useful lives assigned to property, plant and equipment: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | 31-Dec-14 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Land | NA | $ | 47.4 | $ | (12.6 | ) | $ | 34.8 | |||||||
Buildings | 24 | 273.1 | (23.8 | ) | 249.3 | ||||||||||
Machinery and equipment | 5 | 273.5 | 76.3 | 349.8 | |||||||||||
Leasehold improvements | 5 | 22.5 | (0.3 | ) | 22.2 | ||||||||||
Equipment on operating lease | 3 | 13.8 | (0.2 | ) | 13.6 | ||||||||||
Construction in progress | NA | 131.1 | (6.2 | ) | 124.9 | ||||||||||
Total property, plant and equipment acquired | $ | 761.4 | $ | 33.2 | $ | 794.6 | |||||||||
2013 Other Business Combinations | |||||||||||||||
Business Combinations | |||||||||||||||
Schedule of acquisitions | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. | ||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | December 31, 2014 | |||||||||||||
(as adjusted) | |||||||||||||||
Cash | $ | 43.1 | $ | — | $ | 43.1 | |||||||||
Accounts receivable(b) | 64 | 0.5 | 64.5 | ||||||||||||
Inventories | 33.6 | 1.9 | 35.5 | ||||||||||||
Other current assets | 14 | — | 14 | ||||||||||||
Property, plant and equipment | 13.9 | (3.3 | ) | 10.6 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(c) | 722.9 | 3.9 | 726.8 | ||||||||||||
Acquired IPR&D(d) | 18.7 | 0.2 | 18.9 | ||||||||||||
Indemnification assets | 3.2 | (0.7 | ) | 2.5 | |||||||||||
Other non-current assets | 0.2 | 3.7 | 3.9 | ||||||||||||
Current liabilities | (36.2 | ) | (0.4 | ) | (36.6 | ) | |||||||||
Short-term borrowings(e) | (33.3 | ) | 0.5 | (32.8 | ) | ||||||||||
Long-term debt(e) | (24.0 | ) | — | (24.0 | ) | ||||||||||
Deferred tax liability, net | (147.8 | ) | (1.1 | ) | (148.9 | ) | |||||||||
Other non-current liabilities | (1.5 | ) | — | (1.5 | ) | ||||||||||
Total identifiable net assets | 670.8 | 5.2 | 676 | ||||||||||||
Noncontrolling interest(f) | (11.2 | ) | — | (11.2 | ) | ||||||||||
Goodwill(g) | 224.3 | 9 | 233.3 | ||||||||||||
Total fair value of consideration transferred | $ | 883.9 | $ | 14.2 | $ | 898.1 | |||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect an increase in the total fair value of consideration transferred with respect to the Natur Produkt acquisition pursuant to a purchase price adjustment. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $64.5 million, with the gross contractual amount being $68.2 million, of which the Company expects that $3.7 million will be uncollectible. | ||||||||||||||
(c) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 7 | $ | 517.2 | $ | 3.1 | $ | 520.3 | ||||||||
Corporate brand | 13 | 86.1 | 0.8 | 86.9 | |||||||||||
Patents | 3 | 71.7 | — | 71.7 | |||||||||||
Royalty Agreement | 5 | 26.5 | — | 26.5 | |||||||||||
Partner relationships | 5 | 16 | — | 16 | |||||||||||
Technology | 10 | 5.4 | — | 5.4 | |||||||||||
Total identifiable intangible assets acquired | 8 | $ | 722.9 | $ | 3.9 | $ | 726.8 | ||||||||
(d) | The acquired IPR&D assets relate to the Obagi and Natur Produkt acquisitions. Obagi’s acquired IPR&D assets primarily relate to the development of dermatology products for anti-aging and suncare. Natur Produkt’s acquired IPR&D assets include a product indicated for the prevention of viral diseases, specifically cold and flu, and a product indicated for the treatment of inflammation and muscular disorders. | ||||||||||||||
(e) | Short-term borrowings and long-term debt primarily relate to the Natur Produkt acquisition. In March 2013, the Company settled all of Natur Produkt’s outstanding third party short-term borrowings and long-term debt. | ||||||||||||||
(f) | Represents the estimated fair value of noncontrolling interest related to a smaller acquisition completed in the third quarter of 2013. | ||||||||||||||
(g) | The goodwill relates primarily to the Obagi and Natur Produkt acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of Obagi’s and Natur Produkt’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the Obagi and the Natur Produkt acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. | ||||||||||||||
The amount of goodwill from the Obagi acquisition has been allocated primarily to the Company’s Developed Markets segment. The amount of goodwill from the Natur Produkt acquisition has been allocated to the Company’s Emerging Markets segment. | |||||||||||||||
Schedule of estimated fair value of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the business combinations, in the aggregate, as of the applicable acquisition dates. | ||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | December 31, 2014 | |||||||||||||
(as adjusted) | |||||||||||||||
Cash | $ | 43.1 | $ | — | $ | 43.1 | |||||||||
Accounts receivable(b) | 64 | 0.5 | 64.5 | ||||||||||||
Inventories | 33.6 | 1.9 | 35.5 | ||||||||||||
Other current assets | 14 | — | 14 | ||||||||||||
Property, plant and equipment | 13.9 | (3.3 | ) | 10.6 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(c) | 722.9 | 3.9 | 726.8 | ||||||||||||
Acquired IPR&D(d) | 18.7 | 0.2 | 18.9 | ||||||||||||
Indemnification assets | 3.2 | (0.7 | ) | 2.5 | |||||||||||
Other non-current assets | 0.2 | 3.7 | 3.9 | ||||||||||||
Current liabilities | (36.2 | ) | (0.4 | ) | (36.6 | ) | |||||||||
Short-term borrowings(e) | (33.3 | ) | 0.5 | (32.8 | ) | ||||||||||
Long-term debt(e) | (24.0 | ) | — | (24.0 | ) | ||||||||||
Deferred tax liability, net | (147.8 | ) | (1.1 | ) | (148.9 | ) | |||||||||
Other non-current liabilities | (1.5 | ) | — | (1.5 | ) | ||||||||||
Total identifiable net assets | 670.8 | 5.2 | 676 | ||||||||||||
Noncontrolling interest(f) | (11.2 | ) | — | (11.2 | ) | ||||||||||
Goodwill(g) | 224.3 | 9 | 233.3 | ||||||||||||
Total fair value of consideration transferred | $ | 883.9 | $ | 14.2 | $ | 898.1 | |||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect an increase in the total fair value of consideration transferred with respect to the Natur Produkt acquisition pursuant to a purchase price adjustment. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $64.5 million, with the gross contractual amount being $68.2 million, of which the Company expects that $3.7 million will be uncollectible. | ||||||||||||||
(c) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 7 | $ | 517.2 | $ | 3.1 | $ | 520.3 | ||||||||
Corporate brand | 13 | 86.1 | 0.8 | 86.9 | |||||||||||
Patents | 3 | 71.7 | — | 71.7 | |||||||||||
Royalty Agreement | 5 | 26.5 | — | 26.5 | |||||||||||
Partner relationships | 5 | 16 | — | 16 | |||||||||||
Technology | 10 | 5.4 | — | 5.4 | |||||||||||
Total identifiable intangible assets acquired | 8 | $ | 722.9 | $ | 3.9 | $ | 726.8 | ||||||||
(d) | The acquired IPR&D assets relate to the Obagi and Natur Produkt acquisitions. Obagi’s acquired IPR&D assets primarily relate to the development of dermatology products for anti-aging and suncare. Natur Produkt’s acquired IPR&D assets include a product indicated for the prevention of viral diseases, specifically cold and flu, and a product indicated for the treatment of inflammation and muscular disorders. | ||||||||||||||
(e) | Short-term borrowings and long-term debt primarily relate to the Natur Produkt acquisition. In March 2013, the Company settled all of Natur Produkt’s outstanding third party short-term borrowings and long-term debt. | ||||||||||||||
(f) | Represents the estimated fair value of noncontrolling interest related to a smaller acquisition completed in the third quarter of 2013. | ||||||||||||||
(g) | The goodwill relates primarily to the Obagi and Natur Produkt acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of Obagi’s and Natur Produkt’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the Obagi and the Natur Produkt acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. | ||||||||||||||
The amount of goodwill from the Obagi acquisition has been allocated primarily to the Company’s Developed Markets segment. The amount of goodwill from the Natur Produkt acquisition has been allocated to the Company’s Emerging Markets segment. | |||||||||||||||
Summary of amounts and useful lives assigned to identifiable intangible assets | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Dates | Adjustments | December 31, 2014 | ||||||||||||
(Years) | (as adjusted) | ||||||||||||||
Product brands | 7 | $ | 517.2 | $ | 3.1 | $ | 520.3 | ||||||||
Corporate brand | 13 | 86.1 | 0.8 | 86.9 | |||||||||||
Patents | 3 | 71.7 | — | 71.7 | |||||||||||
Royalty Agreement | 5 | 26.5 | — | 26.5 | |||||||||||
Partner relationships | 5 | 16 | — | 16 | |||||||||||
Technology | 10 | 5.4 | — | 5.4 | |||||||||||
Total identifiable intangible assets acquired | 8 | $ | 722.9 | $ | 3.9 | $ | 726.8 | ||||||||
Medicis | |||||||||||||||
Business Combinations | |||||||||||||||
Schedule of acquisitions | The following table indicates the consideration transferred to effect the acquisition of Medicis: | ||||||||||||||
(Number of shares, stock options and restricted | Conversion | Fair | |||||||||||||
share units in millions) | Calculation | Value | |||||||||||||
Number of common shares of Medicis outstanding as of acquisition date | 57.1 | ||||||||||||||
Multiplied by Medicis Per Share Consideration | $ | 44 | $ | 2,513.90 | |||||||||||
Number of stock options of Medicis cancelled and exchanged for cash(a) | 3.2 | 33.1 | |||||||||||||
Number of outstanding restricted shares cancelled and exchanged for cash(a) | 2 | 31.9 | |||||||||||||
Total fair value of consideration transferred | $ | 2,578.90 | |||||||||||||
____________________________________ | |||||||||||||||
(a) | The cash consideration paid for Medicis stock options and restricted shares attributable to pre-combination services has been included as a component of purchase price. The remaining $77.3 million balance related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control was recognized as a post-combination expense within Other (income) expense in the fourth quarter of 2012. | ||||||||||||||
Assets Acquired and Liabilities Assumed | |||||||||||||||
The transaction has been accounted for as business combination under the acquisition method of accounting. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. | |||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Date | Adjustments(a) | December 31, 2013 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 169.6 | $ | — | $ | 169.6 | |||||||||
Accounts receivable(b) | 81.1 | 9.1 | 90.2 | ||||||||||||
Inventories(c) | 145.1 | (7.6 | ) | 137.5 | |||||||||||
Short-term and long-term investments(d) | 626.6 | — | 626.6 | ||||||||||||
Income taxes receivable | 40.4 | — | 40.4 | ||||||||||||
Other current assets | 74.6 | — | 74.6 | ||||||||||||
Property and equipment, net | 8.2 | (5.6 | ) | 2.6 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(e) | 1,390.70 | (21.8 | ) | 1,368.90 | |||||||||||
Acquired IPR&D(f) | 153.8 | 6 | 159.8 | ||||||||||||
Other non-current assets | 0.6 | — | 0.6 | ||||||||||||
Current liabilities | (453.8 | ) | (12.5 | ) | (466.3 | ) | |||||||||
Long-term debt, including current portion(g) | (778.0 | ) | — | (778.0 | ) | ||||||||||
Deferred income taxes, net | (205.0 | ) | 12.2 | (192.8 | ) | ||||||||||
Other non-current liabilities | (8.8 | ) | — | (8.8 | ) | ||||||||||
Total identifiable net assets | 1,245.10 | (20.2 | ) | 1,224.90 | |||||||||||
Goodwill(h) | 1,333.80 | 20.2 | 1,354.00 | ||||||||||||
Total fair value of consideration transferred | $ | 2,578.90 | $ | — | $ | 2,578.90 | |||||||||
______________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) reductions in the estimated fair value of a product brand intangible asset and property and equipment; (ii) changes in estimated inventory reserves; (iii) changes in certain assumptions impacting the fair value of acquired IPR&D; (iv) additional information obtained with respect to the valuation of certain pre-acquisition contingent assets, as well as legal and milestone obligations; and (v) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $90.2 million, with the gross contractual amount being $90.3 million, of which the Company expects that $0.1 million will be uncollectible. | ||||||||||||||
(c) | Includes an estimated fair value adjustment to inventory of $104.6 million. | ||||||||||||||
(d) | Short-term and long-term investments consist of corporate and various government agency and municipal debt securities, investments in auction rate floating securities (student loans), and investments in equity securities. Subsequent to the acquisition date, the Company liquidated these investments for proceeds of $615.4 million, $9.0 million and $8.0 million in the fourth quarter of 2012, the first quarter of 2013, and the second quarter of 2013, respectively. | ||||||||||||||
(e) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
In-licensed products | 11 | $ | 633.4 | $ | 2.3 | $ | 635.7 | ||||||||
Product brands | 8 | 491.6 | (24.8 | ) | 466.8 | ||||||||||
Patents | 5 | 225 | 1.1 | 226.1 | |||||||||||
Corporate brands | 14 | 40.7 | (0.4 | ) | 40.3 | ||||||||||
Total identifiable intangible assets acquired | 9 | $ | 1,390.70 | $ | (21.8 | ) | $ | 1,368.90 | |||||||
(f) | The significant components of the acquired IPR&D assets relate to the development of dermatology products, such as Luliconazole, a new imidazole, antimycotic cream for the treatment of tinea cruris, pedis and corporis, and Metronidazole 1.3%, a topical antibiotic for the treatment of bacterial vaginosis ($136.9 million, in the aggregate), and the development of aesthetics programs ($22.9 million). In November 2013, the FDA approved a New Drug Application (“NDA”) for Luliconazole, which triggered the commencement of amortization. A multi-period excess earnings methodology (income approach) was primarily used to determine the estimated fair values of the acquired IPR&D assets. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project. Risk-adjusted discount rates of 10% - 11% were used to present value the projected cash flows. On July 1, 2014, the Company sold the worldwide rights in its Metronidazole 1.3% Vaginal Gel antibiotic development product to Actavis Specialty Brands. For further details, see note 4 titled “DIVESTITURES”. | ||||||||||||||
(g) | During the period from the acquisition date to December 31, 2013, the Company settled a significant portion of Medicis’ outstanding long-term debt. As of December 31, 2014 and 2013, Medicis’ outstanding long-term debt includes 1.375% Convertible Senior Notes, with an outstanding principal amount of $0.2 million. | ||||||||||||||
(h) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of Medicis with those of the Company; | ||||||||||||||
• | the value of the continuing operations of Medicis’ existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, Medicis’ assembled workforce). | ||||||||||||||
The goodwill has been allocated to the Company’s Developed Markets segment. | |||||||||||||||
Schedule of estimated fair value of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. | ||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Date | Adjustments(a) | December 31, 2013 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 169.6 | $ | — | $ | 169.6 | |||||||||
Accounts receivable(b) | 81.1 | 9.1 | 90.2 | ||||||||||||
Inventories(c) | 145.1 | (7.6 | ) | 137.5 | |||||||||||
Short-term and long-term investments(d) | 626.6 | — | 626.6 | ||||||||||||
Income taxes receivable | 40.4 | — | 40.4 | ||||||||||||
Other current assets | 74.6 | — | 74.6 | ||||||||||||
Property and equipment, net | 8.2 | (5.6 | ) | 2.6 | |||||||||||
Identifiable intangible assets, excluding acquired IPR&D(e) | 1,390.70 | (21.8 | ) | 1,368.90 | |||||||||||
Acquired IPR&D(f) | 153.8 | 6 | 159.8 | ||||||||||||
Other non-current assets | 0.6 | — | 0.6 | ||||||||||||
Current liabilities | (453.8 | ) | (12.5 | ) | (466.3 | ) | |||||||||
Long-term debt, including current portion(g) | (778.0 | ) | — | (778.0 | ) | ||||||||||
Deferred income taxes, net | (205.0 | ) | 12.2 | (192.8 | ) | ||||||||||
Other non-current liabilities | (8.8 | ) | — | (8.8 | ) | ||||||||||
Total identifiable net assets | 1,245.10 | (20.2 | ) | 1,224.90 | |||||||||||
Goodwill(h) | 1,333.80 | 20.2 | 1,354.00 | ||||||||||||
Total fair value of consideration transferred | $ | 2,578.90 | $ | — | $ | 2,578.90 | |||||||||
______________________ | |||||||||||||||
(a) | The measurement period adjustments primarily reflect: (i) reductions in the estimated fair value of a product brand intangible asset and property and equipment; (ii) changes in estimated inventory reserves; (iii) changes in certain assumptions impacting the fair value of acquired IPR&D; (iv) additional information obtained with respect to the valuation of certain pre-acquisition contingent assets, as well as legal and milestone obligations; and (v) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $90.2 million, with the gross contractual amount being $90.3 million, of which the Company expects that $0.1 million will be uncollectible. | ||||||||||||||
(c) | Includes an estimated fair value adjustment to inventory of $104.6 million. | ||||||||||||||
(d) | Short-term and long-term investments consist of corporate and various government agency and municipal debt securities, investments in auction rate floating securities (student loans), and investments in equity securities. Subsequent to the acquisition date, the Company liquidated these investments for proceeds of $615.4 million, $9.0 million and $8.0 million in the fourth quarter of 2012, the first quarter of 2013, and the second quarter of 2013, respectively. | ||||||||||||||
(e) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
In-licensed products | 11 | $ | 633.4 | $ | 2.3 | $ | 635.7 | ||||||||
Product brands | 8 | 491.6 | (24.8 | ) | 466.8 | ||||||||||
Patents | 5 | 225 | 1.1 | 226.1 | |||||||||||
Corporate brands | 14 | 40.7 | (0.4 | ) | 40.3 | ||||||||||
Total identifiable intangible assets acquired | 9 | $ | 1,390.70 | $ | (21.8 | ) | $ | 1,368.90 | |||||||
(f) | The significant components of the acquired IPR&D assets relate to the development of dermatology products, such as Luliconazole, a new imidazole, antimycotic cream for the treatment of tinea cruris, pedis and corporis, and Metronidazole 1.3%, a topical antibiotic for the treatment of bacterial vaginosis ($136.9 million, in the aggregate), and the development of aesthetics programs ($22.9 million). In November 2013, the FDA approved a New Drug Application (“NDA”) for Luliconazole, which triggered the commencement of amortization. A multi-period excess earnings methodology (income approach) was primarily used to determine the estimated fair values of the acquired IPR&D assets. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project. Risk-adjusted discount rates of 10% - 11% were used to present value the projected cash flows. On July 1, 2014, the Company sold the worldwide rights in its Metronidazole 1.3% Vaginal Gel antibiotic development product to Actavis Specialty Brands. For further details, see note 4 titled “DIVESTITURES”. | ||||||||||||||
(g) | During the period from the acquisition date to December 31, 2013, the Company settled a significant portion of Medicis’ outstanding long-term debt. As of December 31, 2014 and 2013, Medicis’ outstanding long-term debt includes 1.375% Convertible Senior Notes, with an outstanding principal amount of $0.2 million. | ||||||||||||||
(h) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of Medicis with those of the Company; | ||||||||||||||
• | the value of the continuing operations of Medicis’ existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, Medicis’ assembled workforce). | ||||||||||||||
The goodwill has been allocated to the Company’s Developed Markets segment. | |||||||||||||||
Summary of amounts and useful lives assigned to identifiable intangible assets | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
In-licensed products | 11 | $ | 633.4 | $ | 2.3 | $ | 635.7 | ||||||||
Product brands | 8 | 491.6 | (24.8 | ) | 466.8 | ||||||||||
Patents | 5 | 225 | 1.1 | 226.1 | |||||||||||
Corporate brands | 14 | 40.7 | (0.4 | ) | 40.3 | ||||||||||
Total identifiable intangible assets acquired | 9 | $ | 1,390.70 | $ | (21.8 | ) | $ | 1,368.90 | |||||||
Schedule of fair value of consideration transferred | The following table indicates the consideration transferred to effect the acquisition of Medicis: | ||||||||||||||
(Number of shares, stock options and restricted | Conversion | Fair | |||||||||||||
share units in millions) | Calculation | Value | |||||||||||||
Number of common shares of Medicis outstanding as of acquisition date | 57.1 | ||||||||||||||
Multiplied by Medicis Per Share Consideration | $ | 44 | $ | 2,513.90 | |||||||||||
Number of stock options of Medicis cancelled and exchanged for cash(a) | 3.2 | 33.1 | |||||||||||||
Number of outstanding restricted shares cancelled and exchanged for cash(a) | 2 | 31.9 | |||||||||||||
Total fair value of consideration transferred | $ | 2,578.90 | |||||||||||||
____________________________________ | |||||||||||||||
(a) | The cash consideration paid for Medicis stock options and restricted shares attributable to pre-combination services has been included as a component of purchase price. The remaining $77.3 million balance related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control was recognized as a post-combination expense within Other (income) expense in the fourth quarter of 2012. | ||||||||||||||
2012 Other Business Combinations | |||||||||||||||
Business Combinations | |||||||||||||||
Schedule of acquisitions | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the other business combinations, in the aggregate, as of the acquisition dates. | ||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | 31-Dec-13 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 21.4 | $ | (0.3 | ) | $ | 21.1 | ||||||||
Accounts receivable(b) | 40.2 | — | 40.2 | ||||||||||||
Assets held for sale(c) | 15.6 | — | 15.6 | ||||||||||||
Inventories | 68 | (8.8 | ) | 59.2 | |||||||||||
Other current assets | 6.6 | — | 6.6 | ||||||||||||
Property, plant and equipment | 17.2 | — | 17.2 | ||||||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 1,133.00 | (62.6 | ) | 1,070.40 | |||||||||||
Acquired IPR&D(e) | 16.7 | 13.1 | 29.8 | ||||||||||||
Indemnification assets | 27.9 | — | 27.9 | ||||||||||||
Other non-current assets | 1.9 | — | 1.9 | ||||||||||||
Current liabilities | (41.8 | ) | (0.7 | ) | (42.5 | ) | |||||||||
Long-term debt(f) | (38.8 | ) | — | (38.8 | ) | ||||||||||
Liability for uncertain tax position | (6.7 | ) | 6.7 | — | |||||||||||
Other non-current liabilities | (28.7 | ) | — | (28.7 | ) | ||||||||||
Deferred income taxes, net | (184.8 | ) | 18.8 | (166.0 | ) | ||||||||||
Total identifiable net assets | 1,047.70 | (33.8 | ) | 1,013.90 | |||||||||||
Goodwill(g) | 157.4 | 24.7 | 182.1 | ||||||||||||
Total fair value of consideration transferred | $ | 1,205.10 | $ | (9.1 | ) | $ | 1,196.00 | ||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily relate to the OraPharma acquisition and primarily reflect: (i) changes in the estimated fair value of the Arestin® product brand; (ii) the reclassification of intangible assets from product brands to IPR&D; (iii) a decrease in the total fair value of consideration transferred due to a working capital adjustment; and (iv) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $40.2 million, with the gross contractual amount being $41.5 million, of which the Company expects that $1.3 million will be uncollectible. | ||||||||||||||
(c) | Assets held for sale relate to a product brand acquired in the other smaller acquisition. Subsequent to that acquisition, the plan of sale changed, and the Company no longer intends to sell the asset. Consequently, the product brand was not classified as an asset held for sale as of December 31, 2012. | ||||||||||||||
(d) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 11 | $ | 903.7 | $ | (63.8 | ) | $ | 839.9 | |||||||
Corporate brands | 13 | 51.4 | 2.1 | 53.5 | |||||||||||
Product rights | 10 | 109.3 | (0.9 | ) | 108.4 | ||||||||||
Royalty agreement | 9 | 36.2 | — | 36.2 | |||||||||||
Partner relationships | 5 | 32.4 | — | 32.4 | |||||||||||
Total identifiable intangible assets acquired | 11 | $ | 1,133.00 | $ | (62.6 | ) | $ | 1,070.40 | |||||||
(e) | The IPR&D assets primarily relate to the OraPharma acquisition. OraPharma’s acquired IPR&D assets primarily relate to the development of Arestin® ER, which is indicated for oral hygiene use and Arestin® Peri-Implantitis, which is indicated for anti-inflammatory and anti-bacterial use. | ||||||||||||||
(f) | Primarily relates to the OraPharma acquisition. Effective June 18, 2012, the Company terminated the OraPharma’s credit facility agreement, repaid the assumed debt outstanding ($37.9 million) and cancelled the undrawn credit facilities. | ||||||||||||||
(g) | The goodwill relates primarily to the OraPharma acquisition. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of OraPharma’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the OraPharma acquisition represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of OraPharma with those of the Company; | ||||||||||||||
• | the value of the continuing operations of OraPharma’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, OraPharma’s assembled workforce). | ||||||||||||||
The amount of goodwill from OraPharma acquisition has been allocated to the Company’s Developed Markets segment. The amount of goodwill from the Gerot Lannach acquisition has been allocated to the Company’s Emerging Markets segment. | |||||||||||||||
Schedule of estimated fair value of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed related to the other business combinations, in the aggregate, as of the acquisition dates. | ||||||||||||||
Amounts | Measurement | Amounts | |||||||||||||
Recognized as of | Period | Recognized as of | |||||||||||||
Acquisition Dates | Adjustments(a) | 31-Dec-13 | |||||||||||||
(as previously | (as adjusted) | ||||||||||||||
reported) | |||||||||||||||
Cash and cash equivalents | $ | 21.4 | $ | (0.3 | ) | $ | 21.1 | ||||||||
Accounts receivable(b) | 40.2 | — | 40.2 | ||||||||||||
Assets held for sale(c) | 15.6 | — | 15.6 | ||||||||||||
Inventories | 68 | (8.8 | ) | 59.2 | |||||||||||
Other current assets | 6.6 | — | 6.6 | ||||||||||||
Property, plant and equipment | 17.2 | — | 17.2 | ||||||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 1,133.00 | (62.6 | ) | 1,070.40 | |||||||||||
Acquired IPR&D(e) | 16.7 | 13.1 | 29.8 | ||||||||||||
Indemnification assets | 27.9 | — | 27.9 | ||||||||||||
Other non-current assets | 1.9 | — | 1.9 | ||||||||||||
Current liabilities | (41.8 | ) | (0.7 | ) | (42.5 | ) | |||||||||
Long-term debt(f) | (38.8 | ) | — | (38.8 | ) | ||||||||||
Liability for uncertain tax position | (6.7 | ) | 6.7 | — | |||||||||||
Other non-current liabilities | (28.7 | ) | — | (28.7 | ) | ||||||||||
Deferred income taxes, net | (184.8 | ) | 18.8 | (166.0 | ) | ||||||||||
Total identifiable net assets | 1,047.70 | (33.8 | ) | 1,013.90 | |||||||||||
Goodwill(g) | 157.4 | 24.7 | 182.1 | ||||||||||||
Total fair value of consideration transferred | $ | 1,205.10 | $ | (9.1 | ) | $ | 1,196.00 | ||||||||
________________________ | |||||||||||||||
(a) | The measurement period adjustments primarily relate to the OraPharma acquisition and primarily reflect: (i) changes in the estimated fair value of the Arestin® product brand; (ii) the reclassification of intangible assets from product brands to IPR&D; (iii) a decrease in the total fair value of consideration transferred due to a working capital adjustment; and (iv) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. | ||||||||||||||
(b) | The fair value of trade accounts receivable acquired was $40.2 million, with the gross contractual amount being $41.5 million, of which the Company expects that $1.3 million will be uncollectible. | ||||||||||||||
(c) | Assets held for sale relate to a product brand acquired in the other smaller acquisition. Subsequent to that acquisition, the plan of sale changed, and the Company no longer intends to sell the asset. Consequently, the product brand was not classified as an asset held for sale as of December 31, 2012. | ||||||||||||||
(d) | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 11 | $ | 903.7 | $ | (63.8 | ) | $ | 839.9 | |||||||
Corporate brands | 13 | 51.4 | 2.1 | 53.5 | |||||||||||
Product rights | 10 | 109.3 | (0.9 | ) | 108.4 | ||||||||||
Royalty agreement | 9 | 36.2 | — | 36.2 | |||||||||||
Partner relationships | 5 | 32.4 | — | 32.4 | |||||||||||
Total identifiable intangible assets acquired | 11 | $ | 1,133.00 | $ | (62.6 | ) | $ | 1,070.40 | |||||||
(e) | The IPR&D assets primarily relate to the OraPharma acquisition. OraPharma’s acquired IPR&D assets primarily relate to the development of Arestin® ER, which is indicated for oral hygiene use and Arestin® Peri-Implantitis, which is indicated for anti-inflammatory and anti-bacterial use. | ||||||||||||||
(f) | Primarily relates to the OraPharma acquisition. Effective June 18, 2012, the Company terminated the OraPharma’s credit facility agreement, repaid the assumed debt outstanding ($37.9 million) and cancelled the undrawn credit facilities. | ||||||||||||||
(g) | The goodwill relates primarily to the OraPharma acquisition. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of OraPharma’s goodwill is expected to be deductible for tax purposes. The goodwill recorded from the OraPharma acquisition represents the following: | ||||||||||||||
• | cost savings, operating synergies and other benefits expected to result from combining the operations of OraPharma with those of the Company; | ||||||||||||||
• | the value of the continuing operations of OraPharma’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and | ||||||||||||||
• | intangible assets that do not qualify for separate recognition (for instance, OraPharma’s assembled workforce). | ||||||||||||||
The amount of goodwill from OraPharma acquisition has been allocated to the Company’s Developed Markets segment. The amount of goodwill from the Gerot Lannach acquisition has been allocated to the Company’s Emerging Markets segment. | |||||||||||||||
Summary of amounts and useful lives assigned to identifiable intangible assets | The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: | ||||||||||||||
Weighted- | Amounts | Measurement | Amounts | ||||||||||||
Average | Recognized as of | Period | Recognized as of | ||||||||||||
Useful Lives | Acquisition Date | Adjustments | December 31, 2013 | ||||||||||||
(Years) | (as previously | (as adjusted) | |||||||||||||
reported) | |||||||||||||||
Product brands | 11 | $ | 903.7 | $ | (63.8 | ) | $ | 839.9 | |||||||
Corporate brands | 13 | 51.4 | 2.1 | 53.5 | |||||||||||
Product rights | 10 | 109.3 | (0.9 | ) | 108.4 | ||||||||||
Royalty agreement | 9 | 36.2 | — | 36.2 | |||||||||||
Partner relationships | 5 | 32.4 | — | 32.4 | |||||||||||
Total identifiable intangible assets acquired | 11 | $ | 1,133.00 | $ | (62.6 | ) | $ | 1,070.40 | |||||||
RESTRUCTURING_INTEGRATION_AND_1
RESTRUCTURING, INTEGRATION AND OTHER CHARGES (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||
Schedule of major components of Medicis acquisition-related costs incurred | The following table summarizes the major components of the restructuring costs incurred in connection with the B&L Acquisition since the acquisition date through December 31, 2014: | ||||||||||||||||||||
Employee Termination Costs | IPR&D | Contract | |||||||||||||||||||
Termination | Termination, | ||||||||||||||||||||
Costs | Facility Closure | ||||||||||||||||||||
Severance and | Share-Based | and Other Costs | Total | ||||||||||||||||||
Related Benefits | Compensation(1) | ||||||||||||||||||||
Balance, January 1, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Costs incurred and/or charged to expense | 155.7 | 52.8 | — | 25.6 | 234.1 | ||||||||||||||||
Cash payments | (77.8 | ) | (52.8 | ) | — | (7.8 | ) | (138.4 | ) | ||||||||||||
Non-cash adjustments | 11.4 | — | — | (6.8 | ) | 4.6 | |||||||||||||||
Balance, December 31, 2013 | $ | 89.3 | $ | — | $ | — | $ | 11 | $ | 100.3 | |||||||||||
Costs incurred and charged to expense | 46 | — | — | 23.7 | 69.7 | ||||||||||||||||
Cash payments | (110.7 | ) | — | — | (24.9 | ) | (135.6 | ) | |||||||||||||
Non-cash adjustments | (5.7 | ) | — | — | (5.4 | ) | (11.1 | ) | |||||||||||||
Balance, December 31, 2014 | $ | 18.9 | $ | — | $ | — | $ | 4.4 | $ | 23.3 | |||||||||||
___________________________________ | |||||||||||||||||||||
-1 | Relates to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees as a result of the B&L Acquisition. These charges were reclassified to Other (income) expense to conform to the current year presentation. | ||||||||||||||||||||
Schedule of major components of costs incurred and a reconciliation of the liability balance | The following table summarizes the major components of the $109.2 million of restructuring costs incurred in connection with the Medicis acquisition since the acquisition date through December 31, 2014: | ||||||||||||||||||||
Employee Termination Costs | IPR&D | Contract | |||||||||||||||||||
Termination | Termination, | ||||||||||||||||||||
Costs | Facility Closure | ||||||||||||||||||||
Severance and | Share-Based | and Other Costs | Total | ||||||||||||||||||
Related Benefits | Compensation(1) | ||||||||||||||||||||
Balance, January 1, 2012 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Costs incurred and/or charged to expense | 85.3 | 77.3 | — | 0.4 | 163 | ||||||||||||||||
Cash payments | (78.0 | ) | (77.3 | ) | — | — | (155.3 | ) | |||||||||||||
Non-cash adjustments | 4.1 | — | — | (0.2 | ) | 3.9 | |||||||||||||||
Balance, December 31, 2012 | 11.4 | — | — | 0.2 | 11.6 | ||||||||||||||||
Costs incurred and/or charged to expense | 20 | — | — | 3.5 | 23.5 | ||||||||||||||||
Cash payments | (31.4 | ) | — | — | (3.6 | ) | (35.0 | ) | |||||||||||||
Non-cash adjustments | 0.3 | — | — | (0.1 | ) | 0.2 | |||||||||||||||
Balance, December 31, 2013(2) | $ | 0.3 | $ | — | $ | — | $ | — | $ | 0.3 | |||||||||||
____________________________________ | |||||||||||||||||||||
-1 | Relates to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control. These charges were reclassified to Other (income) expense to conform to the current year presentation. | ||||||||||||||||||||
-2 | The Company has not recognized any restructuring charges, and made a payment of $0.1 million, in the year ended December 31, 2014 with respect to the Medicis acquisition-related initiatives. |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of components and classification of financial assets and liabilities measured at fair value | The following fair value hierarchy table presents the components and classification of the Company’s financial assets and liabilities measured at fair value as of December 31, 2014 and 2013: | ||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Carrying | Quoted | Significant | Significant | Carrying | Quoted | Significant | Significant | ||||||||||||||||||||||||||
Value | Prices | Other | Unobservable | Value | Prices | Other | Unobservable | ||||||||||||||||||||||||||
in Active | Observable | Inputs | in Active | Observable | Inputs | ||||||||||||||||||||||||||||
Markets for | Inputs | (Level 3) | Markets for | Inputs | (Level 3) | ||||||||||||||||||||||||||||
Identical | (Level 2) | Identical | (Level 2) | ||||||||||||||||||||||||||||||
Assets | Assets | ||||||||||||||||||||||||||||||||
(Level 1) | (Level 1) | ||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Cash equivalents(1) | $ | 4.6 | $ | 2.8 | $ | 1.8 | $ | — | $ | 171.3 | $ | 171.3 | $ | — | $ | — | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Acquisition-related contingent consideration | $ | (308.8 | ) | $ | — | $ | — | $ | (308.8 | ) | $ | (355.8 | ) | $ | — | $ | — | $ | (355.8 | ) | |||||||||||||
___________________________________ | |||||||||||||||||||||||||||||||||
-1 | Cash equivalents include highly liquid investments with an original maturity of three months or less at acquisition, primarily including money market funds, reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. | ||||||||||||||||||||||||||||||||
Schedule of reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) | The following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013: | ||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Balance, beginning of year | $ | (355.8 | ) | $ | (455.1 | ) | |||||||||||||||||||||||||||
Included in net income (loss): | |||||||||||||||||||||||||||||||||
Arising during the year(1) | 14.1 | 29.2 | |||||||||||||||||||||||||||||||
Included in other comprehensive (loss) income: | |||||||||||||||||||||||||||||||||
Arising during the year | 4.1 | 5 | |||||||||||||||||||||||||||||||
Issuances(2) | (93.8 | ) | (76.1 | ) | |||||||||||||||||||||||||||||
Payments(3) | 116.8 | 141.2 | |||||||||||||||||||||||||||||||
Release from restricted cash | 5.8 | — | |||||||||||||||||||||||||||||||
Balance, end of year | $ | (308.8 | ) | $ | (355.8 | ) | |||||||||||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||||||||||
-1 | For the year ended December 31, 2014, a net gain of $14.1 million was recognized as Acquisition-related contingent consideration in the consolidated statements of income (loss). The acquisition-related contingent consideration net gain was primarily driven by net fair value adjustments of $19.0 million related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL in June 2011 (the “Elidel®/Xerese®/Zovirax® agreement”), as a result of continued assessment of the impact from generic competition on performance trends and future revenue forecasts for Zovirax®. | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2013, a net gain of $29.2 million was recognized as Acquisition-related contingent consideration in the consolidated statements of income (loss). The acquisition-related contingent consideration net gain was primarily driven by a net gain related to the Elidel®/Xerese®/Zovirax® agreement. As a result of analysis in the third quarter of 2013 of performance trends since the launch of a generic Zovirax® ointment in April 2013, the Company adjusted the projected revenue forecast, resulting in an acquisition-related contingent consideration net gain of $20.0 million in the year ended December 31, 2013. Also contributing to the acquisition-related contingent consideration net gain was a net gain of $6.9 million which resulted from the termination, in the third quarter of 2013, of the A007 (Lacrisert®) development program, which impacted the probability associated with potential milestone payments. The termination of this program also resulted in an IPR&D impairment charge in the third quarter of 2013, as described in note 10 titled “INTANGIBLE ASSETS AND GOODWILL”. | |||||||||||||||||||||||||||||||||
-2 | 2014 issuances relate primarily to the Solta Medical acquisition and other smaller acquisitions, and the 2013 issuances relate to smaller acquisitions. | ||||||||||||||||||||||||||||||||
-3 | The 2014 payments of acquisition-related contingent consideration relate to the OraPharma acquisition, the Elidel®/Xerese®/Zovirax® agreement, and other smaller acquisitions. The 2013 payments of acquisition-related contingent consideration related primarily to the Elidel®/Xerese®/Zovirax® agreement and the OraPharma and the Gerot Lannach acquisitions. See note 3 titled “BUSINESS COMBINATIONS”. |
TRADE_RECEIVABLES_NET_Tables
TRADE RECEIVABLES, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Schedule of trade receivables, net | The components of trade receivables, net as of December 31, 2014 and 2013 were as follows: | ||||||||
2014 | 2013 | ||||||||
Trade | $ | 2,111.70 | $ | 1,704.00 | |||||
Less allowance for doubtful accounts | (35.9 | ) | (27.6 | ) | |||||
$ | 2,075.80 | $ | 1,676.40 | ||||||
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of the components of inventories | The components of inventories as of December 31, 2014 and 2013 were as follows: | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 232.8 | $ | 221.8 | |||||
Work in process | 98 | 104.7 | |||||||
Finished goods | 732.7 | 656.3 | |||||||
1,063.50 | 982.8 | ||||||||
Less allowance for obsolescence | (112.9 | ) | (99.8 | ) | |||||
$ | 950.6 | $ | 883 | ||||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of property, plant and equipment | The major components of property, plant and equipment as of December 31, 2014 and 2013 were as follows: | ||||||||
2014 | 2013 | ||||||||
Land | $ | 79.6 | $ | 76.9 | |||||
Buildings | 602.8 | 607.1 | |||||||
Machinery and equipment | 1,081.30 | 1,062.70 | |||||||
Other equipment and leasehold improvements | 278 | 108.2 | |||||||
Equipment on operating lease | 32.7 | 28.6 | |||||||
Construction in progress | 214 | 189.5 | |||||||
2,288.40 | 2,073.00 | ||||||||
Less accumulated depreciation | (977.9 | ) | (838.8 | ) | |||||
$ | 1,310.50 | $ | 1,234.20 | ||||||
INTANGIBLE_ASSETS_AND_GOODWILL1
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Schedule of components of intangible assets | The major components of intangible assets as of December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
Weighted- | 2014 | 2013 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Useful | ||||||||||||||||||||||||||
Lives | ||||||||||||||||||||||||||
(Years) | Gross | Accumulated | Net | Gross | Accumulated | Net | ||||||||||||||||||||
Carrying | Amortization, | Carrying | Carrying | Amortization, | Carrying | |||||||||||||||||||||
Amount | Including | Amount | Amount | Including | Amount | |||||||||||||||||||||
Impairments | Impairments | |||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||||
Product brands | 9 | $ | 10,320.20 | $ | (3,579.8 | ) | $ | 6,740.40 | $ | 10,554.20 | $ | (2,729.1 | ) | $ | 7,825.10 | |||||||||||
Corporate brands | 14 | 364.2 | (65.2 | ) | 299 | 365.6 | (44.4 | ) | 321.2 | |||||||||||||||||
Product rights | 7 | 3,225.90 | (1,263.8 | ) | 1,962.10 | 3,021.00 | (876.9 | ) | 2,144.10 | |||||||||||||||||
Partner relationships | 4 | 223.1 | (107.5 | ) | 115.6 | 194 | (83.2 | ) | 110.8 | |||||||||||||||||
Out-licensed technology and other | 5 | 275.5 | (124.3 | ) | 151.2 | 264 | (93.8 | ) | 170.2 | |||||||||||||||||
Total finite-lived intangible assets(1) | 7 | 14,408.90 | (5,140.6 | ) | 9,268.30 | 14,398.80 | (3,827.4 | ) | 10,571.40 | |||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||||
Acquired IPR&D(2) | NA | 290.1 | — | 290.1 | 579.3 | — | 579.3 | |||||||||||||||||||
Corporate brand(3) | NA | 1,697.50 | — | 1,697.50 | 1,697.50 | — | 1,697.50 | |||||||||||||||||||
$ | 16,396.50 | $ | (5,140.6 | ) | $ | 11,255.90 | $ | 16,675.60 | $ | (3,827.4 | ) | $ | 12,848.20 | |||||||||||||
____________________________________ | ||||||||||||||||||||||||||
-1 | In the fourth quarter of 2014, the Company recognized a write-off of $55.2 million related to the Kinerase® product within the Developed Market segment. The write-off was driven by the discontinuation of the product. | |||||||||||||||||||||||||
In the third quarter of 2014, the Company recognized a write-off of $32.4 million related to Grifulvin®, an anti-fungal product within the Developed Markets segment. The write-off was driven by withdrawal of the supplemental Abbreviated New Drug Application, which resulted from assessment of extended timelines and increased costs associated with a change in the supplier and the manufacturing process, based on feedback received from the FDA. | ||||||||||||||||||||||||||
In the third quarter of 2013, the Company recognized an impairment charge of $551.6 million related to ezogabine/retigabine (immediate-release formulation), which is included within the Developed Markets segment. This product is co-developed and marketed under a collaboration agreement with GSK. For further information regarding this asset impairment charge, see note 6 titled “FAIR VALUE MEASUREMENTS”. | ||||||||||||||||||||||||||
In the first quarter of 2013, the Company recognized a write-off of $22.2 million related to Opana®, a pain relief medication approved in Canada (included in the Company’s Developed Markets segment), due to production issues arising in the first quarter of 2013. These production issues resulted in higher spending projections and delayed commercialization timelines which, in turn, triggered the Company’s decision to suspend its launch plans. The Company does not believe this program has value to a market participant. | ||||||||||||||||||||||||||
These impairment charges were recognized in Amortization and impairments of finite-lived intangible assets in the consolidated statements of income (loss). | ||||||||||||||||||||||||||
-2 | In the fourth quarter of 2013, the Company wrote-off an IPR&D asset of $14.4 million related to the termination of the Mapracorat development program (included in both the Emerging Markets and Developed Markets segments), acquired by the Company as part of B&L Acquisition, resulting from analysis of Phase 3 study results. | |||||||||||||||||||||||||
In the third quarter of 2013, the Company wrote off an IPR&D asset of $93.8 million relating to a modified-release formulation of ezogabine/retigabine. For further information regarding this write-off, see note 6 titled “FAIR VALUE MEASUREMENTS”. | ||||||||||||||||||||||||||
In addition, in the third quarter of 2013, the Company wrote-off IPR&D assets of $27.3 million, in the aggregate, due to the write-off of IPR&D assets mainly related to the termination of the A007 (Lacrisert®) development program (Developed Markets segment) in the third quarter of 2013. The Company does not believe these programs have value to a market participant. | ||||||||||||||||||||||||||
The write offs of the IPR&D assets were recognized in In-process research and development impairments and other charges in the consolidated statements of income (loss). | ||||||||||||||||||||||||||
-3 | Represents the B&L corporate trademark, which has an indefinite useful life and is not amortizable. See note 3 “BUSINESS COMBINATIONS” for further information. | |||||||||||||||||||||||||
Schedule of estimated aggregate amortization expense for each of the five succeeding years | Estimated aggregate amortization expense for each of the five succeeding years ending December 31 is as follows: | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||||
Amortization expense(1) | $ | 1,376.10 | $ | 1,280.10 | $ | 1,216.30 | $ | 1,093.60 | $ | 949.8 | ||||||||||||||||
____________________________________ | ||||||||||||||||||||||||||
-1 | Estimated amortization expense shown in the table above does not include potential future impairments of finite-lived intangible assets, if any. | |||||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill for years ended December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
Developed | Emerging | Total | ||||||||||||||||||||||||
Markets | Markets | |||||||||||||||||||||||||
Balance, December 31, 2012 | $ | 3,993.00 | $ | 1,148.40 | $ | 5,141.40 | ||||||||||||||||||||
Additions(1) | 3,395.70 | 1,199.50 | 4,595.20 | |||||||||||||||||||||||
Adjustments(2) | 28.4 | (0.3 | ) | 28.1 | ||||||||||||||||||||||
Foreign exchange and other | 11.6 | (24.2 | ) | (12.6 | ) | |||||||||||||||||||||
Balance, December 31, 2013 | 7,428.70 | 2,323.40 | 9,752.10 | |||||||||||||||||||||||
Additions(3) | 317.4 | 78.9 | 396.3 | |||||||||||||||||||||||
Adjustments(4) | (19.6 | ) | (4.3 | ) | (23.9 | ) | ||||||||||||||||||||
Divestitures(5) | (428.9 | ) | — | (428.9 | ) | |||||||||||||||||||||
Foreign exchange and other | (182.6 | ) | (166.6 | ) | (349.2 | ) | ||||||||||||||||||||
Balance, December 31, 2014 | $ | 7,115.00 | $ | 2,231.40 | $ | 9,346.40 | ||||||||||||||||||||
____________________________________ | ||||||||||||||||||||||||||
-1 | Primarily relates to the B&L, Obagi and Natur Produkt acquisitions. | |||||||||||||||||||||||||
-2 | Primarily reflects the impact of measurement period adjustments related to the Medicis acquisition. | |||||||||||||||||||||||||
-3 | Primarily relates to the PreCision and Solta Medical acquisitions. | |||||||||||||||||||||||||
-4 | Primarily reflects the impact of measurement period adjustments related to the B&L Acquisition. | |||||||||||||||||||||||||
-5 | See note 4, titled “DIVESTITURES” for additional information. |
ACCRUED_AND_OTHER_CURRENT_LIAB1
ACCRUED AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Liabilities, Current [Abstract] | |||||||||
Schedule of accrued liabilities | The major components of accrued and other current liabilities as of December 31, 2014 and 2013 were as follows: | ||||||||
2014 | 2013 | ||||||||
Product returns | $ | 380.3 | $ | 225.5 | |||||
Product rebates | 714.9 | 566.6 | |||||||
Interest | 196.7 | 231.3 | |||||||
Employee costs | 204.9 | 201.2 | |||||||
Accrued milestones(1) | 62 | — | |||||||
Professional fees | 55.6 | 46.3 | |||||||
Restructuring, integration and other costs (see note 5) | 66.6 | 112 | |||||||
Royalties | 41.4 | 37.6 | |||||||
Legal settlements and related fees (see note 20) | 8 | 55.9 | |||||||
Liabilities for uncertain tax positions | 6.8 | 8.7 | |||||||
Value added tax | 24.7 | 25.9 | |||||||
Short-term borrowings | 6.2 | 12.1 | |||||||
Deferred income | 18.8 | 19.5 | |||||||
Income taxes payable | 122.9 | 39.1 | |||||||
Capital expenditures | 25.6 | 27.2 | |||||||
Advertising and promotion | 33.3 | 19.3 | |||||||
Other | 210.7 | 172 | |||||||
$ | 2,179.40 | $ | 1,800.20 | ||||||
____________________________________ | |||||||||
-1 | Primarily relates to milestones associated with the agreements with Spear Dermatology Products Inc. (“Spear”). See note 21 titled "Commitments and Contingencies" for additional information. |
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Schedule of long-term debt | A summary of the Company’s consolidated long-term debt as of December 31, 2014 and 2013, respectively, is outlined in the table below: | ||||||||||
Maturity Date | 2014 | 2013 | |||||||||
Revolving Credit Facility(1) | April 2018 | $ | 165 | $ | — | ||||||
Series A-1 Tranche A Term Loan Facility, net of unamortized debt discount (2014 — $1.4; 2013 — $3.6)(1) | April 2016 | 139.6 | 259 | ||||||||
Series A-2 Tranche A Term Loan Facility, net of unamortized debt discount (2014 — $2.5; 2013 — $6.2)(1) | Apr-16 | 135.7 | 228.1 | ||||||||
Series A-3 Tranche A Term Loan Facility, net of unamortized debt discount (2014 — $22.4; 2013 - $35.4)(1) | Oct-18 | 1,637.90 | 1,935.70 | ||||||||
Series D-2 Tranche B Term Loan Facility, net of unamortized debt discount of (2014 — $18.9; 2013 — $27.0)(1) | Feb-19 | 1,089.70 | 1,256.70 | ||||||||
Series C-2 Tranche B Term Loan Facility, net of unamortized debt discount of (2014 — $14.5; 2013 — $20.7)(1) | Dec-19 | 838.3 | 966.8 | ||||||||
Series E-1 Tranche B Term Loan Facility, net of unamortized debt discount (2014 — $2.9; 2013 — $85.5)(1) | Aug-20 | 2,544.90 | 3,090.50 | ||||||||
Senior Notes: | |||||||||||
6.75%, net of unamortized debt discount (2013 — $1.3) | October 2017 | — | 498.7 | ||||||||
6.875%, net of unamortized debt discount (2014 — $1.9; 2013 — $4.4)(2) | December 2018 | 497.7 | 940.2 | ||||||||
7.00%, net of unamortized debt discount (2014 — $2.5; 2013 — $2.9) | October 2020 | 687.5 | 687.1 | ||||||||
6.75% | August 2021 | 650 | 650 | ||||||||
7.25%, net of unamortized debt discount (2014 — $6.8; 2013 — $7.8) | July 2022 | 543.2 | 542.2 | ||||||||
6.375%, net of unamortized discount (2014 — $24.4; 2013 — $28.6) | Oct-20 | 2,225.60 | 2,221.40 | ||||||||
6.75%, net of unamortized discount (2014 — $14.2; 2013 — $18.2) | Aug-18 | 1,585.80 | 1,581.90 | ||||||||
7.50%, net of unamortized discount (2014 — $16.6; 2013 — $19.1) | Jul-21 | 1,608.40 | 1,605.90 | ||||||||
5.625%, net of unamortized discount (2014 — $7.4; 2013 — $8.5) | Dec-21 | 892.6 | 891.5 | ||||||||
Other(3) | Various | 12.7 | 12 | ||||||||
15,254.60 | 17,367.70 | ||||||||||
Less current portion | (0.9 | ) | (204.8 | ) | |||||||
Total long-term debt | $ | 15,253.70 | $ | 17,162.90 | |||||||
____________________________________ | |||||||||||
-1 | Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement, as amended (the “Credit Agreement”). | ||||||||||
-2 | On February 17, 2015, Valeant redeemed all of the outstanding $499.6 million aggregate principal amount of its 6.875% senior notes due December 2018 (the “December 2018 Notes”) with a portion of the net proceeds from the issuance of the 5.50% senior notes due 2023 (the “2023 Notes”) on January 30, 2015. See note 24 titled “SUBSEQUENT EVENTS” for further information. | ||||||||||
-3 | Relates primarily to the debentures assumed in the B&L Acquisition, as described in note 3 titled “BUSINESS COMBINATIONS”. | ||||||||||
Schedule of aggregate maturities of long-term debt | Aggregate maturities of our long-term debt for each of the five succeeding years ending December 31 and thereafter are as follows: | ||||||||||
2015 | $ | 0.9 | |||||||||
2016 | 639.3 | ||||||||||
2017 | 360.2 | ||||||||||
2018 | 3,204.50 | ||||||||||
2019 | 1,961.40 | ||||||||||
Thereafter | 9,224.70 | ||||||||||
Total gross maturities | 15,391.00 | ||||||||||
Unamortized discounts | (136.4 | ) | |||||||||
Total long-term debt | $ | 15,254.60 | |||||||||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of amounts recognized in accumulated other comprehensive loss | The table below presents the amounts recognized in accumulated other comprehensive loss as of December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Unrecognized actuarial (losses) gains | $ | (18.2 | ) | $ | 11.2 | $ | (72.9 | ) | $ | 12.7 | $ | (3.8 | ) | $ | 1 | ||||||||||
Unrecognized prior service credits(1) | — | — | 26.8 | — | 25.5 | 27.9 | |||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Relate to negative plan amendments, as described below. | ||||||||||||||||||||||||
Components of net periodic benefit cost | The following table provides the components of net periodic (benefit) cost for the Company’s defined benefit pension plans and postretirement benefit plan for the year ended December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Service cost | $ | 0.4 | $ | 0.1 | $ | 3.9 | $ | 2.2 | $ | 1.7 | $ | 0.9 | |||||||||||||
Interest cost | 10.8 | 4.5 | 8.3 | 3.7 | 2.3 | 1.6 | |||||||||||||||||||
Expected return on plan assets | (14.7 | ) | (5.9 | ) | (7.7 | ) | (3.1 | ) | (0.5 | ) | (0.3 | ) | |||||||||||||
Amortization of net gain | — | — | (0.2 | ) | — | — | — | ||||||||||||||||||
Curtailment gain recognized | — | — | (1.6 | ) | — | — | — | ||||||||||||||||||
Amortization of prior service credit | — | — | — | — | (2.5 | ) | — | ||||||||||||||||||
Settlement loss (gain) recognized | 0.9 | (0.1 | ) | 0.2 | 0.6 | — | — | ||||||||||||||||||
Other | — | — | 0.2 | — | — | — | |||||||||||||||||||
Net periodic (benefit) cost | $ | (2.6 | ) | $ | (1.4 | ) | $ | 3.1 | $ | 3.4 | $ | 1 | $ | 2.2 | |||||||||||
Components of the change in projected benefit obligations, change in plan assets and funded status | The table below presents components of the change in projected benefit obligation, change in plan assets and funded status at December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan(1) | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Change in Projected benefit Obligation | |||||||||||||||||||||||||
Projected benefit obligation, beginning of year | $ | 234.6 | $ | — | $ | 229.7 | $ | 7 | $ | 59.2 | $ | — | |||||||||||||
Service cost | 0.4 | 0.1 | 3.9 | 2.2 | 1.7 | 0.9 | |||||||||||||||||||
Interest cost | 10.8 | 4.5 | 8.3 | 3.7 | 2.3 | 1.6 | |||||||||||||||||||
Acquisition of B&L | — | 244.2 | — | 224 | — | 87.6 | |||||||||||||||||||
Employee contributions | — | — | — | — | 1.2 | 0.3 | |||||||||||||||||||
Plan amendments(2) | — | — | (29.4 | ) | — | — | (27.9 | ) | |||||||||||||||||
Plan curtailments | — | — | (1.6 | ) | — | — | — | ||||||||||||||||||
Settlements(3) | (13.0 | ) | (5.3 | ) | (0.4 | ) | (0.1 | ) | — | — | |||||||||||||||
Benefits paid | (10.4 | ) | (4.3 | ) | (6.2 | ) | (3.6 | ) | (8.1 | ) | (3.0 | ) | |||||||||||||
Actuarial losses (gains) | 29.4 | (4.6 | ) | 101.9 | (10.1 | ) | 5.9 | (0.3 | ) | ||||||||||||||||
Currency translation adjustments | — | — | (33.8 | ) | 6.6 | — | — | ||||||||||||||||||
Other | — | — | 0.2 | — | — | — | |||||||||||||||||||
Projected benefit obligation, end of year | 251.8 | 234.6 | 272.6 | 229.7 | 62.2 | 59.2 | |||||||||||||||||||
Change in Plan Assets | |||||||||||||||||||||||||
Fair value of plan assets, beginning of year | $ | 197.3 | $ | — | $ | 139.1 | $ | 1.3 | $ | 14.5 | $ | — | |||||||||||||
Actual return on plan assets | 13.8 | 12.7 | 17.5 | 5.1 | 1.5 | 1.1 | |||||||||||||||||||
Employee contributions | — | — | — | — | 1.2 | 0.3 | |||||||||||||||||||
Company contributions | 8.9 | 3.3 | 8.4 | 7 | — | — | |||||||||||||||||||
Acquisition of B&L | — | 190.9 | — | 125.6 | — | 16.1 | |||||||||||||||||||
Settlements(3) | (13.0 | ) | (5.3 | ) | (0.4 | ) | (0.1 | ) | — | — | |||||||||||||||
Benefits paid | (10.4 | ) | (4.3 | ) | (6.2 | ) | (3.6 | ) | (8.1 | ) | (3.0 | ) | |||||||||||||
Currency translation adjustments | — | — | (17.9 | ) | 3.8 | — | — | ||||||||||||||||||
Fair value of plan assets, end of year | 196.6 | 197.3 | 140.5 | 139.1 | 9.1 | 14.5 | |||||||||||||||||||
Funded Status at end of year | $ | (55.2 | ) | $ | (37.3 | ) | $ | (132.1 | ) | $ | (90.6 | ) | $ | (53.1 | ) | $ | (44.7 | ) | |||||||
Recognized as: | |||||||||||||||||||||||||
Other long-term assets, net | $ | — | $ | — | $ | 1.4 | $ | 1.5 | $ | — | $ | — | |||||||||||||
Accrued and other current liabilities | — | — | (2.0 | ) | (2.1 | ) | — | — | |||||||||||||||||
Pension and other benefit liabilities | (55.2 | ) | (37.3 | ) | (131.5 | ) | (90.0 | ) | (53.1 | ) | (44.7 | ) | |||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Assumed in connection with the B&L Acquisition, as described above. | ||||||||||||||||||||||||
-2 | In December 2014, one of the Ireland plans was amended effective August 2014 to eliminate future benefit accruals related to salary increases. The reduction in accruing benefits was accounted for as a negative plan amendment resulting in an accumulated benefit obligation reduction that was recognized as a component of accumulated other comprehensive loss and is being amortized into income over approximately 42.5 years. In the fourth quarter of 2013, the Company announced that effective January 1, 2014, B&L will no longer offer medical and life insurance coverage to new retirees. The reduction in medical benefits was accounted for as a negative plan amendment resulting in an accumulated postretirement benefit obligation reduction that was recognized as a component of accumulated other comprehensive loss and is being amortized into income over approximately 11.3 years. | ||||||||||||||||||||||||
-3 | The 2014 and 2013 plan settlements primarily reflect lump sum benefit payments made to terminating employees of the U.S. pension benefit plan. | ||||||||||||||||||||||||
Schedule of underfunded plans | Information for the underfunded plans is presented in the following table: | ||||||||||||||||||||||||
Pension Benefit Plans | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Projected benefit obligation | $ | 251.8 | $ | 234.6 | $ | 266.4 | $ | 224.1 | |||||||||||||||||
Accumulated benefit obligation | 251.8 | 234.6 | 257.3 | 196.3 | |||||||||||||||||||||
Fair value of plan assets | 196.6 | 197.3 | 133.1 | 132.2 | |||||||||||||||||||||
Information for the pension benefit plans that are underfunded on a projected benefit obligation basis (versus underfunded on an accumulated benefit basis as in the table above) is presented in the following table: | |||||||||||||||||||||||||
Pension Benefit Plans | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Projected benefit obligation | $ | 251.8 | $ | 234.6 | $ | 267.9 | $ | 225.5 | |||||||||||||||||
Fair value of plan assets | 196.6 | 197.3 | 134.3 | 133.4 | |||||||||||||||||||||
Future benefit payments for the pension benefit plans | Future benefit payments over the next 10 years for the pension benefit plans and the postretirement benefit plan, which reflect expected future service, as appropriate, are expected to be paid as follows: | ||||||||||||||||||||||||
Pension Benefit Plans | Postretirement | ||||||||||||||||||||||||
Benefit | |||||||||||||||||||||||||
U.S. Plan | Non-U.S. Plans | Plan | |||||||||||||||||||||||
2015 | $ | 13.4 | $ | 5 | $ | 6.8 | |||||||||||||||||||
2016 | 18.9 | 3.9 | 6.4 | ||||||||||||||||||||||
2017 | 18.9 | 4.4 | 5.9 | ||||||||||||||||||||||
2018 | 18.2 | 4.4 | 5.4 | ||||||||||||||||||||||
2019 | 17.7 | 5.4 | 5 | ||||||||||||||||||||||
2020-2024 | 85.1 | 37.7 | 20.1 | ||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit costs and benefit obligations | The weighted-average assumptions used to determine net periodic benefit costs and benefit obligations at December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||
Pension Benefit | Postretirement | ||||||||||||||||||||||||
Plans | Benefit Plan(1) | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
For Determining Net Periodic Benefit Cost | |||||||||||||||||||||||||
U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 4.7 | % | 4.5 | % | 4.3 | % | (2) | 4.5 | % | ||||||||||||||||
Expected rate of return on plan assets | 7.5 | % | 7.5 | % | 5.5 | % | 5.5 | % | |||||||||||||||||
Rate of compensation increase | — | — | — | — | |||||||||||||||||||||
Non-U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 3.86 | % | 3.61 | % | |||||||||||||||||||||
Expected rate of return on plan assets | 5.63 | % | 5.59 | % | |||||||||||||||||||||
Rate of compensation increase | 2.88 | % | 2.8 | % | |||||||||||||||||||||
For Determining Benefit Obligation | |||||||||||||||||||||||||
U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 3.9 | % | 4.7 | % | 3.7 | % | 4.3 | % | |||||||||||||||||
Rate of compensation increase | — | — | — | — | |||||||||||||||||||||
Non-U.S. Plans: | |||||||||||||||||||||||||
Discount rate | 2.41 | % | 3.85 | % | |||||||||||||||||||||
Rate of compensation increase | 2.86 | % | 2.88 | % | |||||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | The Company does not have non-U.S. postretirement benefit plans. | ||||||||||||||||||||||||
-2 | The discount rate for the postretirement benefit plan was impacted by the amendment described above which eliminated coverage for new retirees. | ||||||||||||||||||||||||
Target asset allocations | Pension and postretirement benefit plan assets are invested in several asset categories. The following presents the actual asset allocation as of December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension Benefit | Postretirement | ||||||||||||||||||||||||
Plans | Benefit Plan | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
U.S. Plan | |||||||||||||||||||||||||
Equity securities | 60 | % | 60 | % | 45 | % | 63 | % | |||||||||||||||||
Fixed income securities | 40 | % | 40 | % | 16 | % | 24 | % | |||||||||||||||||
Cash | — | % | — | % | 39 | % | 13 | % | |||||||||||||||||
Non-U.S. Plans | |||||||||||||||||||||||||
Equity securities | 44 | % | 43 | % | |||||||||||||||||||||
Fixed income securities | 42 | % | 47 | % | |||||||||||||||||||||
Other | 14 | % | 10 | % | |||||||||||||||||||||
Fair value of pension and postretirement benefit plan assets assumed in connection with the Acquisition | The table below presents total plan assets by investment category as of December 31, 2014 and 2013 and the classification of each investment category within the fair value hierarchy with respect to the inputs used to measure fair value: | ||||||||||||||||||||||||
Pension Benefit Plans - U.S. Plans | |||||||||||||||||||||||||
Assets | Quoted | Significant | Significant | Total | |||||||||||||||||||||
Prices in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 1.3 | $ | — | $ | — | $ | 1.3 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
U.S. broad market | — | 74.9 | — | 74.9 | |||||||||||||||||||||
Emerging markets | — | 15.9 | — | 15.9 | |||||||||||||||||||||
Non-U.S. developed markets | — | 25.5 | — | 25.5 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 59.4 | — | 59.4 | |||||||||||||||||||||
Global high yield | — | 19.6 | — | 19.6 | |||||||||||||||||||||
$ | 1.3 | $ | 195.3 | $ | — | $ | 196.6 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 0.4 | $ | — | $ | — | $ | 0.4 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
U.S. broad market | — | 72.7 | — | 72.7 | |||||||||||||||||||||
Emerging markets | — | 16.5 | — | 16.5 | |||||||||||||||||||||
Non-U.S. developed markets | — | 27.9 | — | 27.9 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 59 | — | 59 | |||||||||||||||||||||
Global high yield | — | 20.8 | — | 20.8 | |||||||||||||||||||||
$ | 0.4 | $ | 196.9 | $ | — | $ | 197.3 | ||||||||||||||||||
Pension Benefit Plans - Non-U.S. Plans | |||||||||||||||||||||||||
Assets | Quoted | Significant | Significant | Total | |||||||||||||||||||||
Prices in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 14 | $ | — | $ | — | $ | 14 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Emerging markets | — | 1 | — | 1 | |||||||||||||||||||||
Worldwide developed markets | — | 61.5 | — | 61.5 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 11.2 | — | 11.2 | |||||||||||||||||||||
Global high yield | — | 1 | — | 1 | |||||||||||||||||||||
Government bond funds | — | 46.4 | — | 46.4 | |||||||||||||||||||||
Other assets | — | 5.4 | — | 5.4 | |||||||||||||||||||||
$ | 14 | $ | 126.5 | $ | — | $ | 140.5 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Cash & cash equivalents(1) | $ | 9.3 | $ | — | $ | — | $ | 9.3 | |||||||||||||||||
Commingled funds:(2)(3) | |||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||
Emerging markets | — | 0.9 | — | 0.9 | |||||||||||||||||||||
Worldwide developed markets | — | 59.2 | — | 59.2 | |||||||||||||||||||||
Fixed income securities: | |||||||||||||||||||||||||
Investment grade | — | 21.3 | — | 21.3 | |||||||||||||||||||||
Global high yield | — | 0.7 | — | 0.7 | |||||||||||||||||||||
Government bond funds | — | 42.5 | — | 42.5 | |||||||||||||||||||||
Other assets | — | 5.2 | — | 5.2 | |||||||||||||||||||||
$ | 9.3 | $ | 129.8 | $ | — | $ | 139.1 | ||||||||||||||||||
Postretirement Benefit Plan | |||||||||||||||||||||||||
Assets | Quoted | Significant | Significant | Total | |||||||||||||||||||||
Prices in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Assets | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Cash | $ | 3.5 | $ | — | $ | — | $ | 3.5 | |||||||||||||||||
Insurance policies(4) | — | 5.6 | — | 5.6 | |||||||||||||||||||||
$ | 3.5 | $ | 5.6 | $ | — | $ | 9.1 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Cash | $ | 1.8 | $ | — | $ | — | $ | 1.8 | |||||||||||||||||
Insurance policies(4) | — | 12.7 | — | 12.7 | |||||||||||||||||||||
$ | 1.8 | $ | 12.7 | $ | — | $ | 14.5 | ||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Cash equivalents consisted primarily of term deposits and money market instruments. The fair value of the term deposits approximates their carrying amounts due to their short term maturities. The money market instruments also have short maturities and are valued using a market approach based on the quoted market prices of identical instruments. | ||||||||||||||||||||||||
-2 | Commingled funds are not publicly traded. The underlying assets in these funds are publicly traded on the exchanges and have readily available price quotes. The Ireland pension plans held approximately 85% of the non-U.S. commingled funds in both 2014 and 2013. The commingled funds held by the U.S. and Ireland pension plans are primarily invested in index funds. | ||||||||||||||||||||||||
-3 | The underlying assets in the fixed income funds are generally valued using the net asset value per fund share, which is derived using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades. | ||||||||||||||||||||||||
-4 | The insurance policies held by the postretirement benefit plan consist of variable life insurance contracts whose fair value is their cash surrender value. Cash surrender value is the amount currently payable by the insurance company upon surrender of the policy and is based principally on the net asset values of the underlying trust funds. The trust funds are commingled funds that are not publicly traded. The underlying assets in these funds are primarily publicly traded on exchanges and have readily available price quotes. | ||||||||||||||||||||||||
Health care cost trend rate assumptions | The health care cost trend rate assumptions for the postretirement benefit plan are as follows: | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Health care cost trend rate assumed for next year | 7.31 | % | 7.57 | % | |||||||||||||||||||||
Rate to which the cost trend rate is assumed to decline | 4.5 | % | 4.5 | % | |||||||||||||||||||||
Year that the rate reaches the ultimate trend rate | 2029 | 2029 | |||||||||||||||||||||||
One percentage point change in health care cost trend rate | A one percentage point change in health care cost trend rate would have had the following effects: | ||||||||||||||||||||||||
One Percentage Point | |||||||||||||||||||||||||
Increase | Decrease | ||||||||||||||||||||||||
Effect on benefit obligations | $ | 1 | $ | 0.9 | |||||||||||||||||||||
SHAREBASED_COMPENSATION_Tables
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Summary of the components and classification of share-based compensation expense | The following table summarizes the components and classification of share-based compensation expense related to stock options and RSUs: | |||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Stock options | $ | 18.2 | $ | 17.3 | $ | 21.7 | ||||||||
RSUs | 60 | 28.2 | 44.5 | |||||||||||
Share-based compensation expense | $ | 78.2 | $ | 45.5 | $ | 66.2 | ||||||||
Research and development expenses | $ | 5.6 | $ | — | $ | 0.7 | ||||||||
Selling, general and administrative expenses | 72.6 | 45.5 | 65.5 | |||||||||||
Share-based compensation expense | $ | 78.2 | $ | 45.5 | $ | 66.2 | ||||||||
Schedule of weighted-average assumption as of the date of grant using the Black Scholes option-pricing model | The fair values of all stock options granted during the years ended December 31, 2014, 2013 and 2012 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: | |||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Expected stock option life (years)(1) | 5.8 | 4 | 4 | |||||||||||
Expected volatility(2) | 43 | % | 40.1 | % | 44.9 | % | ||||||||
Risk-free interest rate(3) | 1.8 | % | 1 | % | 0.5 | % | ||||||||
Expected dividend yield(4) | — | % | — | % | — | % | ||||||||
____________________________________ | ||||||||||||||
-1 | Determined based on historical exercise and forfeiture patterns. | |||||||||||||
-2 | Determined based on implied volatility in the market traded options of the Company’s common stock. | |||||||||||||
-3 | Determined based on the rate at the time of grant for zero-coupon U.S. or Canadian government bonds with maturity dates equal to the expected life of the stock option. | |||||||||||||
-4 | Determined based on the stock option’s exercise price and expected annual dividend rate at the time of grant. | |||||||||||||
Summary of stock option activity | The following table summarizes stock option activity during the year ended December 31, 2014: | |||||||||||||
Options | Weighted- | Weighted- | Aggregate | |||||||||||
Average | Average | Intrinsic | ||||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Term | ||||||||||||||
(Years) | ||||||||||||||
Outstanding, January 1, 2014 | 8.6 | $ | 30.19 | |||||||||||
Granted | 0.3 | 117.82 | ||||||||||||
Exercised | (0.8 | ) | 21.78 | |||||||||||
Expired or forfeited | (0.4 | ) | 74.88 | |||||||||||
Outstanding, December 31, 2014 | 7.7 | $ | 31.44 | 4.8 | $ | 852.6 | ||||||||
Vested and exercisable, December 31, 2014 | 5.7 | $ | 17.75 | 4 | $ | 720.6 | ||||||||
Summary of non-vested time-based RSU activity | The following table summarizes non-vested time-based RSU activity during the year ended December 31, 2014: | |||||||||||||
Time-Based | Weighted- | |||||||||||||
RSUs | Average | |||||||||||||
Grant-Date | ||||||||||||||
Fair Value | ||||||||||||||
Non-vested, January 1, 2014 | 0.9 | $ | 39.11 | |||||||||||
Granted | 0.1 | 137.71 | ||||||||||||
Vested | (0.1 | ) | 54.6 | |||||||||||
Non-vested, December 31, 2014 | 0.9 | $ | 51.34 | |||||||||||
Schedule of assumptions used to calculate the fair values of performance-based RSUs | The fair values of performance-based RSUs granted during the years ended December 31, 2014, 2013 and 2012 were estimated with the following assumptions: | |||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Contractual term (years) | 2.6 - 6.3 | 2.8 - 4.3 | 2.9 - 4.3 | |||||||||||
Expected Company share volatility(1) | 38.7% - 45.4% | 36.1% - 44.4% | 42.5% - 52.3% | |||||||||||
Risk-free interest rate(2) | 0.8% - 2.3% | 0.5% - 1.3% | 0.6% - 1.0% | |||||||||||
____________________________________ | ||||||||||||||
-1 | Determined based on historical volatility over the contractual term of the performance-based RSU. | |||||||||||||
-2 | Determined based on the rate at the time of grant for zero-coupon U.S. government bonds with maturity dates equal to the contractual term of the performance-based RSUs. | |||||||||||||
Summary of non-vested performance-based RSU activity | The following table summarizes non-vested performance-based RSU activity during the year ended December 31, 2014: | |||||||||||||
Performance- | Weighted- | |||||||||||||
Based RSUs | Average | |||||||||||||
Grant-Date | ||||||||||||||
Fair Value | ||||||||||||||
Non-vested, January 1, 2014 | 1 | $ | 102.22 | |||||||||||
Granted | 0.5 | 219.79 | ||||||||||||
Vested | (0.2 | ) | 61.8 | |||||||||||
Forfeited | (0.1 | ) | 136.59 | |||||||||||
Non-vested, December 31, 2014 | 1.2 | $ | 160.44 | |||||||||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||||||||||||||||||||||||
Schedule of the components of accumulated other comprehensive loss | The components of accumulated other comprehensive loss income as of December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
Foreign | Unrealized | Net | Net | Pension | Total | ||||||||||||||||||||
Currency | Gain on | Unrealized | Unrealized | Adjustment | |||||||||||||||||||||
Translation | Equity | Holding | Holding | ||||||||||||||||||||||
Adjustment | Investment | Gain | Loss | ||||||||||||||||||||||
on Available- | on Available- | ||||||||||||||||||||||||
For-Sale | For-Sale | ||||||||||||||||||||||||
Equity | Debt | ||||||||||||||||||||||||
Securities | Securities | ||||||||||||||||||||||||
Balance, January 1, 2012 | $ | (280.5 | ) | $ | — | $ | 1.6 | $ | (0.2 | ) | $ | (0.5 | ) | $ | (279.6 | ) | |||||||||
Foreign currency translation adjustment | 161 | — | — | — | — | 161 | |||||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities | — | — | 0.4 | — | — | 0.4 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | — | (1.6 | ) | 0.2 | — | (1.4 | ) | |||||||||||||||||
Pension adjustment(2) | — | — | — | — | 0.2 | 0.2 | |||||||||||||||||||
Balance, December 31, 2012 | (119.5 | ) | — | 0.4 | — | (0.3 | ) | (119.4 | ) | ||||||||||||||||
Foreign currency translation adjustment | (50.8 | ) | — | — | — | — | (50.8 | ) | |||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities | — | — | 3.6 | — | — | 3.6 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | — | (4.0 | ) | — | — | (4.0 | ) | |||||||||||||||||
Pension adjustment, net of tax(2) | — | — | — | — | 37.8 | 37.8 | |||||||||||||||||||
Balance, December 31, 2013 | (170.3 | ) | — | — | — | 37.5 | (132.8 | ) | |||||||||||||||||
Foreign currency translation adjustment | (716.2 | ) | — | — | — | — | (716.2 | ) | |||||||||||||||||
Unrealized gain on equity method investment, net of tax | — | 51.3 | — | — | — | 51.3 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | (51.3 | ) | — | — | — | (51.3 | ) | |||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities, net of tax | — | — | 1.8 | — | — | 1.8 | |||||||||||||||||||
Reclassification to net income (loss)(1) | — | — | (1.8 | ) | — | — | (1.8 | ) | |||||||||||||||||
Pension adjustment, net of tax(2) | — | — | — | — | (66.9 | ) | (66.9 | ) | |||||||||||||||||
Balance, December 31, 2014 | $ | (886.5 | ) | $ | — | $ | — | $ | — | $ | (29.4 | ) | $ | (915.9 | ) | ||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Included in gain on investments, net. | ||||||||||||||||||||||||
-2 | Reflects changes in defined benefit obligations and related plan assets of the Company’s defined benefit pension plans and the U.S. postretirement benefit plan (as described in note 13). |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Components of loss before recovery of income taxes | The components of income (loss) before provision for (recovery of) income taxes were as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Domestic | $ | (851.1 | ) | $ | (574.5 | ) | $ | (205.6 | ) | ||||
Foreign | 1,943.70 | (739.9 | ) | (188.6 | ) | ||||||||
$ | 1,092.60 | $ | (1,314.4 | ) | $ | (394.2 | ) | ||||||
Components of recovery of income taxes | The components of provision for (recovery of) income taxes were as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Domestic | $ | 0.6 | $ | 3.4 | $ | 7.2 | |||||||
Foreign | 150.1 | 80 | 56.3 | ||||||||||
150.7 | 83.4 | 63.5 | |||||||||||
Deferred: | |||||||||||||
Domestic | — | — | (11.9 | ) | |||||||||
Foreign | 29.7 | (534.2 | ) | (329.8 | ) | ||||||||
29.7 | (534.2 | ) | (341.7 | ) | |||||||||
$ | 180.4 | $ | (450.8 | ) | $ | (278.2 | ) | ||||||
Reconciliation of reported recovery of income taxes from the expected amount calculated by applying the Canadian statutory rate to income before recovery of income taxes | The reasons for this difference and the related tax effects are as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Income (loss) before provision for (recovery of) income taxes | $ | 1,092.60 | $ | (1,314.4 | ) | $ | (394.2 | ) | |||||
Expected Canadian statutory rate | 26.9 | % | 26.9 | % | 26.9 | % | |||||||
Expected provision for (recovery) of income taxes | 293.9 | (353.6 | ) | (106.0 | ) | ||||||||
Non-deductible amounts: | |||||||||||||
Amortization | — | — | 6.2 | ||||||||||
Share-based compensation | 19.8 | 13.1 | 6.3 | ||||||||||
Merger and acquisition costs | — | 1.1 | 24.2 | ||||||||||
In-process research and development | — | — | 3.2 | ||||||||||
Non-taxable gain on disposal of investments | (50.1 | ) | — | (3.1 | ) | ||||||||
Changes in enacted income tax rates | 29.7 | 6.6 | (4.5 | ) | |||||||||
Canadian dollar foreign exchange gain for Canadian tax purposes | 22.8 | 0.6 | 9.1 | ||||||||||
Change in valuation allowance related to foreign tax credits and net operating losses | 17.4 | 70.2 | — | ||||||||||
Change in valuation allowance on Canadian deferred tax assets and | 255.2 | 143.9 | (34.2 | ) | |||||||||
tax rate changes | |||||||||||||
Change in uncertain tax positions | (1.8 | ) | — | 15.4 | |||||||||
Foreign tax rate differences | (502.8 | ) | (407.6 | ) | (226.8 | ) | |||||||
Unrecognized income tax benefit of losses | — | — | 32 | ||||||||||
Withholding taxes on foreign income | 3.7 | 3.4 | 8 | ||||||||||
Alternative minimum and other taxes | — | — | (4.5 | ) | |||||||||
Taxable foreign income | 269 | 55.4 | 10.7 | ||||||||||
Tax benefit on intra-entity transfers | (147.3 | ) | (5.7 | ) | (10.4 | ) | |||||||
Other | (29.1 | ) | 21.8 | (3.8 | ) | ||||||||
$ | 180.4 | $ | (450.8 | ) | $ | (278.2 | ) | ||||||
Schedule of tax effect of major items recorded as deferred tax assets and liabilities | The tax effect of major items recorded as deferred tax assets and liabilities is as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Tax loss carryforwards | $ | 958.3 | $ | 957.7 | |||||||||
Tax credit carryforwards | 234.9 | 126.4 | |||||||||||
Scientific Research and Experimental Development pool | 58.2 | 62.9 | |||||||||||
Research and development tax credits | 90.5 | 83.7 | |||||||||||
Provisions | 369.9 | 577.5 | |||||||||||
Plant, equipment and technology | 2.8 | 38.3 | |||||||||||
Deferred revenue | 13.5 | 12.5 | |||||||||||
Deferred financing and share issue costs | 209.4 | — | |||||||||||
Share-based compensation | 49.8 | 43 | |||||||||||
Other | 38.2 | 76.5 | |||||||||||
Total deferred tax assets | 2,025.50 | 1,978.50 | |||||||||||
Less valuation allowance | (859.2 | ) | (477.6 | ) | |||||||||
Net deferred tax assets | 1,166.30 | 1,500.90 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Intangible assets | 520 | 2,884.30 | |||||||||||
Outside basis differences | 2,636.60 | 563.8 | |||||||||||
Deferred financing and share issue costs | — | 16.6 | |||||||||||
Prepaid expenses | 0.6 | (0.4 | ) | ||||||||||
Total deferred tax liabilities | 3,157.20 | 3,464.30 | |||||||||||
Net deferred income taxes | $ | (1,990.9 | ) | $ | (1,963.4 | ) | |||||||
Summary of open tax years by jurisdiction | |||||||||||||
Jurisdiction: | Open Years | ||||||||||||
United States - Federal | 2011 - 2013 | ||||||||||||
Canada | 2005 - 2013 | ||||||||||||
Brazil | 2009 - 2013 | ||||||||||||
Germany | 2011 - 2013 | ||||||||||||
France | 2011 - 2013 | ||||||||||||
China | 2009 -2013 | ||||||||||||
Ireland | 2009 - 2013 | ||||||||||||
Netherlands | 2011 - 2013 | ||||||||||||
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance, beginning of year | $ | 247.5 | $ | 128 | $ | 102.3 | |||||||
Acquisition of B&L | — | 52.2 | — | ||||||||||
Acquisition of Medicis | — | — | 6.6 | ||||||||||
Additions based on tax positions related to the current year | 143 | 60.7 | 3.5 | ||||||||||
Additions for tax positions of prior years | 12.8 | 19.4 | 19 | ||||||||||
Reductions for tax positions of prior years | (50.2 | ) | (10.8 | ) | (1.4 | ) | |||||||
Lapse of statute of limitations | (8.1 | ) | (2.0 | ) | (2.0 | ) | |||||||
Balance, end of year | $ | 345 | $ | 247.5 | $ | 128 | |||||||
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Schedule of calculation of earnings per share | Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc. for the years ended December 31, 2014, 2013 and 2012 were calculated as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | $ | 913.5 | $ | (866.1 | ) | $ | (116.0 | ) | |||||
Basic weighted-average number of common shares outstanding | 335.4 | 321 | 305.4 | ||||||||||
Dilutive effect of stock options and RSUs | 6.1 | — | — | ||||||||||
Diluted weighted-average number of common shares outstanding | 341.5 | 321 | 305.4 | ||||||||||
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||||||||||||
Basic | $ | 2.72 | $ | (2.70 | ) | $ | (0.38 | ) | |||||
Diluted | $ | 2.67 | $ | (2.70 | ) | $ | (0.38 | ) | |||||
Schedule of dilutive effect of stock options, RSUs and Convertible Notes on weighted-average number of common shares outstanding | The dilutive effect of potential common shares issuable for stock options, RSUs and convertible notes on the weighted-average number of common shares outstanding would have been as follows: | ||||||||||||
2013 | 2012 | ||||||||||||
Basic weighted-average number of common shares outstanding | 321 | 305.4 | |||||||||||
Dilutive effect of stock options and RSUs | 6.5 | 7.2 | |||||||||||
Dilutive effect of convertible notes | — | 0.5 | |||||||||||
Diluted weighted-average number of common shares outstanding | 327.5 | 313.1 | |||||||||||
SUPPLEMENTAL_CASH_FLOW_DISCLOS1
SUPPLEMENTAL CASH FLOW DISCLOSURES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||
Schedule of interest and income taxes paid | Interest and income taxes paid during the years ended December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Interest paid | $ | 934 | $ | 652.9 | $ | 421 | |||||||
Income taxes paid | 98.7 | 65.1 | 41.4 | ||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Minimum future rental payments under non-cancelable operating leases | Minimum future rental payments under non-cancelable operating leases for each of the five succeeding years ending December 31 and thereafter are as follows: | ||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Lease obligations | $ | 195.7 | $ | 44.2 | $ | 35.7 | $ | 28.8 | $ | 18 | $ | 15.7 | $ | 53.3 | |||||||||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Schedule of segment revenues and profit | Segment revenues and profit for the years ended December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Developed Markets(1) | $ | 6,167.10 | $ | 4,293.20 | $ | 2,502.30 | |||||||||||||||||||
Emerging Markets(1) | 2,096.40 | 1,476.40 | 978.1 | ||||||||||||||||||||||
Total revenues | 8,263.50 | 5,769.60 | 3,480.40 | ||||||||||||||||||||||
Segment profit: | |||||||||||||||||||||||||
Developed Markets(2) | 2,019.70 | 573.2 | 815.9 | ||||||||||||||||||||||
Emerging Markets(3) | 337.3 | 93 | 69 | ||||||||||||||||||||||
Total segment profit | 2,357.00 | 666.2 | 884.9 | ||||||||||||||||||||||
Corporate(4) | (171.1 | ) | (165.7 | ) | (138.3 | ) | |||||||||||||||||||
Restructuring, integration and other costs | (381.7 | ) | (462.0 | ) | (267.1 | ) | |||||||||||||||||||
In-process research and development impairments and other charges | (41.0 | ) | (153.6 | ) | (189.9 | ) | |||||||||||||||||||
Acquisition-related costs | (6.3 | ) | (36.4 | ) | (78.6 | ) | |||||||||||||||||||
Acquisition-related contingent consideration | 14.1 | 29.2 | 5.3 | ||||||||||||||||||||||
Other income (expense) | 268.7 | (287.2 | ) | (136.6 | ) | ||||||||||||||||||||
Operating income (loss) | 2,039.70 | (409.5 | ) | 79.7 | |||||||||||||||||||||
Interest income | 5 | 8 | 6 | ||||||||||||||||||||||
Interest expense | (971.0 | ) | (844.3 | ) | (481.6 | ) | |||||||||||||||||||
Loss on extinguishment of debt | (129.6 | ) | (65.0 | ) | (20.1 | ) | |||||||||||||||||||
Foreign exchange and other | (144.1 | ) | (9.4 | ) | 19.7 | ||||||||||||||||||||
Gain on investments, net | 292.6 | 5.8 | 2.1 | ||||||||||||||||||||||
Income (loss) before provision for (recovery of) income taxes | $ | 1,092.60 | $ | (1,314.4 | ) | $ | (394.2 | ) | |||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Developed Markets and Emerging Markets segment revenues reflect (i) incremental product sales revenue in 2014 from all 2013 and all 2014 acquisitions and (ii) incremental product sales revenue in 2013 from all 2012 and all 2013 acquisitions. For further information, see Item 7 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Revenues by Segment” of this Form 10-K. | ||||||||||||||||||||||||
-2 | Developed Markets segment profit in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets as follows: (i) $906.4 million in 2014, in the aggregate, (ii) $1,080.4 million in 2013, in the aggregate, and (iii) $506.4 million in 2012, in the aggregate. | ||||||||||||||||||||||||
Developed Markets segment profit in 2013 also reflects an impairment charge of $551.6 million related to ezogabine/retigabine in the third quarter of 2013 (see note 6 titled “FAIR VALUE MEASUREMENTS”). | |||||||||||||||||||||||||
-3 | Emerging Markets segment profit in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets as follows: (i) $323.9 million in 2014, in the aggregate, (ii) $320.5 million in 2013, in the aggregate, and (iii) $180.5 million in 2012, in the aggregate. | ||||||||||||||||||||||||
-4 | Corporate reflects non-restructuring-related share-based compensation expense of $40.3 million, $45.5 million and $66.2 million in 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||
Schedule of total assets by segment | Total assets by segment as of December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Assets(1): | |||||||||||||||||||||||||
Developed Markets(2) | $ | 19,093.40 | $ | 20,007.20 | $ | 12,893.70 | |||||||||||||||||||
Emerging Markets(3) | 6,332.90 | 6,907.80 | 4,022.10 | ||||||||||||||||||||||
25,426.30 | 26,915.00 | 16,915.80 | |||||||||||||||||||||||
Corporate | 926.7 | 1,055.80 | 1,034.60 | ||||||||||||||||||||||
Total assets | $ | 26,353.00 | $ | 27,970.80 | $ | 17,950.40 | |||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | The segment assets as of December 31, 2013 and December 31, 2012 contain reclassifications between segments to conform to the current year presentation. | ||||||||||||||||||||||||
-2 | Developed Markets segment assets as of December 31, 2014 reflect (i) the divestiture of facial aesthetic fillers and toxins in July 2014 with the carrying values of the related assets of $1.0 billion, in the aggregate, (see note 4 titled “DIVESTITURES” for further information), (ii) the provisional amounts of identifiable intangible assets and goodwill of the PreCision acquisition of $257.7 million and $170.5 million, respectively, and (iii) the amounts of identifiable intangible assets and goodwill of the Solta Medical acquisition of $103.5 million and $56.4 million, respectively. Developed Markets segment assets as of December 31, 2013 reflect (i) the provisional amounts of identifiable intangible assets and goodwill of B&L of $3,977.9 million and $3,226.7 million, respectively, and (ii) the amounts of identifiable intangible assets and goodwill of Obagi of $335.5 million and $158.5 million, respectively. | ||||||||||||||||||||||||
-3 | Emerging Markets segment assets as of December 31, 2014 reflect the amounts of identifiable intangible assets and goodwill of the Solta Medical acquisition of $69.4 million and $37.8 million, respectively. Emerging Markets segment assets as of December 31, 2013 reflect (i) the provisional amounts of identifiable intangible assets and goodwill of B&L of $782.7 million and $1,135.7 million, respectively, and (ii) the amounts of identifiable intangible assets and goodwill of Natur Produkt of $104.8 million and $40.9 million, respectively. | ||||||||||||||||||||||||
Schedule of capital expenditures, depreciation and amortization by segment | Capital expenditures, and depreciation and amortization, including impairments of finite-lived intangible assets by segment for the years ended December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Capital expenditures: | |||||||||||||||||||||||||
Developed Markets | $ | 152.7 | $ | 54.1 | $ | 12.3 | |||||||||||||||||||
Emerging Markets | 29.3 | 51.9 | 61.6 | ||||||||||||||||||||||
182 | 106 | 73.9 | |||||||||||||||||||||||
Corporate | 109.6 | 9.3 | 33.7 | ||||||||||||||||||||||
Total capital expenditures | $ | 291.6 | $ | 115.3 | $ | 107.6 | |||||||||||||||||||
Depreciation and amortization, including impairments of finite-lived intangible assets(1): | |||||||||||||||||||||||||
Developed Markets | $ | 1,336.90 | $ | 1,687.70 | $ | 755.1 | |||||||||||||||||||
Emerging Markets | 385.7 | 313.7 | 224.6 | ||||||||||||||||||||||
1,722.60 | 2,001.40 | 979.7 | |||||||||||||||||||||||
Corporate | 15 | 14.4 | 6.5 | ||||||||||||||||||||||
Total depreciation and amortization, including impairments of finite-lived intangible assets | $ | 1,737.60 | $ | 2,015.80 | $ | 986.2 | |||||||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Depreciation and amortization, including impairments of finite-lived intangible assets in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustment to identifiable intangible assets as follows: (i) in 2014 - Developed Markets — $877.6 million; and Emerging Markets — $325.3 million, (ii) in 2013 - Developed Markets — $773.0 million; and Emerging Markets — $255.4 million, and (iii) in 2012 - Developed Markets — $430.5 million; and Emerging Markets — $177.5 million. | ||||||||||||||||||||||||
Schedule of revenues by product category | Revenues by product category for the years ended December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Pharmaceuticals | $ | 3,559.80 | $ | 2,707.80 | $ | 2,054.50 | |||||||||||||||||||
Devices | 1,629.40 | 845.3 | 77 | ||||||||||||||||||||||
OTC | 1,711.40 | 1,086.60 | 475.7 | ||||||||||||||||||||||
Branded and Other Generics | 1,203.00 | 1,000.60 | 681.4 | ||||||||||||||||||||||
Other revenues | 159.9 | 129.3 | 191.8 | ||||||||||||||||||||||
$ | 8,263.50 | $ | 5,769.60 | $ | 3,480.40 | ||||||||||||||||||||
Schedule of revenues and long-lived assets by geographic region | Revenues and long-lived assets by geographic region for the years ended and as of December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
Revenues(1) | Long-Lived Assets(2) | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
U.S. and Puerto Rico | $ | 4,473.00 | $ | 3,194.50 | $ | 1,885.80 | $ | 718.2 | $ | 592 | $ | 60.4 | |||||||||||||
Canada | 375.1 | 387.4 | 349.1 | 83.7 | 87.7 | 109.7 | |||||||||||||||||||
Poland | 276.2 | 268.8 | 199.3 | 99.4 | 110 | 110.9 | |||||||||||||||||||
Russia | 275.1 | 202.8 | 71.2 | 4.6 | 7 | 0.2 | |||||||||||||||||||
Japan | 248.7 | 104.9 | 12.2 | 1.2 | 1.3 | — | |||||||||||||||||||
China | 232 | 91 | 0.6 | 39.6 | 44.3 | — | |||||||||||||||||||
Mexico | 221.6 | 200.9 | 167.4 | 73.8 | 82.5 | 73.9 | |||||||||||||||||||
France | 204.7 | 86.9 | 2.5 | 36 | 40.5 | — | |||||||||||||||||||
Germany | 204.4 | 130.9 | 1.9 | 73.5 | 83.8 | — | |||||||||||||||||||
Australia | 196.3 | 178.2 | 184.1 | 4.4 | 3.4 | 4.4 | |||||||||||||||||||
Brazil | 161 | 155.6 | 135.1 | 31.4 | 41.4 | 46 | |||||||||||||||||||
U.K. | 114.2 | 47 | 19.2 | 11 | 12.2 | — | |||||||||||||||||||
Italy | 98 | 37.2 | 2.3 | 23.1 | 25.3 | — | |||||||||||||||||||
Other (3) | 1,183.20 | 683.5 | 449.7 | 110.6 | 102.8 | 57.2 | |||||||||||||||||||
$ | 8,263.50 | $ | 5,769.60 | $ | 3,480.40 | $ | 1,310.50 | $ | 1,234.20 | $ | 462.7 | ||||||||||||||
____________________________________ | |||||||||||||||||||||||||
-1 | Revenues are attributed to countries based on the location of the customer. | ||||||||||||||||||||||||
-2 | Long-lived assets consist of property, plant and equipment, net of accumulated depreciation, which is attributed to countries based on the physical location of the assets. | ||||||||||||||||||||||||
-3 | Other consists primarily of countries in Europe, Asia, the Middle East, and Africa. | ||||||||||||||||||||||||
Schedule of external customers that accounted for 10% or more of total revenues | External customers that accounted for 10% or more of the Company’s total revenues for the years ended December 31, 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
McKesson Corporation | 17% | 19% | 20% | ||||||||||||||||||||||
AmerisourceBergen Corporation | 10% | 7% | 8% | ||||||||||||||||||||||
Cardinal Health, Inc. | 9% | 13% | 20% |
DESCRIPTION_OF_BUSINESS_DESCRI
DESCRIPTION OF BUSINESS DESCRIPTION OF BUSINESS (Details) | Dec. 31, 2014 |
country | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries in which entity operates | 100 |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) (Other Income (Expense), USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Other Income (Expense) | ||
Reclassifications | ||
Prior period reclassification adjustment | $52.80 | $77.30 |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and Cash Equivalents | ||
Maximum term of original maturity to classify instruments as cash and cash equivalents (less than) | 3 months | |
Percentage of net trade receivables accounted for by largest wholesale customers | 33.00% | |
Net trade receivable | $2,075.80 | $1,676.40 |
Past due period for receivables to be negligible (less than) | 90 days | 90 days |
Period net trade receivable balance outstanding (more than) | 90 days | |
Greece, Spain, Italy, and Portugal | ||
Cash and Cash Equivalents | ||
Net trade receivable | 81.6 | 84.5 |
Portion of net trade receivables that is past due | $10.80 | |
Three largest U.S. wholesaler customers | ||
Cash and Cash Equivalents | ||
Number of largest wholesale customers | 3 | |
Trade receivables | Credit concentration | Three largest U.S. wholesaler customers | ||
Cash and Cash Equivalents | ||
Number of largest wholesale customers | 3 |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 3) | 12 Months Ended |
Dec. 31, 2014 | |
Buildings | Maximum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 40 years |
Machinery and equipment | Minimum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 3 years |
Machinery and equipment | Maximum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 20 years |
Other equipment | Minimum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 3 years |
Other equipment | Maximum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 10 years |
Equipment on operating lease | Maximum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 5 years |
Leasehold improvements and capital leases | Maximum | |
Property, plant and equipment [Line Items] | |
Estimated useful lives (years) | 10 years |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended |
Dec. 31, 2014 | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 7 years |
Product brands | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 9 years |
Product brands | Minimum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 1 year |
Product brands | Maximum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 25 years |
Corporate brands | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 14 years |
Corporate brands | Minimum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 4 years |
Corporate brands | Maximum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 20 years |
Product rights | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 7 years |
Product rights | Minimum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 1 year |
Product rights | Maximum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 15 years |
Partner relationships | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 4 years |
Partner relationships | Minimum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 2 years |
Partner relationships | Maximum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 9 years |
Out-licensed technology and other | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 5 years |
Out-licensed technology and other | Minimum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 1 year |
Out-licensed technology and other | Maximum | |
Finite lived Intangible assets | |
Estimated useful lives (years) | 10 years |
SIGNIFICANT_ACCOUNTING_POLICIE7
SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising expenses | $435.40 | $277.30 | $157.60 |
Tax benefit recognition, measurement percentage | 50.00% | ||
Minimum period to classify uncertain tax position liabilities as long term liabilities (years) | 1 year | ||
Threshold percentage for amortization of net actuarial gains and losses | 10.00% | ||
Three largest U.S. wholesaler customers | |||
SIGNIFICANT ACCOUNTING POLICIES | |||
Number of largest wholesale customers | 3 |
BUSINESS_COMBINATIONS_Narrativ
BUSINESS COMBINATIONS - Narrative (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 17 Months Ended | 0 Months Ended | 3 Months Ended | 25 Months Ended | 0 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Jan. 23, 2014 | Aug. 05, 2013 | Sep. 30, 2013 | Dec. 31, 2014 | Apr. 25, 2013 | Feb. 01, 2013 | Dec. 11, 2012 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Mar. 13, 2012 | Jun. 18, 2012 | Jul. 07, 2014 |
Business Combinations | |||||||||||||||||||
Acquisition of businesses, contingent consideration at fair value | $93.80 | $76.10 | $145.70 | ||||||||||||||||
Goodwill | 9,346.40 | 9,752.10 | 5,141.40 | 9,346.40 | 5,141.40 | 9,346.40 | |||||||||||||
Acquisition-related costs | 6.3 | 36.4 | 78.6 | ||||||||||||||||
Gain (loss) on extinguishment of debt | -93.7 | -129.6 | -65 | -20.1 | |||||||||||||||
Restructuring, integration and other costs | 381.7 | 462 | 267.1 | ||||||||||||||||
Long-term debt | 15,254.60 | 17,367.70 | 15,254.60 | 15,254.60 | |||||||||||||||
Payments of contingent consideration | 106.1 | 130.1 | 103.9 | ||||||||||||||||
Pro forma acquisition accounting adjustment on inventory sold subsequent to acquisition date | 20.2 | 369.9 | 58.1 | ||||||||||||||||
Pro forma acquisition-related costs | 2 | 25.3 | 72.1 | ||||||||||||||||
Developed Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 7,115 | 7,428.70 | 3,993 | 7,115 | 3,993 | 7,115 | |||||||||||||
Emerging Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 2,231.40 | 2,323.40 | 1,148.40 | 2,231.40 | 1,148.40 | 2,231.40 | |||||||||||||
1.375% Convertible Senior Notes due in 2017 | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Long-term debt | 0.2 | 0.2 | 0.2 | 0.2 | |||||||||||||||
2014 Other Business Combinations | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 1,356.90 | 1,356.90 | 1,356.90 | ||||||||||||||||
Fair value of accounts receivable | 82 | 82 | 82 | ||||||||||||||||
Gross contractual amount of trade accounts receivable acquired | 88.2 | 88.2 | 88.2 | ||||||||||||||||
Expected uncollectible of trade accounts receivable acquired | 6.2 | 6.2 | 6.2 | ||||||||||||||||
Goodwill | 396.3 | 396.3 | 396.3 | ||||||||||||||||
Acquisition-related costs | 5 | ||||||||||||||||||
Revenues of acquiree since acquisition date | 250.6 | ||||||||||||||||||
Net earnings (loss), net of tax of acquiree since acquisition date | 9.1 | ||||||||||||||||||
Acquired IPR&D | 63.1 | 63.1 | 63.1 | ||||||||||||||||
Long-term debt | 11.2 | 11.2 | 11.2 | ||||||||||||||||
PreCision | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 454.5 | ||||||||||||||||||
Acquisition-related contingent consideration | 25 | 25 | 25 | ||||||||||||||||
PreCision | Developed Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 170.5 | 170.5 | 170.5 | ||||||||||||||||
PreCision | Other Income (Expense) | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Post-combination expense | 20.4 | ||||||||||||||||||
Solta | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 292.5 | ||||||||||||||||||
Per Share Consideration (in dollars per share) | $2.92 | ||||||||||||||||||
Aggregate principal amount of notes repurchased | 44.2 | ||||||||||||||||||
Charge relating to pre-existing relationship with Solta | 5.6 | ||||||||||||||||||
Solta | Developed Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 56.4 | 56.4 | 56.4 | ||||||||||||||||
Solta | Emerging Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 37.8 | 37.8 | 37.8 | ||||||||||||||||
B&L | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 4,613.30 | 4,613.30 | 4,613.30 | ||||||||||||||||
Fair value of accounts receivable | 540.7 | 540.7 | 540.7 | ||||||||||||||||
Gross contractual amount of trade accounts receivable acquired | 555.6 | 555.6 | 555.6 | ||||||||||||||||
Expected uncollectible of trade accounts receivable acquired | 14.9 | 14.9 | 14.9 | ||||||||||||||||
Goodwill | 4,358 | 4,358 | 4,358 | ||||||||||||||||
Acquisition-related costs | 13.4 | ||||||||||||||||||
Enterprise value | 8,700 | ||||||||||||||||||
Entry to record inventory at its estimated fair value | 269.1 | 269.1 | 269.1 | ||||||||||||||||
Acquired IPR&D | 415.1 | 415.1 | 415.1 | ||||||||||||||||
Potential future milestone payments | 80 | 80 | 80 | ||||||||||||||||
Long-term debt | 4,209.90 | 4,209.90 | 4,209.90 | ||||||||||||||||
Deferred tax assets | 61.6 | 61.6 | 61.6 | ||||||||||||||||
Deferred tax liability, noncurrent | 1,436.50 | 1,436.50 | 1,436.50 | ||||||||||||||||
Fair value of pension and other benefits liabilities | 224.2 | 224.2 | 224.2 | ||||||||||||||||
Aggregate purchase price | 4,613.30 | ||||||||||||||||||
Restructuring, integration and other costs | 69.7 | 234.1 | 52.8 | ||||||||||||||||
B&L | Developed Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 3,300 | 3,226.70 | 3,300 | 3,300 | |||||||||||||||
B&L | Emerging Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 1,100 | 1,135.70 | 1,100 | 1,100 | |||||||||||||||
B&L | Various Vision Care Products | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquired IPR&D | 223.4 | 223.4 | 223.4 | ||||||||||||||||
B&L | Various Pharmaceutical Products | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquired IPR&D | 170.9 | 170.9 | 170.9 | ||||||||||||||||
B&L | Various Surgical Products | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquired IPR&D | 20.8 | 20.8 | 20.8 | ||||||||||||||||
B&L | IPR&D | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Risk-adjusted discount rate | 10.00% | 10.00% | 10.00% | ||||||||||||||||
B&L | Other Income (Expense) | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Cash consideration paid for unvested options | 4.3 | ||||||||||||||||||
B&L | 9.875% Senior Notes | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Interest rate on debt (percent) | 9.88% | ||||||||||||||||||
Gain (loss) on extinguishment of debt | -8.2 | ||||||||||||||||||
2013 Other Business Combinations | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 898.1 | 898.1 | 898.1 | 898.1 | |||||||||||||||
Acquisition-related contingent consideration | 59.1 | ||||||||||||||||||
Fair value of accounts receivable | 64.5 | 64.5 | 64.5 | ||||||||||||||||
Gross contractual amount of trade accounts receivable acquired | 68.2 | 68.2 | 68.2 | ||||||||||||||||
Expected uncollectible of trade accounts receivable acquired | 3.7 | 3.7 | 3.7 | ||||||||||||||||
Goodwill | 233.3 | 233.3 | 233.3 | ||||||||||||||||
Acquired IPR&D | 18.9 | 18.9 | 18.9 | ||||||||||||||||
Long-term debt | 24 | 24 | 24 | ||||||||||||||||
Deferred tax liability, noncurrent | 148.9 | 148.9 | 148.9 | ||||||||||||||||
Obagi Medical Products, Inc | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Per Share Consideration (in dollars per share) | $24 | ||||||||||||||||||
Aggregate purchase price | 437.1 | ||||||||||||||||||
Obagi Medical Products, Inc | Developed Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 158.5 | ||||||||||||||||||
Natur Produkt | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 149.9 | ||||||||||||||||||
Contingent refund of purchase price | 20 | ||||||||||||||||||
Natur Produkt | Emerging Markets | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Goodwill | 40.9 | ||||||||||||||||||
Medicis | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 2,578.90 | ||||||||||||||||||
Per Share Consideration (in dollars per share) | $44 | ||||||||||||||||||
Fair value of accounts receivable | 90.2 | ||||||||||||||||||
Gross contractual amount of trade accounts receivable acquired | 90.3 | ||||||||||||||||||
Expected uncollectible of trade accounts receivable acquired | 0.1 | ||||||||||||||||||
Goodwill | 1,354 | ||||||||||||||||||
Acquisition-related costs | 24.2 | 32.2 | |||||||||||||||||
Entry to record inventory at its estimated fair value | 104.6 | ||||||||||||||||||
Acquired IPR&D | 159.8 | ||||||||||||||||||
Long-term debt | 778 | ||||||||||||||||||
Aggregate purchase price | 2,578.90 | ||||||||||||||||||
Restructuring, integration and other costs | 23.5 | 163 | |||||||||||||||||
Proceeds from liquidation of investments | 8 | 9 | 615.4 | ||||||||||||||||
Medicis | Minimum | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Risk-adjusted discount rate | 10.00% | ||||||||||||||||||
Medicis | Maximum | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Risk-adjusted discount rate | 11.00% | ||||||||||||||||||
Medicis | Development of dermatology products for treatment of bacterial vaginosis | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquired IPR&D | 136.9 | ||||||||||||||||||
Medicis | Development of several aesthetics programs | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquired IPR&D | 22.9 | ||||||||||||||||||
Medicis | Other Income (Expense) | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Restructuring, integration and other costs | 77.3 | ||||||||||||||||||
Medicis | 1.375% Convertible Senior Notes due in 2017 | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Interest rate on debt (percent) | 1.38% | 1.38% | 1.38% | 1.38% | |||||||||||||||
2012 Other Business Combinations | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate purchase price | 1,196 | 1,200 | 1,200 | ||||||||||||||||
Acquisition-related contingent consideration | 145.7 | 145.7 | |||||||||||||||||
Fair value of accounts receivable | 40.2 | ||||||||||||||||||
Gross contractual amount of trade accounts receivable acquired | 41.5 | ||||||||||||||||||
Expected uncollectible of trade accounts receivable acquired | 1.3 | ||||||||||||||||||
Goodwill | 182.1 | ||||||||||||||||||
Acquired IPR&D | 29.8 | ||||||||||||||||||
Long-term debt | 38.8 | ||||||||||||||||||
Ora Pharma | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquisition-related contingent consideration | 99.2 | ||||||||||||||||||
Potential future milestone payments | 114 | ||||||||||||||||||
Upfront payment | 289.3 | ||||||||||||||||||
Payments of contingent consideration | 40 | 40 | |||||||||||||||||
Remaining potential contingent consideration | 34 | 34 | 34 | ||||||||||||||||
Gerot Lannach | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Acquisition-related contingent consideration | 16.8 | ||||||||||||||||||
Upfront payment | 164 | ||||||||||||||||||
Payments of contingent consideration | 20.1 | ||||||||||||||||||
Term of exclusive supply agreement | 10 years | ||||||||||||||||||
Percentage of sales related to acquired assets | 90.00% | ||||||||||||||||||
Office Building | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Classified as assets held for sale | 14.2 | ||||||||||||||||||
Debentures | B&L | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Long-term debt | 11.8 | 11.8 | 11.8 | 11.8 | |||||||||||||||
Revolving credit facility | |||||||||||||||||||
Business Combinations | |||||||||||||||||||
Aggregate principal amount of notes repurchased | $37.90 |
BUSINESS_COMBINATIONS_Estimate
BUSINESS COMBINATIONS - Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 05, 2013 | Dec. 11, 2012 |
In Millions, unless otherwise specified | |||||
Assets acquired and liabilities assumed | |||||
Goodwill | $9,346.40 | $9,752.10 | $5,141.40 | ||
2014 Other Business Combinations | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 33.1 | ||||
Accounts receivable | 82 | ||||
Assets held for sale | 125.7 | ||||
Inventories | 155.6 | ||||
Other current assets | 18.1 | ||||
Property, plant and equipment | 57 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 720.9 | ||||
Acquired IPR&D | 63.1 | ||||
Other non-current assets | 2 | ||||
Current liabilities | -163.8 | ||||
Long-term debt, including current portion | -11.2 | ||||
Deferred income taxes, net | -93.4 | ||||
Other non-current liabilities | -13.5 | ||||
Total identifiable net assets | 975.6 | ||||
Noncontrolling interest | -15 | ||||
Goodwill | 396.3 | ||||
Total fair value of consideration transferred | 1,356.90 | ||||
2014 Other Business Combinations | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 33.6 | ||||
Accounts receivable | 87.7 | ||||
Assets held for sale | 125.7 | ||||
Inventories | 170.4 | ||||
Other current assets | 19.1 | ||||
Property, plant and equipment | 58.5 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 697.2 | ||||
Acquired IPR&D | 65.8 | ||||
Other non-current assets | 4 | ||||
Current liabilities | -152 | ||||
Long-term debt, including current portion | -11.2 | ||||
Deferred income taxes, net | -116 | ||||
Other non-current liabilities | -13.4 | ||||
Total identifiable net assets | 969.4 | ||||
Noncontrolling interest | -15 | ||||
Goodwill | 410.4 | ||||
Total fair value of consideration transferred | 1,364.80 | ||||
2014 Other Business Combinations | Measurement Period Adjustments | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | -0.5 | ||||
Accounts receivable | -5.7 | ||||
Assets held for sale | 0 | ||||
Inventories | -14.8 | ||||
Other current assets | -1 | ||||
Property, plant and equipment | -1.5 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 23.7 | ||||
Acquired IPR&D | -2.7 | ||||
Other non-current assets | -2 | ||||
Current liabilities | -11.8 | ||||
Long-term debt, including current portion | 0 | ||||
Deferred income taxes, net | 22.6 | ||||
Other non-current liabilities | -0.1 | ||||
Total identifiable net assets | 6.2 | ||||
Noncontrolling interest | 0 | ||||
Goodwill | -14.1 | ||||
Total fair value of consideration transferred | -7.9 | ||||
B&L | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 178.1 | ||||
Accounts receivable | 540.7 | ||||
Inventories | 641.8 | ||||
Other current assets | 146.9 | ||||
Property, plant and equipment | 794.6 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 4,333.40 | ||||
Acquired IPR&D | 415.1 | ||||
Other non-current assets | 56.9 | ||||
Current liabilities | -883.5 | ||||
Long-term debt, including current portion | -4,209.90 | ||||
Deferred income taxes, net | -1,374.90 | ||||
Deferred tax liability, net | -1,436.50 | ||||
Other non-current liabilities | -281.2 | ||||
Total identifiable net assets | 358 | ||||
Noncontrolling interest | -102.7 | ||||
Goodwill | 4,358 | ||||
Total fair value of consideration transferred | 4,613.30 | ||||
B&L | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 209.5 | ||||
Accounts receivable | 547.9 | ||||
Inventories | 675.8 | ||||
Other current assets | 146.6 | ||||
Property, plant and equipment | 761.4 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 4,316.10 | ||||
Acquired IPR&D | 398.1 | ||||
Other non-current assets | 58.8 | ||||
Current liabilities | -885.6 | ||||
Long-term debt, including current portion | -4,209.90 | ||||
Deferred income taxes, net | -1,410.90 | ||||
Other non-current liabilities | -280.2 | ||||
Total identifiable net assets | 327.6 | ||||
Noncontrolling interest | -102.3 | ||||
Goodwill | 4,388 | ||||
Total fair value of consideration transferred | 4,613.30 | ||||
B&L | Measurement Period Adjustments | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | -31.4 | ||||
Accounts receivable | -7.2 | ||||
Inventories | -34 | ||||
Other current assets | 0.3 | ||||
Property, plant and equipment | 33.2 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 17.3 | ||||
Acquired IPR&D | 17 | ||||
Other non-current assets | -1.9 | ||||
Current liabilities | 2.1 | ||||
Long-term debt, including current portion | 0 | ||||
Deferred income taxes, net | 36 | ||||
Other non-current liabilities | -1 | ||||
Total identifiable net assets | 30.4 | ||||
Noncontrolling interest | -0.4 | ||||
Goodwill | -30 | ||||
Total fair value of consideration transferred | 0 | ||||
2013 Other Business Combinations | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 43.1 | ||||
Accounts receivable | 64.5 | ||||
Inventories | 35.5 | ||||
Other current assets | 14 | ||||
Property, plant and equipment | 10.6 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 726.8 | ||||
Acquired IPR&D | 18.9 | ||||
Indemnification assets | 2.5 | ||||
Other non-current assets | 3.9 | ||||
Current liabilities | -36.6 | ||||
Short-term borrowings | -32.8 | ||||
Long-term debt, including current portion | -24 | ||||
Deferred tax liability, net | -148.9 | ||||
Other non-current liabilities | -1.5 | ||||
Total identifiable net assets | 676 | ||||
Noncontrolling interest | -11.2 | ||||
Goodwill | 233.3 | ||||
Total fair value of consideration transferred | 898.1 | 898.1 | |||
2013 Other Business Combinations | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 43.1 | ||||
Accounts receivable | 64 | ||||
Inventories | 33.6 | ||||
Other current assets | 14 | ||||
Property, plant and equipment | 13.9 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 722.9 | ||||
Acquired IPR&D | 18.7 | ||||
Indemnification assets | 3.2 | ||||
Other non-current assets | 0.2 | ||||
Current liabilities | -36.2 | ||||
Short-term borrowings | -33.3 | ||||
Long-term debt, including current portion | -24 | ||||
Deferred tax liability, net | -147.8 | ||||
Other non-current liabilities | -1.5 | ||||
Total identifiable net assets | 670.8 | ||||
Noncontrolling interest | -11.2 | ||||
Goodwill | 224.3 | ||||
Total fair value of consideration transferred | 883.9 | ||||
2013 Other Business Combinations | Measurement Period Adjustments | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 0 | ||||
Accounts receivable | 0.5 | ||||
Inventories | 1.9 | ||||
Other current assets | 0 | ||||
Property, plant and equipment | -3.3 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 3.9 | ||||
Acquired IPR&D | 0.2 | ||||
Indemnification assets | -0.7 | ||||
Other non-current assets | 3.7 | ||||
Current liabilities | -0.4 | ||||
Short-term borrowings | 0.5 | ||||
Long-term debt, including current portion | 0 | ||||
Deferred tax liability, net | -1.1 | ||||
Other non-current liabilities | 0 | ||||
Total identifiable net assets | 5.2 | ||||
Noncontrolling interest | 0 | ||||
Goodwill | 9 | ||||
Total fair value of consideration transferred | 14.2 | ||||
Medicis | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 169.6 | ||||
Accounts receivable | 90.2 | ||||
Inventories | 137.5 | ||||
Short-term and long-term investments | 626.6 | ||||
Income taxes receivable | 40.4 | ||||
Other current assets | 74.6 | ||||
Property, plant and equipment | 2.6 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 1,368.90 | ||||
Acquired IPR&D | 159.8 | ||||
Other non-current assets | 0.6 | ||||
Current liabilities | -466.3 | ||||
Long-term debt, including current portion | -778 | ||||
Deferred income taxes, net | -192.8 | ||||
Other non-current liabilities | -8.8 | ||||
Total identifiable net assets | 1,224.90 | ||||
Goodwill | 1,354 | ||||
Total fair value of consideration transferred | 2,578.90 | ||||
Medicis | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 169.6 | ||||
Accounts receivable | 81.1 | ||||
Inventories | 145.1 | ||||
Short-term and long-term investments | 626.6 | ||||
Income taxes receivable | 40.4 | ||||
Other current assets | 74.6 | ||||
Property, plant and equipment | 8.2 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 1,390.70 | ||||
Acquired IPR&D | 153.8 | ||||
Other non-current assets | 0.6 | ||||
Current liabilities | -453.8 | ||||
Long-term debt, including current portion | -778 | ||||
Deferred income taxes, net | -205 | ||||
Other non-current liabilities | -8.8 | ||||
Total identifiable net assets | 1,245.10 | ||||
Goodwill | 1,333.80 | ||||
Total fair value of consideration transferred | 2,578.90 | ||||
Medicis | Measurement Period Adjustments | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 0 | ||||
Accounts receivable | 9.1 | ||||
Inventories | -7.6 | ||||
Short-term and long-term investments | 0 | ||||
Income taxes receivable | 0 | ||||
Other current assets | 0 | ||||
Property, plant and equipment | -5.6 | ||||
Identifiable intangible assets, excluding acquired IPR&D | -21.8 | ||||
Acquired IPR&D | 6 | ||||
Other non-current assets | 0 | ||||
Current liabilities | -12.5 | ||||
Long-term debt, including current portion | 0 | ||||
Deferred income taxes, net | 12.2 | ||||
Other non-current liabilities | 0 | ||||
Total identifiable net assets | -20.2 | ||||
Goodwill | 20.2 | ||||
Total fair value of consideration transferred | 0 | ||||
2012 Other Business Combinations | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 21.1 | ||||
Accounts receivable | 40.2 | ||||
Assets held for sale | 15.6 | ||||
Inventories | 59.2 | ||||
Other current assets | 6.6 | ||||
Property, plant and equipment | 17.2 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 1,070.40 | ||||
Acquired IPR&D | 29.8 | ||||
Indemnification assets | 27.9 | ||||
Other non-current assets | 1.9 | ||||
Current liabilities | -42.5 | ||||
Long-term debt, including current portion | -38.8 | ||||
Liability for uncertain tax position | 0 | ||||
Deferred income taxes, net | -166 | ||||
Other non-current liabilities | -28.7 | ||||
Total identifiable net assets | 1,013.90 | ||||
Goodwill | 182.1 | ||||
Total fair value of consideration transferred | 1,196 | 1,200 | |||
2012 Other Business Combinations | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | 21.4 | ||||
Accounts receivable | 40.2 | ||||
Assets held for sale | 15.6 | ||||
Inventories | 68 | ||||
Other current assets | 6.6 | ||||
Property, plant and equipment | 17.2 | ||||
Identifiable intangible assets, excluding acquired IPR&D | 1,133 | ||||
Acquired IPR&D | 16.7 | ||||
Indemnification assets | 27.9 | ||||
Other non-current assets | 1.9 | ||||
Current liabilities | -41.8 | ||||
Long-term debt, including current portion | -38.8 | ||||
Liability for uncertain tax position | -6.7 | ||||
Deferred income taxes, net | -184.8 | ||||
Other non-current liabilities | -28.7 | ||||
Total identifiable net assets | 1,047.70 | ||||
Goodwill | 157.4 | ||||
Total fair value of consideration transferred | 1,205.10 | ||||
2012 Other Business Combinations | Measurement Period Adjustments | |||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalents | -0.3 | ||||
Accounts receivable | 0 | ||||
Assets held for sale | 0 | ||||
Inventories | -8.8 | ||||
Other current assets | 0 | ||||
Property, plant and equipment | 0 | ||||
Identifiable intangible assets, excluding acquired IPR&D | -62.6 | ||||
Acquired IPR&D | 13.1 | ||||
Indemnification assets | 0 | ||||
Other non-current assets | 0 | ||||
Current liabilities | -0.7 | ||||
Long-term debt, including current portion | 0 | ||||
Liability for uncertain tax position | 6.7 | ||||
Deferred income taxes, net | 18.8 | ||||
Other non-current liabilities | 0 | ||||
Total identifiable net assets | -33.8 | ||||
Goodwill | 24.7 | ||||
Total fair value of consideration transferred | ($9.10) |
BUSINESS_COMBINATIONS_Identifi
BUSINESS COMBINATIONS - Identifiable intangible assets (Details) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 05, 2013 | Dec. 11, 2012 | Dec. 31, 2012 |
Corporate brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | $1,697.50 | $1,697.50 | |||
2014 Other Business Combinations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 10 years | ||||
Total identifiable intangible assets acquired | 720.9 | ||||
2014 Other Business Combinations | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 697.2 | ||||
2014 Other Business Combinations | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 23.7 | ||||
2014 Other Business Combinations | Product brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 10 years | ||||
Total identifiable intangible assets acquired | 528.8 | ||||
2014 Other Business Combinations | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 506 | ||||
2014 Other Business Combinations | Product brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 22.8 | ||||
2014 Other Business Combinations | Product rights | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 8 years | ||||
Total identifiable intangible assets acquired | 94.3 | ||||
2014 Other Business Combinations | Product rights | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 95.2 | ||||
2014 Other Business Combinations | Product rights | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -0.9 | ||||
2014 Other Business Combinations | Corporate brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 15 years | ||||
Total identifiable intangible assets acquired | 30.6 | ||||
2014 Other Business Combinations | Corporate brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 28.9 | ||||
2014 Other Business Combinations | Corporate brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 1.7 | ||||
2014 Other Business Combinations | In-licensed products | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 8 years | ||||
Total identifiable intangible assets acquired | 1.6 | ||||
2014 Other Business Combinations | In-licensed products | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 1.5 | ||||
2014 Other Business Combinations | In-licensed products | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0.1 | ||||
2014 Other Business Combinations | Partner relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 9 years | ||||
Total identifiable intangible assets acquired | 37.5 | ||||
2014 Other Business Combinations | Partner relationships | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 37.5 | ||||
2014 Other Business Combinations | Partner relationships | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
2014 Other Business Combinations | Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 9 years | ||||
Total identifiable intangible assets acquired | 28.1 | ||||
2014 Other Business Combinations | Other | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 28.1 | ||||
2014 Other Business Combinations | Other | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
B&L | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 9 years | ||||
Total identifiable intangible assets acquired | 4,333.40 | ||||
B&L | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 4,316.10 | ||||
B&L | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 17.3 | ||||
B&L | Corporate brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 1,697.50 | ||||
B&L | Corporate brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 1,690.50 | ||||
B&L | Corporate brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 7 | ||||
B&L | Product brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 10 years | ||||
Total identifiable intangible assets acquired | 1,774.80 | ||||
B&L | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 1,770.20 | ||||
B&L | Product brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 4.6 | ||||
B&L | Product rights | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 8 years | ||||
Total identifiable intangible assets acquired | 861.1 | ||||
B&L | Product rights | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 855.4 | ||||
B&L | Product rights | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 5.7 | ||||
2013 Other Business Combinations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 8 years | ||||
Total identifiable intangible assets acquired | 726.8 | ||||
2013 Other Business Combinations | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 722.9 | ||||
2013 Other Business Combinations | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 3.9 | ||||
2013 Other Business Combinations | Product brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 7 years | ||||
Total identifiable intangible assets acquired | 520.3 | ||||
2013 Other Business Combinations | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 517.2 | ||||
2013 Other Business Combinations | Product brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 3.1 | ||||
2013 Other Business Combinations | Corporate brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 13 years | ||||
Total identifiable intangible assets acquired | 86.9 | ||||
2013 Other Business Combinations | Corporate brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 86.1 | ||||
2013 Other Business Combinations | Corporate brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0.8 | ||||
2013 Other Business Combinations | Partner relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 5 years | ||||
Total identifiable intangible assets acquired | 16 | ||||
2013 Other Business Combinations | Partner relationships | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 16 | ||||
2013 Other Business Combinations | Partner relationships | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
2013 Other Business Combinations | Patents | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 3 years | ||||
Total identifiable intangible assets acquired | 71.7 | ||||
2013 Other Business Combinations | Patents | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 71.7 | ||||
2013 Other Business Combinations | Patents | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
2013 Other Business Combinations | Royalty Agreement | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 5 years | ||||
Total identifiable intangible assets acquired | 26.5 | ||||
2013 Other Business Combinations | Royalty Agreement | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 26.5 | ||||
2013 Other Business Combinations | Royalty Agreement | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
2013 Other Business Combinations | Technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 10 years | ||||
Total identifiable intangible assets acquired | 5.4 | ||||
2013 Other Business Combinations | Technology | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 5.4 | ||||
2013 Other Business Combinations | Technology | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
Medicis | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 9 years | ||||
Total identifiable intangible assets acquired | 1,368.90 | ||||
Medicis | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 1,390.70 | ||||
Medicis | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -21.8 | ||||
Medicis | Product brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 8 years | ||||
Total identifiable intangible assets acquired | 466.8 | ||||
Medicis | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 491.6 | ||||
Medicis | Product brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -24.8 | ||||
Medicis | Corporate brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 14 years | ||||
Total identifiable intangible assets acquired | 40.3 | ||||
Medicis | Corporate brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 40.7 | ||||
Medicis | Corporate brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -0.4 | ||||
Medicis | In-licensed products | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 11 years | ||||
Total identifiable intangible assets acquired | 635.7 | ||||
Medicis | In-licensed products | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 633.4 | ||||
Medicis | In-licensed products | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 2.3 | ||||
Medicis | Patents | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 5 years | ||||
Total identifiable intangible assets acquired | 226.1 | ||||
Medicis | Patents | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 225 | ||||
Medicis | Patents | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 1.1 | ||||
2012 Other Business Combinations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 11 years | ||||
Total identifiable intangible assets acquired | 1,070.40 | ||||
2012 Other Business Combinations | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 1,133 | ||||
2012 Other Business Combinations | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -62.6 | ||||
2012 Other Business Combinations | Product brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 11 years | ||||
Total identifiable intangible assets acquired | 839.9 | ||||
2012 Other Business Combinations | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 903.7 | ||||
2012 Other Business Combinations | Product brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -63.8 | ||||
2012 Other Business Combinations | Product rights | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 10 years | ||||
Total identifiable intangible assets acquired | 108.4 | ||||
2012 Other Business Combinations | Product rights | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 109.3 | ||||
2012 Other Business Combinations | Product rights | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | -0.9 | ||||
2012 Other Business Combinations | Corporate brands | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 13 years | ||||
Total identifiable intangible assets acquired | 53.5 | ||||
2012 Other Business Combinations | Corporate brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 51.4 | ||||
2012 Other Business Combinations | Corporate brands | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 2.1 | ||||
2012 Other Business Combinations | Partner relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 5 years | ||||
Total identifiable intangible assets acquired | 32.4 | ||||
2012 Other Business Combinations | Partner relationships | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 32.4 | ||||
2012 Other Business Combinations | Partner relationships | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 0 | ||||
2012 Other Business Combinations | Royalty Agreement | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted- Average Useful Lives (Years) | 9 years | ||||
Total identifiable intangible assets acquired | 36.2 | ||||
2012 Other Business Combinations | Royalty Agreement | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | 36.2 | ||||
2012 Other Business Combinations | Royalty Agreement | Measurement Period Adjustments | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total identifiable intangible assets acquired | $0 |
BUSINESS_COMBINATIONS_Consider
BUSINESS COMBINATIONS - Consideration Transferred (Details) (USD $) | 0 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Aug. 05, 2013 | Dec. 11, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Adjusted for the following: | ||||
Common stock, shares outstanding | 334,402,964 | 333,036,637 | ||
B&L | ||||
Business Combinations | ||||
Enterprise value | $8,700 | |||
Adjusted for the following: | ||||
B&L’s outstanding debt, including accrued interest | -4,248.30 | |||
B&L’s company expenses | -6.4 | |||
Payment in B&L’s performance-based option | -48.5 | |||
Payment for B&L’s cash balance | 149 | |||
Additional cash payment | 75 | |||
Other | -3.2 | |||
Equity purchase price | 4,617.60 | |||
Less: Cash consideration paid for B&L’s unvested stock options | -4.3 | |||
Total fair value of consideration transferred | 4,613.30 | |||
Medicis | ||||
Adjusted for the following: | ||||
Common stock, shares outstanding | 57,100,000 | |||
Per Share Consideration (in dollars per share) | $44 | |||
Per Share Consideration | 2,513.90 | |||
Number of stock options of Medicis cancelled and exchanged for cash (in shares) | 3,200,000 | |||
Number of stock options of Medicis cancelled and exchanged for cash | 33.1 | |||
Number of outstanding restricted shares cancelled and exchanged for cash (in shares) | 2,000,000 | |||
Number of outstanding restricted shares cancelled and exchanged for cash | 31.9 | |||
Total fair value of consideration transferred | $2,578.90 |
BUSINESS_COMBINATIONS_Property
BUSINESS COMBINATIONS - Property, Plant and Equipment Acquired (Details) (B&L, USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Aug. 05, 2013 |
Business Combinations | ||
Total property, plant and equipment acquired | $794.60 | |
Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 761.4 | |
Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | 33.2 | |
Land | ||
Business Combinations | ||
Total property, plant and equipment acquired | 34.8 | |
Land | Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 47.4 | |
Land | Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | -12.6 | |
Buildings | ||
Business Combinations | ||
Weighted- Average Useful Lives (Years) | 24 years | |
Total property, plant and equipment acquired | 249.3 | |
Buildings | Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 273.1 | |
Buildings | Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | -23.8 | |
Machinery and equipment | ||
Business Combinations | ||
Weighted- Average Useful Lives (Years) | 5 years | |
Total property, plant and equipment acquired | 349.8 | |
Machinery and equipment | Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 273.5 | |
Machinery and equipment | Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | 76.3 | |
Leasehold improvements | ||
Business Combinations | ||
Weighted- Average Useful Lives (Years) | 5 years | |
Total property, plant and equipment acquired | 22.2 | |
Leasehold improvements | Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 22.5 | |
Leasehold improvements | Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | -0.3 | |
Equipment on operating lease | ||
Business Combinations | ||
Weighted- Average Useful Lives (Years) | 3 years | |
Total property, plant and equipment acquired | 13.6 | |
Equipment on operating lease | Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 13.8 | |
Equipment on operating lease | Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | -0.2 | |
Construction in progress | ||
Business Combinations | ||
Total property, plant and equipment acquired | 124.9 | |
Construction in progress | Amounts Recognized as of Acquisition Date (as previously reported) | ||
Business Combinations | ||
Total property, plant and equipment acquired | 131.1 | |
Construction in progress | Measurement Period Adjustments | ||
Business Combinations | ||
Total property, plant and equipment acquired | ($6.20) |
BUSINESS_COMBINATIONS_Pro_form
BUSINESS COMBINATIONS - Pro forma impact of business combinations (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Pro forma of consolidated results of operations | |||
Revenues | $8,348.90 | $7,929.90 | $7,700.60 |
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | $909.30 | ($801.90) | ($709.60) |
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||
Basic (in usd per share) | $2.71 | ($2.43) | ($2.14) |
Diluted (in usd per share) | $2.66 | ($2.43) | ($2.14) |
DIVESTITURES_Details
DIVESTITURES (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Jul. 01, 2014 | Oct. 31, 2013 | Dec. 31, 2013 | Feb. 29, 2012 | Jul. 10, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | Dec. 31, 2014 |
Asset acquisitions and disposition | ||||||||
Milestone payments | $0 | $62 | ||||||
Period of payment of minimum royalties from commercialization of development product | 3 years | |||||||
Skincare Products | ||||||||
Asset acquisitions and disposition | ||||||||
Net cash proceeds | 13.7 | 13.7 | ||||||
Gain (loss) on sale of business | -10.2 | |||||||
Potential additional earn-out payments, period | 12 months | |||||||
Clindamycin and benzoyl peroxide gel ("IDP-111") and Fluorouracil cream ("5-FU") | ||||||||
Asset acquisitions and disposition | ||||||||
Net cash proceeds | 66.3 | |||||||
Filler and Toxin Group | ||||||||
Asset acquisitions and disposition | ||||||||
Net cash proceeds | 1,400 | |||||||
Gain (loss) on sale of business | 323.9 | |||||||
Disposal group, costs to sell for divestiture | 43 | |||||||
Metronidazole 1.3 Percent Vaginal Gel Antibiotic Development Product [Member] | ||||||||
Asset acquisitions and disposition | ||||||||
Gain (loss) on sale of business | -58.5 | |||||||
Milestone payments | 10 | |||||||
PreCision Tretin-X Cream Product | ||||||||
Asset acquisitions and disposition | ||||||||
Up-front purchase price | 70 | |||||||
Precision Generic Tretinoin Products | ||||||||
Asset acquisitions and disposition | ||||||||
Gain (loss) on sale of business | -8.8 | |||||||
Up-front purchase price | $45 |
RESTRUCTURING_INTEGRATION_AND_2
RESTRUCTURING, INTEGRATION AND OTHER CHARGES (Details) (USD $) | 12 Months Ended | 3 Months Ended | 17 Months Ended | 3 Months Ended | 25 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2014 |
Cost-rationalization and integration initiatives | |||||||
Restructuring, integration and other costs | $381.70 | $462 | $267.10 | ||||
Acquisition-related costs | 6.3 | 36.4 | 78.6 | ||||
B&L | |||||||
Cost-rationalization and integration initiatives | |||||||
Restructuring and acquisition-related costs since acquisition date | 569.1 | ||||||
Restructuring, integration and other costs | 69.7 | 234.1 | 52.8 | ||||
Severance costs | 55.9 | 55.9 | |||||
Restructuring expenses related to acquisition | 306.9 | ||||||
Integration expenses related to acquisition | 132.8 | 116 | 248.8 | ||||
Acquisition-related costs | 13.4 | ||||||
Approximate number of employees expected to be terminated | 3,000 | ||||||
Payments for Merger Related Costs | 144.1 | 102.2 | |||||
B&L | Maximum | |||||||
Cost-rationalization and integration initiatives | |||||||
Restructuring and acquisition-related costs since acquisition date | 600 | ||||||
Medicis | |||||||
Cost-rationalization and integration initiatives | |||||||
Restructuring and acquisition-related costs since acquisition date | 193.2 | ||||||
Restructuring, integration and other costs | 23.5 | 163 | |||||
Severance costs | 77.3 | 77.3 | |||||
Restructuring expenses related to acquisition | 109.2 | ||||||
Integration expenses related to acquisition | 11.9 | 38.4 | 1.5 | 51.8 | |||
Acquisition-related costs | 24.2 | 32.2 | |||||
Approximate number of employees expected to be terminated | 750 | ||||||
Payments for Merger Related Costs | 12 | 38.5 | 0.5 | ||||
Medicis | Maximum | |||||||
Cost-rationalization and integration initiatives | |||||||
Estimated cost related to cost-rationalization and integration initiatives | 200 | 200 | 200 | ||||
One-time Termination Benefits | B&L | |||||||
Cost-rationalization and integration initiatives | |||||||
Payments for Merger Related Costs | $24 |
RESTRUCTURING_INTEGRATION_AND_3
RESTRUCTURING, INTEGRATION AND OTHER CHARGES (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Restructuring reserve | ||||
Costs incurred and/or charged to expense | $381.70 | $462 | $267.10 | |
Non-cash adjustments | 0 | |||
B&L | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 100.3 | 0 | ||
Costs incurred and/or charged to expense | 69.7 | 234.1 | 52.8 | |
Cash payments | -135.6 | -138.4 | ||
Non-cash adjustments | -11.1 | 4.6 | ||
Balance at the end of the period | 23.3 | 100.3 | ||
Medicis | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 0.3 | 11.6 | 0 | |
Costs incurred and/or charged to expense | 23.5 | 163 | ||
Cash payments | -0.1 | -35 | -155.3 | |
Non-cash adjustments | 0.2 | 3.9 | ||
Balance at the end of the period | 0.3 | 11.6 | ||
Employee Termination Costs - Severance and Related Benefits | B&L | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 89.3 | 0 | ||
Costs incurred and/or charged to expense | 46 | 155.7 | ||
Cash payments | -110.7 | -77.8 | ||
Non-cash adjustments | -5.7 | 11.4 | ||
Balance at the end of the period | 18.9 | 89.3 | ||
Employee Termination Costs - Severance and Related Benefits | Medicis | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 11.4 | 0 | ||
Costs incurred and/or charged to expense | 20 | 85.3 | ||
Cash payments | -31.4 | -78 | ||
Non-cash adjustments | 0.3 | 4.1 | ||
Balance at the end of the period | 0.3 | 11.4 | ||
Employee Termination Costs - Share-Based Compensation | B&L | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 0 | 0 | ||
Costs incurred and/or charged to expense | 0 | 52.8 | ||
Cash payments | 0 | -52.8 | ||
Non-cash adjustments | 0 | |||
Balance at the end of the period | 0 | 0 | ||
Employee Termination Costs - Share-Based Compensation | Medicis | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 0 | 0 | ||
Costs incurred and/or charged to expense | 0 | 77.3 | ||
Cash payments | 0 | -77.3 | ||
Non-cash adjustments | 0 | 0 | ||
Balance at the end of the period | 0 | 0 | ||
IPR&D Termination Costs | B&L | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 0 | 0 | ||
Costs incurred and/or charged to expense | 0 | 0 | ||
Cash payments | 0 | 0 | ||
Non-cash adjustments | 0 | 0 | ||
Balance at the end of the period | 0 | 0 | ||
IPR&D Termination Costs | Medicis | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 0 | 0 | ||
Costs incurred and/or charged to expense | 0 | 0 | ||
Cash payments | 0 | 0 | ||
Non-cash adjustments | 0 | 0 | ||
Balance at the end of the period | 0 | 0 | ||
Contract Termination, Facility Closure and Other Costs | B&L | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 11 | 0 | ||
Costs incurred and/or charged to expense | 23.7 | 25.6 | ||
Cash payments | -24.9 | -7.8 | ||
Non-cash adjustments | -5.4 | -6.8 | ||
Balance at the end of the period | 4.4 | 11 | ||
Contract Termination, Facility Closure and Other Costs | Medicis | ||||
Restructuring reserve | ||||
Balance at the beginning of the period | 0.2 | 0 | ||
Costs incurred and/or charged to expense | 3.5 | 0.4 | ||
Cash payments | -3.6 | 0 | ||
Non-cash adjustments | -0.1 | -0.2 | ||
Balance at the end of the period | $0 | $0.20 |
RESTRUCTURING_INTEGRATION_AND_4
RESTRUCTURING, INTEGRATION AND OTHER CHARGES (Details 3) (Other Restructuring, Integration-related and Other Costs, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Restructuring, Integration-related and Other Costs | |||
Cost-rationalization and integration initiatives | |||
Other restructuring, integration-related costs incurred | $111.40 | $102.80 | $179.90 |
Integration consulting, duplicate labor, transition service, and other | 67.8 | 35.8 | 72 |
Severance costs | 25 | 15.1 | 59.2 |
Facility closure costs | 11.7 | 39.1 | 30.4 |
Other costs, including non-personnel manufacturing integration costs | 6.9 | 12.8 | 18.3 |
Cash payment made | $104.40 | $103.30 | $173.60 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Liabilities: | ||
Fair value, assets, level 1 to level 2 transfers, amount | $0 | |
Recurring basis | ||
Assets: | ||
Cash equivalents | 4,600,000 | 171,300,000 |
Liabilities: | ||
Acquisition-related contingent consideration | -308,800,000 | -355,800,000 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash equivalents | 2,800,000 | 171,300,000 |
Liabilities: | ||
Acquisition-related contingent consideration | 0 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash equivalents | 1,800,000 | 0 |
Liabilities: | ||
Acquisition-related contingent consideration | 0 | 0 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Liabilities: | ||
Acquisition-related contingent consideration | -308,800,000 | -355,800,000 |
Prepaid Expenses and Other Current Assets | Significant Other Observable Inputs (Level 2) | ||
Liabilities: | ||
Carrying value of time deposits | $42,600,000 | $25,200,000 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Balance at the beginning of the period | ($355.80) | ($455.10) | ||
Included in net income (loss): | ||||
Arising during the year | 14.1 | 29.2 | ||
Included in other comprehensive (loss) income: | ||||
Arising during the year | 4.1 | 5 | ||
Issuances | -93.8 | -76.1 | -145.7 | |
Payments | 116.8 | 141.2 | ||
Release from restricted cash | 5.8 | 0 | ||
Balance at the end of the period | -308.8 | -355.8 | -455.1 | |
Included in net income (loss) | ||||
Acquisition-related contingent consideration | 14.1 | 29.2 | 5.3 | |
Net fair value adjustment | 19 | |||
Elidel, Xerese & Zovirax | ||||
Included in net income (loss) | ||||
Acquisition-related contingent consideration | 20 | |||
Lacricert | ||||
Included in net income (loss) | ||||
Acquisition-related contingent consideration | $6.90 |
FAIR_VALUE_MEASUREMENTS_Detail2
FAIR VALUE MEASUREMENTS (Details 3) (USD $) | 12 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 |
Corporate brands | Amortization and Impairments of Finite-lived Intangible Assets | ||
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | ||
Impairment charges on intangible assets | $31.50 | |
Non-recurring basis | Ezogabine Retigabine | Amortization and Impairments of Finite-lived Intangible Assets | ||
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | ||
Impairment charges on intangible assets | 551.6 | |
Non-recurring basis | Ezogabine Retigabine | In-process Research and Development Impairments and Other Charges | ||
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | ||
Impairment charges on intangible assets | 93.8 | |
Non-recurring basis | Significant Unobservable Inputs (Level 3) | Ezogabine Retigabine | ||
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | ||
Fair value of assets measured on nonrecurring basis | $45.10 |
TRADE_RECEIVABLES_NET_Details
TRADE RECEIVABLES, NET (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Receivables [Abstract] | ||
Trade | $2,111.70 | $1,704 |
Less allowance for doubtful accounts | -35.9 | -27.6 |
Trade, net | $2,075.80 | $1,676.40 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $232.80 | $221.80 |
Work in process | 98 | 104.7 |
Finished goods | 732.7 | 656.3 |
Inventories, gross | 1,063.50 | 982.8 |
Less allowance for obsolescence | -112.9 | -99.8 |
Inventories, net | $950.60 | $883 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | $2,288.40 | $2,073 | |
Less accumulated depreciation | -977.9 | -838.8 | |
Property, plant and equipment, net | 1,310.50 | 1,234.20 | |
Depreciation expense | 186.9 | 113.8 | 54.8 |
Land | |||
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | 79.6 | 76.9 | |
Buildings | |||
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | 602.8 | 607.1 | |
Machinery and equipment | |||
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | 1,081.30 | 1,062.70 | |
Other equipment and leasehold improvements | |||
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | 278 | 108.2 | |
Equipment on operating lease | |||
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | 32.7 | 28.6 | |
Construction in progress | |||
Property, plant and equipment [Line Items] | |||
Property, plant and equipment, gross | $214 | $189.50 |
INTANGIBLE_ASSETS_AND_GOODWILL2
INTANGIBLE ASSETS AND GOODWILL (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Finite-lived intangible assets: | ||||||
Weighted- Average Useful Lives (Years) | 7 years | |||||
Gross Carrying Amount | $14,408.90 | $14,408.90 | $14,398.80 | |||
Accumulated Amortization, Including Impairments | -5,140.60 | -5,140.60 | -3,827.40 | |||
Net Carrying Amount | 9,268.30 | 9,268.30 | 10,571.40 | |||
Total intangible assets | ||||||
Gross carrying amount | 16,396.50 | 16,396.50 | 16,675.60 | |||
Net Carrying Amount | 11,255.90 | 11,255.90 | 12,848.20 | |||
Developed Markets | Ezogabine Retigabine | ||||||
Total intangible assets | ||||||
Impairment charges | 551.6 | |||||
Non-recurring basis | Amortization and Impairments of Finite-lived Intangible Assets | Ezogabine Retigabine | ||||||
Total intangible assets | ||||||
Impairment charges | 551.6 | |||||
Non-recurring basis | Amortization and Impairments of Finite-lived Intangible Assets | Developed Markets | Kinerase | ||||||
Total intangible assets | ||||||
Impairment charges | 55.2 | |||||
Non-recurring basis | Amortization and Impairments of Finite-lived Intangible Assets | Developed Markets | Grifulvin | ||||||
Total intangible assets | ||||||
Impairment charges | 32.4 | |||||
Non-recurring basis | Amortization and Impairments of Finite-lived Intangible Assets | Developed Markets | Ezogabine Retigabine | ||||||
Total intangible assets | ||||||
Impairment charges | 551.6 | |||||
Non-recurring basis | Amortization and Impairments of Finite-lived Intangible Assets | Developed Markets | Opana | ||||||
Total intangible assets | ||||||
Impairment charges | 22.2 | |||||
Non-recurring basis | In-process Research and Development Impairments and Other Charges | Ezogabine Retigabine | ||||||
Total intangible assets | ||||||
Impairment charges | 93.8 | |||||
Acquired IPR&D | ||||||
Finite-lived intangible assets: | ||||||
Accumulated Amortization, Including Impairments | 0 | 0 | 0 | |||
Indefinite-lived intangible assets: | ||||||
Indefinite-lived intangible assets | 290.1 | 290.1 | 579.3 | |||
Corporate brands | ||||||
Finite-lived intangible assets: | ||||||
Accumulated Amortization, Including Impairments | 0 | 0 | 0 | |||
Indefinite-lived intangible assets: | ||||||
Indefinite-lived intangible assets | 1,697.50 | 1,697.50 | 1,697.50 | |||
In Process Research and Development | Non-recurring basis | In-process Research and Development Impairments and Other Charges | Ezogabine Retigabine | ||||||
Total intangible assets | ||||||
Impairment charges | 93.8 | |||||
In Process Research and Development | Non-recurring basis | In-process Research and Development Impairments and Other Charges | Mapracorat | ||||||
Total intangible assets | ||||||
Impairment charges | 14.4 | |||||
In Process Research and Development | Non-recurring basis | In-process Research and Development Impairments and Other Charges | Lacricert | ||||||
Total intangible assets | ||||||
Impairment charges | 27.3 | |||||
Product brands | ||||||
Finite-lived intangible assets: | ||||||
Weighted- Average Useful Lives (Years) | 9 years | |||||
Gross Carrying Amount | 10,320.20 | 10,320.20 | 10,554.20 | |||
Accumulated Amortization, Including Impairments | -3,579.80 | -3,579.80 | -2,729.10 | |||
Net Carrying Amount | 6,740.40 | 6,740.40 | 7,825.10 | |||
Corporate brands | ||||||
Finite-lived intangible assets: | ||||||
Weighted- Average Useful Lives (Years) | 14 years | |||||
Gross Carrying Amount | 364.2 | 364.2 | 365.6 | |||
Accumulated Amortization, Including Impairments | -65.2 | -65.2 | -44.4 | |||
Net Carrying Amount | 299 | 299 | 321.2 | |||
Product rights | ||||||
Finite-lived intangible assets: | ||||||
Weighted- Average Useful Lives (Years) | 7 years | |||||
Gross Carrying Amount | 3,225.90 | 3,225.90 | 3,021 | |||
Accumulated Amortization, Including Impairments | -1,263.80 | -1,263.80 | -876.9 | |||
Net Carrying Amount | 1,962.10 | 1,962.10 | 2,144.10 | |||
Partner relationships | ||||||
Finite-lived intangible assets: | ||||||
Weighted- Average Useful Lives (Years) | 4 years | |||||
Gross Carrying Amount | 223.1 | 223.1 | 194 | |||
Accumulated Amortization, Including Impairments | -107.5 | -107.5 | -83.2 | |||
Net Carrying Amount | 115.6 | 115.6 | 110.8 | |||
Out-licensed technology and other | ||||||
Finite-lived intangible assets: | ||||||
Weighted- Average Useful Lives (Years) | 5 years | |||||
Gross Carrying Amount | 275.5 | 275.5 | 264 | |||
Accumulated Amortization, Including Impairments | -124.3 | -124.3 | -93.8 | |||
Net Carrying Amount | $151.20 | $151.20 | $170.20 |
INTANGIBLE_ASSETS_AND_GOODWILL3
INTANGIBLE ASSETS AND GOODWILL (Details 2) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Estimated aggregate amortization expense | |
2015 | $1,376.10 |
2016 | 1,280.10 |
2017 | 1,216.30 |
2018 | 1,093.60 |
2019 | $949.80 |
INTANGIBLE_ASSETS_AND_GOODWILL4
INTANGIBLE ASSETS AND GOODWILL (Details 3) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Change in the carrying amount of goodwill | ||
Balance at the beginning of the period | $9,752.10 | $5,141.40 |
Additions | 396.3 | 4,595.20 |
Adjustments | -23.9 | 28.1 |
Divestitures | -428.9 | |
Foreign exchange and other | -349.2 | -12.6 |
Balance at the end of the period | 9,346.40 | 9,752.10 |
Developed Markets | ||
Change in the carrying amount of goodwill | ||
Balance at the beginning of the period | 7,428.70 | 3,993 |
Additions | 317.4 | 3,395.70 |
Adjustments | -19.6 | 28.4 |
Divestitures | -428.9 | |
Foreign exchange and other | -182.6 | 11.6 |
Balance at the end of the period | 7,115 | 7,428.70 |
Emerging Markets | ||
Change in the carrying amount of goodwill | ||
Balance at the beginning of the period | 2,323.40 | 1,148.40 |
Additions | 78.9 | 1,199.50 |
Adjustments | -4.3 | -0.3 |
Divestitures | 0 | |
Foreign exchange and other | -166.6 | -24.2 |
Balance at the end of the period | $2,231.40 | $2,323.40 |
ACCRUED_AND_OTHER_CURRENT_LIAB2
ACCRUED AND OTHER CURRENT LIABILITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accrued Liabilities, Current [Abstract] | ||
Product returns | $380.30 | $225.50 |
Product rebates | 714.9 | 566.6 |
Interest | 196.7 | 231.3 |
Employee costs | 204.9 | 201.2 |
Accrued milestones | 62 | 0 |
Professional fees | 55.6 | 46.3 |
Restructuring, integration and other costs (see note 5) | 66.6 | 112 |
Royalties | 41.4 | 37.6 |
Legal settlements and related fees (see note 20) | 8 | 55.9 |
Liabilities for uncertain tax positions | 6.8 | 8.7 |
Value added tax | 24.7 | 25.9 |
Short-term borrowings | 6.2 | 12.1 |
Deferred income | 18.8 | 19.5 |
Income taxes payable | 122.9 | 39.1 |
Capital expenditures | 25.6 | 27.2 |
Advertising and promotion | 33.3 | 19.3 |
Other | 210.7 | 172 |
Accrued and Other Current Liabilities | $2,179.40 | $1,800.20 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 28, 2010 | Nov. 23, 2010 | Feb. 08, 2011 | Mar. 08, 2011 | Oct. 04, 2012 | Jul. 12, 2013 | Dec. 02, 2013 | Feb. 17, 2015 | Jan. 30, 2015 |
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | $15,254,600,000 | $17,367,700,000 | |||||||||
Less current portion | -900,000 | -204,800,000 | |||||||||
Total long-term debt | 15,253,700,000 | 17,162,900,000 | |||||||||
Unamortized debt discount | 136,400,000 | ||||||||||
Total fair value of long-term debt | 15,800,000,000 | 18,400,000,000 | |||||||||
Revolving credit facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 165,000,000 | 0 | |||||||||
Series A-1 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 139,600,000 | 259,000,000 | |||||||||
Unamortized debt discount | 1,400,000 | 3,600,000 | |||||||||
Series A-2 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 135,700,000 | 228,100,000 | |||||||||
Unamortized debt discount | 2,500,000 | 6,200,000 | |||||||||
Series A-3 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 1,637,900,000 | 1,935,700,000 | |||||||||
Unamortized debt discount | 22,400,000 | 35,400,000 | |||||||||
Series D-2 Tranche B Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 1,089,700,000 | 1,256,700,000 | |||||||||
Unamortized debt discount | 18,900,000 | 27,000,000 | |||||||||
Series C-2 Tranche B Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 838,300,000 | 966,800,000 | |||||||||
Unamortized debt discount | 14,500,000 | 20,700,000 | |||||||||
Series E-1 Tranche B Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 2,544,900,000 | 3,090,500,000 | |||||||||
Unamortized debt discount | 2,900,000 | 85,500,000 | |||||||||
6.75% Senior Notes due in October 2017 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 0 | 498,700,000 | |||||||||
Unamortized debt discount | 1,300,000 | ||||||||||
Stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | ||||||||
6.875% Senior Notes due in December 2018 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 497,700,000 | 940,200,000 | |||||||||
Unamortized debt discount | 1,900,000 | 4,400,000 | |||||||||
Stated interest rate (as a percent) | 6.88% | 6.88% | 6.88% | ||||||||
7.00% Senior Notes due in October 2020 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 687,500,000 | 687,100,000 | |||||||||
Unamortized debt discount | 2,500,000 | 2,900,000 | |||||||||
Stated interest rate (as a percent) | 7.00% | 7.00% | 7.00% | ||||||||
6.75% Senior Notes due in August 2021 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 650,000,000 | 650,000,000 | |||||||||
Stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | ||||||||
7.25% Senior Notes due in July 2022 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 543,200,000 | 542,200,000 | |||||||||
Unamortized debt discount | 6,800,000 | 7,800,000 | |||||||||
Stated interest rate (as a percent) | 7.25% | 7.25% | 7.25% | ||||||||
6.375% Senior Notes due in October 2020 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 2,225,600,000 | 2,221,400,000 | |||||||||
Unamortized debt discount | 24,400,000 | 28,600,000 | |||||||||
Stated interest rate (as a percent) | 6.38% | 6.38% | 6.38% | ||||||||
6.75% Senior Notes due August 2018 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 1,585,800,000 | 1,581,900,000 | |||||||||
Unamortized debt discount | 14,200,000 | 18,200,000 | |||||||||
Stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | ||||||||
7.50% Senior Notes due July 2021 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 1,608,400,000 | 1,605,900,000 | |||||||||
Unamortized debt discount | 16,600,000 | 19,100,000 | |||||||||
Stated interest rate (as a percent) | 7.50% | 7.50% | |||||||||
5.625 % Senior Notes due December 2021 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 892,600,000 | 891,500,000 | |||||||||
Unamortized debt discount | 7,400,000 | 8,500,000 | |||||||||
Stated interest rate (as a percent) | 5.63% | 5.63% | 5.63% | ||||||||
Other | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | 12,700,000 | 12,000,000 | |||||||||
Subsequent event | 6.875% Senior Notes due in December 2018 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Total long-term debt | $499,600,000 | ||||||||||
Stated interest rate (as a percent) | 6.88% | ||||||||||
Subsequent event | 5.50% Senior Notes due 2023 | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Stated interest rate (as a percent) | 5.50% |
LONGTERM_DEBT_Details_2
LONG-TERM DEBT (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Aggregate maturities of long term debt, including current portion | ||
2015 | $0.90 | |
2016 | 639.3 | |
2017 | 360.2 | |
2018 | 3,204.50 | |
2019 | 1,961.40 | |
Thereafter | 9,224.70 | |
Total gross maturities | 15,391 | |
Unamortized discounts | -136.4 | |
Total long-term debt | $15,254.60 | $17,367.70 |
LONGTERM_DEBT_Facility_Narrati
LONG-TERM DEBT - Facility Narrative (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 11, 2012 | Mar. 31, 2013 | Jul. 31, 2014 | Aug. 05, 2013 | Feb. 06, 2014 | Dec. 31, 2014 | |
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Loss on extinguishment of debt | $93,700,000 | $129,600,000 | $65,000,000 | $20,100,000 | |||||||
Tranche B Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Loss on extinguishment of debt | 17,600,000 | ||||||||||
Series C, Tranche B Term Loan Facility | Medicis | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Amount borrowed | 1,000,000,000 | ||||||||||
Series D-2 and Series C-2, Tranche B, Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Loss on extinguishment of debt | 21,400,000 | ||||||||||
Effective rate (as a percent) | 3.71% | 3.71% | |||||||||
Series A-2 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Debt Instrument, Periodic Payment, Principal | 25,400,000 | ||||||||||
Debt Instrument, Quarterly Amortization Payment | 7,900,000 | ||||||||||
Series A-2 Tranche A Term Loan Facility | B&L | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Amount borrowed | 850,000,000 | ||||||||||
Series E-1 Tranche B Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Amount borrowed | 2,950,000,000 | ||||||||||
Debt Instrument, Periodic Payment, Principal | 380,000,000 | ||||||||||
Effective rate (as a percent) | 3.80% | 3.80% | |||||||||
Series E-1 Tranche B Term Loan Facility | B&L | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Amount borrowed | 3,200,000,000 | ||||||||||
Series A-3 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Amount borrowed | 225,600,000 | ||||||||||
Debt Instrument, Periodic Payment, Principal | 274,500,000 | ||||||||||
Debt Instrument, Quarterly Amortization Payment | 45,000,000 | ||||||||||
Secured Debt | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Debt Instrument, Periodic Payment, Principal | 1,000,000,000 | ||||||||||
Series D-2 Tranche B Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Debt Instrument, Periodic Payment, Principal | 165,400,000 | ||||||||||
Series C-2 Tranche B, Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Debt Instrument, Periodic Payment, Principal | 127,200,000 | ||||||||||
Series A-1 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Debt Instrument, Periodic Payment, Principal | 27,500,000 | ||||||||||
Debt Instrument, Quarterly Amortization Payment | 10,900,000 | ||||||||||
Senior Secured Credit Facilities | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Principal reduction | 255,300,000 | ||||||||||
Percentage of cash proceeds from asset sales outside the ordinary course of business payable as mandatory prepayments | 100.00% | ||||||||||
Percentage of net cash proceeds of insurance and condemnation proceeds for property or asset losses | 100.00% | ||||||||||
Percentage of cash proceeds from issuance of equity securities payable as mandatory prepayments | 50.00% | 50.00% | |||||||||
Percentage of cash proceeds from incurrence of debt | 100.00% | ||||||||||
Percentage of annual excess cash flow | 50.00% | ||||||||||
Percentage of capital stock of the entity and domestic subsidiaries pledged as collateral for borrowings | 100.00% | 100.00% | |||||||||
Percentage of capital stock of foreign subsidiaries pledged as collateral for borrowings | 65.00% | 65.00% | |||||||||
Series A-1, A-2 and A-3 Tranche A Term Loan Facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Effective rate (as a percent) | 2.41% | 2.41% | |||||||||
Revolving credit facility | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Maximum borrowing capacity | $1,000,000,000 | ||||||||||
Effective rate (as a percent) | 2.45% | 2.45% | |||||||||
Revolving credit facility | Senior Secured Credit Facilities | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Commitment fee, unutilized commitments, percentage | 0.50% | ||||||||||
Base Rate | Revolving Credit Facility, Series A-1, A-2 and A-3 Tranche A Term Loan Facilities | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Interest rate margin (as a percent) | 1.25% | ||||||||||
Base Rate | Series D-2, C-2 and E-1 Tranche B Term Loan Facilities | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Interest rate margin (as a percent) | 1.75% | ||||||||||
Variable rate floor (as a percent) | 1.75% | ||||||||||
LIBOR | Revolving Credit Facility, Series A-1, A-2 and A-3 Tranche A Term Loan Facilities | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||||
LIBOR | Series D-2, C-2 and E-1 Tranche B Term Loan Facilities | |||||||||||
Long-term debt, net of unamortized debt discount [Line Items] | |||||||||||
Interest rate margin (as a percent) | 2.75% | ||||||||||
Variable rate floor (as a percent) | 0.75% |
LONGTERM_DEBT_Senior_Notes_Nar
LONG-TERM DEBT - Senior Notes Narrative (Details 4) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||||||
Jun. 24, 2013 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 08, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Oct. 15, 2014 | Sep. 28, 2010 | Dec. 31, 2014 | Dec. 29, 2014 | Nov. 23, 2010 | Feb. 08, 2011 | Oct. 04, 2012 | Jul. 12, 2013 | Dec. 02, 2013 | Aug. 05, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | 24-May-13 | |
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 101.00% | ||||||||||||||||||||
Loss on extinguishment of debt | $93,700,000 | $129,600,000 | $65,000,000 | $20,100,000 | |||||||||||||||||
Issuance of long-term debt, net of discount | 1,632,600,000 | 8,429,600,000 | 6,005,800,000 | ||||||||||||||||||
Issuance of common stock | 2,300,000,000 | 2,306,900,000 | |||||||||||||||||||
B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Issuance of common stock | 2,300,000,000 | ||||||||||||||||||||
6.50% Senior Notes due in July 2016 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 950,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 6.50% | ||||||||||||||||||||
Aggregate principal amount of notes repurchased | 915,500,000 | 34,500,000 | |||||||||||||||||||
Repurchases of convertible debt | 945,300,000 | ||||||||||||||||||||
Call premium | 29,800,000 | ||||||||||||||||||||
Loss on extinguishment of debt | 32,500,000 | ||||||||||||||||||||
7.25% Senior Notes due in July 2022 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 100.00% | ||||||||||||||||||||
Amount borrowed | 550,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% | ||||||||||||||||
Issue price as a percentage of par value | 98.13% | ||||||||||||||||||||
Effective rate (as a percent) | 7.50% | ||||||||||||||||||||
6.75% Senior Notes due in October 2017 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 500,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | 6.75% | 6.75% | ||||||||||||||||
Aggregate principal amount of notes repurchased | 500,000,000 | ||||||||||||||||||||
Repurchases of convertible debt | 518,200,000 | ||||||||||||||||||||
Call premium | 16,900,000 | ||||||||||||||||||||
Loss on extinguishment of debt | 17,900,000 | ||||||||||||||||||||
7.00% Senior Notes due in October 2020 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 100.00% | ||||||||||||||||||||
Amount borrowed | 700,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | ||||||||||||||||
Issue price as a percentage of par value | 99.38% | ||||||||||||||||||||
Effective rate (as a percent) | 7.09% | ||||||||||||||||||||
Aggregate principal amount of notes repurchased | 10,000,000 | ||||||||||||||||||||
6.875% Senior Notes due in December 2018 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 1,000,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 6.88% | 6.88% | 6.88% | 6.88% | 6.88% | ||||||||||||||||
Issue price as a percentage of par value | 99.24% | ||||||||||||||||||||
Effective rate (as a percent) | 7.00% | ||||||||||||||||||||
Aggregate principal amount of notes repurchased | 55,400,000 | 445,000,000 | |||||||||||||||||||
Repurchases of convertible debt | 462,700,000 | ||||||||||||||||||||
Call premium | 15,300,000 | ||||||||||||||||||||
Loss on extinguishment of debt | 17,900,000 | ||||||||||||||||||||
6.75% Senior Notes due in August 2021 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 100.00% | ||||||||||||||||||||
Amount borrowed | 650,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | 6.75% | 6.75% | ||||||||||||||||
6.375% Senior Notes due in October 2020 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 100.00% | ||||||||||||||||||||
Amount borrowed | 1,750,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 6.38% | 6.38% | 6.38% | 6.38% | 6.38% | ||||||||||||||||
Underwriting fees | 26,300,000 | ||||||||||||||||||||
Issuance of long-term debt, net of discount | 1,723,700,000 | ||||||||||||||||||||
Maximum percentage of the aggregate principal amount that may be redeemed with the net proceeds of certain equity offerings | 35.00% | ||||||||||||||||||||
Redemption price, using proceeds from certain equity offerings, as a percentage of the principal amount | 106.38% | ||||||||||||||||||||
6.375% Senior Notes due in October 2020 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 500,000,000 | ||||||||||||||||||||
Underwriting fees | 7,500,000 | ||||||||||||||||||||
Issuance of long-term debt, net of discount | 492,500,000 | ||||||||||||||||||||
6.75% Senior Notes due August 2018 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 1,600,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | 6.75% | 6.75% | ||||||||||||||||
Underwriting fees | 20,000,000 | ||||||||||||||||||||
Issuance of long-term debt, net of discount | 1,580,000,000 | ||||||||||||||||||||
Maximum percentage of the aggregate principal amount that may be redeemed with the net proceeds of certain equity offerings | 35.00% | ||||||||||||||||||||
Redemption price, using proceeds from certain equity offerings, as a percentage of the principal amount | 106.75% | ||||||||||||||||||||
6.75% Senior Notes due August 2018 | B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 1,600,000,000 | ||||||||||||||||||||
7.50% Senior Notes due July 2021 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 1,625,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 7.50% | ||||||||||||||||||||
Underwriting fees | 20,300,000 | ||||||||||||||||||||
Issuance of long-term debt, net of discount | 1,604,700,000 | ||||||||||||||||||||
Maximum percentage of the aggregate principal amount that may be redeemed with the net proceeds of certain equity offerings | 35.00% | ||||||||||||||||||||
Redemption price, using proceeds from certain equity offerings, as a percentage of the principal amount | 107.50% | ||||||||||||||||||||
7.50% Senior Notes due July 2021 | B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 1,625,000,000 | ||||||||||||||||||||
6.75% Senior Notes Due August 2018 and 7.50% Percent Senior Notes Due July 2021 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 100.00% | ||||||||||||||||||||
5.625 % Senior Notes due December 2021 | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 100.00% | ||||||||||||||||||||
Amount borrowed | 900,000,000 | ||||||||||||||||||||
Stated interest rate (as a percent) | 5.63% | 5.63% | 5.63% | 5.63% | 5.63% | ||||||||||||||||
Underwriting fees | 8,500,000 | ||||||||||||||||||||
Issuance of long-term debt, net of discount | 891,500,000 | ||||||||||||||||||||
Maximum percentage of the aggregate principal amount that may be redeemed with the net proceeds of certain equity offerings | 35.00% | ||||||||||||||||||||
Redemption price, using proceeds from certain equity offerings, as a percentage of the principal amount | 105.63% | ||||||||||||||||||||
Bridge loan facility | B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Maximum borrowing capacity | 9,275,000,000 | ||||||||||||||||||||
Incremental Term Loan Facility | B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Maximum borrowing capacity | 9,575,000,000 | 9,575,000,000 | |||||||||||||||||||
Senior Credit Facilities | B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Amount borrowed | 4,050,000,000 | ||||||||||||||||||||
Amended and Restated Commitment Letter | B&L | |||||||||||||||||||||
Long-term debt [Line Items] | |||||||||||||||||||||
Deferred financing costs | 37,300,000 | ||||||||||||||||||||
Deferred financing costs expensed | $13,100,000 | $24,200,000 |
EMPLOYEE_BENEFIT_PLANS_Narrati
EMPLOYEE BENEFIT PLANS - Narrative (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 05, 2013 | |
defined_benefit_plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer contribution maximum age | 65 years | |||
Estimated Future Benefit Payments | ||||
Future benefit payments period | 10 years | |||
Assumptions | ||||
Fair value, assets, level 1 to level 2 transfers, amount | $0 | |||
Defined Contribution Plans | ||||
Contributions recognized | 20,500,000 | 16,400,000 | 2,800,000 | |
U.S. defined benefit pension plan | ||||
Benefit Obligation, Change in Plan Assets and Funded Status | ||||
Estimated company contributions in current fiscal year | 10,100,000 | |||
Assumptions | ||||
Expected return on plan assets (percent) | 7.50% | 7.50% | ||
Non-U.S. defined benefit pension plans | ||||
Accounting for Pension Benefit Plans and Postretirement Benefit Plan | ||||
Expected unrecognized prior service credits during next year | 600,000 | |||
Expected unrecognized loss during next year | 1,400,000 | |||
Benefit Obligation, Change in Plan Assets and Funded Status | ||||
Accumulated benefit obligation | 263,100,000 | 201,500,000 | ||
Estimated company contributions in current fiscal year | 7,400,000 | |||
Assumptions | ||||
Expected return on plan assets (percent) | 5.63% | 5.59% | ||
U.S. postretirement benefit plan | ||||
Accounting for Pension Benefit Plans and Postretirement Benefit Plan | ||||
Expected unrecognized prior service credits during next year | $2,500,000 | |||
Assumptions | ||||
Expected return on plan assets (percent) | 5.50% | 5.50% | ||
Reduction of expected return on plan assets (percent) | 2.00% | |||
Ireland | Non-U.S. defined benefit pension plans | ||||
Assumptions | ||||
Expected return on plan assets (percent) | 6.00% | |||
B&L | Ireland | Non-U.S. defined benefit pension plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined benefit plans | 2 |
EMPLOYEE_BENEFIT_PLANS_Amounts
EMPLOYEE BENEFIT PLANS - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
U.S. defined benefit pension plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Unrecognized actuarial (losses) gains | ($18.20) | $11.20 |
Unrecognized prior service credits | 0 | 0 |
Non-U.S. defined benefit pension plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Unrecognized actuarial (losses) gains | -72.9 | 12.7 |
Unrecognized prior service credits | 26.8 | 0 |
U.S. postretirement benefit plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Unrecognized actuarial (losses) gains | -3.8 | 1 |
Unrecognized prior service credits | $25.50 | $27.90 |
EMPLOYEE_BENEFIT_PLANS_Compone
EMPLOYEE BENEFIT PLANS - Components of net periodic benefit cost (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
U.S. defined benefit pension plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $0.40 | $0.10 |
Interest cost | 10.8 | 4.5 |
Expected return on plan assets | -14.7 | -5.9 |
Amortization of net gain | 0 | 0 |
Curtailment gain recognized | 0 | 0 |
Amortization of prior service credit | 0 | 0 |
Settlement loss (gain) recognized | 0.9 | -0.1 |
Other | 0 | 0 |
Net periodic (benefit) cost | -2.6 | -1.4 |
Non-U.S. defined benefit pension plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 3.9 | 2.2 |
Interest cost | 8.3 | 3.7 |
Expected return on plan assets | -7.7 | -3.1 |
Amortization of net gain | -0.2 | 0 |
Curtailment gain recognized | -1.6 | 0 |
Amortization of prior service credit | 0 | 0 |
Settlement loss (gain) recognized | 0.2 | 0.6 |
Other | 0.2 | 0 |
Net periodic (benefit) cost | 3.1 | 3.4 |
U.S. postretirement benefit plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 1.7 | 0.9 |
Interest cost | 2.3 | 1.6 |
Expected return on plan assets | -0.5 | -0.3 |
Amortization of net gain | 0 | 0 |
Curtailment gain recognized | 0 | 0 |
Amortization of prior service credit | -2.5 | 0 |
Settlement loss (gain) recognized | 0 | 0 |
Other | 0 | 0 |
Net periodic (benefit) cost | $1 | $2.20 |
EMPLOYEE_BENEFIT_PLANS_Change_
EMPLOYEE BENEFIT PLANS - Change in Benefit Obligation, Plan Assets and Funded Status (Details) (USD $) | 12 Months Ended | 3 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 |
U.S. defined benefit pension plan | ||||
Change in Projected benefit Obligation | ||||
Projected benefit obligation, beginning of year | $234.60 | $0 | ||
Service cost | 0.4 | 0.1 | ||
Interest cost | 10.8 | 4.5 | ||
Acquisition of B&L | 0 | 244.2 | ||
Employee contributions | 0 | 0 | ||
Plan amendments | 0 | 0 | ||
Plan curtailments | 0 | 0 | ||
Settlements | -13 | -5.3 | ||
Benefits paid | -10.4 | -4.3 | ||
Actuarial losses (gains) | 29.4 | -4.6 | ||
Currency translation adjustments | 0 | 0 | ||
Other | 0 | 0 | ||
Projected benefit obligation, end of year | 251.8 | 234.6 | 234.6 | 251.8 |
Change in Plan Assets | ||||
Fair value of plan assets, beginning of year | 197.3 | 0 | ||
Actual return on plan assets | 13.8 | 12.7 | ||
Employee contributions | 0 | 0 | ||
Company contributions | 8.9 | 3.3 | ||
Acquisition of B&L | 0 | 190.9 | ||
Settlements | -13 | -5.3 | ||
Benefits paid | -10.4 | -4.3 | ||
Currency translation adjustments | 0 | 0 | ||
Fair value of plan assets, end of year | 196.6 | 197.3 | 197.3 | 196.6 |
Funded Status at end of year | -55.2 | -37.3 | -37.3 | -55.2 |
Recognized as: | ||||
Other long-term assets, net | 0 | 0 | 0 | 0 |
Accrued and other current liabilities | 0 | 0 | 0 | 0 |
Pension and other benefit liabilities | -55.2 | -37.3 | -37.3 | -55.2 |
Non-U.S. defined benefit pension plans | ||||
Change in Projected benefit Obligation | ||||
Projected benefit obligation, beginning of year | 229.7 | 7 | ||
Service cost | 3.9 | 2.2 | ||
Interest cost | 8.3 | 3.7 | ||
Acquisition of B&L | 0 | 224 | ||
Employee contributions | 0 | 0 | ||
Plan amendments | -29.4 | 0 | ||
Plan curtailments | -1.6 | 0 | ||
Settlements | -0.4 | -0.1 | ||
Benefits paid | -6.2 | -3.6 | ||
Actuarial losses (gains) | 101.9 | -10.1 | ||
Currency translation adjustments | -33.8 | 6.6 | ||
Other | 0.2 | 0 | ||
Projected benefit obligation, end of year | 272.6 | 229.7 | 229.7 | 272.6 |
Change in Plan Assets | ||||
Fair value of plan assets, beginning of year | 139.1 | 1.3 | ||
Actual return on plan assets | 17.5 | 5.1 | ||
Employee contributions | 0 | 0 | ||
Company contributions | 8.4 | 7 | ||
Acquisition of B&L | 0 | 125.6 | ||
Settlements | -0.4 | -0.1 | ||
Benefits paid | -6.2 | -3.6 | ||
Currency translation adjustments | -17.9 | 3.8 | ||
Fair value of plan assets, end of year | 140.5 | 139.1 | 139.1 | 140.5 |
Funded Status at end of year | -132.1 | -90.6 | -90.6 | -132.1 |
Recognized as: | ||||
Other long-term assets, net | 1.4 | 1.5 | 1.5 | 1.4 |
Accrued and other current liabilities | -2 | -2.1 | -2.1 | -2 |
Pension and other benefit liabilities | -131.5 | -90 | -90 | -131.5 |
U.S. postretirement benefit plan | ||||
Change in Projected benefit Obligation | ||||
Projected benefit obligation, beginning of year | 59.2 | 0 | ||
Service cost | 1.7 | 0.9 | ||
Interest cost | 2.3 | 1.6 | ||
Acquisition of B&L | 0 | 87.6 | ||
Employee contributions | 1.2 | 0.3 | ||
Plan amendments | 0 | -27.9 | ||
Plan curtailments | 0 | 0 | ||
Settlements | 0 | 0 | ||
Benefits paid | -8.1 | -3 | ||
Actuarial losses (gains) | 5.9 | -0.3 | ||
Currency translation adjustments | 0 | 0 | ||
Other | 0 | 0 | ||
Projected benefit obligation, end of year | 62.2 | 59.2 | 59.2 | 62.2 |
Change in Plan Assets | ||||
Fair value of plan assets, beginning of year | 14.5 | 0 | ||
Actual return on plan assets | 1.5 | 1.1 | ||
Employee contributions | 1.2 | 0.3 | ||
Company contributions | 0 | 0 | ||
Acquisition of B&L | 0 | 16.1 | ||
Settlements | 0 | 0 | ||
Benefits paid | -8.1 | -3 | ||
Currency translation adjustments | 0 | 0 | ||
Fair value of plan assets, end of year | 9.1 | 14.5 | 14.5 | 9.1 |
Funded Status at end of year | -53.1 | -44.7 | -44.7 | -53.1 |
Recognized as: | ||||
Other long-term assets, net | 0 | 0 | 0 | 0 |
Accrued and other current liabilities | 0 | 0 | 0 | 0 |
Pension and other benefit liabilities | ($53.10) | ($44.70) | ($44.70) | -53.1 |
Period over which defined benefit obligation reductions amortized into income | 11 years 3 months 18 days | |||
Ireland | Non-U.S. defined benefit pension plans | ||||
Recognized as: | ||||
Period over which defined benefit obligation reductions amortized into income | 42 years 6 months |
EMPLOYEE_BENEFIT_PLANS_Underfu
EMPLOYEE BENEFIT PLANS - Underfunded Plans (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
U.S. defined benefit pension plan | ||
Underfunded plans having accumulated benefit obligations exceeding the fair value of plan assets | ||
Projected benefit obligation | $251.80 | $234.60 |
Accumulated benefit obligation | 251.8 | 234.6 |
Fair value of plan assets | 196.6 | 197.3 |
Underfunded plans on a projected benefit obligation basis | ||
Projected benefit obligation | 251.8 | 234.6 |
Fair value of plan assets | 196.6 | 197.3 |
Non-U.S. defined benefit pension plans | ||
Underfunded plans having accumulated benefit obligations exceeding the fair value of plan assets | ||
Projected benefit obligation | 266.4 | 224.1 |
Accumulated benefit obligation | 257.3 | 196.3 |
Fair value of plan assets | 133.1 | 132.2 |
Underfunded plans on a projected benefit obligation basis | ||
Projected benefit obligation | 267.9 | 225.5 |
Fair value of plan assets | $134.30 | $133.40 |
EMPLOYEE_BENEFIT_PLANS_Future_
EMPLOYEE BENEFIT PLANS - Future benefit payments for the pension benefit plans (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
U.S. defined benefit pension plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2015 | $13.40 |
2016 | 18.9 |
2017 | 18.9 |
2018 | 18.2 |
2019 | 17.7 |
2020-2024 | 85.1 |
Non-U.S. defined benefit pension plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2015 | 5 |
2016 | 3.9 |
2017 | 4.4 |
2018 | 4.4 |
2019 | 5.4 |
2020-2024 | 37.7 |
U.S. postretirement benefit plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2015 | 6.8 |
2016 | 6.4 |
2017 | 5.9 |
2018 | 5.4 |
2019 | 5 |
2020-2024 | $20.10 |
EMPLOYEE_BENEFIT_PLANS_Weighte
EMPLOYEE BENEFIT PLANS - Weighted-average assumptions used to determine net periodic benefit costs and benefit obligations (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
U.S. defined benefit pension plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate - for determining net periodic benefit cost | 4.70% | 4.50% |
Expected rate of return on plan assets - for determining net periodic benefit cost | 7.50% | 7.50% |
Rate of compensation increase - for determining net periodic benefit cost | 0.00% | 0.00% |
Discount rate - for determining benefit obligation | 3.90% | 4.70% |
U.S. postretirement benefit plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate - for determining net periodic benefit cost | 4.30% | 4.50% |
Expected rate of return on plan assets - for determining net periodic benefit cost | 5.50% | 5.50% |
Rate of compensation increase - for determining net periodic benefit cost | 0.00% | 0.00% |
Discount rate - for determining benefit obligation | 3.70% | 4.30% |
Non-U.S. defined benefit pension plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate - for determining net periodic benefit cost | 3.86% | 3.61% |
Expected rate of return on plan assets - for determining net periodic benefit cost | 5.63% | 5.59% |
Rate of compensation increase - for determining net periodic benefit cost | 2.88% | 2.80% |
Discount rate - for determining benefit obligation | 2.41% | 3.85% |
Rate of compensation increase - for determining benefit obligation | 2.86% | 2.88% |
EMPLOYEE_BENEFIT_PLANS_Target_
EMPLOYEE BENEFIT PLANS - Target asset allocations (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equity securities | U.S. defined benefit pension plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 60.00% | 60.00% |
Equity securities | U.S. postretirement benefit plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 45.00% | 63.00% |
Equity securities | Non-U.S. defined benefit pension plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 44.00% | 43.00% |
Fixed income securities | U.S. defined benefit pension plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 40.00% | 40.00% |
Fixed income securities | U.S. postretirement benefit plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 16.00% | 24.00% |
Fixed income securities | Non-U.S. defined benefit pension plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 42.00% | 47.00% |
Cash | U.S. defined benefit pension plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 0.00% | 0.00% |
Cash | U.S. postretirement benefit plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 39.00% | 13.00% |
Other | Non-U.S. defined benefit pension plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 14.00% | 10.00% |
EMPLOYEE_BENEFIT_PLANS_Fair_va
EMPLOYEE BENEFIT PLANS - Fair value of pension and postretirement benefit plan assets assumed in connection with the Acquisition (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 196.6 | 197.3 | $0 |
Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 140.5 | 139.1 | 1.3 |
Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 9.1 | 14.5 | 0 |
Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 196.6 | 197.3 | |
Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 140.5 | 139.1 | |
Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 9.1 | 14.5 | |
Cash | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1.3 | 0.4 | |
Cash | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 14 | 9.3 | |
Cash | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 3.5 | 1.8 | |
U.S. broad market | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 74.9 | 72.7 | |
Emerging markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 15.9 | 16.5 | |
Emerging markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1 | 0.9 | |
Non-U.S. developed markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 25.5 | 27.9 | |
Worldwide developed markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 61.5 | 59.2 | |
Investment grade | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 59.4 | 59 | |
Investment grade | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 11.2 | 21.3 | |
Global high yield | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 19.6 | 20.8 | |
Global high yield | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1 | 0.7 | |
Government bond funds | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 46.4 | 42.5 | |
Other assets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 5.4 | 5.2 | |
Insurance policies | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 5.6 | 12.7 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1.3 | 0.4 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 14 | 9.3 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 3.5 | 1.8 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1.3 | 0.4 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 14 | 9.3 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 3.5 | 1.8 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. broad market | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Emerging markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Emerging markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-U.S. developed markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Worldwide developed markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Investment grade | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Investment grade | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Global high yield | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Global high yield | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Government bond funds | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other assets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Insurance policies | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 195.3 | 196.9 | |
Significant Other Observable Inputs (Level 2) | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 126.5 | 129.8 | |
Significant Other Observable Inputs (Level 2) | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 5.6 | 12.7 | |
Significant Other Observable Inputs (Level 2) | Cash | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Cash | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Cash | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | U.S. broad market | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 74.9 | 72.7 | |
Significant Other Observable Inputs (Level 2) | Emerging markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 15.9 | 16.5 | |
Significant Other Observable Inputs (Level 2) | Emerging markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1 | 0.9 | |
Significant Other Observable Inputs (Level 2) | Non-U.S. developed markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 25.5 | 27.9 | |
Significant Other Observable Inputs (Level 2) | Worldwide developed markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 61.5 | 59.2 | |
Significant Other Observable Inputs (Level 2) | Investment grade | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 59.4 | 59 | |
Significant Other Observable Inputs (Level 2) | Investment grade | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 11.2 | 21.3 | |
Significant Other Observable Inputs (Level 2) | Global high yield | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 19.6 | 20.8 | |
Significant Other Observable Inputs (Level 2) | Global high yield | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 1 | 0.7 | |
Significant Other Observable Inputs (Level 2) | Government bond funds | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 46.4 | 42.5 | |
Significant Other Observable Inputs (Level 2) | Other assets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 5.4 | 5.2 | |
Significant Other Observable Inputs (Level 2) | Insurance policies | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 5.6 | 12.7 | |
Significant Unobservable Inputs (Level 3) | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Cash | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Cash | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Cash | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | U.S. broad market | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Emerging markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Emerging markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Non-U.S. developed markets | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Worldwide developed markets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Investment grade | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Investment grade | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Global high yield | Recurring basis | Pension Benefit Plans - U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Global high yield | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Government bond funds | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Other assets | Recurring basis | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Insurance policies | Recurring basis | Postretirement Benefit Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Ireland | Pension Benefit Plans - Non-U.S. Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percentage of funds held | 85.00% | 85.00% |
EMPLOYEE_BENEFIT_PLANS_Health_
EMPLOYEE BENEFIT PLANS - Health Care Cost Trend Rate (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract] | ||
Effect on benefit obligations, one percent increase | 1 | |
Effect on benefit obligations, one percent decrease | 0.9 | |
B&L | U.S. postretirement benefit plan | ||
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract] | ||
Health care cost trend rate assumed for next year | 7.31% | 7.57% |
Rate to which the cost trend rate is assumed to decline | 4.50% | 4.50% |
Year that the rate reaches the ultimate trend rate | 2029 | 2029 |
SECURITIES_REPURCHASES_AND_SHA1
SECURITIES REPURCHASES AND SHARE ISSUANCE (Details) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | |||||
Jun. 24, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Nov. 03, 2011 | Nov. 19, 2012 | Nov. 21, 2013 | Nov. 21, 2014 | |
Securities Repurchase Program | |||||||||
Aggregate repurchase price of the entity's common shares repurchased | $0 | $55,600,000 | $280,700,000 | ||||||
Issuance of common stock (in shares) | 27,058,824 | ||||||||
Price per share | $85 | ||||||||
Issuance of common stock | 2,300,000,000 | 2,306,900,000 | |||||||
Issuance costs | 30,700,000 | ||||||||
Director | |||||||||
Securities Repurchase Program | |||||||||
Aggregate repurchase price of the entity's common shares repurchased | 19,900,000 | ||||||||
Excess of repurchase price over carrying value of securities repurchased, charged to accumulated deficit | 15,600,000 | ||||||||
Shares repurchased | 217,294 | ||||||||
2011 Securities Repurchase Program | |||||||||
Securities Repurchase Program | |||||||||
Aggregate maximum amount authorized under the Securities Repurchase Program | 1,500,000,000 | ||||||||
Common shares repurchased | 5,257,454 | ||||||||
Aggregate repurchase price of the entity's common shares repurchased | 280,700,000 | ||||||||
Excess of repurchase price over carrying value of securities repurchased, charged to accumulated deficit | 178,400,000 | ||||||||
2012 Securities Repurchase Program | |||||||||
Securities Repurchase Program | |||||||||
Aggregate maximum amount authorized under the Securities Repurchase Program | 1,500,000,000 | ||||||||
Common shares repurchased | 507,957 | ||||||||
Aggregate repurchase price of the entity's common shares repurchased | 35,700,000 | ||||||||
Excess of repurchase price over carrying value of securities repurchased, charged to accumulated deficit | 25,800,000 | ||||||||
2013 Securities Repurchase Program | |||||||||
Securities Repurchase Program | |||||||||
Aggregate maximum amount authorized under the Securities Repurchase Program | 1,500,000,000 | ||||||||
Common shares repurchased | 0 | 0 | |||||||
2014 Securities Repurchase Program | |||||||||
Securities Repurchase Program | |||||||||
Aggregate maximum amount authorized under the Securities Repurchase Program | $2,000,000,000 | ||||||||
Shares authorized to be repurchased as a percentage of public float | 10.00% | ||||||||
Common shares repurchased | 0 | 0 | |||||||
2014 Securities Repurchase Program | NYSE | |||||||||
Securities Repurchase Program | |||||||||
Shares to be repurchased as a percentage of issued capital | 5.00% |
SHAREBASED_COMPENSATION_Detail
SHARE-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components and classification of share-based compensation expense | ||||
Share-based compensation | $78.20 | $45.50 | $66.20 | |
Reduction in stock-based compensation expense due to change in classification from equity awards to liability awards | 5.8 | |||
Stock-based compensation expense due to change in classification from equity awards to liability awards | 21.3 | |||
Tax benefits from stock options exercised | -17.1 | -24.2 | -12.5 | |
2011 Omnibus Incentive Plan | ||||
Components and classification of share-based compensation expense | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 20,000,000 | |||
Number of shares available for future grants | 17,505,663 | |||
Maximum | 2011 Omnibus Incentive Plan | ||||
Components and classification of share-based compensation expense | ||||
Total number of shares approved for grant by the Company under the share-based compensation plans | 18,000,000 | |||
Research and development expenses | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation | 5.6 | 0 | 0.7 | |
Selling, general and administrative expenses | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation | 72.6 | 45.5 | 65.5 | |
Stock options | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation | 18.2 | 17.3 | 21.7 | |
RSUs | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation | $60 | $28.20 | $44.50 |
SHAREBASED_COMPENSATION_Detail1
SHARE-BASED COMPENSATION (Details 2) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based compensation | |||
Vesting period | 4 years | ||
Method and assumptions on valuation of stock options | |||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Additional disclosures | |||
Proceeds from exercise of stock options | $17.20 | $10 | $23 |
Stock options | |||
Share-based compensation | |||
Number of days average trading price as base for minimum exercise price of stock option granted | 5 days | ||
Percentage of stock options that will vest on each of the first, second, third and fourth anniversaries from the date of grant | 25.00% | ||
Method and assumptions on valuation of stock options | |||
Expected stock option life (years) | 5 years 9 months 18 days | 4 years | 4 years |
Expected volatility (as a percent) | 43.00% | 40.10% | 44.90% |
Risk-free interest rate (as a percent) | 1.80% | 1.00% | 0.50% |
Stock option activity | |||
Options outstanding at the beginning of the period (in shares) | 8.6 | ||
Granted (in shares) | 0.3 | ||
Exercised (in shares) | -0.8 | ||
Expired or forfeited (in shares) | -0.4 | ||
Options outstanding at the end of the period (in shares) | 7.7 | 8.6 | |
Options vested and exercisable at the end of the period (in shares) | 5.7 | ||
Weighted-average exercise price | |||
Options outstanding at the beginning of the period (in dollars per share) | $30.19 | ||
Granted (in dollars per share) | $117.82 | ||
Exercised (in dollars per share) | $21.78 | ||
Expired or forfeited (in dollars per share) | $74.88 | ||
Options outstanding at the end of the period (in dollars per share) | $31.44 | $30.19 | |
Options vested and exercisable at the end of the period (in dollars per share) | $17.75 | ||
Weighted-Average Remaining Contractual Term | |||
Options outstanding at the end of the period | 4 years 9 months 18 days | ||
Options vested and exercisable at the end of the period | 4 years | ||
Aggregate Intrinsic Value | |||
Options outstanding at the end of the period | 852.6 | ||
Options vested and exercisable at the end of the period | 720.6 | ||
Additional disclosures | |||
Weighted-average grant date fair value of stock options (in dollars per share) | $62.15 | $30.47 | $19.57 |
Intrinsic value of stock options exercised in the period | 87.4 | 30.4 | 25.1 |
Proceeds from exercise of stock options | 17.2 | 10 | 23 |
Remaining unrecognized compensation expense related to non-vested awards | 42.2 | ||
Weighted-average remaining requisite service period over which unrecognized compensation cost is expected to be amortized | 3 years 4 months 15 days | ||
Total fair value of stock options vested during the period | $36.30 | $26 | $36.10 |
SHAREBASED_COMPENSATION_Detail2
SHARE-BASED COMPENSATION (Details 3) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Time-Based RSUs | |||
Time-Based RSUs, Performance-Based RSUs and Deferred Share Units | |||
Stock-Based Awards at the beginning of the period (in shares) | 900,000 | ||
Granted (in shares) | 100,000 | ||
Vested (in shares) | -100,000 | ||
Stock-Based Awards at the end of the period (in shares) | 900,000 | 900,000 | |
Weighted-average grant-date fair value | |||
Stock-Based awards at the beginning of the period (in dollars per share) | $39.11 | ||
Granted (in dollars per share) | $137.71 | ||
Vested (in dollars per share) | $54.60 | ||
Stock-Based awards at the end of the period (in dollars per share) | $51.34 | $39.11 | |
Unrecognized compensation expense | |||
Remaining unrecognized compensation expense related to non-vested awards | $18.50 | ||
Weighted-average remaining requisite service period over which unrecognized compensation cost is expected to be amortized | 2 years 9 months 18 days | ||
Total fair value | 8.1 | 15.2 | 18 |
Performance-Based Restricted Stock Units | |||
Time-Based RSUs, Performance-Based RSUs and Deferred Share Units | |||
Stock-Based Awards at the beginning of the period (in shares) | 1,000,000 | ||
Granted (in shares) | 500,000 | ||
Vested (in shares) | -200,000 | ||
Forfeited (in shares) | -100,000 | ||
Stock-Based Awards at the end of the period (in shares) | 1,200,000 | 1,000,000 | |
Weighted-average grant-date fair value | |||
Stock-Based awards at the beginning of the period (in dollars per share) | $102.22 | ||
Granted (in dollars per share) | $219.79 | ||
Vested (in dollars per share) | $61.80 | ||
Forfeited (in dollars per share) | $136.59 | ||
Stock-Based awards at the end of the period (in dollars per share) | $160.44 | $102.22 | |
Unrecognized compensation expense | |||
Remaining unrecognized compensation expense related to non-vested awards | $128.90 | ||
Weighted-average remaining requisite service period over which unrecognized compensation cost is expected to be amortized | 3 years 1 month | ||
Method and assumptions on valuation of stock options | |||
Expected Company share volatility, minimum (as a percent) | 38.70% | 36.10% | 42.50% |
Expected Company share volatility, maximum (as a percent) | 45.40% | 44.40% | 52.30% |
Risk-free interest rate, minimum (as a percent) | 0.80% | 0.50% | 0.60% |
Risk-free interest rate, maximum (as a percent) | 2.30% | 1.30% | 1.00% |
Maximum number of shares that can be issued upon vesting of performance-based RSUs outstanding | 3,065,374 | ||
Performance-Based Restricted Stock Units | Minimum | |||
Method and assumptions on valuation of stock options | |||
Contractual term (years) | 2 years 7 months 6 days | 2 years 9 months 18 days | 2 years 10 months 24 days |
Performance-Based Restricted Stock Units | Maximum | |||
Method and assumptions on valuation of stock options | |||
Contractual term (years) | 6 years 3 months 18 days | 4 years 3 months 18 days | 4 years 3 months 18 days |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of accumulated other comprehensive income | ||||
Balance at the beginning of the period | ($132.80) | ($119.40) | ($279.60) | |
Foreign currency translation adjustment | -716.2 | -50.8 | 161 | |
Unrealized gain on equity method investment, net of tax | 51.3 | 0 | 0 | |
Reclassification to net income (loss) | -51.3 | 0 | 0 | |
Net unrealized holding gain on available-for-sale equity securities, net of tax | 1.8 | 3.6 | 0.4 | |
Reclassification to net income (loss) | -1.8 | -4 | -1.4 | |
Pension adjustment | -66.9 | 37.8 | 0.2 | |
Balance at the end of the period | -915.9 | -132.8 | -119.4 | |
Foreign Currency Translation Adjustment | ||||
Components of accumulated other comprehensive income | ||||
Balance at the beginning of the period | -170.3 | -119.5 | -280.5 | |
Foreign currency translation adjustment | -716.2 | -50.8 | 161 | |
Balance at the end of the period | -886.5 | -170.3 | -119.5 | |
Net Unrealized Holding Gain (Loss) on Securities | Auction rate securities | ||||
Components of accumulated other comprehensive income | ||||
Balance at the beginning of the period | 0 | 0 | ||
Unrealized gain on equity method investment, net of tax | 51.3 | |||
Reclassification to net income (loss) | -51.3 | |||
Balance at the end of the period | 0 | 0 | 0 | |
Net Unrealized Holding Gain (Loss) on Securities | Available-for-sale equity securities | ||||
Components of accumulated other comprehensive income | ||||
Balance at the beginning of the period | 0 | 0.4 | 1.6 | |
Net unrealized holding gain on available-for-sale equity securities, net of tax | 1.8 | 3.6 | 0.4 | |
Reclassification to net income (loss) | -1.8 | -4 | -1.6 | |
Balance at the end of the period | 0 | 0 | 0.4 | |
Net Unrealized Holding Gain (Loss) on Securities | Available-for-sale debt securities | ||||
Components of accumulated other comprehensive income | ||||
Balance at the beginning of the period | -0.2 | |||
Reclassification to net income (loss) | 0.2 | |||
Balance at the end of the period | 0 | 0 | 0 | |
Pension Adjustment | ||||
Components of accumulated other comprehensive income | ||||
Balance at the beginning of the period | 37.5 | -0.3 | -0.5 | |
Pension adjustment | -66.9 | 37.8 | 0.2 | |
Balance at the end of the period | ($29.40) | $37.50 | ($0.30) |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components of loss before recovery of income taxes | |||
Domestic | ($851.10) | ($574.50) | ($205.60) |
Foreign | 1,943.70 | -739.9 | -188.6 |
Income (loss) before provision for (recovery of) income taxes | 1,092.60 | -1,314.40 | -394.2 |
Current: | |||
Domestic | 0.6 | 3.4 | 7.2 |
Foreign | 150.1 | 80 | 56.3 |
Total | 150.7 | 83.4 | 63.5 |
Deferred: | |||
Domestic | 0 | 0 | -11.9 |
Foreign | 29.7 | -534.2 | -329.8 |
Total | 29.7 | -534.2 | -341.7 |
Provision for (recovery of) income taxes | $180.40 | ($450.80) | ($278.20) |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Income (loss) before provision for (recovery of) income taxes | $1,092.60 | ($1,314.40) | ($394.20) |
Expected Canadian statutory rate | 26.90% | 26.90% | 26.90% |
Expected provision for (recovery) of income taxes | 293.9 | -353.6 | -106 |
Non-deductible amounts: | |||
Amortization | 0 | 0 | 6.2 |
Share-based compensation | 19.8 | 13.1 | 6.3 |
Merger and acquisition costs | 0 | 1.1 | 24.2 |
In-process research and development | 0 | 0 | 3.2 |
Non-taxable gain on disposal of investments | -50.1 | 0 | -3.1 |
Changes in enacted income tax rates | 29.7 | 6.6 | -4.5 |
Canadian dollar foreign exchange gain for Canadian tax purposes | 22.8 | 0.6 | 9.1 |
Change in valuation allowance related to foreign tax credits and net operating losses | 17.4 | 70.2 | 0 |
Change in valuation allowance on Canadian deferred tax assets and tax rate changes | 255.2 | 143.9 | -34.2 |
Change in uncertain tax positions | -1.8 | 0 | 15.4 |
Foreign tax rate differences | -502.8 | -407.6 | -226.8 |
Unrecognized income tax benefit of losses | 0 | 0 | 32 |
Withholding taxes on foreign income | 3.7 | 3.4 | 8 |
Alternative minimum and other taxes | 0 | 0 | -4.5 |
Taxable foreign income | 269 | 55.4 | 10.7 |
Tax benefit on intra-entity transfers | -147.3 | -5.7 | -10.4 |
Other | -29.1 | 21.8 | -3.8 |
Provision for (recovery of) income taxes | $180.40 | ($450.80) | ($278.20) |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ||
Tax loss carryforwards | $958.30 | $957.70 |
Tax credit carryforwards | 234.9 | 126.4 |
Scientific Research and Experimental Development pool | 58.2 | 62.9 |
Research and development tax credits | 90.5 | 83.7 |
Provisions | 369.9 | 577.5 |
Plant, equipment and technology | 2.8 | 38.3 |
Deferred revenue | 13.5 | 12.5 |
Deferred financing and share issue costs | 209.4 | 0 |
Share-based compensation | 49.8 | 43 |
Other | 38.2 | 76.5 |
Total deferred tax assets | 2,025.50 | 1,978.50 |
Less valuation allowance | -859.2 | -477.6 |
Net deferred tax assets | 1,166.30 | 1,500.90 |
Deferred tax liabilities: | ||
Intangible assets | 520 | 2,884.30 |
Outside basis differences | 2,636.60 | 563.8 |
Deferred financing and share issue costs | 0 | 16.6 |
Prepaid expenses | 0.6 | -0.4 |
Total deferred tax liabilities | 3,157.20 | 3,464.30 |
Net deferred income taxes | ($1,990.90) | ($1,963.40) |
INCOME_TAXES_Details_4
INCOME TAXES (Details 4) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
INCOME TAXES | ||
Increase (decrease) in valuation allowance | $381.60 | $353.10 |
Valuation allowance against deferred tax assets | 859.2 | 477.6 |
Research and development tax credits | 90.5 | 83.7 |
Accumulated tax losses related to the exercise of non qualified stock options and restricted stock awards | 95.5 | |
Unrecognized tax benefits including interest and penalties | 345 | 247.5 |
Portion of unrecognized tax benefits, if recognized, would affect the Company's effective tax rate | 108.7 | 153.4 |
Portion of unrecognized tax benefits that would not impact effective tax rate | 236.3 | |
Increase to unrecognized tax benefits related to current and prior year tax positions | 143 | 132.4 |
Decrease to unrecognized tax benefits related to current and prior year tax positions | 45.5 | 12.8 |
Accrued interest and penalties related to unrecognized tax benefits | 38.7 | 46.4 |
Reduction recognized in interest and penalties | 7.7 | 5.7 |
Estimated unrecognized tax benefits realized during the next 12 months | 4.7 | |
Pooled Scientific Research and Experimental Development | ||
INCOME TAXES | ||
Tax credit carryforward | 216.2 | 232.1 |
US-Federal | ||
INCOME TAXES | ||
Accumulated losses available for federal and provincial purposes | 2,380.30 | 2,425.10 |
Research and development tax credits | 71.3 | 64.7 |
Canadian Federal and Provincial | ||
INCOME TAXES | ||
Accumulated losses available for federal and provincial purposes | 1,008.50 | 717.9 |
Unclaimed investment tax credits and research and development credits | 39.2 | 42.3 |
Valuation allowance against deferred tax assets | 572 | 253.6 |
Foreign Tax Authority | ||
INCOME TAXES | ||
Income tax credits and adjustments | $167.20 |
INCOME_TAXES_Details_5
INCOME TAXES (Details 5) | 12 Months Ended |
Dec. 31, 2014 | |
US-Federal | Minimum | |
Income Taxes | |
Open tax year | 2011 |
US-Federal | Maximum | |
Income Taxes | |
Open tax year | 2013 |
Canada | Minimum | |
Income Taxes | |
Open tax year | 2005 |
Canada | Maximum | |
Income Taxes | |
Open tax year | 2013 |
Brazil | Minimum | |
Income Taxes | |
Open tax year | 2009 |
Brazil | Maximum | |
Income Taxes | |
Open tax year | 2013 |
Germany | Minimum | |
Income Taxes | |
Open tax year | 2011 |
Germany | Maximum | |
Income Taxes | |
Open tax year | 2013 |
France | Minimum | |
Income Taxes | |
Open tax year | 2011 |
France | Maximum | |
Income Taxes | |
Open tax year | 2013 |
China | Minimum | |
Income Taxes | |
Open tax year | 2009 |
China | Maximum | |
Income Taxes | |
Open tax year | 2013 |
Ireland | Minimum | |
Income Taxes | |
Open tax year | 2009 |
Ireland | Maximum | |
Income Taxes | |
Open tax year | 2013 |
Netherlands | Minimum | |
Income Taxes | |
Open tax year | 2011 |
Netherlands | Maximum | |
Income Taxes | |
Open tax year | 2013 |
INCOME_TAXES_Details_6
INCOME TAXES (Details 6) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | |||
Balance, beginning of year | $247.50 | $128 | $102.30 |
Additions based on tax positions related to the current year | 143 | 60.7 | 3.5 |
Additions for tax positions of prior years | 12.8 | 19.4 | 19 |
Reductions for tax positions of prior years | -50.2 | -10.8 | -1.4 |
Lapse of statute of limitations | -8.1 | -2 | -2 |
Balance, end of year | 345 | 247.5 | 128 |
B&L | |||
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | |||
Acquisition | 0 | 52.2 | 0 |
Medicis | |||
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | |||
Acquisition | $0 | $0 | $6.60 |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | |||
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. | $913.50 | ($866.10) | ($116) |
Basic weighted-average number of common shares outstanding | 335.4 | 321 | 305.4 |
Dilutive effect of stock options and RSUs | 6.1 | 0 | 0 |
Diluted weighted-average number of common shares outstanding | 341.5 | 321 | 305.4 |
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.: | |||
Basic (in dollars per share) | $2.72 | ($2.70) | ($0.38) |
Diluted (in dollars per share) | $2.67 | ($2.70) | ($0.38) |
EARNINGS_LOSS_PER_SHARE_Detail1
EARNINGS (LOSS) PER SHARE (Details 2) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Anti-dilutive shares not included in the computation of diluted earnings per share [Line Items] | |||
Basic weighted-average number of common shares outstanding | 335,400,000 | 321,000,000 | 305,400,000 |
Diluted weighted-average number of common shares outstanding | 327,500,000 | 313,100,000 | |
Dilutive effect of stock options and RSUs | |||
Anti-dilutive shares not included in the computation of diluted earnings per share [Line Items] | |||
Dilutive effect of stock options, RSUs and convertible notes | 6,500,000 | 7,200,000 | |
Dilutive effect of convertible notes | |||
Anti-dilutive shares not included in the computation of diluted earnings per share [Line Items] | |||
Dilutive effect of stock options, RSUs and convertible notes | 0 | 500,000 | |
Dilutive effect of stock options | |||
Anti-dilutive shares not included in the computation of diluted earnings per share [Line Items] | |||
Dilutive effect of stock options, RSUs and convertible notes | 877,000 | 1,090,000 | 1,093,000 |
SUPPLEMENTAL_CASH_FLOW_DISCLOS2
SUPPLEMENTAL CASH FLOW DISCLOSURES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Elements [Abstract] | |||
Interest paid | $934 | $652.90 | $421 |
Income taxes paid | 98.7 | 65.1 | 41.4 |
Costs to settle pre-existing relationships with an acquiree | $122 |
LEGAL_PROCEEDINGS_Details
LEGAL PROCEEDINGS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | 24-May-13 | Dec. 04, 2013 | Dec. 31, 2013 | Nov. 15, 2013 | Aug. 13, 2014 | Nov. 03, 2014 | Dec. 15, 2014 | 16-May-08 | Sep. 11, 2009 | Mar. 27, 2013 | Dec. 31, 2011 | Jan. 16, 2015 | Mar. 31, 2014 |
lawsuit | lawsuit | complaint | employee | |||||||||||
patent | ||||||||||||||
B&L | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Recent suits filed | 4 | |||||||||||||
Number of patents found not infringed | 4 | |||||||||||||
MoistureLoc | B&L | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Currently active lawsuits/claims (less than for 5) | 321 | |||||||||||||
Number consolidated cases | 2 | |||||||||||||
Number of cases settled | 630 | |||||||||||||
MoistureLoc | B&L | Outside the U.S. | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Currently active lawsuits/claims (less than for 5) | 5 | |||||||||||||
Affiliated Entity | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Total settlement amount payable | $34 | |||||||||||||
Required compliance and ethics period | 3 years | |||||||||||||
Natur Produkt | Anti-Grippin Trademark | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Recent suits filed | 2 | |||||||||||||
Damages awarded to plaintiff | 50 | |||||||||||||
Natur Produkt | Anti-Grippin Trademark | Other Expense | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Recognized charge during period | 50 | |||||||||||||
Reverse of recognized charge during period | 50 | |||||||||||||
Perrigo | Acanya Gel | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Period of stay on approval triggered on filing of suit | 30 months | |||||||||||||
Taro | Acanya Gel | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Period of stay on approval triggered on filing of suit | 30 months | |||||||||||||
Innopharma | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Period of stay on approval triggered on filing of suit | 30 months | |||||||||||||
Paddock | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Recent suits filed | 2 | |||||||||||||
Written plea agreement | Biovail Pharmaceuticals, Inc. | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Civil penalty | 22.2 | |||||||||||||
Non-prosecution agreement | Biovail Pharmaceuticals, Inc. | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Civil penalty | $2.40 | |||||||||||||
Corporate Integrity Agreement | Biovail Pharmaceuticals, Inc. | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Obligation term | 5 years | |||||||||||||
Obagi Shareholder Class Actions | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Number of complaints filed | 2 | |||||||||||||
Employment Matter | Medicis | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Number of former employees who filed charges with the EEOC | 6 | |||||||||||||
Non-Fusarium Cases | MoistureLoc | B&L | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Currently active lawsuits/claims (less than for 5) | 320 | |||||||||||||
Subsequent event | Apotex | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Period of stay on approval triggered on filing of suit | 30 months | |||||||||||||
Subsequent event | Paddock | ||||||||||||||
Legal proceedings and other matters | ||||||||||||||
Period of stay on approval triggered on filing of suit | 30 months |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rental expense related to operating lease | $75 | $51.90 | $22.90 |
Minimum future rental payments under non-cancelable lease for five succeeding years | |||
Total | 195.7 | ||
2015 | 44.2 | ||
2016 | 35.7 | ||
2017 | 28.8 | ||
2018 | 18 | ||
2019 | 15.7 | ||
Thereafter | $53.30 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 1 Months Ended | ||||
Aug. 31, 2014 | Jul. 31, 2013 | Dec. 31, 2014 | Oct. 31, 2013 | Mar. 31, 2010 | |
Other commitments | |||||
Capital expenditures | $70,000,000 | ||||
Milestone payments in terms of collaboration and license agreements, aggregate | 1,000,000,000 | ||||
Potential milestone payments in terms of collaboration and license agreements | 150,000,000 | 80,000,000 | |||
Milestone payment period (years) | 5 years | ||||
Mimetogen | |||||
Other commitments | |||||
Initial license fee payment | 95,000,000 | ||||
Potential milestone payments in terms of collaboration and license agreements | 345,000,000 | ||||
B&L and Nicox | |||||
Other commitments | |||||
Potential milestone payments in terms of collaboration and license agreements | $162,500,000 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 17 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2014 |
segment | ||||||
Segment reporting information | ||||||
Number of reportable segments | 2 | |||||
Number of operating segments | 2 | |||||
Total revenues | $8,263.50 | $5,769.60 | $3,480.40 | |||
Total segment profit | 912.2 | -863.6 | -116 | |||
Restructuring, integration and other costs | -381.7 | -462 | -267.1 | |||
In-process research and development impairments and other charges | -41 | -153.6 | -189.9 | |||
Acquisition-related costs | -6.3 | -36.4 | -78.6 | |||
Acquisition-related contingent consideration | 14.1 | 29.2 | 5.3 | |||
Other income (expense) | 268.7 | -287.2 | -136.6 | |||
Operating income (loss) | 2,039.70 | -409.5 | 79.7 | |||
Interest income | 5 | 8 | 6 | |||
Interest expense | -971 | -844.3 | -481.6 | |||
Loss on extinguishment of debt | -93.7 | -129.6 | -65 | -20.1 | ||
Foreign exchange and other | -144.1 | -9.4 | 19.7 | |||
Gain on investments, net (see Note 23) | 292.6 | 5.8 | 2.1 | |||
Income (loss) before provision for (recovery of) income taxes | 1,092.60 | -1,314.40 | -394.2 | |||
Stock-based compensation expense | 40.3 | 45.5 | 66.2 | |||
Total assets | 26,353 | 27,970.80 | 17,950.40 | 26,353 | ||
Identifiable intangible assets | 11,255.90 | 12,848.20 | 11,255.90 | |||
Goodwill | 9,346.40 | 9,752.10 | 5,141.40 | 9,346.40 | ||
Capital Expenditures, and Depreciation and Amortization | ||||||
Total capital expenditures | 291.6 | 115.3 | 107.6 | |||
Total depreciation and amortization, including impairments of finite-lived intangible assets | 1,737.60 | 2,015.80 | 986.2 | |||
B&L | ||||||
Segment reporting information | ||||||
Restructuring, integration and other costs | -69.7 | -234.1 | -52.8 | |||
Acquisition-related costs | -13.4 | |||||
Goodwill | 4,358 | 4,358 | ||||
Developed Markets | ||||||
Segment reporting information | ||||||
Total revenues | 6,167.10 | 4,293.20 | 2,502.30 | |||
Total segment profit | 2,019.70 | 573.2 | 815.9 | |||
Total assets | 19,093.40 | 20,007.20 | 12,893.70 | 19,093.40 | ||
Goodwill | 7,115 | 7,428.70 | 3,993 | 7,115 | ||
Capital Expenditures, and Depreciation and Amortization | ||||||
Total capital expenditures | 152.7 | 54.1 | 12.3 | |||
Total depreciation and amortization, including impairments of finite-lived intangible assets | 1,336.90 | 1,687.70 | 755.1 | |||
Impact of adjustments related to provisional fair value adjustment to identifiable intangible assets | 877.6 | 773 | 430.5 | |||
Developed Markets | Ezogabine Retigabine | ||||||
Segment reporting information | ||||||
Impairment charges on intangible assets | 551.6 | |||||
Developed Markets | Fair Value Adjustment to Inventory and Identifiable Intangible Assets | ||||||
Segment reporting information | ||||||
Total segment profit | 906.4 | 1,080.40 | 506.4 | |||
Developed Markets | PreCision | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 257.7 | 257.7 | ||||
Goodwill | 170.5 | 170.5 | ||||
Developed Markets | Solta | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 103.5 | 103.5 | ||||
Goodwill | 56.4 | 56.4 | ||||
Developed Markets | B&L | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 3,977.90 | |||||
Goodwill | 3,300 | 3,226.70 | 3,300 | |||
Developed Markets | Obagi Medical Products, Inc | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 335.5 | |||||
Goodwill | 158.5 | |||||
Emerging Markets | ||||||
Segment reporting information | ||||||
Total revenues | 2,096.40 | 1,476.40 | 978.1 | |||
Total segment profit | 337.3 | 93 | 69 | |||
Total assets | 6,332.90 | 6,907.80 | 4,022.10 | 6,332.90 | ||
Goodwill | 2,231.40 | 2,323.40 | 1,148.40 | 2,231.40 | ||
Capital Expenditures, and Depreciation and Amortization | ||||||
Total capital expenditures | 29.3 | 51.9 | 61.6 | |||
Total depreciation and amortization, including impairments of finite-lived intangible assets | 385.7 | 313.7 | 224.6 | |||
Impact of adjustments related to provisional fair value adjustment to identifiable intangible assets | 325.3 | 255.4 | 177.5 | |||
Emerging Markets | Fair Value Adjustment to Inventory and Identifiable Intangible Assets | ||||||
Segment reporting information | ||||||
Total segment profit | 323.9 | 320.5 | 180.5 | |||
Emerging Markets | Solta | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 69.4 | 69.4 | ||||
Goodwill | 37.8 | 37.8 | ||||
Emerging Markets | B&L | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 782.7 | |||||
Goodwill | 1,100 | 1,135.70 | 1,100 | |||
Emerging Markets | Natur Produkt | ||||||
Segment reporting information | ||||||
Identifiable intangible assets | 104.8 | |||||
Goodwill | 40.9 | |||||
Total Segment | ||||||
Segment reporting information | ||||||
Total segment profit | 2,357 | 666.2 | 884.9 | |||
Total assets | 25,426.30 | 26,915 | 16,915.80 | 25,426.30 | ||
Capital Expenditures, and Depreciation and Amortization | ||||||
Total capital expenditures | 182 | 106 | 73.9 | |||
Total depreciation and amortization, including impairments of finite-lived intangible assets | 1,722.60 | 2,001.40 | 979.7 | |||
Corporate | ||||||
Segment reporting information | ||||||
Total segment profit | -171.1 | -165.7 | -138.3 | |||
Total assets | 926.7 | 1,055.80 | 1,034.60 | 926.7 | ||
Capital Expenditures, and Depreciation and Amortization | ||||||
Total capital expenditures | 109.6 | 9.3 | 33.7 | |||
Total depreciation and amortization, including impairments of finite-lived intangible assets | 15 | 14.4 | 6.5 | |||
Filler and Toxin Group | Developed Markets | ||||||
Segment reporting information | ||||||
Total assets | $1,000 | $1,000 |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from External Customer [Line Items] | |||
Total revenues | $8,263.50 | $5,769.60 | $3,480.40 |
Pharmaceuticals | |||
Revenue from External Customer [Line Items] | |||
Total revenues | 3,559.80 | 2,707.80 | 2,054.50 |
Devices | |||
Revenue from External Customer [Line Items] | |||
Total revenues | 1,629.40 | 845.3 | 77 |
OTC | |||
Revenue from External Customer [Line Items] | |||
Total revenues | 1,711.40 | 1,086.60 | 475.7 |
Branded and Other Generics | |||
Revenue from External Customer [Line Items] | |||
Total revenues | 1,203 | 1,000.60 | 681.4 |
Other revenues | |||
Revenue from External Customer [Line Items] | |||
Total revenues | $159.90 | $129.30 | $191.80 |
SEGMENT_INFORMATION_Details_3
SEGMENT INFORMATION (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues and long-lived assets by geographic region | |||
Total revenues | $8,263.50 | $5,769.60 | $3,480.40 |
Long-Lived Assets | 1,310.50 | 1,234.20 | 462.7 |
U.S. and Puerto Rico | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 4,473 | 3,194.50 | 1,885.80 |
Long-Lived Assets | 718.2 | 592 | 60.4 |
Canada | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 375.1 | 387.4 | 349.1 |
Long-Lived Assets | 83.7 | 87.7 | 109.7 |
Poland | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 276.2 | 268.8 | 199.3 |
Long-Lived Assets | 99.4 | 110 | 110.9 |
Russia | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 275.1 | 202.8 | 71.2 |
Long-Lived Assets | 4.6 | 7 | 0.2 |
Japan | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 248.7 | 104.9 | 12.2 |
Long-Lived Assets | 1.2 | 1.3 | 0 |
China | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 232 | 91 | 0.6 |
Long-Lived Assets | 39.6 | 44.3 | 0 |
Mexico | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 221.6 | 200.9 | 167.4 |
Long-Lived Assets | 73.8 | 82.5 | 73.9 |
France | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 204.7 | 86.9 | 2.5 |
Long-Lived Assets | 36 | 40.5 | 0 |
Germany | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 204.4 | 130.9 | 1.9 |
Long-Lived Assets | 73.5 | 83.8 | 0 |
Australia | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 196.3 | 178.2 | 184.1 |
Long-Lived Assets | 4.4 | 3.4 | 4.4 |
Brazil | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 161 | 155.6 | 135.1 |
Long-Lived Assets | 31.4 | 41.4 | 46 |
U.K. | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 114.2 | 47 | 19.2 |
Long-Lived Assets | 11 | 12.2 | 0 |
Italy | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 98 | 37.2 | 2.3 |
Long-Lived Assets | 23.1 | 25.3 | 0 |
Other | |||
Revenues and long-lived assets by geographic region | |||
Total revenues | 1,183.20 | 683.5 | 449.7 |
Long-Lived Assets | $110.60 | $102.80 | $57.20 |
SEGMENT_INFORMATION_Details_4
SEGMENT INFORMATION (Details 4) (Revenues, Customer concentration) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
McKesson Corporation | |||
Segment reporting information | |||
Concentration risk, percentage | 17.00% | 19.00% | 20.00% |
AmerisourceBergen Corporation | |||
Segment reporting information | |||
Concentration risk, percentage | 10.00% | 7.00% | 8.00% |
Cardinal Health, Inc. | |||
Segment reporting information | |||
Concentration risk, percentage | 9.00% | 13.00% | 20.00% |
PS_FUND_1_INVESTMENT_Details
PS FUND 1 INVESTMENT (Details) (USD $) | 12 Months Ended | 3 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Apr. 30, 2014 |
Schedule of Equity Method Investments [Line Items] | |||||
Proceeds from sale of equity method investment | $75.90 | $0 | $0 | ||
Return on investment | 397.5 | ||||
PS Fund 1, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment | 75.9 | ||||
Exchange of common stock, number of shares allocable | 597,431 | 597,431 | |||
Common stock held for PS Fund 1 | 28,878,538 | ||||
Total proceeds from sale of the shares | 473.4 | ||||
Proceeds from shares allocable to investor | 127.2 | ||||
Proceeds from percentage of net profits owned by investor | 346.2 | ||||
Ownership percentage of net profits | 15.00% | 15.00% | |||
Net gain on sale of shares | 286.7 | ||||
Commitment letter fees | 53.7 | ||||
Aggregate amount of expenses | $110 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 01, 2012 | Dec. 31, 2012 | Jun. 18, 2012 | Dec. 29, 2014 | Nov. 23, 2010 | Dec. 31, 2011 | Feb. 06, 2014 | Feb. 20, 2015 | Feb. 17, 2015 | Jan. 30, 2015 | Jan. 22, 2015 | |
Subsequent events | ||||||||||||||
Issuance of long-term debt, net of discount | $1,632,600,000 | $8,429,600,000 | $6,005,800,000 | |||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 101.00% | |||||||||||||
BMS Collaboration and Option Agreements | ||||||||||||||
Subsequent events | ||||||||||||||
Number of years granted for rights to promote, market, and sell in several countries in Europe | 2 years | |||||||||||||
Consideration paid for rights | 83,300,000 | |||||||||||||
Revolving credit facility | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 1,000,000,000 | |||||||||||||
Aggregate principal amount of notes repurchased | 37,900,000 | |||||||||||||
6.875% Senior Notes due in December 2018 | ||||||||||||||
Subsequent events | ||||||||||||||
Stated interest rate (as a percent) | 6.88% | 6.88% | 6.88% | |||||||||||
Aggregate principal amount of notes repurchased | 445,000,000 | 55,400,000 | ||||||||||||
Repurchases of convertible debt | 462,700,000 | |||||||||||||
Call premium | 15,300,000 | |||||||||||||
Issuance of term loan | 1,000,000,000 | |||||||||||||
Series A-3 Tranche A Term Loan Facility | ||||||||||||||
Subsequent events | ||||||||||||||
Issuance of term loan | 225,600,000 | |||||||||||||
Subsequent event | ||||||||||||||
Subsequent events | ||||||||||||||
Amendment obtainment period from date of Commitment Letter | 30 days | |||||||||||||
Subsequent event | Incremental Term Loan Facilities | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 5,550,000,000 | |||||||||||||
Subsequent event | Term Loan Facility | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 11,200,000,000 | |||||||||||||
Subsequent event | Revolving credit facility | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 500,000,000 | 1,500,000,000 | ||||||||||||
Subsequent event | Senior Unsecured Bridge Facility One | Bridge loan facility | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 9,600,000,000 | |||||||||||||
Subsequent event | Senior Secured Bridge Facility | Bridge loan facility | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 1,050,000,000 | |||||||||||||
Subsequent event | Senior Unsecured Bridge Facility Two | Bridge loan facility | ||||||||||||||
Subsequent events | ||||||||||||||
Maximum borrowing capacity | 9,750,000,000 | |||||||||||||
Subsequent event | Senior Notes 6.00% Due 2021 | ||||||||||||||
Subsequent events | ||||||||||||||
Stated interest rate (as a percent) | 6.00% | |||||||||||||
Subsequent event | 1.50% Convertible Senior Notes due 2019 | ||||||||||||||
Subsequent events | ||||||||||||||
Stated interest rate (as a percent) | 1.50% | |||||||||||||
Subsequent event | 2.75% Convertible Senior Notes due 2015 | ||||||||||||||
Subsequent events | ||||||||||||||
Stated interest rate (as a percent) | 2.75% | |||||||||||||
Subsequent event | 6.875% Senior Notes due in December 2018 | ||||||||||||||
Subsequent events | ||||||||||||||
Stated interest rate (as a percent) | 6.88% | |||||||||||||
Aggregate principal amount of notes repurchased | 499,600,000 | |||||||||||||
Repurchases of convertible debt | 524,000,000 | |||||||||||||
Call premium | 17,200,000 | |||||||||||||
Subsequent event | 5.50% Senior Notes Due March 2023 | ||||||||||||||
Subsequent events | ||||||||||||||
Stated interest rate (as a percent) | 5.50% | |||||||||||||
Issuance of term loan | 1,000,000,000 | |||||||||||||
Underwriting fees | 8,500,000 | |||||||||||||
Issuance of long-term debt, net of discount | 991,500,000 | |||||||||||||
Maximum percentage of the aggregate principal amount that may be redeemed with the net proceeds of certain equity offerings | 40.00% | |||||||||||||
Redemption price, using proceeds from certain equity offerings, as a percentage of the principal amount | 105.50% | |||||||||||||
Redemption price as a percentage of principal amount as per the merger agreement | 101.00% | |||||||||||||
Subsequent event | Series A-3 Tranche A Term Loan Facility | ||||||||||||||
Subsequent events | ||||||||||||||
Issuance of term loan | 250,000,000 | |||||||||||||
Salix | Subsequent event | ||||||||||||||
Subsequent events | ||||||||||||||
Number of products in product portfolio | 22 | |||||||||||||
Common stock, par value (in usd per share) | 0.001 | |||||||||||||
Per Share Consideration (in dollars per share) | 158 | |||||||||||||
Enterprise value | 14,500,000,000 |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $27.60 | $12.50 | $12.30 |
Charged to Costs and Expenses | 5.2 | 5.8 | 0.8 |
Charged to Other Accounts | 7.9 | 10.2 | -0.5 |
Deductions | -4.8 | -0.9 | -0.1 |
Balance at End of Year | 35.9 | 27.6 | 12.5 |
Deferred tax asset valuation allowance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 477.6 | 124.5 | 128.7 |
Charged to Costs and Expenses | 272.6 | 214.1 | -2.2 |
Charged to Other Accounts | 109 | 139 | -2 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | $859.20 | $477.60 | $124.50 |