Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 04, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Valeant Pharmaceuticals International, Inc. | |
Entity Central Index Key | 885,590 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 347,535,488 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 852.4 | $ 597.3 |
Trade receivables, net | 2,732.5 | 2,686.9 |
Inventories, net | 1,336.7 | 1,256.6 |
Prepaid expenses and other current assets | 896.8 | 966.4 |
Total current assets | 5,818.4 | 5,507.2 |
Property, plant and equipment, net | 1,472.1 | 1,441.8 |
Intangible assets, net | 21,335.8 | 23,083 |
Goodwill | 18,511.8 | 18,552.8 |
Deferred tax assets, net | 304.7 | 156 |
Other long-term assets, net | 219.4 | 223.7 |
Total assets | 47,662.2 | 48,964.5 |
Current liabilities: | ||
Accounts payable | 425.9 | 433.7 |
Accrued and other current liabilities | 3,335.5 | 3,859.1 |
Acquisition-related contingent consideration | 170.9 | 196.8 |
Current portion of long-term debt | 294.1 | 823 |
Total current liabilities | 4,226.4 | 5,312.6 |
Acquisition-related contingent consideration | 903.7 | 959.1 |
Long-term debt | 30,773.2 | 30,265.4 |
Pension and other benefit liabilities | 191.6 | 190.4 |
Liabilities for uncertain tax positions | 116.3 | 120.2 |
Deferred tax liabilities, net | 5,879.2 | 5,902.4 |
Other long-term liabilities | 168.7 | 184.6 |
Total liabilities | 42,259.1 | 42,934.7 |
Commitments and contingencies | ||
Equity | ||
Common shares, no par value, unlimited shares authorized, 343,030,673 and 342,926,531 issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 9,914.9 | 9,897.4 |
Additional paid-in capital | 380.4 | 304.9 |
Accumulated deficit | (3,425.7) | (2,749.7) |
Accumulated other comprehensive loss | (1,573.7) | (1,541.6) |
Total Valeant Pharmaceuticals International, Inc. shareholders’ equity | 5,295.9 | 5,911 |
Noncontrolling interest | 107.2 | 118.8 |
Total equity | 5,403.1 | 6,029.8 |
Total liabilities and equity | $ 47,662.2 | $ 48,964.5 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, no par value (in usd per share) | $ 0 | $ 0 |
Common stock, shares issued (in shares) | 343,030,673 | 342,926,531 |
Common stock, shares outstanding (in shares) | 343,030,673 | 342,926,531 |
CONSOLIDATED STATEMENTS OF (LOS
CONSOLIDATED STATEMENTS OF (LOSS) INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | ||||
Product sales | $ 2,388.7 | $ 2,695 | $ 4,724.8 | $ 4,821.1 |
Other revenues | 31.5 | 37.4 | 67 | 81.4 |
Total revenues | 2,420.2 | 2,732.4 | 4,791.8 | 4,902.5 |
Operating Expenses | ||||
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | 647.3 | 669.9 | 1,267.5 | 1,177.8 |
Cost of other revenues | 10.5 | 15.2 | 20.2 | 29.5 |
Selling, general and administrative | 671.5 | 685.5 | 1,484.1 | 1,259.3 |
Research and development | 124.3 | 81.1 | 227.4 | 136.9 |
Amortization and impairments of finite-lived intangible assets | 887.6 | 585.4 | 1,582.1 | 950.6 |
Restructuring, integration and other costs | 19.5 | 143.4 | 57.5 | 198.4 |
In-process research and development impairments and other charges | 17.4 | 12.3 | 17.9 | 12.3 |
Acquisition-related costs | 0 | 9.5 | 1.8 | 23.4 |
Acquisition-related contingent consideration | 6.9 | 11.7 | 9.3 | 18.8 |
Other (income) expense | (45.3) | 176.9 | (22.7) | 183 |
Total expenses | 2,339.7 | 2,390.9 | 4,645.1 | 3,990 |
Operating income | 80.5 | 341.5 | 146.7 | 912.5 |
Interest income | 2.1 | 0.9 | 3 | 1.8 |
Interest expense | (472.5) | (412.7) | (899.1) | (710.5) |
Loss on extinguishment of debt | 0 | 0 | 0 | (20) |
Foreign exchange and other | 13.1 | 5.6 | 6.9 | (65.5) |
(Loss) income before (recovery of) provision for income taxes | (376.8) | (64.7) | (742.5) | 118.3 |
(Recovery of) provision for income taxes | (72.8) | (13.1) | (65.6) | 71.4 |
Net (loss) income | (304) | (51.6) | (676.9) | 46.9 |
Less: Net (loss) income attributable to noncontrolling interest | (1.7) | 1.4 | (0.9) | 2.2 |
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ (302.3) | $ (53) | $ (676) | $ 44.7 |
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: | ||||
Basic (in usd per share) | $ (0.88) | $ (0.15) | $ (1.96) | $ 0.13 |
Diluted (in usd per share) | $ (0.88) | $ (0.15) | $ (1.96) | $ 0.13 |
Weighted-average common shares outstanding (in millions) | ||||
Basic (in shares) | 345 | 344.4 | 344.9 | 340.5 |
Diluted (in shares) | 345 | 344.4 | 344.9 | 347.1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (304) | $ (51.6) | $ (676.9) | $ 46.9 |
Other comprehensive loss | ||||
Foreign currency translation adjustment | (96.6) | 36.4 | (32.7) | (375.1) |
Pension and postretirement benefit plan adjustments | (0.6) | (0.5) | (1) | (0.9) |
Other comprehensive (loss) income | (97.2) | 35.9 | (33.7) | (376) |
Comprehensive loss | (401.2) | (15.7) | (710.6) | (329.1) |
Less: Comprehensive (loss) income attributable to noncontrolling interest | (3.8) | 1.2 | (2.5) | 1.8 |
Comprehensive loss attributable to Valeant Pharmaceuticals International, Inc. | $ (397.4) | $ (16.9) | $ (708.1) | $ (330.9) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows From Operating Activities | ||
Net (loss) income | $ (676.9) | $ 46.9 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization, including impairments of finite-lived intangible assets | 1,681.9 | 1,042 |
Amortization and write-off of debt discounts and debt issuance costs | 56.6 | 103.2 |
In-process research and development impairments | 14.5 | 12.3 |
Acquisition accounting adjustment on inventory sold | 36.4 | 70.5 |
Gain on disposal of assets and businesses, net | (11) | 0 |
Acquisition-related contingent consideration | 9.3 | 18.8 |
Allowances for losses on accounts receivable and inventories | 52.5 | 26.8 |
Deferred income tax (benefit) expense | (164.6) | 37.7 |
(Reductions) additions to accrued legal settlements | (32.7) | 6.3 |
Payments of accrued legal settlements | (51.4) | (5.9) |
Loss on deconsolidation | 18.4 | 0 |
Share-based compensation | 97.2 | 60.9 |
Tax expense (benefit) from share-based compensation | 1.4 | (25.6) |
Foreign exchange (gain) loss | (15.5) | 65.6 |
Loss on extinguishment of debt | 0 | 20 |
Payment of contingent consideration adjustments, including accretion | (7.9) | (12.1) |
Other | (9.5) | (9.9) |
Changes in operating assets and liabilities: | ||
Trade receivables | (43.2) | (308.8) |
Inventories | (145.1) | (139.3) |
Prepaid expenses and other current assets | 161.7 | (163.5) |
Accounts payable, accrued and other liabilities | 34.1 | 55.7 |
Net cash provided by operating activities | 1,006.2 | 901.6 |
Cash Flows From Investing Activities | ||
Acquisition of businesses, net of cash acquired | (18.5) | (13,885.9) |
Acquisition of intangible assets and other assets | (10.3) | (58) |
Purchases of property, plant and equipment | (128.3) | (112.6) |
Reduction of cash due to deconsolidation | (30.2) | 0 |
Proceeds from sales and maturities of short-term investments | 0 | 17.7 |
Net settlement of assumed derivative contracts | 0 | 184.6 |
Settlement of foreign currency forward exchange contracts | 0 | (26.3) |
Purchases of marketable securities | (1.4) | 0 |
Proceeds from sale of marketable securities | 15.2 | 0 |
Proceeds from sale of assets and businesses, net of costs to sell | 111.4 | 0 |
Increase in restricted cash and cash equivalents | 0 | (5.2) |
Net cash used in investing activities | (62.1) | (13,885.7) |
Cash Flows From Financing Activities | ||
Issuance of long-term debt, net of discount | 1,220 | 16,925.8 |
Repayments of long-term debt | (1,273.1) | (1,358.2) |
Short-term debt borrowings | 2.2 | 5.9 |
Short-term debt repayments | (1.9) | (5) |
Repayments of convertible notes assumed | 0 | (3,122.8) |
Issuance of common stock, net | 0 | 1,433.4 |
Repurchases of common shares | 0 | (50) |
Proceeds from exercise of stock options | 0.7 | 22.1 |
Tax (expense) benefit from share-based compensation | (1.4) | 25.6 |
Payment of employee withholding tax upon vesting of share-based awards | (7.3) | (61.5) |
Payments of contingent consideration | (44.4) | (81) |
Payments of deferred consideration | (516.1) | 0 |
Payments of financing costs | (65.2) | (101.7) |
Other | (5.8) | (1) |
Net cash (used in) provided by financing activities | (692.3) | 13,631.6 |
Effect of exchange rate changes on cash and cash equivalents | 3.3 | (12.1) |
Net increase in cash and cash equivalents | 255.1 | 635.4 |
Cash and cash equivalents, beginning of period | 597.3 | 322.6 |
Cash and cash equivalents, end of period | 852.4 | 958 |
Non-Cash Investing and Financing Activities | ||
Acquisition of businesses, contingent and deferred consideration obligations at fair value (Restated) | 0 | (635.8) |
Acquisition of businesses, debt assumed | $ 0 | $ (3,123.1) |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2016 | |
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, continued under the laws of the Province of British Columbia, 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. On April 1, 2015, the Company acquired Salix Pharmaceuticals, Ltd. ("Salix"), pursuant to an Agreement and Plan of Merger dated February 20, 2015, as amended on March 16, 2015 (the "Salix Merger Agreement"), with Salix surviving as a wholly owned subsidiary of Valeant Pharmaceuticals International ("Valeant"), a subsidiary of the Company (the "Salix Acquisition"). For further information regarding the Salix Acquisition, see Note 4. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTRUCTURING OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS This footnote discloses the nature of the restatement matters described below and shows the impact of the restatement matters on the Company's consolidated financial statements for the six months ended June 30, 2015. As described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”), the Company has restated its consolidated financial statements for the year ended December 31, 2014 (including the financial information for the three months ended December 31, 2014), the three months ended March 31, 2015, six months ended June 30, 2015 and nine months ended September 30, 2015. The Company filed the 2015 Form 10-K on April 29, 2016. Additional information regarding the restatement is contained in that filing. Prior period financial information in this Form 10-Q has been amended where necessary to reflect the restatement. Therefore, this Form 10-Q should be read in conjunction with the Company’s 2015 Form 10-K. On December 15, 2014, the Company entered into a purchase option agreement with Philidor Rx Services, LLC (“Philidor”) and its members in which the Company received an exclusive option to acquire 100% of the equity interest in Philidor, and as of which time Philidor was consolidated with the Company for accounting purposes as a variable interest entity for which the Company was the primary beneficiary. Prior to consolidation, revenue on sales to Philidor was recognized by the Company on a sell-in basis (i.e., recorded when the Company delivered product to Philidor). The Company determined that certain sales transactions for deliveries to Philidor in the second half of 2014 leading up to the execution of the purchase option agreement were not executed in the normal course of business under applicable accounting standards and included actions taken by the Company (including fulfillment of unusually large orders with extended payment terms and increased pricing, an emphasis on delivering product prior to the execution of the purchase option agreement and seeking and filling a substitute order of equivalent value for an unavailable product) in contemplation of the purchase option agreement. As a result of these actions, revenue for certain transactions completed prior to entry into the purchase option agreement should have been recognized on a sell-through basis (i.e., record revenue when Philidor dispensed the products to patients) rather than incorrectly recognized on the sell-in basis utilized by the Company. Additionally, related to these and certain earlier transactions, the Company has since concluded that collectability was not reasonably assured at the time the revenue was originally recognized, and, thus, these transactions should have been recognized at a later date (when collectability was reasonably assured which the Company determined coincides with when the inventory is sold through to the end customer) instead of on a sell-in basis. Following the consolidation of Philidor on the date of entry into the purchase option agreement, the Company began recognizing revenue as Philidor dispensed product to patients. The restatement of previously issued financial statements, primarily for these Philidor-related adjustments, reduced revenue for the three months ended March 31, 2015 by approximately $21 million and increased the Company's net income attributable to Valeant Pharmaceuticals International, Inc. and diluted earnings per share for the three months ended March 31, 2015 by approximately $24 million or $0.07 per share. Due to the fact that the first quarter 2015 results are included within the financial statements for the six months ended June 30, 2015 and the financial statements for the nine months ended September 30, 2015, those financial statements have also been restated. The following tables summarize the Consolidated Statement of Income and the Consolidated Statement of Cash Flows for the six months ended June 30, 2015, as reported on the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 , filed on July 28, 2015, compared to the restated financial statements. The individual restatement matters that underlie the restatement adjustments are described below and are reflected and quantified, as applicable, in the footnotes to the below tables. (a) Philidor revenue recognition adjustments - The correction of the misstatement from recognizing revenue related to sales to Philidor from a sell-in to sell-through basis had the effect of eliminating certain revenue recorded in 2014 prior to the date that Philidor was consolidated as a variable interest entity. The revenue that was eliminated from 2014 did not result in an increase to revenue in subsequent periods as a result of the Company having previously recognized that revenue, subsequent to the consolidation of Philidor, when Philidor dispensed the product to patients. Under the sell-in method previously utilized by the Company with respect to sales to Philidor prior to its consolidation in December 2014, revenue was recognized upon delivery of the products to Philidor. At the date of consolidation, certain of that previously sold inventory was still held by Philidor. Subsequent to the consolidation, Philidor recognized revenue on that inventory when it dispensed products to patients, and that revenue was consolidated into the Company’s results. As long as those pre-consolidation sales transactions were in the normal course of business under applicable accounting standards and not entered into in contemplation of the purchase option agreement, the Company’s historical accounting for this revenue was in accordance with U.S. GAAP. The Company has since determined that certain sales transactions for deliveries to Philidor, leading up to the purchase option agreement, were not executed in the normal course of business under applicable accounting standards and included actions taken by the Company (including fulfillment of unusually large orders with extended payment terms and increased pricing, an emphasis on delivering product prior to the execution of the purchase option agreement and seeking and filling a substitute order of equivalent value for an unavailable product) in contemplation of the purchase option agreement. As such, revenue, net of managed care rebates, of $58 million previously recorded in 2014 was corrected. However, because that revenue was also recorded by Philidor subsequent to consolidation, upon dispensing of products to patients, the elimination of this revenue in 2014, prior to consolidation, did not result in additional revenue being recorded in 2015. Additionally, provisions for managed care rebates of $21 million previously recorded in 2014 are now recognized against that revenue in the first quarter of 2015. At the time of the consolidation of Philidor in December 2014, under the acquisition method of accounting, the Company recorded the fair value of the inventory on hand at Philidor at the net price the Company previously sold the inventory to Philidor, exclusive of the impact of managed care rebates. The restatement adjustments to eliminate the revenue for certain sales transactions between the Company and Philidor prior to consolidation, resulted in a reduction, for accounting purposes, to the amount of inventory that the Company acquired from Philidor. Eliminating the pre-consolidation sales described above had the effect of reducing pre-tax profit that was recognized in 2014 by $39 million . The majority of this profit is now recognized in 2015 as a reduction to previously recorded Cost of Goods Sold as the restated carrying amount of this inventory does not include the stepped up value resulting from the Company's consolidation of Philidor. (b) Accrued liability adjustment - Unrelated to Philidor, the Company recorded an accrual for previously unrecorded professional fees related to acquisition-related costs. (c) Tax effect of restatement adjustments - The Company calculated the tax effect of the adjustments noted above. (d) Philidor measurement period adjustments - Related to the consolidation of Philidor, the Company previously recorded certain measurement period adjustments during the second and third quarters of 2015 when known, which should be retroactively recorded as of the date Philidor was consolidated (December 2014). These measurement period adjustments primarily resulted in (1) an increase to acquisition-related contingent consideration as a result of further valuation analysis around the probability and timing of certain milestone payments; (2) increases in the fair value of certain intangible assets resulting from the higher sales forecast; and (3) a net increase in goodwill as a result of (1) and (2) above. The measurement period adjustments were previously determined to be immaterial to the Company’s consolidated financial statements, but were recorded in the fourth quarter of 2014 in connection with the other restatement adjustments related to Philidor. CONSOLIDATED STATEMENT OF INCOME (Unaudited) Six Months Ended June 30, 2015 (As Previously Reported) Restatement Adjustments 2015 (Restated) Restatement Ref Revenues Product sales $ 4,841.9 $ (20.8 ) $ 4,821.1 (a) Other revenues 81.4 — 81.4 4,923.3 (20.8 ) 4,902.5 Expenses Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) 1,230.3 (52.5 ) 1,177.8 (a) Cost of other revenues 29.5 — 29.5 Selling, general and administrative 1,259.3 — 1,259.3 Research and development 136.9 — 136.9 Amortization and impairment of finite-lived intangible assets 950.6 — 950.6 Restructuring, integration and other costs 198.4 — 198.4 In-process research and development impairments and other changes 12.3 — 12.3 Acquisition-related costs 19.3 4.1 23.4 (b) Acquisition-related contingent consideration 18.8 — 18.8 Other expense 183.0 — 183.0 4,038.4 (48.4 ) 3,990.0 Operating income 884.9 27.6 912.5 Interest income 1.8 — 1.8 Interest expense (710.5 ) — (710.5 ) Loss on extinguishment of debt (20.0 ) — (20.0 ) Foreign exchange and other (65.5 ) — (65.5 ) Income before provision for income taxes 90.7 27.6 118.3 Provision for income taxes 67.8 3.6 71.4 (c) Net income 22.9 24.0 46.9 Less: Net income attributable to noncontrolling interest 2.2 — 2.2 Net income attributable to Valeant Pharmaceuticals International, Inc. $ 20.7 $ 24.0 $ 44.7 Earnings per share attributable to Valeant Pharmaceuticals International, Inc.: Basic $ 0.06 $ 0.07 $ 0.13 Diluted $ 0.06 $ 0.07 $ 0.13 Weighted-average common shares (in millions) Basic 340.5 340.5 Diluted 347.1 347.1 There was no net impact of the 2015 restatement adjustments on net cash provided by operating activities, net cash used in investing activities and net cash provided by financing activities in the Consolidated Statement of Cash Flows. The adjustments only had an impact on certain captions within cash flows from operating activities. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2015 (As Previously Reported) Restatement Adjustments 2015 (Restated) Restatement Ref Cash Flow From Operating Activities Net income $ 22.9 $ 24.0 $ 46.9 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, including impairments of finite-lived intangible assets 1,042.0 — 1,042.0 Amortization and write-off of debt discounts and debt issuance costs 103.2 — 103.2 In-process research and development impairments 12.3 — 12.3 Acquisition accounting adjustment on inventory sold 70.5 — 70.5 Acquisition-related contingent consideration 18.8 — 18.8 Allowances for losses on accounts receivable and inventories 26.8 — 26.8 Deferred income taxes (1) 34.1 3.6 37.7 (c) Additions to accrued legal settlements 6.3 — 6.3 Payments of accrued legal settlements (5.9 ) — (5.9 ) Share-based compensation 60.9 — 60.9 Tax benefits from share-based compensation (25.6 ) — (25.6 ) Foreign exchange loss 65.6 — 65.6 Loss on extinguishment of debt 20.0 — 20.0 Payment of contingent consideration adjustments, including accretion (12.1 ) — (12.1 ) Other (9.9 ) — (9.9 ) Changes in operating assets and liabilities: Trade receivables (308.8 ) — (308.8 ) Inventories (86.8 ) (52.5 ) (139.3 ) (a) Prepaid expenses and other current assets (163.5 ) — (163.5 ) Accounts payable, accrued and other liabilities (1) 30.8 24.9 55.7 (a), (b) Net cash provided by operating activities 901.6 — 901.6 Net cash used in investing activities (13,885.7 ) — (13,885.7 ) Net cash provided by financing activities 13,631.6 — 13,631.6 Effect of exchange rate changes on cash and cash equivalents (12.1 ) — (12.1 ) Net increase in cash and cash equivalents 635.4 — 635.4 Cash and cash equivalents, beginning of period 322.6 — 322.6 Cash and cash equivalents, end of period $ 958.0 $ — $ 958.0 Non- Cash Investing and Financing Activities Acquisition of businesses, contingent consideration at fair value $ (674.6 ) $ 38.8 $ (635.8 ) (d) Acquisition of businesses, debt assumed (3,123.1 ) — (3,123.1 ) ________________________ (1) As described in Note 3, the Consolidated Statement of Cash Flows reflects a reclassification of $22 million related to a change in income taxes payable which increased deferred income taxes and decreased accounts payable, accrued and other liabilities within the cash flow from operating activities. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements (the “unaudited 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 (“U.S. GAAP”) for interim financial reporting, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly, these condensed notes to the unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto prepared in accordance with U.S. GAAP that are contained in the Company’s 2015 Form 10-K. The unaudited consolidated financial statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited consolidated financial statements for the year ended December 31, 2015. The unaudited consolidated financial statements reflect all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods. Reclassifications Certain reclassifications have been made to prior year amounts to conform with the current year presentation. Such amounts include a reclassification of $22 million related to a change in income taxes payable which increased deferred income taxes and decreased accounts payable, accrued and other liabilities within changes in operating assets and liabilities within cash flow from operating activities of the Consolidated Statements of Cash Flows for the six-month period ended June 30, 2015. Use of Estimates In preparing the unaudited 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 unaudited consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. 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 results of operations and financial position could be materially impacted. Adoption of New Accounting Standards 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 variable interest entities ("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 was effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2015. The Company adopted this standard as of January 1, 2016 using the modified retrospective approach, as permitted, and, as such, prior periods were not retrospectively adjusted. The adoption of this standard did not have a material impact on the presentation of the Company's results of operations, cash flows or financial position. Recently Issued Accounting Standards, Not Adopted as of June 30, 2016 In May 2014, the FASB issued 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. In March 2016, the FASB issued an amendment to clarify the implementation guidance around considerations of whether an entity is a principal or an agent, impacting whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued an amendment to clarify guidance on identifying performance obligations and the implementation guidance on licensing. In May 2016, the FASB issued amendments to certain aspects of the new revenue guidance (including transition, collectability, noncash consideration and the presentation of sales and other similar taxes) and provided certain practical expedients. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early application is permitted but not before the annual reporting period (and interim reporting period) beginning January 1, 2017. 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, at this time, the Company does not expect any impact on its disclosures. In July 2015, the FASB issued guidance which requires entities to measure most inventory “at the lower of cost and net realizable value (“NRV”),” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation”. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations. In January 2016, the FASB issued guidance which amends the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured under the fair value option. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and disclosures. In February 2016, the FASB issued new guidance on leases. The new guidance will increase transparency and comparability among organizations that lease buildings, equipment, and other assets by recognizing the assets and liabilities that arise from lease transactions. Current off-balance sheet leasing activities will be required to be reflected on balance sheets so that investors and other users of financial statements can more readily and accurately understand the rights and obligations associated with these transactions. Consistent with the current lease standard, the new guidance addresses two types of leases: finance leases and operating leases. Finance leases will be accounted for in substantially the same manner as capital leases are accounted for under current GAAP. Operating leases will be accounted for (both in the income statement and statement of cash flows) in a manner consistent with operating leases under existing GAAP. However, as it relates to the balance sheet, lessees will recognize lease liabilities based upon the present value of remaining lease payments and corresponding lease assets for operating leases with limited exception. The new guidance will also require lessees and lessors to provide additional qualitative and quantitative disclosures to help financial statement users assess the amount, timing, and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an organization’s leasing activities. The new guidance is effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2018. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and disclosures. In March 2016, the FASB issued new guidance which simplifies several aspects of the accounting for employee share-based payment transactions. The areas for simplification involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and cash flows. In June 2016, the FASB issued new guidance on the impairment of financial instruments requiring an impairment model based on expected losses rather than incurred losses. Under this guidance, an entity recognizes as an allowance its estimate of expected credit losses. The guidance is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and cash flows. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS The Company completed an immaterial business combination in the first quarter of 2016. Business combinations in 2015 included the following: Amoun Description of the Transaction On October 19, 2015, the Company acquired Mercury (Cayman) Holdings, the holding company of Amoun Pharmaceutical Company S.A.E. (“Amoun”), for consideration of approximately $911 million , including contingent payments (the “Amoun Acquisition”). Amoun develops and markets a wide range of pharmaceutical brands in therapeutic areas such as anti-hypertensives, broad spectrum antibiotics, and anti-diarrheals primarily in North Africa and the Middle East. Fair Value of Consideration Transferred The fair value of consideration transferred to effect the Amoun Acquisition consisted of $847 million in cash, plus contingent consideration based upon the achievement of specified sales-based milestones. The range of potential milestone payments as of the acquisition date is from nil, if none of the milestones are achieved, to a maximum of up to approximately $75 million over time, if all milestones are achieved, in the aggregate. The total fair value of the contingent consideration of $64 million as of the acquisition date was determined using probability-weighted discounted cash flows. Refer to Note 7 for additional information regarding contingent consideration. The Company recognized a post-combination expense of $12 million within Other expense (income) in the fourth quarter of 2015 related to cash bonuses paid to Amoun employees. 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 the acquisition date. The following recognized amounts are provisional and subject to change: • amounts for intangible assets, property, plant and equipment, certain liabilities, and other working capital balances 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 process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the provisional amounts recognized at the acquisition date in the reporting period in which the adjustments are determined. These changes could be significant. The Company will finalize these amounts no later than one year from the acquisition date. Amounts Recognized as of Acquisition Date (as previously reported) (a) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Cash $ 43.5 $ — $ 43.5 Accounts receivable (b) 64.2 — 64.2 Inventories 37.9 — 37.9 Other current assets 12.2 — 12.2 Property, plant and equipment 96.4 (1.0 ) 95.4 Identifiable intangible assets, excluding acquired in-process research and development ("IPR&D") (c) 528.0 (0.2 ) 527.8 Acquired IPR&D 18.5 (1.1 ) 17.4 Other non-current assets 0.1 — 0.1 Current liabilities (30.8 ) — (30.8 ) Deferred tax liability, net (d) (130.5 ) (1.6 ) (132.1 ) Other non-current liabilities (11.2 ) 4.0 (7.2 ) Total identifiable net assets 628.3 0.1 628.4 Goodwill (e) 282.0 0.8 282.8 Total fair value of consideration transferred $ 910.3 $ 0.9 $ 911.2 ________________________ (a) As previously reported in the Company’s 2015 Form 10-K. (b) The fair value of trade accounts receivable acquired was $64 million , with the gross contractual amount being $66 million , of which the Company expects that $2 million will be uncollectible. (c) The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: Weighted- Average Useful Lives (Years) Amounts Recognized as of Acquisition Date (as previously reported) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Product brands 9 $ 490.8 $ (0.1 ) $ 490.7 Corporate brand 15 37.2 (0.1 ) 37.1 Total identifiable intangible assets acquired 9 $ 528.0 $ (0.2 ) $ 527.8 (d) Comprised of deferred tax liabilities partially offset by nominal deferred tax assets. (e) 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 products and expand its business to new geographic markets; • the value of the continuing operations of Amoun'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, Amoun's assembled workforce). The provisional amount of goodwill has been allocated to the Company’s Emerging Markets segment. Sprout Description of the Transaction On October 1, 2015, the Company acquired Sprout Pharmaceuticals, Inc. (“Sprout”), pursuant to the merger agreement, among Sprout, the Company, Valeant, Miranda Acquisition Sub, Inc., a wholly owned subsidiary of Valeant, and Shareholder Representative Services LLC, as stockholder representative, on a debt-free basis (the “Sprout Acquisition”), for an aggregate purchase price of $1.45 billion , which includes cash plus contingent consideration. Sprout has focused solely on the delivery of a treatment option for the unmet need of pre-menopausal women with acquired, generalized hypoactive sexual desire disorder (HSDD) as characterized by low sexual desire that causes marked distress or interpersonal difficulty and is not due to a co-existing medical or psychiatric condition, problems within the relationship, or the effects of a medication or other drug substance. In August 2015, Sprout received approval from the U.S. Food and Drug Administration ("FDA") on its New Drug Application ("NDA") for flibanserin, which is being marketed as Addyi® in the U.S. (launched in the U.S. in October 2015). Sprout also has global rights to flibanserin. In connection with the acquisition of Sprout, the Company has a contractual obligation for expenditures of at least $200 million with respect to Addyi® for selling, general and administrative, marketing and research and development expenses from the period commencing January 1, 2016 through June 30, 2017. Fair Value of Consideration Transferred The Company paid approximately $530 million , inclusive of customary purchase price adjustments, upon closing of the transaction in October 2015, and an additional payment in the amount of $500 million (acquisition date fair value of $495 million ), included in accrued and other current liabilities as of December 31, 2015, was paid in the first quarter of 2016. In addition, the transaction includes contingent consideration representing payments to the former shareholders and former holders of vested stock appreciation rights of Sprout for a share of future profits. The share of future profits with the former shareholders and former holders of vested stock appreciation rights of Sprout is uncapped and commences on the date that the earlier of the following events occurs (a) net cumulative worldwide sales of flibanserin products (plus any amounts received from sublicenses on the sale of flibanserin products) exceed $1 billion or (b) July 1, 2017, and continues until December 31, 2030. The total fair value of the contingent consideration of $422 million as of the acquisition date was determined using a Monte Carlo Simulation. Refer to Note 7 for additional information regarding contingent consideration. 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 the acquisition date. The following recognized amounts are provisional and subject to change: • amounts for intangible assets, certain liabilities, and other working capital balances 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 process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the provisional amounts recognized at the acquisition date in the reporting period in which the adjustments are determined. These changes could be significant. The Company will finalize these amounts no later than one year from the acquisition date. Amounts Recognized as of Acquisition Date (as previously reported) (a) Cash and cash equivalents $ 26.6 Inventories 11.0 Other assets 1.6 Identifiable intangible assets (b) 993.7 Current liabilities (4.4 ) Deferred income taxes, net (351.9 ) Total identifiable net assets 676.6 Goodwill (c) 769.9 Total fair value of consideration transferred $ 1,446.5 ________________________ (a) As previously reported in the Company’s 2015 Form 10-K. (b) Consists of product rights with a weighted-average useful life of 11 years. (c) 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 potential ability to develop and market the product to additional types of patients/indications and launch the product in a variety of new geographies; • the value of the continuing operations of Sprout'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, Sprout's assembled workforce). The provisional amount of goodwill has been allocated to the Company’s Developed Markets segment. Salix Description of the Transaction On April 1, 2015, the Company acquired Salix, pursuant to the Salix Merger Agreement, among the Company, Valeant, Sun Merger Sub, Inc., a wholly owned subsidiary of Valeant (“Sun Merger Sub”), and Salix. Salix is a specialty pharmaceutical company dedicated to developing and commercializing prescription drugs and medical devices used in treatment of variety of gastrointestinal ("GI") disorders with a portfolio of over 20 marketed products, including Xifaxan®, Uceris®, Apriso®, Glumetza®, and Relistor®. In accordance with the terms of the Salix Merger Agreement, Sun Merger Sub commenced 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 $173.00 per Salix Share, net to the holder in cash, without interest, less any applicable withholding taxes. The Offer expired on April 1, 2015, as scheduled. A sufficient number of Salix Shares were validly tendered in the Offer such that the minimum tender condition to the Offer was satisfied, and Sun Merger Sub accepted for payment all such tendered Salix Shares. Following the expiration of the Offer on April 1, 2015, Sun Merger Sub merged with and into Salix, with Salix surviving as a wholly owned subsidiary of Valeant (the “Merger”). The Merger was governed by Section 251(h) of the General Corporation Law of the State of Delaware, with no stockholder vote required to consummate the Merger. At the effective time of the Merger, each Salix Share then outstanding was converted into the right to receive $173.00 in cash, without interest, less any applicable withholding taxes, except for Salix Shares then owned by the Company or Salix or their respective wholly owned subsidiaries, which Salix Shares were cancelled for no consideration. In connection with the Merger, each unexpired and unexercised option to purchase Salix Shares (the “Salix Options”), whether or not then exercisable or vested, was cancelled and, in exchange therefor, each former holder of any such cancelled Salix Options was entitled to receive, a payment in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) of an amount equal to the product of (i) the total number of Salix Shares previously subject to such Salix Options and (ii) the excess, if any, of $173.00 over the exercise price per Salix Share previously subject to such Salix Options. Each unvested Salix Share subject to forfeiture restrictions, repurchase rights or other restrictions (the “Salix Restricted Stock”) automatically became fully vested and was cancelled and, in exchange therefor, each former holder of such cancelled Salix Restricted Stock was entitled to receive, a payment in cash (subject to any applicable withholding or other taxes required by applicable law to be withheld) equal to $173.00 per share of Salix Restricted Stock. The Salix Acquisition (including the Offer and the Merger), as well as related transactions and expenses, were funded through a combination of: (i) the proceeds from an issuance of senior unsecured notes that closed on March 27, 2015; (ii) the proceeds from incremental term loan commitments; (iii) the proceeds from a registered offering of the Company’s common shares in the United States that closed on March 27, 2015; and (iv) cash on hand. Fair Value of Consideration Transferred The following table indicates the consideration transferred to effect the Salix Acquisition: (In millions except per share data) Conversion Calculation Fair Value Number of shares of Salix common stock outstanding as of acquisition date 64.3 Multiplied by Per Share Merger Consideration $ 173.00 $ 11,123.9 Number of outstanding stock options of Salix cancelled and exchanged for cash (a) 0.1 10.1 Number of outstanding restricted stock of Salix cancelled and exchanged for cash (a) 1.1 195.0 11,329.0 Less: Cash consideration paid for Salix’s restricted stock that was accelerated at the closing of the Salix Acquisition (a) (164.5 ) Add: Payment of Salix’s Term Loan B Credit Facility (b) 1,125.2 Add: Payment of Salix’s 6.00% Senior Notes due 2021 (b) 842.3 Total fair value of consideration transferred $ 13,132.0 ___________________________________ (a) The purchase consideration paid to holders of Salix stock options and restricted stock attributable to pre-combination services was included as a component of the purchase price. Purchase consideration of $165 million paid for outstanding restricted stock that was accelerated by the Company in connection with the Salix Acquisition was excluded from the purchase price and accounted for as post-combination expense within Other expense (income) in the second quarter of 2015. (b) The repayment of Salix’s Term Loan B Credit Facility has been reflected as part of the purchase consideration as the debt was repaid concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition. Similarly, the redemption of Salix’s 6.00% Senior Notes due 2021 has been reflected as part of the purchase consideration as the indenture governing the 6.00% Senior Notes due 2021 was satisfied and discharged concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition. 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 the acquisition date. Amounts Recognized as of Acquisition Date (as previously reported) (a) Measurement Period Adjustments (b) Amounts Recognized as of December 31, 2015 (as adjusted) Cash and cash equivalents $ 113.7 $ — $ 113.7 Inventories (c) 233.2 (0.6 ) 232.6 Other assets (d) 1,400.3 10.1 1,410.4 Property, plant and equipment, net 24.3 — 24.3 Identifiable intangible assets, excluding acquired IPR&D (e) 6,756.3 — 6,756.3 Acquired IPR&D (f) 5,366.8 (183.9 ) 5,182.9 Current liabilities (g) (1,764.2 ) (175.0 ) (1,939.2 ) Contingent consideration, including current and long-term portion (h) (327.9 ) (6.2 ) (334.1 ) Long-term debt, including current portion (i) (3,123.1 ) — (3,123.1 ) Deferred income taxes, net (j) (3,512.0 ) 84.1 (3,427.9 ) Other non-current liabilities (7.3 ) (36.0 ) (43.3 ) Total identifiable net assets 5,160.1 (307.5 ) 4,852.6 Goodwill (k) 7,971.9 307.5 8,279.4 Total fair value of consideration transferred $ 13,132.0 $ — $ 13,132.0 ________________________ (a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. (b) The measurement period adjustments primarily reflect: (i) a reduction in acquired IPR&D assets, specifically for the Oral Relistor® program based mainly on refinement of the pricing assumptions and cost projections (see further discussion of IPR&D programs in (f) below) and (ii) the tax impact of pre-tax measurement period adjustments as well as reclassifications of certain tax balances impacting current liabilities. 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 consolidated financial statements. As the measurement period for the Salix Acquisition closed in the fourth quarter of 2015, there were no measurement period adjustments recorded in subsequent periods. (c) Includes an estimated fair value step-up adjustment to inventory of $108 million . (d) Primarily includes an estimated fair value of $1.27 billion to record the capped call transactions and convertible bond hedge transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 and 2.75% Convertible Senior Notes due 2015. These instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts. Other assets also includes an estimated insurance recovery of $80 million , based on estimated fair value, related to the legal matters discussed in (g) below. (e) The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: Weighted- Average Useful Lives (Years) Amounts Recognized as of Acquisition Date (as previously reported) Measurement Period Adjustments Amounts Recognized as of December 31, 2015 (as adjusted) Product brands 10 $ 6,088.3 $ 1.3 $ 6,089.6 Corporate brand 20 668.0 (1.3 ) 666.7 Total identifiable intangible assets acquired 11 $ 6,756.3 $ — $ 6,756.3 (f) A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from a market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and the Company used risk-adjusted discount rates of 9.5% - 11% to present value the projected cash flows. The IPR&D assets primarily relate to Xifaxan® 550 mg for the treatment of irritable bowel syndrome with diarrhea (new indication) in adults ("Xifaxan® IBS-D"). In determining the fair value of Xifaxan® IBS-D ( $4.79 billion as of the acquisition date), the Company assumed material cash inflows would commence in 2015. In May 2015, Xifaxan® IBS-D received approval from the FDA, and, accordingly, such asset has been reclassified to an amortizable intangible asset as of the approval date and is being amortized over a period of 10 years. Other IPR&D assets include, among others, Relistor® tablets ("Oral Relistor®"), for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain, and Rifaximin soluble solid dispersion ("SSD") tablets, for the treatment of early decompensated liver cirrhosis. In September 2015, the Company announced that the FDA accepted for review the Company's NDA for Oral Relistor®, and the FDA assigned a Prescription Drug User Fee Act (PDUFA) action date of April 19, 2016. In April 2016, the Company announced that the FDA had extended the PDUFA action date for Oral Relistor® to July 19, 2016 to allow time for a full review of the Company's responses to certain information requests from the FDA. On July 19, 2016, the FDA approved Oral Relistor® for the treatment of opioid-induced constipation in adults with chronic non-cancer pain. The associated IPR&D asset ( $304 million as of the acquisition date) will be reclassified to an amortizable intangible as of the approval date and will be amortized over a period of 12 years. In the third quarter of 2015, the Company terminated the Rifaximin SSD IPR&D program and recognized an impairment charge as described in Note 9. (g) Primarily includes an estimated fair value of $1.08 billion to record the warrant transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 (these instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts), as well as accruals for (i) the estimated fair value of $336 million (exclusive of the related insurance recovery described in (d) above) for potential losses and related costs associated with legal matters relating to the legacy Salix business (See Note 17 for additional information regarding these legal matters) and (ii) product returns and rebates of $375 million . (h) The contingent consideration consists of potential payments to third parties including developmental milestone payments due upon specified regulatory achievements, commercialization milestones contingent upon achieving specified targets for net sales, and royalty-based payments. As of the acquisition date, the range of potential milestone payments (excluding royalty-based payments) is from nil , if none of the milestones are achieved, to a maximum of up to approximately $650 million (the majority of which relates to sales-based milestones) over time, if all milestones are achieved, in the aggregate, to third parties. This amount includes up to $250 million in developmental and sales-based milestones to Progenics Pharmaceuticals, Inc. related to Relistor® (including Oral Relistor®), of which $50 million was paid in the third quarter of 2016 in connection with the FDA's approval of Oral Relistor®, and various other developmental and sales-based milestones. The total fair value of the contingent consideration of $334 million as of the acquisition date was determined using probability-weighted discounted cash flows. Refer to Note 7 for additional information regarding the contingent consideration. (i) The following table summarizes the fair value of long-term debt assumed as of the acquisition date: Amounts Recognized as of Acquisition Date 1.5% Convertible Senior Notes due 2019 (1) $ 1,837.1 2.75% Convertible Senior Notes due 2015 (1) 1,286.0 Total long-term debt assumed $ 3,123.1 ____________________________________ (1) The Company subsequently redeemed these amounts in full in the second quarter of 2015, except for a nominal amount of the 1.5% Convertible Senior Notes due 2019 which remains outstanding. (j) Comprises deferred tax assets ( $303 million ) and deferred tax liabilities ( $3.73 billion ). (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 Salix with those of the Company; • the value of the continuing operations of Salix’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, Salix’s assembled workforce). Goodwill has been allocated to the Company’s Developed Markets segment . Other 2015 Business Combinations (excluding the Amoun Acquisition, the Sprout Acquisition, and the Salix Acquisition) Description of the Transactions In the year ended December 31, 2015, the Company completed other business combinations (excluding the Amoun Acquisition, the Sprout Acquisition, and the Salix Acquisition), which included the acquisition of the following businesses, for an aggregate purchase price of $1.41 billion . The other business combinations completed during the year ended December 31, 2015 included contingent consideration arrangements with an aggregate acquisition date fair value of $186 million , primarily related to the acquisition of certain assets of Marathon Pharmaceuticals, LLC ("Marathon") (see below), as well as milestone payments and royalties related to other smaller acquisitions. Refer to Note 7 for additional information regarding contingent consideration. • On February 23, 2015, the Company, completed via a "stalking horse bid" in a sales process conducted under the U.S. Bankruptcy Code, acquired certain assets of Dendreon Corporation ("Dendreon") for a purchase price of $415 million , net of cash received ( $495 million less cash received of $80 million ). The purchase price included approximately $50 million in stock consideration, and the Company issued such common shares in June 2015. The assets acquired from Dendreon included the worldwide rights to the Provenge® product (an immunotherapy treatment designed to treat men with advanced prostate cancer). • On February 10, 2015, the Company acquired certain assets of Marathon. The assets acquired from Marathon comprised a portfolio of hospital products, including Nitropress®, Isuprel®, Opium Tincture, Pepcid®, Seconal® Sodium, Amytal® Sodium, and Iprivask® for an aggregate purchase price of $286 million (which is net of a $64 million assumed liability owed to a third party which is reflected in the table below). Also, as part of this acquisition, the Company assumed a contingent consideration liability as described further below. • In the year ended December 31, 2015, 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. The following recognized amounts related to 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 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 Recognized as of Acquisition Dates (as previously reported) Measurement Period Adjustments (a) Amounts Recognized as of June 30, 2016 (as adjusted) Cash $ 92.2 $ — $ 92.2 Accounts receivable (b) 49.5 (3.0 ) 46.5 Inventories 142.9 (2.6 ) 140.3 Other current assets 20.2 (0.5 ) 19.7 Property, plant and equipment 94.6 (14.8 ) 79.8 Identifiable intangible assets, excluding acquired IPR&D (c) 1,121.6 (43.2 ) 1,078.4 Acquired IPR&D 57.5 (3.7 ) 53.8 Other non-current assets 2.9 — 2.9 Deferred tax (liability) asset, net (54.7 ) 60.8 6.1 Current liabilities (d) (123.9 ) (4.1 ) (128.0 ) Long-term debt (6.1 ) — (6.1 ) Non-current liabilities (d) (117.4 ) 0.2 (117.2 ) Total identifiable net assets 1,279.3 (10.9 ) 1,268.4 Goodwill (e) 141.9 (3.5 ) 138.4 Total fair value of consideration transferred $ 1,421.2 $ (14.4 ) $ 1,406.8 ________________________ (a) The measurement period adjustments primarily relate to the acquisition of certain assets of Dendreon and reflect: (i) an increase to the deferred tax assets based on further assessment of the Dendreon net operating losses ("NOLs") available to the Company post-acquisition, (ii) a reduction in the estimated fair value of intangible assets based on further assessment of assumptions related to the probability-weighted cash flows, (iii) a reduction in the estimated fair value of property, plant and equipment driven by further assessment of the fair value of a manufacturing facility, 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. The adjustments recorded in the current period did not have a significant impact on the Company’s consolidated financial statements. (b) The fair value of trade accounts receivable acquired was $47 million , with the gross contractual amount being $51 million , of which the Company expects that $4 million will be uncollectible. (c) The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: Weighted- Average Useful Lives (Years) Amounts Recognized as of Acquisition Dates (as previously reported) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Product brands 7 $ 741.2 $ (6.0 ) $ 735.2 Product rights 3 42.7 (0.7 ) 42.0 Corporate brands 16 6.6 — 6.6 Partner relationships 8 7.8 — 7.8 Technology/know-how 10 321.3 (36.5 ) 284.8 Other 6 2.0 — 2.0 Total identifiable intangible assets acquired 8 $ 1,121.6 $ (43.2 ) $ 1,078.4 (d) As part of the acquisition of certain assets of Marathon, the Company assumed a contingent consideration liability related to potential payments, in the aggregate, of up to approximately $200 million as of the acquisition date, for Isuprel® and Nitropress®, the amounts of which are dependent on the timing of generic entrants for these products. The fair value of the liability as of the acquisition date was determined using probability-weighted projected cash flows, with $41 million classified in Current liabilities and $46 million classified in Non-current liabilities in the table above. As of June 30, 2016 , the assumptions used for determining the fair value of the contingent consideration liability have not changed significantly from those used as of the acquisition date. The Company made contingent consideration payments related to the Marathon acquisition of $35 million during 2015 and an additional $17 million and $27 million during the three-month and six-month periods ended June 30, 2016 , respectively. (e) The goodwill relates primarily to certain smaller acquisitions and the acquisition of certain assets of Marathon. 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. The majority of the goodwill is not expected to be deductible for tax purposes. The goodwill represents primarily the cost savings, operating |
DIVESTITURES
DIVESTITURES | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DIVESTITURES | DIVESTITURES On April 1, 2016, the Company sold a portfolio of neurology medical device products, including product rights and related fixed assets, to Stryker Corporation for an upfront purchase price and certain future milestone payments. These assets were included in the Company’s Developed Markets segment. As a result of this transaction, the Company recognized a nominal loss on sale in the second quarter of 2016, due in part to the Company's accounting policy 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 (loss) income. |
RESTRUCTURING, INTEGRATION AND
RESTRUCTURING, INTEGRATION AND OTHER COSTS | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING, INTEGRATION AND OTHER COSTS | RESTRUCTURING, INTEGRATION AND OTHER COSTS In connection with the Salix Acquisition, as well as other 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/or • procurement savings. Salix Acquisition-Related Cost-Rationalization and Integration Initiatives The Company had estimated that it would incur total costs of approximately $300 million in connection with the cost-rationalization and integration initiatives relating to the Salix Acquisition, which were substantially completed by mid-2016. Since the acquisition date, total costs of $240 million have been incurred through June 30, 2016 , including (i) $125 million of integration expenses, (ii) $100 million of restructuring expenses, and (iii) $15 million of acquisition-related costs. The estimate of total costs to be incurred primarily includes: employee termination costs payable to approximately 475 employees of the Company and Salix who have been terminated as a result of the Salix Acquisition; potential IPR&D termination costs related to the transfer to other parties of product-development programs that do not align with the Company's research and development model; costs to consolidate or close facilities and relocate employees; and contract termination and lease cancellation costs. Salix Restructuring Costs The following table summarizes the major components of the restructuring costs incurred in connection with the Salix Acquisition since the acquisition date through June 30, 2016 : Severance and Related Benefits Contract Termination, Facility Closure and Other Costs Total Balance, January 1, 2015 $ — $ — $ — Costs incurred and/or charged to expense 90.6 0.9 91.5 Cash payments (57.8 ) (0.3 ) (58.1 ) Non-cash adjustments 2.2 — 2.2 Balance, December 31, 2015 (1) $ 35.0 $ 0.6 $ 35.6 Costs incurred and/or charged to expense 0.7 7.7 8.4 Cash payments (11.1 ) (0.3 ) (11.4 ) Balance, March 31, 2016 $ 24.6 $ 8.0 $ 32.6 Costs incurred and/or charged to expense (1.2 ) 0.9 (0.3 ) Cash payments (10.2 ) (1.2 ) (11.4 ) Balance, June 30, 2016 $ 13.2 $ 7.7 $ 20.9 ___________________________________ (1) In the six-month period ended June 30, 2015 , the Company recognized $82 million of restructuring charges and made payments of $26 million related to the Salix Acquisition. Salix Integration Costs As mentioned above, the Company has incurred $125 million of integration costs related to the Salix Acquisition since the acquisition date. In the six-month periods ended June 30, 2016 and 2015 , the Company incurred $15 million and $29 million , respectively, of integration costs related to the Salix Acquisition, which related primarily to integration consulting, duplicate labor, transition service, and other costs. The Company made payments of $19 million and $16 million related to Salix integration costs during the six-month periods ended June 30, 2016 and 2015 , respectively. Other Restructuring and Integration-Related Costs (Excluding Salix) In the six-month period ended June 30, 2016 , in addition to the restructuring and integration costs associated with the Salix Acquisition described above, the Company incurred an additional $34 million of other restructuring, integration-related and other costs. These costs included (i) $24 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $6 million of severance costs, and (iii) $4 million of facility closure costs. These costs primarily related to restructuring and integration costs for other smaller acquisitions. The Company made payments of $39 million during the six-month period ended June 30, 2016 (in addition to the payments related to the Salix Acquisition described above). In the six-month period ended June 30, 2015 , in addition to the restructuring and integration costs associated with the Salix Acquisition described above, the Company incurred an additional $87 million of other restructuring, integration-related and other costs. These costs included (i) $60 million of integration consulting, duplicate labor, transition service, and other costs, (ii) $23 million of severance costs, (iii) $3 million of facility closure costs, and (iv) $1 million of other costs. These costs primarily related to restructuring and integration costs for the acquired assets of Dendreon and other smaller acquisitions. The Company made payments of $101 million during the six-month period ended June 30, 2015 (in addition to the payments related to the Salix Acquisition described above). |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 and December 31, 2015 : As of June 30, 2016 As of December 31, 2015 Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents (1) $ 416.6 $ 344.2 $ 72.4 $ — $ 167.2 $ 156.1 $ 11.1 $ — Liabilities: Acquisition-related contingent consideration $ (1,074.6 ) $ — $ — $ (1,074.6 ) $ (1,155.9 ) $ — $ — $ (1,155.9 ) ___________________________________ (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 March 2015, the Company entered into foreign currency forward-exchange contracts to sell €1.53 billion and buy U.S. Dollars in order to reduce its exposure to the variability in expected cash inflows attributable to the changes in foreign exchange rates related to the €1.50 billion aggregate principal amount and related interest of 4.50% senior unsecured notes due 2023 (the "Euro Notes") issued on March 27, 2015, the proceeds of which were used to finance the Salix Acquisition. These derivative contracts were not designated as hedges for accounting purposes, and such contracts matured on April 1, 2015 (which coincides with the consummation of the Salix Acquisition). A foreign exchange loss of $26 million was recognized in Foreign exchange and other in the Consolidated statement of (loss) income for the three-month period ended March 31, 2015. In addition to the above, the Company has time deposits valued at cost, which approximates fair value due to their short-term maturities. The carrying value of $1 million and $16 million as of June 30, 2016 and December 31, 2015 , 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 six-month period ended June 30, 2016 . 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 via a probability-weighted discounted cash flow analysis or Monte Carlo Simulation, using unobservable (Level 3) inputs. These inputs may 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; (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows; and (iv) volatility of projected performance (Monte Carlo Simulation). 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 six-month period ended June 30, 2016 : Balance, January 1, 2016 Payments/ Settlements (a) Net Unrealized Loss Foreign Exchange (b) Adjustments Balance, Acquisition-related contingent consideration $ (1,155.9 ) $ 76.9 $ (9.3 ) $ 8.0 $ 5.7 $ (1,074.6 ) ____________________________________ (a) Primarily relates to payments of acquisition-related contingent consideration related to the acquisition of certain assets of Marathon, the settlement of contingent consideration obligation in connection with the termination of the arrangements with and relating to Philidor, and payments of acquisition-related contingent consideration related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL in June 2011 (the "Elidel®/Xerese®/Zovirax® agreement"), and other smaller acquisitions. (b) Included in other comprehensive loss. There were no transfers into or out of Level 3 during the six-month period ended June 30, 2016 . Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis There were no significant assets or liabilities that were re-measured at fair value on a non-recurring basis subsequent to initial recognition in the six-month period ended June 30, 2016 . For further information regarding asset impairment charges, see Note 9. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The components of inventories as of June 30, 2016 and December 31, 2015 were as follows: As of As of Raw materials (1) $ 357.5 $ 289.3 Work in process (1) 148.5 152.7 Finished goods (1) 830.7 814.6 $ 1,336.7 $ 1,256.6 ___________________________________ (1) The components of inventories shown in the table above are net of allowance for obsolescence. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets The major components of intangible assets as of June 30, 2016 and December 31, 2015 were as follows: As of June 30, 2016 As of December 31, 2015 Gross Carrying Amount Accumulated Amortization, Including Impairments Net Carrying Amount Gross Carrying Amount Accumulated Amortization, Including Impairments Net Carrying Amount Finite-lived intangible assets: Product brands $ 21,774.0 $ (6,291.5 ) $ 15,482.5 $ 22,082.8 $ (5,236.4 ) $ 16,846.4 Corporate brands 1,041.9 (128.6 ) 913.3 1,066.1 (107.1 ) 959.0 Product rights/patents 4,305.9 (1,954.8 ) 2,351.1 4,339.9 (1,711.7 ) 2,628.2 Partner relationships 167.5 (131.6 ) 35.9 217.6 (170.3 ) 47.3 Technology and other 442.3 (174.1 ) 268.2 480.3 (186.1 ) 294.2 Total finite-lived intangible assets (1) 27,731.6 (8,680.6 ) 19,051.0 28,186.7 (7,411.6 ) 20,775.1 Indefinite-lived intangible assets: Acquired IPR&D (2) 587.3 — 587.3 610.4 — 610.4 Corporate brand (3) 1,697.5 — 1,697.5 1,697.5 — 1,697.5 $ 30,016.4 $ (8,680.6 ) $ 21,335.8 $ 30,494.6 $ (7,411.6 ) $ 23,083.0 ____________________________________ (1) The Company continues to monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if indicators of impairment are present. In the second quarter of 2016, the Company recognized impairment charges of $215 million , primarily due to $199 million recognized as a result of the intangible assets related to Ruconest®, inclusive of goodwill of $37 million , being classified as assets held for sale as of June 30, 2016. Refer to Note 19 for further details. In the first quarter of 2016, the Company recognized impairment charges of $16 million for a number of individually immaterial intangible assets. In the fourth quarter of 2015, the Company recognized impairment charges of $79 million related to the write-off of intangible assets and $23 million related to the write-off of property, plant and equipment, in connection with the termination (announced in October 2015) of the arrangements with and relating to Philidor (Developed Markets segment). In addition, in the fourth quarter of 2015, the Company recognized an impairment charge of $27 million related to the write-off of ezogabine/retigabine (immediate-release formulation) (Developed Markets segment) resulting from further analysis of commercialization strategy and projections. GlaxoSmithKline plc (‘‘GSK’’) controls all sales force promotion for ezogabine/retigabine. In the third quarter of 2015, the Company recognized an impairment charge of $26 million related to Zelapar® (Developed Markets segment), resulting from declining sales trends. These impairment charges were recognized in Amortization and impairments of finite-lived intangible assets in the Consolidated statements of (loss) income for the respective periods. (2) The Company acquired certain IPR&D assets as part of the Salix Acquisition, as described further in Note 4. In the second quarter of 2016, the Company wrote off an IPR&D asset of $14 million related to the termination of the development program for Cirle 3-dimensional surgical navigation technology, resulting from a feasibility analysis. In the fourth quarter of 2015, the Company wrote off an IPR&D asset of $28 million related to the Emerade® development program in the U.S. (Developed Markets segment) based on analysis of feedback received from the FDA, and such program was terminated in the U.S. In the third quarter of 2015, the Company wrote off an IPR&D asset of $90 million related to the Rifaximin SSD development program (Developed Markets segment) based on analysis of Phase 2 study data, and the program was subsequently terminated. In the second quarter of 2015, the Company wrote off an IPR&D asset of $12 million related to the Arestin ® Peri-Implantitis development program (Developed Markets segment), resulting from analysis of Phase 3 study data. 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 (loss) income for the respective periods. (3) Represents the corporate trademark, related to the acquisition of Bausch & Lomb Holdings Incorporated (‘‘B&L’’) in August 2013, which has an indefinite useful life and is therefore not amortized. Estimated aggregate amortization expense, as of June 30, 2016 , for each of the five succeeding years ending December 31 is as follows: 2016 2017 2018 2019 2020 Amortization expense (1) $ 2,666.4 $ 2,583.9 $ 2,454.5 $ 2,327.6 $ 2,120.4 ____________________________________ (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 in the six-month period ended June 30, 2016 were as follows: Developed Markets Emerging Markets Total Balance, January 1, 2016 $ 16,141.3 $ 2,411.5 $ 18,552.8 Additions 0.7 — 0.7 Divestiture (1) (36.2 ) — (36.2 ) Allocations to assets held for sale (2) (37.1 ) — (37.1 ) Foreign exchange and other 45.0 (13.4 ) 31.6 Balance, June 30, 2016 $ 16,113.7 $ 2,398.1 $ 18,511.8 ____________________________________ (1) See Note 5 for additional information regarding the divestiture of a portfolio of neurology medical device products to Stryker Corporation. (2) Relates to the reclassification of goodwill to assets held for sale in the second quarter of 2016 related to the divestiture of Ruconest®, refer to Note 19 for further details. As described in Note 4, the allocations of the goodwill balance associated with certain acquisitions are provisional and subject to the completion of the valuation of the assets acquired and liabilities assumed. 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. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants. The Company operates in two operating and reportable segments: Developed Markets and Emerging Markets. The Developed Markets segment consists of four reporting units based on geography, namely (i) U.S., (ii) Canada and Australia, (iii) Western Europe, and (iv) Japan. The Emerging Markets segment consists of three reporting units based on geography, namely (i) Central and Eastern Europe, Middle East and Africa, (ii) Latin America, and (iii) Asia. The Company conducted its annual goodwill impairment test in the fourth quarter of 2015 which resulted in no goodwill impairment. Given the challenges facing the Company in certain businesses, primarily in dermatology and GI, management, under the direction of the Company's new Chief Executive Officer, performed a review of the Company's current forecast for fiscal year 2016 (the “2016 forecast”) in connection with the preparation of the Company's Consolidated financial statements as of and for the three months ended March 31, 2016, which resulted in a reduction in the 2016 forecast. The Company considered this reduction in its 2016 forecast to constitute a triggering event requiring the performance of an updated goodwill impairment analysis as of March 31, 2016. The Company estimated the fair values of its reporting units using a discounted cash flow analysis approach. These calculations contain uncertainties as they require management to make assumptions about future cash flows and the appropriate discount rate to reflect the risk inherent in the future cash flows. A change in any of these estimates and assumptions could produce a different fair value, which could have a material impact on the Company's results of operations. As a result of this goodwill impairment analysis, despite a decline in the estimated fair value of the U.S. reporting unit, the Company determined that none of the goodwill associated with its reporting units was impaired as of March 31, 2016. The estimated fair values of each reporting unit exceeded their carrying values at the date of testing. The Company applied a hypothetical 15% decrease to the fair values of each reporting unit, which at such date, would not have triggered additional impairment testing and analysis. The Company continues to evaluate the performance of its reporting units and other factors that may affect the fair value estimates of its reporting units. Based on its most recent evaluation, no triggering event requiring the performance of a goodwill impairment analysis has been identified, including consideration of the hypothetical 15% decrease to the fair values of each reporting unit. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT A summary of the Company’s consolidated long-term debt as of June 30, 2016 and December 31, 2015 is outlined in the table below: Maturity Date As of As of Revolving Credit Facility (1) April 2018 $ 1,350.0 $ 250.0 Series A-1 Tranche A Term Loan Facility (1) April 2016 — 140.4 Series A-2 Tranche A Term Loan Facility (1) April 2016 — 137.3 Series A-3 Tranche A Term Loan Facility (1) October 2018 1,424.1 1,881.5 Series A-4 Tranche A Term Loan Facility (1) April 2020 835.6 951.3 Series D-2 Tranche B Term Loan Facility (1) February 2019 1,053.1 1,087.5 Series C-2 Tranche B Term Loan Facility (1) December 2019 808.9 835.1 Series E-1 Tranche B Term Loan Facility (1) August 2020 2,445.7 2,531.2 Series F Tranche B Term Loan Facility (1) April 2022 3,879.5 4,055.8 Senior Notes: 7.00% October 2020 688.2 688.0 6.75% August 2021 646.4 646.1 7.25% July 2022 542.7 542.1 6.375% October 2020 2,228.9 2,226.5 6.75% August 2018 1,590.9 1,588.8 7.50% July 2021 1,611.1 1,609.7 5.625% December 2021 893.8 893.2 5.50% March 2023 991.3 990.6 5.375% March 2020 1,982.2 1,979.9 5.875% May 2023 3,217.3 3,215.0 4.50% (2) May 2023 1,649.1 1,611.8 6.125% April 2025 3,216.2 3,214.3 Other (3) Various 12.3 12.3 31,067.3 31,088.4 Less current portion (294.1 ) (823.0 ) Total long-term debt $ 30,773.2 $ 30,265.4 ____________________________________ (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) Represents the U.S. dollar equivalent of Euro-denominated debt (discussed below). (3) Relates primarily to the debentures assumed in the acquisition of B&L. The Company’s Senior Secured Credit Facilities and indentures governing its senior notes contain customary affirmative and negative covenants, including, among other things, and subject to certain qualifications and exceptions, covenants that restrict 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 indentures relating to the senior notes issued by the Company’s subsidiary Valeant contain similar covenants. The Company’s Senior Secured Credit Facilities also contain specified financial maintenance covenants (consisting of a secured leverage ratio and an interest coverage ratio) and specified events of default. The Company’s and Valeant’s senior note indentures also contain certain specified events of default. As of June 30, 2016 , the Company was in compliance with all covenants related to the Company’s outstanding debt. The total fair value of the Company’s long-term debt, with carrying values of $31.07 billion and $31.09 billion at June 30, 2016 and December 31, 2015 , was $27.63 billion and $29.60 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). In the six-month period ended June 30, 2016, the Company made long-term debt repayments of $1.27 billion , in the aggregate. Of this amount, $1.15 billion of term loan facilities was repaid, which included (i) payments of the scheduled March and June 2016 term loan amortization payments, resulting in an aggregate principal reduction of $283 million ; (ii) final repayment of the maturities of the Series A-1 and Series A-2 Tranche A Term Loan Facilities, resulting in an aggregate principal reduction of $260 million ; (iii) voluntary prepayments of the scheduled September and December 2016 term loan amortization payments, resulting in an aggregate principal reduction of $273 million ; (iv) $62 million of prepayments of term loans from asset sale proceeds; and (v) additional voluntary prepayments of $275 million , in the aggregate, that were applied pro rata across the Company's term loans (of which $125 million represented an estimate of the mandatory excess cash flow payment for the fiscal year ended December 31, 2015 based on preliminary 2015 results at the time). During the first half of 2016, the net borrowings under the Company's revolving credit facility were $1.1 billion . The Company did not repay any senior notes in the six-month period ended June 30, 2016. Credit Agreement Amendment On April 11, 2016, the Company obtained an amendment and waiver to its Credit Agreement (the “April 2016 amendment”). Pursuant to the April 2016 amendment, the Company obtained an extension to the deadline for filing (i) the Company's 2015 Form 10-K to May 31, 2016 and (ii) the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (the “March 31, 2016 Form 10-Q”) to July 31, 2016. The April 2016 amendment also waived, among other things, the cross-default under the Credit Agreement to the Company's and Valeant's senior note indentures that arose when the 2015 Form 10-K was not filed by March 15, 2016, any cross default under the Credit Agreement that may have arisen under the Company's other indebtedness from the failure to timely deliver the 2015 Form 10-K, and the cross default under the Credit Agreement to the Company's and Valeant's senior note indentures that arose when the March 31, 2016 Form 10-Q was not filed by May 16, 2016 or any cross default under the Credit Agreement to the Company’s other indebtedness as a result of the delay in filing the March 31, 2016 Form 10-Q. The April 2016 amendment modified, among other things, the interest coverage financial maintenance covenant from 3.00 to 1.00 to 2.75 to 1.00 from the fiscal quarter ending June 30, 2016 through the fiscal quarter ending March 31, 2017. Certain financial definitions were also amended, including the definition of “Consolidated Adjusted EBITDA” which has been modified to add back fees and expenses in connection with any amendment or modification of the Credit Agreement or any other indebtedness, and to permit up to $175 million to be added back in connection with costs, fees and expenses relating to, among other things, Philidor-related matters and/or product pricing-related matters and any review by the Board and the Company’s ad hoc committee of independent directors (the “Ad Hoc Committee”) related to such matters. The April 2016 amendment also modified certain existing add-backs to Consolidated Adjusted EBITDA under the Credit Agreement, including increasing the add-back for (i) restructuring charges in any twelve-month period to $200 million from $125 million and (ii) fees and expenses in connection with any proposed or actual issuance of debt, equity, acquisitions, investments, assets sales or divestitures to $150 million from $75 million for any twelve month period ending on or prior to March 31, 2017. The terms of the April 2016 amendment impose a number of restrictions on the Company and its subsidiaries until the time that (i) the Company delivers the 2015 Form 10-K (which was filed on April 29, 2016) and the March 31, 2016 Form 10-Q (which was filed on June 7, 2016) (such requirements, the "Financial Reporting Requirements") and (ii) the leverage ratio of the Company and its subsidiaries (being the ratio, as of the last day of any fiscal quarter, of Consolidated Total Debt (as defined in the Credit Agreement) as of such day to Consolidated Adjusted EBITDA (as defined in the Credit Agreement) for the four fiscal quarter period ending on such date) is less than 4.50 to 1.00, including imposing (i) a $250 million aggregate cap (the "Transaction Cap") on acquisitions (although the Transaction Cap does not apply to any portion of acquisition consideration paid for by either the issuance of the Company’s equity or the proceeds of any such equity issuance), (ii) a restriction on the incurrence of debt to finance such acquisitions and (iii) a requirement that the net proceeds from certain asset sales be used to repay the term loans under the Credit Agreement, instead of investing such net proceeds in real estate, equipment, other tangible assets or intellectual property useful in the business. In addition, the Company's ability to make investments, dividends, distributions, share repurchases and other restricted payments is also restricted and subject to the Transaction Cap until such time as the Financial Reporting Requirements are satisfied and the leverage ratio of the Company and its subsidiaries is less than 4.00 to 1.00 (unless such investments or restricted payments can fit within other existing exceptions set out in the Credit Agreement). The April 2016 amendment also increased the interest rate applicable to the Company's loans under the Credit Agreement by 1.00% until delivery of the Company's financial statements for the fiscal quarter ending June 30, 2017. Thereafter, the interest rate applicable to the loans will be determined on the basis of a pricing grid tied to the Company's secured leverage ratio. With the filing of the March 31, 2016 Form 10-Q on June 7, 2016, the Financial Reporting Requirements were satisfied in all respects. The April 2016 amendment was accounted for as a debt modification. As a result, payments to the lenders were recognized as additional debt discounts and are being amortized over the remaining term of each term loan. Notices of Default Under Senior Note Indentures The Company's delay in filing the 2015 Form 10-K resulted in a violation of covenants contained in the Company's Credit Agreement and senior note indentures. On April 12, 2016, the Company received a notice of default from certain holders of its 5.50% Senior Notes due 2023 and, on April 22, 2016, the Company received additional notices of default from the trustee under the respective indentures governing the Company’s 5.375% Senior Notes due 2020 and 7.50% Senior Notes due 2021 and Valeant's 6.375% Senior Notes due 2020 and 7.250% Senior Notes due 2022. All defaults under the Credit Agreement resulting from the failure to timely deliver the 2015 Form 10-K were waived by the requisite lenders under the Credit Agreement by the April 2016 amendment, and the 2015 Form 10-K was filed within the extended timeframe granted to the Company as part of that amendment and waiver. The filing of the 2015 Form 10-K on April 29, 2016 cured in all respects the default under the Company’s senior note indentures triggered by the failure to timely file the 2015 Form 10-K. The Company's delay in filing the March 31, 2016 Form 10-Q resulted in a violation of covenants contained in the Company's senior note indentures. On May 19, 2016, the Company received a notice of default from the trustee under the indenture governing the Company’s 5.50% Notes due 2023 and, on June 2, 2016, the Company received an additional notice of default from the trustee under the respective indentures governing the Company’s 7.50% Senior Notes due 2021 and Valeant's 7.250% Senior Notes due 2022. All defaults under the Credit Agreement resulting from the failure to timely deliver the March 31, 2016 Form 10-Q were waived by the requisite lenders under the Credit Agreement by the April 2016 amendment and the March 31, 2016 Form 10-Q was filed within the extended timeframe granted to the Company as part of that amendment and waiver. The filing of the March 31, 2016 Form 10-Q on June 7, 2016 cured in all respects the default under the Company’s and Valeant's senior note indentures triggered by the failure to timely file the March 31, 2016 Form 10-Q. Senior Secured Credit Facilities The effective rates of interest for the six-month period ended June 30, 2016 and the applicable margins available as of June 30, 2016 on the Company's borrowings under the Senior Secured Credit Facilities were as follows: Margins Effective Interest Rate Base Rate Borrowings LIBO Rate Borrowings Revolving Credit Facility 3.41 % 2.25 % 3.25 % Series A-1 Tranche A Term Loan Facility (1) 2.68 % 2.25 % 3.25 % Series A-2 Tranche A Term Loan Facility (1) 2.68 % 2.25 % 3.25 % Series A-3 Tranche A Term Loan Facility 3.20 % 2.25 % 3.25 % Series A-4 Tranche A Term Loan Facility 3.37 % 2.25 % 3.25 % Series D-2 Tranche B Term Loan Facility (2) 4.07 % 2.75 % 3.75 % Series C-2 Tranche B Term Loan Facility (2) 4.32 % 3.00 % 4.00 % Series E-1 Tranche B Term Loan Facility (2) 4.19 % 3.00 % 4.00 % Series F Tranche B Term Loan Facility (2) 4.44 % 3.25 % 4.25 % ____________________________________ (1) Fully repaid in the three-month period ended March 31, 2016. (2) Subject to a 1.75% base rate floor and a 0.75% LIBO rate floor. |
PENSION AND POSTRETIREMENT EMPL
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS | PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS The Company sponsors defined benefit plans and a participatory defined benefit postretirement medical and life insurance plan, which covers certain U.S. employees and employees in certain other countries. 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 three-month and six-month periods ended June 30, 2016 and 2015 : Pension Benefit Plans Postretirement Benefit Plan U.S. Plan Non-U.S. Plans Three Months Ended June 30, 2016 2015 2016 2015 2016 2015 Service cost $ 0.6 $ 0.4 $ 0.7 $ 0.8 $ 0.1 $ 0.5 Interest cost 1.9 2.4 1.3 1.6 0.5 0.5 Expected return on plan assets (3.2 ) (3.6 ) (1.7 ) (2.0 ) — (0.1 ) Amortization of prior service credit — — (0.2 ) (0.2 ) (0.6 ) (0.7 ) Amortization of net loss — — 0.2 0.4 — — Net periodic (benefit) cost $ (0.7 ) $ (0.8 ) $ 0.3 $ 0.6 $ — $ 0.2 Pension Benefit Plans Postretirement Benefit Plan U.S. Plan Non-U.S. Plans Six Months Ended June 30, 2016 2015 2016 2015 2016 2015 Service cost $ 1.1 $ 0.8 $ 1.3 $ 1.6 $ 0.3 $ 1.0 Interest cost 3.9 4.8 2.7 3.2 0.9 1.0 Expected return on plan assets (6.5 ) (7.2 ) (3.4 ) (4.0 ) — (0.2 ) Amortization of prior service credit — — (0.3 ) (0.3 ) (1.2 ) (1.3 ) Amortization of net loss — — 0.3 0.7 — — Net periodic (benefit) cost $ (1.5 ) $ (1.6 ) $ 0.6 $ 1.2 $ — $ 0.5 During the six-month period ended June 30, 2016 , the Company contributed $4 million to the non-U.S. pension benefit plans. In 2016 , the Company does not expect to make contributions to the U.S. pension benefit plan. The Company expects to contribute $6 million to the non-U.S. pension benefit plans in 2016 , in the aggregate, inclusive of amounts contributed to the plans during the six-month period ended June 30, 2016 . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2016 | |
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 11,142,870 shares were available for future grants as of June 30, 2016 . 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 restricted share units (“RSUs”) for the three-month and six-month periods ended June 30, 2016 and 2015 : Three Months Ended Six Months Ended 2016 2015 2016 2015 Stock options $ 3.5 $ 3.5 $ 6.7 $ 7.4 RSUs 30.2 22.4 90.5 53.5 Share-based compensation expense $ 33.7 $ 25.9 $ 97.2 $ 60.9 Research and development expenses $ 1.6 $ 1.5 $ 3.3 $ 3.0 Selling, general and administrative expenses 32.1 24.4 93.9 57.9 Share-based compensation expense $ 33.7 $ 25.9 $ 97.2 $ 60.9 In the six-month periods ended June 30, 2016 and 2015 , the Company granted approximately 1,349,800 stock options with a weighted-average exercise price of $23.96 per option and approximately 97,000 stock options with a weighted-average exercise price of $201.70 per option, respectively. The weighted-average fair values of all stock options granted to employees in the six-month periods ended June 30, 2016 and 2015 were $13.87 and $66.81 , respectively. In the six-month periods ended June 30, 2016 and 2015 , the Company granted approximately 1,408,000 time-based RSUs with a weighted-average grant date fair value of $31.51 per RSU and approximately 45,000 time-based RSUs with a weighted-average grant date fair value of $224.45 per RSU, respectively. In the six-month periods ended June 30, 2016 and 2015 , the Company granted approximately 1,374,800 performance-based RSUs with a weighted-average grant date fair value of $37.22 per RSU and approximately 693,000 performance-based RSUs with a weighted-average grant date fair value of $310.56 per RSU, respectively. In March 2016, the Company announced that its Board of Directors had initiated a search to identify a candidate for a new Chief Executive Officer to succeed the Company's then current Chief Executive Officer, who would continue to serve in that role until his replacement was appointed. On May 2, 2016, the Company's new Chief Executive Officer assumed the role, succeeding the Company's former Chief Executive Officer. Pursuant to the terms of his employment agreement dated January 2015, the former Chief Executive Officer was entitled to certain share-based awards and payments upon termination. Under his January 2015 employment agreement, the former Chief Executive Officer received performance-based RSUs that vest when certain market conditions (namely total shareholder return) are met at the defined dates, provided continuing employment through those dates. Under the termination provisions of his employment agreement, upon termination of the former Chief Executive Officer, the defined dates for meeting the market conditions of the performance-based RSUs were eliminated and, as a result, vesting was based solely on the attainment of the applicable level of total shareholder return through the date of termination and the resulting number of common shares, if any, to be awarded to the former Chief Executive Officer was determined on a pro-rata basis for service provided under the original performance period, with credit given for an additional year of service. Because the total shareholder return at the time of the former Chief Executive Officer’s termination did not meet the performance threshold, no common shares were issued and no value was ultimately received by the former Chief Executive Officer pursuant to this performance-based RSU award. However, an incremental share-based compensation expense of $3 million and $28 million has been recognized in the three-month and six-month periods ended June 30, 2016 , respectively, which represents the additional year of service credit consistent with the grant date fair value calculated using a Monte Carlo Simulation Model in the first quarter of 2015, notwithstanding the fact that no value was ultimately received by the former Chief Executive Officer. In addition to the acceleration of his performance-based RSUs, the former Chief Executive Officer was also entitled to a cash severance payment of $9 million and a pro-rata annual cash bonus of approximately $2 million pursuant to his employment agreement. The cash severance payments, the pro-rata cash bonus and the associated payroll taxes were also recognized as expense in the first quarter of 2016. On June 30, 2015, the Company's former Chief Financial Officer terminated his employment and subsequently entered into a consulting service agreement with the Company through January 2016. As a result, the outstanding awards held by him were modified to allow the recipient to continue vesting in those awards as service is rendered during the consulting services period. Share-based compensation expense previously recognized of $6 million related to the original awards was reversed in the second quarter of 2015 when such awards were deemed improbable of vesting. The modified awards were re-measured at fair value, at each reporting period, until the performance was complete. The value of the modified awards was recognized as expense over the requisite service period and resulted in expense of $12 million for the year ended December 31, 2015. Subsequently, on January 6, 2016, the consulting services period was terminated in connection with such executive’s appointment as the Company’s interim chief executive officer. The termination of the consulting services period resulted in acceleration of vesting for all unvested equity awards that were scheduled to vest during the remainder of such consulting services period (January 2016) and consequently, the associated unrecognized expense was fully recognized on such date. As of June 30, 2016 , the total remaining unrecognized compensation expense related to non-vested stock options, time-based RSUs and performance-based RSUs amounted to $298 million , in the aggregate, which will be amortized over a weighted-average period of 2.58 years. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY Valeant Pharmaceuticals International, Inc. Shareholders Common Shares Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Valeant Pharmaceuticals International, Inc. Shareholders’ Equity Noncontrolling Interest Total Equity Shares (in millions) Amount Balance, January 1, 2015 (restated) 334.4 $ 8,349.2 $ 243.9 $ (2,397.8 ) $ (915.9 ) $ 5,279.4 $ 122.3 $ 5,401.7 Issuance of common stock (see below) 7.5 1,481.0 — — — 1,481.0 — 1,481.0 Common shares issued under share-based compensation plans 1.1 57.0 (34.9 ) — — 22.1 — 22.1 Repurchases of common shares (0.2 ) (6.4 ) — (43.6 ) — (50.0 ) — (50.0 ) Share-based compensation — — 60.9 — — 60.9 — 60.9 Employee withholding taxes related to share-based awards — — (61.5 ) — — (61.5 ) — (61.5 ) Excess tax benefits from share-based compensation — — 25.6 — — 25.6 — 25.6 Noncontrolling interest distributions — — — — — — (1.1 ) (1.1 ) 342.8 9,880.8 234.0 (2,441.4 ) (915.9 ) 6,757.5 121.2 6,878.7 Comprehensive loss: Net income (restated) — — — 44.7 — 44.7 2.2 46.9 Other comprehensive loss — — — — (375.6 ) (375.6 ) (0.4 ) (376.0 ) Total comprehensive loss (restated) (330.9 ) 1.8 (329.1 ) Balance, June 30, 2015 (restated) 342.8 $ 9,880.8 $ 234.0 $ (2,396.7 ) $ (1,291.5 ) $ 6,426.6 $ 123.0 $ 6,549.6 Balance, January 1, 2016 342.9 $ 9,897.4 $ 304.9 $ (2,749.7 ) $ (1,541.6 ) $ 5,911.0 $ 118.8 $ 6,029.8 Common shares issued under share-based compensation plans 0.1 17.5 (13.0 ) — — 4.5 — 4.5 Share-based compensation — — 97.2 — — 97.2 — 97.2 Employee withholding taxes related to share-based awards — — (7.3 ) — — (7.3 ) — (7.3 ) Excess tax expense from share-based compensation — — (1.4 ) — — (1.4 ) — (1.4 ) Noncontrolling interest distributions — — — — — — (9.1 ) (9.1 ) 343.0 9,914.9 380.4 (2,749.7 ) (1,541.6 ) 6,004.0 109.7 6,113.7 Comprehensive loss: Net loss — — — (676.0 ) — (676.0 ) (0.9 ) (676.9 ) Other comprehensive loss — — — — (32.1 ) (32.1 ) (1.6 ) (33.7 ) Total comprehensive loss (708.1 ) (2.5 ) (710.6 ) Balance, June 30, 2016 343.0 $ 9,914.9 $ 380.4 $ (3,425.7 ) $ (1,573.7 ) $ 5,295.9 $ 107.2 $ 5,403.1 Share Issuances On March 27, 2015, the Company completed, pursuant to an Underwriting Agreement dated March 17, 2015 with Deutsche Bank Securities Inc. on behalf of several underwriters, a registered offering in the United States of 7,286,432 of its common shares, no par value, at a price of $199.00 per common share, for aggregate gross proceeds of approximately $1.45 billion . In connection with the issuance of these new common shares, the Company incurred approximately $18 million of issuance costs, which has been reflected as reduction to the gross proceeds from the equity issuance. The proceeds of this offering were used to fund the Salix Acquisition. The Company granted the underwriters an option to purchase additional common shares equal to up to 15% of the common shares initially issued in the offering. This option was not exercised by the underwriters. On June 10, 2015, the Company issued 213,610 common shares, representing a portion of the consideration transferred in connection with the acquisition of certain assets of Dendreon. The shares had an aggregate value of approximately $50 million as of the date of issuance. See Note 4 for additional information regarding the acquisition of certain assets of Dendreon. Management Cease Trade Orders On March 21, 2016, the Company applied for a customary management cease trade order (the “MCTO”) from the AMF, the Company's principal securities regulator in Canada. The application was made in connection with the Company’s anticipated delay in filing its audited consolidated annual financial statements for the fiscal year ended December 31, 2015, the related management’s discussion and analysis, certificates of its Chief Executive Officer and Chief Financial Officer and its 2015 Form 10-K (collectively, the “Required Annual Canadian Filings”) with Canadian securities regulators until after the March 30, 2016 filing deadline. This MCTO (the “March MCTO”) was issued on March 31, 2016 and prohibited the trading in or acquisition of any securities of the Company, directly or indirectly, by each of the Company’s then-current Chief Executive Officer, Chief Financial Officer and each other member of the then-current Board. The March MCTO did not affect the ability of other shareholders of the Company to trade in the Company’s securities. A similar order was issued by the Ontario Securities Commission with respect to a director of the Company who is resident in that province. The Company made the Required Annual Canadian Filings on April 29, 2016 and, as of that date, the March MCTOs and the corresponding trading restrictions were lifted. On May 11, 2016, the Company applied for a further customary MCTO from the AMF in connection with its delay in filing its interim consolidated financial statements for the quarter ended March 31, 2016, the related management’s discussion and analysis and certificates of its current Chief Executive Officer and Chief Financial Officer (collectively, the “Required Interim Canadian Filings”) with Canadian securities regulators until after the May 15, 2016 filing deadline. This MCTO (the “May MCTO”) was issued on May 17, 2016 and prohibited the trading in or acquisition of any securities of the Company, directly or indirectly, by each of the Company’s current Chief Executive Officer, Chief Financial Officer and each other member of the then-current Board. A similar order was issued by the Ontario Securities Commission with respect to a director of the Company who is resident in that province. The Company made the Required Interim Canadian Filings on June 7, 2016 and, as of June 8, 2016, the May MCTOs and the corresponding trading restrictions were lifted. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2016 | |
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 as of June 30, 2016 and 2015, were as follows: Foreign Currency Translation Adjustment Pension Adjustment Total Balance, January 1, 2015 $ (886.5 ) $ (29.4 ) $ (915.9 ) Foreign currency translation adjustment (374.7 ) — (374.7 ) Pension adjustment (1) — (0.9 ) (0.9 ) Balance, June 30, 2015 $ (1,261.2 ) $ (30.3 ) $ (1,291.5 ) Balance, January 1, 2016 $ (1,529.4 ) $ (12.2 ) $ (1,541.6 ) Foreign currency translation adjustment (31.1 ) — (31.1 ) Pension adjustment (1) — (1.0 ) (1.0 ) Balance, June 30, 2016 $ (1,560.5 ) $ (13.2 ) $ (1,573.7 ) ____________________________________ (1) 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 (see Note 11). 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 | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In the three-month period ended June 30, 2016 , the Company recognized an income tax benefit of $73 million , comprised of $73 million related to the expected tax benefit in tax jurisdictions outside of Canada and an income tax provision of an immaterial amount related to Canadian income taxes. In the six-month period ended June 30, 2016, the Company recognized an income tax benefit of $66 million , comprised of $66 million related to the expected tax benefit in tax jurisdictions outside of Canada and an income tax provision of an immaterial amount related to Canadian income taxes. In the three-month period ended June 30, 2016, the Company’s effective tax rate was different from the Company’s statutory Canadian tax rate due to tax expense generated from the Company’s annualized mix of earnings by jurisdiction, the discrete treatment of an adjustment to the accrual established for legal expenses and a significant impairment of an intangible asset, the recording of valuation allowance on entities for which no tax benefit of losses is expected and the quarterly accrual of interest on uncertain tax positions. In the six-month period ended June 30, 2016, the Company’s effective tax rate was different from the Company’s statutory Canadian tax rate due to tax expense generated from the Company’s annualized mix of earnings by jurisdiction, the discrete treatment of an adjustment to the accrual established for legal expenses and a significant impairment of an intangible asset, the recording of valuation allowance on entities for which no tax benefit of losses is expected and the quarterly accrual of interest on uncertain tax positions. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. The valuation allowance against deferred tax assets is $1.80 billion as of June 30, 2016 and was $1.37 billion as of December 31, 2015 . The Company will continue to assess this amount for appropriateness on a go-forward basis associated with the deferred tax assets previously established. As of June 30, 2016 , the Company had $346 million of unrecognized tax benefits, which included $46 million relating to interest and penalties. Of the total unrecognized tax benefits, $126 million would reduce the Company’s effective tax rate, if recognized. The Company anticipates that an immaterial amount of unrecognized tax benefits may be resolved within the next 12 months. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of June 30, 2016 and December 31, 2015, the Company had accrued $40 million and $46 million for interest, respectively, and $6 million and $7 million for penalties, respectively. The Company is currently under examination by the Canada Revenue Agency (CRA) for three separate cycles: (a) years 2005 to 2006, (b) 2007 through 2009, and (c) 2010 through 2011. 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. In May 2016, the Company received a proposed audit adjustment from the CRA for the years 2010 through 2011. The Company is currently reviewing the proposed adjustments. The total proposed adjustment would result in a loss of tax attributes which are subject to a full valuation allowance and would not result in a material change to the provision for income taxes. The Company’s U.S. consolidated federal income tax return for the 2013 and 2014 tax years is currently under examination by the Internal Revenue Service. The Company remains under examination for various state tax audits in the U.S. for years 2002 to 2014. In addition, certain affiliates of the Company in other regions outside of Canada and the U.S. are currently under examination by relevant taxing authorities, and all necessary accruals have been recorded, including uncertain tax benefits. At this time, the Company does not expect that proposed adjustments, if any, would be material to the Company's consolidated financial statements. |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | (LOSS) EARNINGS PER SHARE (Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc. for the three-month and six-month periods ended June 30, 2016 and 2015 were calculated as follows: Three Months Ended Six Months Ended 2016 2015 2016 2015 Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. $ (302.3 ) $ (53.0 ) $ (676.0 ) $ 44.7 Basic weighted-average number of common shares outstanding 345.0 344.4 344.9 340.5 Diluted effect of stock options, RSUs and other (a) — — — 6.6 Diluted weighted-average number of common shares outstanding 345.0 344.4 344.9 347.1 (Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: Basic $ (0.88 ) $ (0.15 ) $ (1.96 ) $ 0.13 Diluted $ (0.88 ) $ (0.15 ) $ (1.96 ) $ 0.13 ____________________________________ (a) In the three-month periods ended June 30, 2016 and 2015 and the six-month period ended June 30, 2016, all potential common shares issuable for stock options and RSUs 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 and RSUs on the weighted-average number of common shares outstanding would have been as follows: Three Months Ended Six Months Ended 2016 2015 2016 Basic weighted-average number of common shares outstanding 345.0 344.4 344.9 Diluted effect of stock options, RSUs and other 4.1 6.5 4.5 Diluted weighted-average number of common shares outstanding 349.1 350.9 349.4 In the three-month and six-month periods ended June 30, 2016 , stock options, time-based RSUs and performance-based RSUs to purchase approximately 7,075,000 and 6,854,000 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, compared with 1,197,000 and 1,207,000 common shares in both of the corresponding periods of 2015 . |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 6 Months Ended |
Jun. 30, 2016 | |
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 and/or debt securities to decline. Governmental and Regulatory Inquiries Letter from the U.S. Department of Justice Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania The Company has received a letter dated September 10, 2015 from the U.S. Department of Justice Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania stating that they are investigating potential violations of the False Claims Act arising out of Biovail Pharmaceuticals, Inc.'s treatment of certain service agreements with wholesalers when calculating and reporting Average Manufacturer Prices in connection with the Medicaid Drug Rebate Program. The letter requests that the Company voluntarily produce documents and information relating to the investigation. The Company produced certain documents in response to the request and is cooperating with the government’s investigation. The Company cannot predict the outcome or the duration of these investigations or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of these investigations. U.S. Department of Justice Investigation On September 15, 2015, B&L received a subpoena from the Criminal Division of the U.S. Department of Justice regarding agreements and payments between B&L and medical professionals related to its surgical products Crystalens® IOL and Victus® femtosecond laser platform. The government has indicated that the subpoena was issued in connection with a criminal investigation into possible violations of Federal health care laws. B&L produced certain documents in response to the subpoena and is cooperating with the investigation. The Company cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of this investigation. Investigations by the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York In or about October 2015, the Company received subpoenas from the U.S. Attorney's Offices for the District of Massachusetts and the Southern District of New York. The materials requested by those offices, pursuant to the subpoenas and follow-up requests, include documents with respect to the Company’s patient assistance programs (including financial support provided to patients); its former relationship with Philidor and other pharmacies; the Company’s accounting treatment for sales by specialty pharmacies; information provided to the Centers for Medicare and Medicaid Services; the Company’s pricing (including discounts and rebates), marketing and distribution of its products; the Company’s compliance program; and employee compensation. The Company is cooperating with these investigations. The Company cannot predict the outcome or the duration of these investigations or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of these investigations. Voluntary Request Letter from the U.S. Federal Trade Commission On or about October 16, 2015, the Company received a voluntary request letter from the Federal Trade Commission ("FTC") with respect to its non-public investigation into the Company's recent acquisition of Paragon Holdings I, Inc. (“Paragon”). In the letter, the FTC has requested that the Company provide, on a voluntary basis, certain information and documentation relating to its acquisition of Paragon. The Company produced certain documents and information in response to the request and is cooperating with the FTC in connection with this investigation. Congressional Inquiries Beginning in November 2015, the Company has received from the United States Senate Special Committee on Aging various document requests, as well as subpoenas for documents, depositions and a hearing which was held on April 27, 2016. Certain directors, officers and other employees of the Company have also received from the United States Senate Special Committee on Aging subpoenas for depositions and/or hearings. In January 2016, the Company received from the United States House Committee on Oversight and Government Reform a document request and an invitation for the Company’s then interim CEO to testify at a hearing, at which he testified on February 4, 2016. Most of the materials requested to date relate to the Company’s pricing decisions on particular drugs, as well as revenue, expense and profit information, and also include requests relating to financial support provided by the Company for patients and financial data related to the Company’s research and development program, Medicare and Medicaid. The Company is cooperating with these inquiries; however, the Company cannot predict their outcome or duration. SEC Investigation On November 18, 2015, the Company received a document subpoena from the staff of the Los Angeles Regional Office of the SEC related to its investigation of the Company, including requests for documents concerning the Company's former relationship with Philidor, its accounting practices and policies, its public disclosures and other matters. The Company is cooperating with the SEC in this matter. The Company cannot predict the outcome or the duration of the SEC investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of the SEC investigation. Investigation by the State of North Carolina Department of Justice In the beginning of March 2016, the Company received an investigative demand from the State of North Carolina Department of Justice. The materials requested relate to the Company's Nitropress®, Isuprel® and Cuprimine® products, including documents relating to the production, marketing, distribution, sale and pricing of, and patient assistance programs covering, such products, as well as issues relating to the Company's pricing decisions for certain of its other products. The Company is cooperating with this investigation. The Company cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of this investigation. Request for Information from the AMF On April 12, 2016, the Company received a request letter from the Autorité des marchés financiers (the “AMF”) requesting documents concerning the work of the Company’s ad hoc committee of independent directors (the “Ad Hoc Committee”) (established to review certain allegations regarding the Company’s former relationship with Philidor and related matters), the Company’s former relationship with Philidor, the Company's accounting practices and policies and other matters. The Company is cooperating with the AMF in this matter. The Company has not received any notice of investigation from the AMF, and the Company cannot predict whether any investigation will be commenced by the AMF or, if commenced, whether any enforcement action against the Company would result from any such investigation. Investigation by the State of New Jersey Department of Law and Public Safety, Division of Consumer Affairs, Bureau of Securities On April 20, 2016, the Company received a document subpoena from the New Jersey State Bureau of Securities. The materials requested include documents concerning the Company’s former relationship with Philidor, its accounting treatment for sales to Philidor, its financial reporting and public disclosures and other matters. The Company is cooperating with this investigation. The Company cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of this investigation. Investigation by the State of Texas On May 27, 2014, the State of Texas served Bausch & Lomb, Inc. (“B&L Inc.”) with a Civil Investigative Demand concerning various price reporting matters relating to the State's Medicaid program and the amounts the State paid in reimbursement for B&L products for the period from 1995 to the date of the Civil Investigative Demand. The Company and B&L Inc. have cooperated fully with the State's investigation and have produced all of the documents requested by the State. In April 2016, the State sent B&L Inc. a demand letter claiming damages in the amount of $20 million . The Company and B&L Inc. have evaluated the letter and disagree with the allegations and methodologies set forth in the letter. The Company and B&L Inc. have responded to the State and are awaiting further response from the State. California Department of Insurance Investigation On May 4, 2016, Bausch & Lomb International, Inc. (“B&L International”) received from the Office of the California Insurance Commissioner an administrative subpoena to produce books, records and documents. The requested books, records and documents are being requested in connection with an investigation by the California Department of Insurance and relate to, among other things, consulting agreements and financial arrangements between B&L and healthcare professionals in California, the provision of ocular equipment, including the Victus® femtosecond laser platform, by B&L to healthcare professionals in California and prescribing data for prescriptions written by healthcare professionals in California for certain of B&L’s products, including the Crystalens®, Lotemax®, Besivance® and Prolensa®. B&L International and the Company are cooperating with the investigation. The Company cannot predict the outcome or the duration of this investigation or any other legal proceedings or any enforcement actions or other remedies that may be imposed on the Company arising out of this investigation. Securities and Other Class Actions Allergan Shareholder Class Action On December 16, 2014, Anthony Basile, an alleged shareholder of Allergan filed a lawsuit on behalf of a putative class of Allergan shareholders against the Company, Valeant, AGMS, Pershing Square, 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). On June 26, 2015, lead plaintiffs the State Teachers Retirement System of Ohio, the Iowa Public Employees Retirement System and Patrick T. Johnson filed an amended complaint against the Company, Valeant, J. Michael Pearson, Pershing Square, PS Management, GP, LLC, PS Fund 1 and William A. Ackman. The amended complaint alleges claims on behalf of a putative class of sellers of Allergan securities between February 25, 2014 and April 21, 2014, against all defendants contending that various purchases of Allergan securities by AGMS were made while in possession of material, non-public information concerning a potential tender offer by the Company for Allergan stock, and asserting violations of Section 14(e) of the Exchange Act and rules promulgated by the SEC thereunder and Section 20A of the Exchange Act. The amended complaint also alleges violations of Section 20(a) of the Exchange Act against Pershing Square, PS Management, GP, LLC, William A. Ackman and J. Michael Pearson. The amended complaint seeks, among other relief, money damages, equitable relief, and attorneys’ fees and costs. On August 7, 2015, the defendants moved to dismiss the amended complaint in its entirety, and, on November 9, 2015, the Court denied that motion. The Company intends to vigorously defend these matters. Salix Shareholder Class Actions Following the announcement of the execution of the Salix Merger Agreement with Salix, between February 25, 2015 and March 12, 2015, six purported stockholder class actions were filed challenging the Salix Acquisition. All of the actions were filed in the Delaware Court of Chancery, and alleged claims against some or all of the board of directors of Salix (the “Salix Board”), the Company, Salix, Valeant and Sun Merger Sub. On March 17, 2015, the Court consolidated the actions under the caption Salix Pharmaceuticals, Ltd. Shareholder Litigation, Consolidated C.A. No.10721-CB. On September 25, 2015, Plaintiffs filed an amended complaint. The operative complaint alleges generally that the members of the Salix Board breached their fiduciary duties to stockholders, and that the other defendants aided and abetted such breaches, by seeking to sell Salix through an allegedly inadequate sales process and for allegedly inadequate consideration and by agreeing to allegedly preclusive deal protections. The complaint also alleges that the Schedule 14D-9 filed by Salix in connection with the Salix Acquisition contained inaccurate or materially misleading information about, among other things, the Salix Acquisition and the sales process leading up to the Salix Merger Agreement. The complaint seeks, among other things, money damages and unspecified attorneys’ and other fees and costs. Defendants’ Motions to Dismiss were fully briefed as of February 19, 2016. In an oral ruling given on May 19, 2016, the Court dismissed the consolidated action against all defendants. On June 17, 2016, the Plaintiffs filed a notice of appeal in the Delaware Supreme Court appealing the decision to dismiss the consolidated action against all defendants. The Plaintiffs’ opening appellate brief was filed on August 2, 2016. Defendants’ response appellate brief is due on September 1, 2016. The Company intends to vigorously defend against this appeal. Synergetics Shareholder Class Actions On September 1, 2015, Valeant entered into a merger agreement, whereby it would acquire all shares of Synergetics USA, Inc. (“Synergetics”). The merger was announced on September 2, 2015. Following the announcement of the merger, four putative stockholder class actions were filed challenging the merger. Three of these actions were filed in the Eleventh Judicial Circuit of the State of Missouri and name as defendants all members of the Synergetics Board of Directors, Synergetics, Valeant and Blue Subsidiary Corp. (a wholly-owned subsidiary of Valeant). Those actions are captioned as follows: Murphy, et al. v. Synergetics USA Inc., et al., C.A. No. 1511-CC00778 (filed September 15, 2015 and amended September 23, 2015 (the “Murphy Action”)); Glorioso, et al., v. Synergetics USA Inc., et al., C.A. No. 1511-CC00803 (filed September 23, 2015 (the “Glorioso Action”)); and Scarantino, et al. v. Synergetics USA Inc., et al., C.A. No. 1511-CC00810 (filed September 28, 2015 (the “Scarantino Action”)) (collectively, the “Missouri Actions”). The fourth action, captioned Nilsen, et al. v. Valeant Pharmaceuticals International, et al., C.A. No. 11552-VCL (the “Delaware Action,” and together with the Missouri Actions, the “Actions”) was filed on September 28, 2015, in the Delaware Court of Chancery and named as defendants all members of the Synergetics Board of Directors, Valeant, and Blue Subsidiary Corp. The Actions generally allege that the members of the Synergetics Board of Directors breached their fiduciary duties to Synergetics stockholders by, among other things, conducting a flawed process in considering the transaction, agreeing to an inadequate offer price, providing incomplete and misleading information to Synergetics stockholders, and accepting unreasonable deal protection measures in the merger agreement that allegedly dissuaded other potential bidders from making competing offers. The Actions also allege that Valeant and Blue Subsidiary Corp. aided and abetted these alleged breaches of fiduciary duties. The Missouri Actions sought, among other things, an order enjoining consummation of the merger, rescission of the merger or awarding damages to members of the class, and an award of fees and expenses. The Delaware Action sought, among other things, an order awarding damages to members of the class, and an award of fees and expenses. On October 2, 2015, Synergetics, each member of the Synergetics Board of Directors, Valeant, and Blue Subsidiary Corp. entered into a Memorandum of Understanding (the “MOU”) with the plaintiffs in the Actions, which sets forth the parties’ agreement in principle for a settlement of the Actions on the basis of the additional disclosures made in a supplement to the Schedule 14D-9 filed with the SEC on October 2, 2015, in exchange for the release of, among other things, certain claims relating to the Actions, the merger and disclosures made in connection therewith. On October 8, 2015 the Delaware Court of Chancery unilaterally dismissed the Delaware Action. In October 2015, the Missouri Actions were consolidated into the Murphy Action. In January 2016, the parties engaged in confirmatory discovery, including additional documents produced by Defendants and conducting two depositions. Thereafter, the parties negotiated and reached agreement on a stipulation of settlement and ancillary settlement documents, which were filed with the Court on April 25, 2016. A hearing with the Court was held on April 29, 2016. At that hearing, the Court signed the scheduling order, which governs settlement proceedings, and set a final settlement hearing for July 29, 2016. On May 26, 2016, notice of the proposed settlement was mailed to Synergetics record holders that are members of the class. The parties have reached an agreement in principle respecting payment by the Company of a nominal amount in respect of the plaintiffs’ attorneys' fees. The Court held the final settlement hearing on July 29, 2016, at which it granted final approval of the settlement and awarded the negotiated attorneys' fees. Pursuant to the settlement, the Court dismissed the Missouri Actions with prejudice as to the named plaintiffs and all members of the settlement class. Valeant U.S. Securities Class Action From October 22, 2015 to October 30, 2015, four putative securities class actions were filed in the U.S. District Court for the District of New Jersey against the Company and certain current or former officers and directors. Those four actions, captioned Potter v. Valeant Pharmaceuticals International, Inc. et al. (Case No. 15-cv-7658), Chen v. Valeant Pharmaceuticals International, Inc. et al. (Case No. 15-cv-7679), Yang v. Valeant Pharmaceuticals International, Inc. et al. (Case No. 15-cv-7746), and Fein v. Valeant Pharmaceuticals International, Inc. et al. (Case No. 15-cv-7809), all asserted securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf of putative classes of persons who purchased or otherwise acquired the Company’s stock during various time periods between February 28, 2014 and October 21, 2015. The allegations relate to, among other things, allegedly false and misleading statements and/or failures to disclose information about the Company’s business and prospects, including relating to drug pricing, the Company’s use of specialty pharmacies, and the Company’s relationship with Philidor. On May 31, 2016, the Court entered an order consolidating the four actions under the caption In re Valeant Pharmaceuticals International, Inc. Securities Litigation, Case No. 3:15-cv-07658, and appointing a lead plaintiff and lead plaintiff’s counsel. On June 24, 2016, the lead plaintiff filed a consolidated complaint naming additional defendants and asserting additional claims based on allegations of false and misleading statements and/or omissions similar to those in the initial complaints. Specifically, the consolidated complaint asserts claims under Sections 10(b) and 20(a) of the Exchange Act against the Company, and certain current or former officers and directors, as well as claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 against the Company, certain current or former officers and directors, and certain other parties. The lead plaintiff seeks to bring these claims on behalf of a putative class of persons who purchased the Company’s equity securities and senior notes in the United States between January 4, 2013 and March 15, 2016, including all those who purchased the Company’s securities in the United States in the Company’s debt and stock offerings between July 2013 to March 2015. The Company’s response to the consolidated complaint is due on September 13, 2016. The Company believes the actions are without merit and intends to defend itself vigorously. Canadian Securities Class Actions In 2015, six putative class actions were filed and served against the Company in Canada in the provinces of British Columbia, Ontario and Quebec. These actions are captioned: (a) Alladina v. Valeant, et al. (Case No. S-1594B6) (Supreme Court of British Columbia) (filed November 17, 2015); (b) Kowalyshyn v. Valeant, et al. (CV-15-540593-00CP) (Ontario Superior Court) (filed November 16, 2015); (c) Kowalyshyn et al. v. Valeant, et al. (CV-15-541082-00CP (Ontario Superior Court) (filed November 23, 2015); (d) O’Brien v. Valeant et al. (CV-15-543678-00CP) (Ontario Superior Court) (filed December 30, 2015); (e) Catucci v. Valeant, et al. (Court File No. 540-17-011743159) (Quebec Superior Court) (filed October 26, 2015); and (f) Rousseau-Godbout v. Valeant, et al. (Court File No. 500-06-000770-152) (Quebec Superior Court) (filed October 27, 2015). The Alladina, Kowalyshyn, O’Brien, Catucci and Rousseau-Godbout actions also name, among others, certain current or former directors and officers of the Company. The Rosseau-Godbout action was subsequently stayed by the Quebec Superior Court by consent order. Each of the five remaining actions alleges violations of Canadian provincial securities legislation on behalf of putative classes of persons who purchased or otherwise acquired securities of the Company for periods commencing as early as January 1, 2013 and ending as late as November 16, 2015. The alleged violations relate to, among other things, alleged misrepresentations and/or failures to disclose material information about the Company’s business and prospects, relating to drug pricing, the Company’s policies and accounting practices, the Company’s use of specialty pharmacies and, in particular, the Company’s relationship with Philidor. The Alladina, Kowalyshyn and O’Brien actions also assert common law claims for negligent misrepresentation, and the Alladina claim additionally asserts common law negligence, conspiracy, and claims under the British Columbia Business Corporations Act, including the statutory oppression remedies in that legislation. The Catucci action asserts claims under the Quebec Civil Code, alleging the Company breached its duty of care under the civil standard of liability contemplated by the Code. The Company is aware of two additional putative class actions that have been filed with the applicable court but which have not yet been served on the Company. These actions are captioned: (i) Okeley v. Valeant, et al. (Case No. S-159991) (Supreme Court of British Columbia) (filed December 2, 2015); and (ii) Sukenaga v Valeant et al. (CV-15-540567-00CP) (Ontario Superior Court) (filed November 16, 2015), and the factual allegations made in these actions are substantially similar to those outlined above. The Company has been advised that the plaintiffs in these actions do not intend to pursue the actions. The Company expects that certain of these actions will be consolidated or stayed prior to proceeding to motions for leave and certification and that no more than one action will proceed in any jurisdiction. In particular, on June 10, 2016, the Ontario Superior Court of Justice rendered its decision on carriage motions (motions held to determine who will have carriage of the class action) heard on April 8, 2016, provisionally staying the O'Brien action, in favor of the Kowalyshyn action. On June 30, 2016, the plaintiffs in the Catucci and O’Brien actions filed a motion seeking to stay the Kowalyshyn action in favor of the Catucci action on the basis of forum non conveniens (namely on the basis that the Quebec Superior Court is the more appropriate forum to hear this matter). That motion is scheduled to be heard on September 15, 2016. In the Catucci action, a schedule has been set for the week of April 24, 2017 for the hearing of motions for leave under the Quebec Securities Act and for authorization as a class proceeding. In the Kowalyshyn action, a schedule has been set for the hearing of the motions for leave under the Ontario Securities Act and certification as a class proceeding commencing April 12, 2017. The Company believes that it has viable defenses to each of the actions, and in each case intends to defend itself vigorously. RICO Class Actions On May 27, 2016 and June 24, 2016, two virtually identical actions were filed in the U.S. District Court for the District of New Jersey against the Company and Philidor, alleging claims under the federal Racketeer Influenced Corrupt Organizations Act (“RICO”) on behalf of a putative class of certain third party payors that paid claims submitted by Philidor for certain Valeant branded drugs between January 2, 2013 and November 9, 2015 (Airconditioning and Refrigeration Industry Health and Welfare Trust Fund et al. v. Valeant Pharmaceuticals International. Inc. et al., No. 3:16-cv-03087, and Plumbers Local Union No. 1 Welfare Fund v. Valeant Pharmaceuticals International Inc. et al., No. 3:16-cv-3885). The complaints allege, among other things, that the Defendants committed predicate acts of mail and wire fraud by submitting or causing to be submitted prescription reimbursement requests that misstated or omitted facts regarding (1) the identity and licensing status of the dispensing pharmacy; (2) the resubmission of previously denied claims; (3) patient co-pay waivers; (4) the availability of generic alternatives; and (5) the insured’s consent to renew the prescription. The complaints further allege that these acts constitute a pattern of racketeering or a racketeering conspiracy in violation of the RICO statute and caused plaintiffs and the putative class unspecified damages, which may be trebled under the RICO statute. The Company believes these claims are without merit and intends to defend itself vigorously. Antitrust Solodyn® Antitrust Class Actions Beginning in July 2013, a number of civil antitrust class action suits were filed against Medicis, Valeant Pharmaceuticals International, Inc. (“VPII”) 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 plaintiffs in such suits alleged 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 alleged that the defendants have been unjustly enriched through their alleged conduct. The plaintiffs sought declaratory and injunctive relief and, where applicable, treble, multiple, punitive and/or other damages, including attorneys’ fees. By order dated February 25, 2014, the Judicial Panel for Multidistrict Litigation (‘‘JPML’’) centralized the suits in the District of Massachusetts, under the caption In re Solodyn (Minocycline Hydrochloride) Antitrust Litigation, Case No. 1:14-md-02503-DJC, before U.S. District Judge Denise Casper. After the Direct Purchaser Class Plaintiffs and the End-Payor Class Plaintiffs each filed a consolidated amended class action complaint on September 12, 2014, the defendants jointly moved to dismiss those complaints. On August 14, 2015, the Court granted the Defendants' motion to dismiss with respect to claims brought under Sherman Act, Section 2 and various state laws but denied the motion to dismiss with respect to claims brought under Sherman Act, Section 1 and other state laws. VPII was dismissed from the case, but the litigation continues against Medicis and the generic manufacturers as to the remaining claims. The actions are currently in discovery. On March 26, 2015, and on April 6, 2015, while the motion to dismiss the class action complaints was pending, two additional non-class action complaints were filed against Medicis by certain retail pharmacy and grocery chains ("Individual Plaintiffs") making similar allegations and seeking similar relief to that sought by Direct Purchaser Class Plaintiffs. Those suits have been centralized with the class action suits in the District of Massachusetts. Following the Court's August 14, 2015 decision on the motion to dismiss, the Individual Plaintiffs each filed amended complaints on October 1, 2015, and Medicis answered on December 7, 2015. A third non-class action was filed by another retail pharmacy against Medicis on January 26, 2016, and Medicis answered on March 28, 2016. On July 20, 2016, each group of Plaintiffs filed a motion seeking leave to file a proposed amended complaint. The proposed amended complaints seek to reassert alleged sham litigation claims against Medicis; the Direct Purchaser Plaintiffs and the End-Payor Plaintiffs also seek to amend their respective purported class definitions. The Company is evaluating these motions and intends to vigorously defend all of these actions. Contact Lens Antitrust Class Actions Beginning in March 2015, a number of civil antitrust class action suits were filed by purchasers of contact lenses against B&L, three other contact lens manufacturers, and a contact lens distributor, alleging that the defendants engaged in an anticompetitive scheme to eliminate price competition on certain contact lens lines through the use of unilateral pricing policies. The plaintiffs in such suits alleged violations of Section 1 of the Sherman Act, 15 U.S.C. § 1, and of various state antitrust and consumer protection laws, and further alleged that the defendants have been unjustly enriched through their alleged conduct. The plaintiffs sought declaratory and injunctive relief and, where applicable, treble, punitive and/or other damages, including attorneys’ fees. By order dated June 8, 2015, the JPML centralized the suits in the Middle District of Florida, under the caption In re Disposable Contact Lens Antitrust Litigation, Case No. 3:15-md-02626-HES-JRK, before U.S. District Judge Harvey E. Schlesinger. After the Class Plaintiffs filed a corrected consolidated class action complaint on December 16, 2015, the defendants jointly moved to dismiss those complaints. On June 16, 2016, the Court granted the Defendants' motion to dismiss with respect to claims brought under the Maryland Consumer Protection Act, but denied the motion to dismiss with respect to claims brought under Sherman Act, Section 1 and other state laws. The actions are currently in discovery. The Company intends to vigorously defend all of these actions. Intellectual Property AntiGrippin® Litigation A suit was brought against the Company’s subsidiary, Natur Produkt International, JSC ("Natur Produkt") seeking lost profits in connection with the registration by Natur Produkt of its AntiGrippin® trademark. The plaintiff in this matter alleged that Natur Produkt violated Russian competition law by preventing plaintiff from producing and marketing its products under certain brand names. The matter (Case No. A-56-23056/2013, Arbitration Court of St. Petersburg) was accepted for proceedings on June 24, 2013 and a hea |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2016 | |
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 as of June 30, 2016 : • 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 dermatology and podiatry, neurology, gastrointestinal disorders, eye health, oncology and urology, dentistry, aesthetics, and women's health and (ii) pharmaceutical products, OTC products, and medical device products sold in Western Europe, Canada, Japan, Australia and New Zealand. • 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, Argentina, and Colombia 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 three-month and six-month periods ended June 30, 2016 and 2015 were as follows: Three Months Ended Six Months Ended 2016 2015 2016 2015 Revenues: Developed Markets (1) $ 1,923.5 $ 2,237.6 $ 3,853.4 $ 3,981.2 Emerging Markets (2) 496.7 494.8 938.4 921.3 Total revenues 2,420.2 2,732.4 4,791.8 4,902.5 Segment profit: Developed Markets (3) 107.6 678.5 367.2 1,346.2 Emerging Markets (4) 48.4 78.3 66.7 132.9 Total segment profit 156.0 756.8 433.9 1,479.1 Corporate (5) (77.0 ) (61.5 ) (223.4 ) (130.7 ) Restructuring, integration and other costs (19.5 ) (143.4 ) (57.5 ) (198.4 ) In-process research and development impairments and other charges (17.4 ) (12.3 ) (17.9 ) (12.3 ) Acquisition-related costs — (9.5 ) (1.8 ) (23.4 ) Acquisition-related contingent consideration (6.9 ) (11.7 ) (9.3 ) (18.8 ) Other income (expense) 45.3 (176.9 ) 22.7 (183.0 ) Operating income 80.5 341.5 146.7 912.5 Interest income 2.1 0.9 3.0 1.8 Interest expense (472.5 ) (412.7 ) (899.1 ) (710.5 ) Loss on extinguishment of debt — — — (20.0 ) Foreign exchange and other 13.1 5.6 6.9 (65.5 ) (Loss) income before (recovery of) provision for income taxes $ (376.8 ) $ (64.7 ) $ (742.5 ) $ 118.3 ____________________________________ (1) Developed Markets segment revenues reflect incremental product sales revenue in the three-month and six-month periods ended June 30, 2016 from 2015 acquisitions of $24 million and $537 million , respectively, in the aggregate, primarily from the Salix Acquisition and the acquisition of certain assets of Dendreon. (2) Emerging Markets segment revenues reflect incremental product sales revenue in the three-month and six-month periods ended June 30, 2016 from 2015 acquisitions of $57 million and $115 million , respectively, in the aggregate, primarily from the Amoun Acquisition. (3) Developed Markets segment profit in the three-month and six-month periods ended June 30, 2016 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $808 million and $1.45 billion , respectively, in the aggregate, primarily from the Salix Acquisition, compared with $555 million and $870 million in the corresponding periods of 2015 . (4) Emerging Markets segment profit in the three-month and six-month periods ended June 30, 2016 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $87 million and $173 million , respectively, in the aggregate, compared with $76 million and $151 million in the corresponding periods of 2015 . (5) Corporate reflects non-restructuring-related share-based compensation expense of $20 million and $70 million in the three-month and six-month periods ended June 30, 2016 , respectively, compared with $14 million and $38 million in the corresponding periods of 2015 . The expense in the three-month and six-month periods ended June 30, 2016 , included a charge relating to the acceleration of vesting of the performance-based RSUs held by the Company's former Chief Executive Officer. See Note 12 for additional information. Segment Assets Total assets by segment as of June 30, 2016 and December 31, 2015 were as follows: As of As of Assets: Developed Markets $ 39,897.8 $ 41,182.7 Emerging Markets 6,693.6 6,897.4 46,591.4 48,080.1 Corporate 1,070.8 884.4 Total assets $ 47,662.2 $ 48,964.5 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Divestiture of Ruconest® On August 9, 2016, the Company entered into a definitive agreement to divest all North American commercialization rights to Ruconest® (recombinant human C1 esterase inhibitor) to Pharming Group N.V. ("Pharming"). Under the terms of the agreement, Pharming will pay Valeant aggregate consideration of up to $125 million , including an upfront fee of $60 million payable upon closing and certain sales-based milestone payments of up to $65 million . The transaction is subject to customary closing conditions, in addition to Pharming obtaining certain financing. The carrying values of the assets being sold, including the associated goodwill, were written down to fair value less costs to sell and were classified as assets held for sale, within Prepaids and other current assets in the Consolidated balance sheet, as of June 30, 2016. A loss of $199 million was recorded in Amortization and impairments of finite-lived intangible assets for the three months ended June 30, 2016. Organizational Change On August 9, 2016, the Company announced a new organizational structure which will result in a realignment of the current segment structure. Pursuant to this change, which will become effective in the third quarter of 2016, the Company will have three reportable segments: (i) Bausch + Lomb/International, (ii) Branded Rx, and (iii) U.S. Diversified Products. The Company will commence reporting under this new structure in the third quarter of 2016. Proposed Credit Facility Amendment On August 9, 2016, the Company announced its intention to launch a process to obtain an amendment to our Senior Secured Credit Facilities. Pursuant to the proposed amendment, in order to provide the Company with additional flexibility and to address the limited headroom in its interest coverage ratio maintenance covenant, the Company is seeking to amend the interest coverage maintenance covenant and certain asset sale and debt incurrence baskets that will provide additional flexibility to sell assets and incur debt if the proceeds from either are used to repay term loans. The proposed amendment must be approved by lenders holding more than 50% of the Company’s loans in principal amount. The Company cannot guarantee that the necessary approvals will be obtained. |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements (the “unaudited 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 (“U.S. GAAP”) for interim financial reporting, which do not conform in all respects to the requirements of U.S. GAAP for annual financial statements. Accordingly, these condensed notes to the unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto prepared in accordance with U.S. GAAP that are contained in the Company’s 2015 Form 10-K. The unaudited consolidated financial statements have been prepared using accounting policies that are consistent with the policies used in preparing the Company’s audited consolidated financial statements for the year ended December 31, 2015. The unaudited consolidated financial statements reflect all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform with the current year presentation. Such amounts include a reclassification of $22 million related to a change in income taxes payable which increased deferred income taxes and decreased accounts payable, accrued and other liabilities within changes in operating assets and liabilities within cash flow from operating activities of the Consolidated Statements of Cash Flows for the six-month period ended June 30, 2015. |
Use of Estimates | Use of Estimates In preparing the unaudited 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 unaudited consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. 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 results of operations and financial position could be materially impacted. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards 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 variable interest entities ("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 was effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2015. The Company adopted this standard as of January 1, 2016 using the modified retrospective approach, as permitted, and, as such, prior periods were not retrospectively adjusted. The adoption of this standard did not have a material impact on the presentation of the Company's results of operations, cash flows or financial position. Recently Issued Accounting Standards, Not Adopted as of June 30, 2016 In May 2014, the FASB issued 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. In March 2016, the FASB issued an amendment to clarify the implementation guidance around considerations of whether an entity is a principal or an agent, impacting whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued an amendment to clarify guidance on identifying performance obligations and the implementation guidance on licensing. In May 2016, the FASB issued amendments to certain aspects of the new revenue guidance (including transition, collectability, noncash consideration and the presentation of sales and other similar taxes) and provided certain practical expedients. The guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early application is permitted but not before the annual reporting period (and interim reporting period) beginning January 1, 2017. 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, at this time, the Company does not expect any impact on its disclosures. In July 2015, the FASB issued guidance which requires entities to measure most inventory “at the lower of cost and net realizable value (“NRV”),” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation”. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position and results of operations. In January 2016, the FASB issued guidance which amends the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured under the fair value option. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and disclosures. In February 2016, the FASB issued new guidance on leases. The new guidance will increase transparency and comparability among organizations that lease buildings, equipment, and other assets by recognizing the assets and liabilities that arise from lease transactions. Current off-balance sheet leasing activities will be required to be reflected on balance sheets so that investors and other users of financial statements can more readily and accurately understand the rights and obligations associated with these transactions. Consistent with the current lease standard, the new guidance addresses two types of leases: finance leases and operating leases. Finance leases will be accounted for in substantially the same manner as capital leases are accounted for under current GAAP. Operating leases will be accounted for (both in the income statement and statement of cash flows) in a manner consistent with operating leases under existing GAAP. However, as it relates to the balance sheet, lessees will recognize lease liabilities based upon the present value of remaining lease payments and corresponding lease assets for operating leases with limited exception. The new guidance will also require lessees and lessors to provide additional qualitative and quantitative disclosures to help financial statement users assess the amount, timing, and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an organization’s leasing activities. The new guidance is effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2018. Early application is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and disclosures. In March 2016, the FASB issued new guidance which simplifies several aspects of the accounting for employee share-based payment transactions. The areas for simplification involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and cash flows. In June 2016, the FASB issued new guidance on the impairment of financial instruments requiring an impairment model based on expected losses rather than incurred losses. Under this guidance, an entity recognizes as an allowance its estimate of expected credit losses. The guidance is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is evaluating the impact of adoption of this guidance on its financial position, results of operations and cash flows. |
RESTATEMENT OF PREVIOUSLY ISS27
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement Adjustments | CONSOLIDATED STATEMENT OF INCOME (Unaudited) Six Months Ended June 30, 2015 (As Previously Reported) Restatement Adjustments 2015 (Restated) Restatement Ref Revenues Product sales $ 4,841.9 $ (20.8 ) $ 4,821.1 (a) Other revenues 81.4 — 81.4 4,923.3 (20.8 ) 4,902.5 Expenses Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) 1,230.3 (52.5 ) 1,177.8 (a) Cost of other revenues 29.5 — 29.5 Selling, general and administrative 1,259.3 — 1,259.3 Research and development 136.9 — 136.9 Amortization and impairment of finite-lived intangible assets 950.6 — 950.6 Restructuring, integration and other costs 198.4 — 198.4 In-process research and development impairments and other changes 12.3 — 12.3 Acquisition-related costs 19.3 4.1 23.4 (b) Acquisition-related contingent consideration 18.8 — 18.8 Other expense 183.0 — 183.0 4,038.4 (48.4 ) 3,990.0 Operating income 884.9 27.6 912.5 Interest income 1.8 — 1.8 Interest expense (710.5 ) — (710.5 ) Loss on extinguishment of debt (20.0 ) — (20.0 ) Foreign exchange and other (65.5 ) — (65.5 ) Income before provision for income taxes 90.7 27.6 118.3 Provision for income taxes 67.8 3.6 71.4 (c) Net income 22.9 24.0 46.9 Less: Net income attributable to noncontrolling interest 2.2 — 2.2 Net income attributable to Valeant Pharmaceuticals International, Inc. $ 20.7 $ 24.0 $ 44.7 Earnings per share attributable to Valeant Pharmaceuticals International, Inc.: Basic $ 0.06 $ 0.07 $ 0.13 Diluted $ 0.06 $ 0.07 $ 0.13 Weighted-average common shares (in millions) Basic 340.5 340.5 Diluted 347.1 347.1 There was no net impact of the 2015 restatement adjustments on net cash provided by operating activities, net cash used in investing activities and net cash provided by financing activities in the Consolidated Statement of Cash Flows. The adjustments only had an impact on certain captions within cash flows from operating activities. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2015 (As Previously Reported) Restatement Adjustments 2015 (Restated) Restatement Ref Cash Flow From Operating Activities Net income $ 22.9 $ 24.0 $ 46.9 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, including impairments of finite-lived intangible assets 1,042.0 — 1,042.0 Amortization and write-off of debt discounts and debt issuance costs 103.2 — 103.2 In-process research and development impairments 12.3 — 12.3 Acquisition accounting adjustment on inventory sold 70.5 — 70.5 Acquisition-related contingent consideration 18.8 — 18.8 Allowances for losses on accounts receivable and inventories 26.8 — 26.8 Deferred income taxes (1) 34.1 3.6 37.7 (c) Additions to accrued legal settlements 6.3 — 6.3 Payments of accrued legal settlements (5.9 ) — (5.9 ) Share-based compensation 60.9 — 60.9 Tax benefits from share-based compensation (25.6 ) — (25.6 ) Foreign exchange loss 65.6 — 65.6 Loss on extinguishment of debt 20.0 — 20.0 Payment of contingent consideration adjustments, including accretion (12.1 ) — (12.1 ) Other (9.9 ) — (9.9 ) Changes in operating assets and liabilities: Trade receivables (308.8 ) — (308.8 ) Inventories (86.8 ) (52.5 ) (139.3 ) (a) Prepaid expenses and other current assets (163.5 ) — (163.5 ) Accounts payable, accrued and other liabilities (1) 30.8 24.9 55.7 (a), (b) Net cash provided by operating activities 901.6 — 901.6 Net cash used in investing activities (13,885.7 ) — (13,885.7 ) Net cash provided by financing activities 13,631.6 — 13,631.6 Effect of exchange rate changes on cash and cash equivalents (12.1 ) — (12.1 ) Net increase in cash and cash equivalents 635.4 — 635.4 Cash and cash equivalents, beginning of period 322.6 — 322.6 Cash and cash equivalents, end of period $ 958.0 $ — $ 958.0 Non- Cash Investing and Financing Activities Acquisition of businesses, contingent consideration at fair value $ (674.6 ) $ 38.8 $ (635.8 ) (d) Acquisition of businesses, debt assumed (3,123.1 ) — (3,123.1 ) ________________________ (1) As described in Note 3, the Consolidated Statement of Cash Flows reflects a reclassification of $22 million related to a change in income taxes payable which increased deferred income taxes and decreased accounts payable, accrued and other liabilities within the cash flow from operating activities. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Acquisition [Line Items] | |
Schedule of pro forma impact of merger and acquisition | The following table presents unaudited pro forma consolidated results of operations for the three-month and six-month periods ended June 30, 2015 , as if the 2015 acquisitions had occurred as of January 1, 2014 . Three Months Ended 2015 Six Months Ended 2015 Revenues $ 2,805.0 $ 5,076.2 Net loss attributable to Valeant Pharmaceuticals International, Inc. (30.1 ) (299.9 ) Loss per share attributable to Valeant Pharmaceuticals International, Inc.: Basic $ (0.09 ) $ (0.87 ) Diluted $ (0.09 ) $ (0.87 ) |
Amoun | |
Business Acquisition [Line Items] | |
Schedule of estimated fair value of assets acquired and liabilities assumed | Amounts Recognized as of Acquisition Date (as previously reported) (a) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Cash $ 43.5 $ — $ 43.5 Accounts receivable (b) 64.2 — 64.2 Inventories 37.9 — 37.9 Other current assets 12.2 — 12.2 Property, plant and equipment 96.4 (1.0 ) 95.4 Identifiable intangible assets, excluding acquired in-process research and development ("IPR&D") (c) 528.0 (0.2 ) 527.8 Acquired IPR&D 18.5 (1.1 ) 17.4 Other non-current assets 0.1 — 0.1 Current liabilities (30.8 ) — (30.8 ) Deferred tax liability, net (d) (130.5 ) (1.6 ) (132.1 ) Other non-current liabilities (11.2 ) 4.0 (7.2 ) Total identifiable net assets 628.3 0.1 628.4 Goodwill (e) 282.0 0.8 282.8 Total fair value of consideration transferred $ 910.3 $ 0.9 $ 911.2 ________________________ (a) As previously reported in the Company’s 2015 Form 10-K. (b) The fair value of trade accounts receivable acquired was $64 million , with the gross contractual amount being $66 million , of which the Company expects that $2 million will be uncollectible. (c) The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: Weighted- Average Useful Lives (Years) Amounts Recognized as of Acquisition Date (as previously reported) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Product brands 9 $ 490.8 $ (0.1 ) $ 490.7 Corporate brand 15 37.2 (0.1 ) 37.1 Total identifiable intangible assets acquired 9 $ 528.0 $ (0.2 ) $ 527.8 (d) Comprised of deferred tax liabilities partially offset by nominal deferred tax assets. (e) 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 products and expand its business to new geographic markets; • the value of the continuing operations of Amoun'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, Amoun's assembled workforce). The provisional amount of goodwill 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- Average Useful Lives (Years) Amounts Recognized as of Acquisition Date (as previously reported) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Product brands 9 $ 490.8 $ (0.1 ) $ 490.7 Corporate brand 15 37.2 (0.1 ) 37.1 Total identifiable intangible assets acquired 9 $ 528.0 $ (0.2 ) $ 527.8 |
Sprout Pharmaceuticals, Inc. | |
Business Acquisition [Line Items] | |
Schedule of estimated fair value of assets acquired and liabilities assumed | Amounts Recognized as of Acquisition Date (as previously reported) (a) Cash and cash equivalents $ 26.6 Inventories 11.0 Other assets 1.6 Identifiable intangible assets (b) 993.7 Current liabilities (4.4 ) Deferred income taxes, net (351.9 ) Total identifiable net assets 676.6 Goodwill (c) 769.9 Total fair value of consideration transferred $ 1,446.5 ________________________ (a) As previously reported in the Company’s 2015 Form 10-K. (b) Consists of product rights with a weighted-average useful life of 11 years. (c) 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 potential ability to develop and market the product to additional types of patients/indications and launch the product in a variety of new geographies; • the value of the continuing operations of Sprout'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, Sprout's assembled workforce). The provisional amount of goodwill has been allocated to the Company’s Developed Markets segment. |
Salix | |
Business Acquisition [Line Items] | |
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 Recognized as of Acquisition Date (as previously reported) (a) Measurement Period Adjustments (b) Amounts Recognized as of December 31, 2015 (as adjusted) Cash and cash equivalents $ 113.7 $ — $ 113.7 Inventories (c) 233.2 (0.6 ) 232.6 Other assets (d) 1,400.3 10.1 1,410.4 Property, plant and equipment, net 24.3 — 24.3 Identifiable intangible assets, excluding acquired IPR&D (e) 6,756.3 — 6,756.3 Acquired IPR&D (f) 5,366.8 (183.9 ) 5,182.9 Current liabilities (g) (1,764.2 ) (175.0 ) (1,939.2 ) Contingent consideration, including current and long-term portion (h) (327.9 ) (6.2 ) (334.1 ) Long-term debt, including current portion (i) (3,123.1 ) — (3,123.1 ) Deferred income taxes, net (j) (3,512.0 ) 84.1 (3,427.9 ) Other non-current liabilities (7.3 ) (36.0 ) (43.3 ) Total identifiable net assets 5,160.1 (307.5 ) 4,852.6 Goodwill (k) 7,971.9 307.5 8,279.4 Total fair value of consideration transferred $ 13,132.0 $ — $ 13,132.0 ________________________ (a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. (b) The measurement period adjustments primarily reflect: (i) a reduction in acquired IPR&D assets, specifically for the Oral Relistor® program based mainly on refinement of the pricing assumptions and cost projections (see further discussion of IPR&D programs in (f) below) and (ii) the tax impact of pre-tax measurement period adjustments as well as reclassifications of certain tax balances impacting current liabilities. 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 consolidated financial statements. As the measurement period for the Salix Acquisition closed in the fourth quarter of 2015, there were no measurement period adjustments recorded in subsequent periods. (c) Includes an estimated fair value step-up adjustment to inventory of $108 million . (d) Primarily includes an estimated fair value of $1.27 billion to record the capped call transactions and convertible bond hedge transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 and 2.75% Convertible Senior Notes due 2015. These instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts. Other assets also includes an estimated insurance recovery of $80 million , based on estimated fair value, related to the legal matters discussed in (g) below. (e) The following table summarizes the amounts and useful lives assigned to identifiable intangible assets: Weighted- Average Useful Lives (Years) Amounts Recognized as of Acquisition Date (as previously reported) Measurement Period Adjustments Amounts Recognized as of December 31, 2015 (as adjusted) Product brands 10 $ 6,088.3 $ 1.3 $ 6,089.6 Corporate brand 20 668.0 (1.3 ) 666.7 Total identifiable intangible assets acquired 11 $ 6,756.3 $ — $ 6,756.3 (f) A multi-period excess earnings methodology (income approach) was used to determine the estimated fair values of the acquired IPR&D assets from a market participant perspective. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project, and the Company used risk-adjusted discount rates of 9.5% - 11% to present value the projected cash flows. The IPR&D assets primarily relate to Xifaxan® 550 mg for the treatment of irritable bowel syndrome with diarrhea (new indication) in adults ("Xifaxan® IBS-D"). In determining the fair value of Xifaxan® IBS-D ( $4.79 billion as of the acquisition date), the Company assumed material cash inflows would commence in 2015. In May 2015, Xifaxan® IBS-D received approval from the FDA, and, accordingly, such asset has been reclassified to an amortizable intangible asset as of the approval date and is being amortized over a period of 10 years. Other IPR&D assets include, among others, Relistor® tablets ("Oral Relistor®"), for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain, and Rifaximin soluble solid dispersion ("SSD") tablets, for the treatment of early decompensated liver cirrhosis. In September 2015, the Company announced that the FDA accepted for review the Company's NDA for Oral Relistor®, and the FDA assigned a Prescription Drug User Fee Act (PDUFA) action date of April 19, 2016. In April 2016, the Company announced that the FDA had extended the PDUFA action date for Oral Relistor® to July 19, 2016 to allow time for a full review of the Company's responses to certain information requests from the FDA. On July 19, 2016, the FDA approved Oral Relistor® for the treatment of opioid-induced constipation in adults with chronic non-cancer pain. The associated IPR&D asset ( $304 million as of the acquisition date) will be reclassified to an amortizable intangible as of the approval date and will be amortized over a period of 12 years. In the third quarter of 2015, the Company terminated the Rifaximin SSD IPR&D program and recognized an impairment charge as described in Note 9. (g) Primarily includes an estimated fair value of $1.08 billion to record the warrant transactions that were entered into by Salix prior to the Salix Acquisition in connection with its 1.5% Convertible Senior Notes due 2019 (these instruments were settled on the date of the Salix Acquisition and, as such, the fair value was based on the settlement amounts), as well as accruals for (i) the estimated fair value of $336 million (exclusive of the related insurance recovery described in (d) above) for potential losses and related costs associated with legal matters relating to the legacy Salix business (See Note 17 for additional information regarding these legal matters) and (ii) product returns and rebates of $375 million . (h) The contingent consideration consists of potential payments to third parties including developmental milestone payments due upon specified regulatory achievements, commercialization milestones contingent upon achieving specified targets for net sales, and royalty-based payments. As of the acquisition date, the range of potential milestone payments (excluding royalty-based payments) is from nil , if none of the milestones are achieved, to a maximum of up to approximately $650 million (the majority of which relates to sales-based milestones) over time, if all milestones are achieved, in the aggregate, to third parties. This amount includes up to $250 million in developmental and sales-based milestones to Progenics Pharmaceuticals, Inc. related to Relistor® (including Oral Relistor®), of which $50 million was paid in the third quarter of 2016 in connection with the FDA's approval of Oral Relistor®, and various other developmental and sales-based milestones. The total fair value of the contingent consideration of $334 million as of the acquisition date was determined using probability-weighted discounted cash flows. Refer to Note 7 for additional information regarding the contingent consideration. (i) The following table summarizes the fair value of long-term debt assumed as of the acquisition date: Amounts Recognized as of Acquisition Date 1.5% Convertible Senior Notes due 2019 (1) $ 1,837.1 2.75% Convertible Senior Notes due 2015 (1) 1,286.0 Total long-term debt assumed $ 3,123.1 ____________________________________ (1) The Company subsequently redeemed these amounts in full in the second quarter of 2015, except for a nominal amount of the 1.5% Convertible Senior Notes due 2019 which remains outstanding. (j) Comprises deferred tax assets ( $303 million ) and deferred tax liabilities ( $3.73 billion ). (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 Salix with those of the Company; • the value of the continuing operations of Salix’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, Salix’s assembled workforce). Goodwill has been allocated to the Company’s Developed Markets segment . |
Fair value of consideration transferred | The following table indicates the consideration transferred to effect the Salix Acquisition: (In millions except per share data) Conversion Calculation Fair Value Number of shares of Salix common stock outstanding as of acquisition date 64.3 Multiplied by Per Share Merger Consideration $ 173.00 $ 11,123.9 Number of outstanding stock options of Salix cancelled and exchanged for cash (a) 0.1 10.1 Number of outstanding restricted stock of Salix cancelled and exchanged for cash (a) 1.1 195.0 11,329.0 Less: Cash consideration paid for Salix’s restricted stock that was accelerated at the closing of the Salix Acquisition (a) (164.5 ) Add: Payment of Salix’s Term Loan B Credit Facility (b) 1,125.2 Add: Payment of Salix’s 6.00% Senior Notes due 2021 (b) 842.3 Total fair value of consideration transferred $ 13,132.0 ___________________________________ (a) The purchase consideration paid to holders of Salix stock options and restricted stock attributable to pre-combination services was included as a component of the purchase price. Purchase consideration of $165 million paid for outstanding restricted stock that was accelerated by the Company in connection with the Salix Acquisition was excluded from the purchase price and accounted for as post-combination expense within Other expense (income) in the second quarter of 2015. (b) The repayment of Salix’s Term Loan B Credit Facility has been reflected as part of the purchase consideration as the debt was repaid concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition. Similarly, the redemption of Salix’s 6.00% Senior Notes due 2021 has been reflected as part of the purchase consideration as the indenture governing the 6.00% Senior Notes due 2021 was satisfied and discharged concurrently with the consummation of the Salix Acquisition and was not assumed by the Company as part of the acquisition. |
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- Average Useful Lives (Years) Amounts Recognized as of Acquisition Date (as previously reported) Measurement Period Adjustments Amounts Recognized as of December 31, 2015 (as adjusted) Product brands 10 $ 6,088.3 $ 1.3 $ 6,089.6 Corporate brand 20 668.0 (1.3 ) 666.7 Total identifiable intangible assets acquired 11 $ 6,756.3 $ — $ 6,756.3 |
Schedule of fair value of long-term debt assumed | The following table summarizes the fair value of long-term debt assumed as of the acquisition date: Amounts Recognized as of Acquisition Date 1.5% Convertible Senior Notes due 2019 (1) $ 1,837.1 2.75% Convertible Senior Notes due 2015 (1) 1,286.0 Total long-term debt assumed $ 3,123.1 ____________________________________ (1) The Company subsequently redeemed these amounts in full in the second quarter of 2015, except for a nominal amount of the 1.5% Convertible Senior Notes due 2019 which remains outstanding. |
Other 2015 Acquisitions | |
Business Acquisition [Line Items] | |
Schedule of estimated fair value of assets acquired and liabilities assumed | Amounts Recognized as of Acquisition Dates (as previously reported) Measurement Period Adjustments (a) Amounts Recognized as of June 30, 2016 (as adjusted) Cash $ 92.2 $ — $ 92.2 Accounts receivable (b) 49.5 (3.0 ) 46.5 Inventories 142.9 (2.6 ) 140.3 Other current assets 20.2 (0.5 ) 19.7 Property, plant and equipment 94.6 (14.8 ) 79.8 Identifiable intangible assets, excluding acquired IPR&D (c) 1,121.6 (43.2 ) 1,078.4 Acquired IPR&D 57.5 (3.7 ) 53.8 Other non-current assets 2.9 — 2.9 Deferred tax (liability) asset, net (54.7 ) 60.8 6.1 Current liabilities (d) (123.9 ) (4.1 ) (128.0 ) Long-term debt (6.1 ) — (6.1 ) Non-current liabilities (d) (117.4 ) 0.2 (117.2 ) Total identifiable net assets 1,279.3 (10.9 ) 1,268.4 Goodwill (e) 141.9 (3.5 ) 138.4 Total fair value of consideration transferred $ 1,421.2 $ (14.4 ) $ 1,406.8 ________________________ (a) The measurement period adjustments primarily relate to the acquisition of certain assets of Dendreon and reflect: (i) an increase to the deferred tax assets based on further assessment of the Dendreon net operating losses ("NOLs") available to the Company post-acquisition, (ii) a reduction in the estimated fair value of intangible assets based on further assessment of assumptions related to the probability-weighted cash flows, (iii) a reduction in the estimated fair value of property, plant and equipment driven by further assessment of the fair value of a manufacturing facility, 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. The adjustments recorded in the current period did not have a significant impact on the Company’s consolidated financial statements. (b) The fair value of trade accounts receivable acquired was $47 million , with the gross contractual amount being $51 million , of which the Company expects that $4 million will be uncollectible. (c) The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: Weighted- Average Useful Lives (Years) Amounts Recognized as of Acquisition Dates (as previously reported) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Product brands 7 $ 741.2 $ (6.0 ) $ 735.2 Product rights 3 42.7 (0.7 ) 42.0 Corporate brands 16 6.6 — 6.6 Partner relationships 8 7.8 — 7.8 Technology/know-how 10 321.3 (36.5 ) 284.8 Other 6 2.0 — 2.0 Total identifiable intangible assets acquired 8 $ 1,121.6 $ (43.2 ) $ 1,078.4 (d) As part of the acquisition of certain assets of Marathon, the Company assumed a contingent consideration liability related to potential payments, in the aggregate, of up to approximately $200 million as of the acquisition date, for Isuprel® and Nitropress®, the amounts of which are dependent on the timing of generic entrants for these products. The fair value of the liability as of the acquisition date was determined using probability-weighted projected cash flows, with $41 million classified in Current liabilities and $46 million classified in Non-current liabilities in the table above. As of June 30, 2016 , the assumptions used for determining the fair value of the contingent consideration liability have not changed significantly from those used as of the acquisition date. The Company made contingent consideration payments related to the Marathon acquisition of $35 million during 2015 and an additional $17 million and $27 million during the three-month and six-month periods ended June 30, 2016 , respectively. (e) The goodwill relates primarily to certain smaller acquisitions and the acquisition of certain assets of Marathon. 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. The majority of the goodwill is not expected to be deductible for tax purposes. The goodwill represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. The provisional amount of goodwill has been allocated primarily to the Company’s Developed Markets segment. |
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- Average Useful Lives (Years) Amounts Recognized as of Acquisition Dates (as previously reported) Measurement Period Adjustments Amounts Recognized as of June 30, 2016 (as adjusted) Product brands 7 $ 741.2 $ (6.0 ) $ 735.2 Product rights 3 42.7 (0.7 ) 42.0 Corporate brands 16 6.6 — 6.6 Partner relationships 8 7.8 — 7.8 Technology/know-how 10 321.3 (36.5 ) 284.8 Other 6 2.0 — 2.0 Total identifiable intangible assets acquired 8 $ 1,121.6 $ (43.2 ) $ 1,078.4 |
RESTRUCTURING, INTEGRATION AN29
RESTRUCTURING, INTEGRATION AND OTHER COSTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Salix | |
Restructuring costs | |
Schedule of major components of restructuring costs incurred in connection with acquisition-related initiatives | The following table summarizes the major components of the restructuring costs incurred in connection with the Salix Acquisition since the acquisition date through June 30, 2016 : Severance and Related Benefits Contract Termination, Facility Closure and Other Costs Total Balance, January 1, 2015 $ — $ — $ — Costs incurred and/or charged to expense 90.6 0.9 91.5 Cash payments (57.8 ) (0.3 ) (58.1 ) Non-cash adjustments 2.2 — 2.2 Balance, December 31, 2015 (1) $ 35.0 $ 0.6 $ 35.6 Costs incurred and/or charged to expense 0.7 7.7 8.4 Cash payments (11.1 ) (0.3 ) (11.4 ) Balance, March 31, 2016 $ 24.6 $ 8.0 $ 32.6 Costs incurred and/or charged to expense (1.2 ) 0.9 (0.3 ) Cash payments (10.2 ) (1.2 ) (11.4 ) Balance, June 30, 2016 $ 13.2 $ 7.7 $ 20.9 ___________________________________ (1) In the six-month period ended June 30, 2015 , the Company recognized $82 million of restructuring charges and made payments of $26 million related to the Salix Acquisition. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 and December 31, 2015 : As of June 30, 2016 As of December 31, 2015 Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents (1) $ 416.6 $ 344.2 $ 72.4 $ — $ 167.2 $ 156.1 $ 11.1 $ — Liabilities: Acquisition-related contingent consideration $ (1,074.6 ) $ — $ — $ (1,074.6 ) $ (1,155.9 ) $ — $ — $ (1,155.9 ) ___________________________________ (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 six-month period ended June 30, 2016 : Balance, January 1, 2016 Payments/ Settlements (a) Net Unrealized Loss Foreign Exchange (b) Adjustments Balance, Acquisition-related contingent consideration $ (1,155.9 ) $ 76.9 $ (9.3 ) $ 8.0 $ 5.7 $ (1,074.6 ) ____________________________________ (a) Primarily relates to payments of acquisition-related contingent consideration related to the acquisition of certain assets of Marathon, the settlement of contingent consideration obligation in connection with the termination of the arrangements with and relating to Philidor, and payments of acquisition-related contingent consideration related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL in June 2011 (the "Elidel®/Xerese®/Zovirax® agreement"), and other smaller acquisitions. (b) Included in other comprehensive loss. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of the components of inventories | The components of inventories as of June 30, 2016 and December 31, 2015 were as follows: As of As of Raw materials (1) $ 357.5 $ 289.3 Work in process (1) 148.5 152.7 Finished goods (1) 830.7 814.6 $ 1,336.7 $ 1,256.6 ___________________________________ (1) The components of inventories shown in the table above are net of allowance for obsolescence. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of components of intangible assets | The major components of intangible assets as of June 30, 2016 and December 31, 2015 were as follows: As of June 30, 2016 As of December 31, 2015 Gross Carrying Amount Accumulated Amortization, Including Impairments Net Carrying Amount Gross Carrying Amount Accumulated Amortization, Including Impairments Net Carrying Amount Finite-lived intangible assets: Product brands $ 21,774.0 $ (6,291.5 ) $ 15,482.5 $ 22,082.8 $ (5,236.4 ) $ 16,846.4 Corporate brands 1,041.9 (128.6 ) 913.3 1,066.1 (107.1 ) 959.0 Product rights/patents 4,305.9 (1,954.8 ) 2,351.1 4,339.9 (1,711.7 ) 2,628.2 Partner relationships 167.5 (131.6 ) 35.9 217.6 (170.3 ) 47.3 Technology and other 442.3 (174.1 ) 268.2 480.3 (186.1 ) 294.2 Total finite-lived intangible assets (1) 27,731.6 (8,680.6 ) 19,051.0 28,186.7 (7,411.6 ) 20,775.1 Indefinite-lived intangible assets: Acquired IPR&D (2) 587.3 — 587.3 610.4 — 610.4 Corporate brand (3) 1,697.5 — 1,697.5 1,697.5 — 1,697.5 $ 30,016.4 $ (8,680.6 ) $ 21,335.8 $ 30,494.6 $ (7,411.6 ) $ 23,083.0 ____________________________________ (1) The Company continues to monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if indicators of impairment are present. In the second quarter of 2016, the Company recognized impairment charges of $215 million , primarily due to $199 million recognized as a result of the intangible assets related to Ruconest®, inclusive of goodwill of $37 million , being classified as assets held for sale as of June 30, 2016. Refer to Note 19 for further details. In the first quarter of 2016, the Company recognized impairment charges of $16 million for a number of individually immaterial intangible assets. In the fourth quarter of 2015, the Company recognized impairment charges of $79 million related to the write-off of intangible assets and $23 million related to the write-off of property, plant and equipment, in connection with the termination (announced in October 2015) of the arrangements with and relating to Philidor (Developed Markets segment). In addition, in the fourth quarter of 2015, the Company recognized an impairment charge of $27 million related to the write-off of ezogabine/retigabine (immediate-release formulation) (Developed Markets segment) resulting from further analysis of commercialization strategy and projections. GlaxoSmithKline plc (‘‘GSK’’) controls all sales force promotion for ezogabine/retigabine. In the third quarter of 2015, the Company recognized an impairment charge of $26 million related to Zelapar® (Developed Markets segment), resulting from declining sales trends. These impairment charges were recognized in Amortization and impairments of finite-lived intangible assets in the Consolidated statements of (loss) income for the respective periods. (2) The Company acquired certain IPR&D assets as part of the Salix Acquisition, as described further in Note 4. In the second quarter of 2016, the Company wrote off an IPR&D asset of $14 million related to the termination of the development program for Cirle 3-dimensional surgical navigation technology, resulting from a feasibility analysis. In the fourth quarter of 2015, the Company wrote off an IPR&D asset of $28 million related to the Emerade® development program in the U.S. (Developed Markets segment) based on analysis of feedback received from the FDA, and such program was terminated in the U.S. In the third quarter of 2015, the Company wrote off an IPR&D asset of $90 million related to the Rifaximin SSD development program (Developed Markets segment) based on analysis of Phase 2 study data, and the program was subsequently terminated. In the second quarter of 2015, the Company wrote off an IPR&D asset of $12 million related to the Arestin ® Peri-Implantitis development program (Developed Markets segment), resulting from analysis of Phase 3 study data. 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 (loss) income for the respective periods. (3) Represents the corporate trademark, related to the acquisition of Bausch & Lomb Holdings Incorporated (‘‘B&L’’) in August 2013, which has an indefinite useful life and is therefore not amortized. |
Schedule of estimated aggregate amortization expense for each of the five succeeding years | Estimated aggregate amortization expense, as of June 30, 2016 , for each of the five succeeding years ending December 31 is as follows: 2016 2017 2018 2019 2020 Amortization expense (1) $ 2,666.4 $ 2,583.9 $ 2,454.5 $ 2,327.6 $ 2,120.4 ____________________________________ (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 in the six-month period ended June 30, 2016 were as follows: Developed Markets Emerging Markets Total Balance, January 1, 2016 $ 16,141.3 $ 2,411.5 $ 18,552.8 Additions 0.7 — 0.7 Divestiture (1) (36.2 ) — (36.2 ) Allocations to assets held for sale (2) (37.1 ) — (37.1 ) Foreign exchange and other 45.0 (13.4 ) 31.6 Balance, June 30, 2016 $ 16,113.7 $ 2,398.1 $ 18,511.8 ____________________________________ (1) See Note 5 for additional information regarding the divestiture of a portfolio of neurology medical device products to Stryker Corporation. (2) Relates to the reclassification of goodwill to assets held for sale in the second quarter of 2016 related to the divestiture of Ruconest®, refer to Note 19 for further details. |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | A summary of the Company’s consolidated long-term debt as of June 30, 2016 and December 31, 2015 is outlined in the table below: Maturity Date As of As of Revolving Credit Facility (1) April 2018 $ 1,350.0 $ 250.0 Series A-1 Tranche A Term Loan Facility (1) April 2016 — 140.4 Series A-2 Tranche A Term Loan Facility (1) April 2016 — 137.3 Series A-3 Tranche A Term Loan Facility (1) October 2018 1,424.1 1,881.5 Series A-4 Tranche A Term Loan Facility (1) April 2020 835.6 951.3 Series D-2 Tranche B Term Loan Facility (1) February 2019 1,053.1 1,087.5 Series C-2 Tranche B Term Loan Facility (1) December 2019 808.9 835.1 Series E-1 Tranche B Term Loan Facility (1) August 2020 2,445.7 2,531.2 Series F Tranche B Term Loan Facility (1) April 2022 3,879.5 4,055.8 Senior Notes: 7.00% October 2020 688.2 688.0 6.75% August 2021 646.4 646.1 7.25% July 2022 542.7 542.1 6.375% October 2020 2,228.9 2,226.5 6.75% August 2018 1,590.9 1,588.8 7.50% July 2021 1,611.1 1,609.7 5.625% December 2021 893.8 893.2 5.50% March 2023 991.3 990.6 5.375% March 2020 1,982.2 1,979.9 5.875% May 2023 3,217.3 3,215.0 4.50% (2) May 2023 1,649.1 1,611.8 6.125% April 2025 3,216.2 3,214.3 Other (3) Various 12.3 12.3 31,067.3 31,088.4 Less current portion (294.1 ) (823.0 ) Total long-term debt $ 30,773.2 $ 30,265.4 ____________________________________ (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) Represents the U.S. dollar equivalent of Euro-denominated debt (discussed below). (3) Relates primarily to the debentures assumed in the acquisition of B&L. |
Schedule of effective interest rates for long-term debt | The effective rates of interest for the six-month period ended June 30, 2016 and the applicable margins available as of June 30, 2016 on the Company's borrowings under the Senior Secured Credit Facilities were as follows: Margins Effective Interest Rate Base Rate Borrowings LIBO Rate Borrowings Revolving Credit Facility 3.41 % 2.25 % 3.25 % Series A-1 Tranche A Term Loan Facility (1) 2.68 % 2.25 % 3.25 % Series A-2 Tranche A Term Loan Facility (1) 2.68 % 2.25 % 3.25 % Series A-3 Tranche A Term Loan Facility 3.20 % 2.25 % 3.25 % Series A-4 Tranche A Term Loan Facility 3.37 % 2.25 % 3.25 % Series D-2 Tranche B Term Loan Facility (2) 4.07 % 2.75 % 3.75 % Series C-2 Tranche B Term Loan Facility (2) 4.32 % 3.00 % 4.00 % Series E-1 Tranche B Term Loan Facility (2) 4.19 % 3.00 % 4.00 % Series F Tranche B Term Loan Facility (2) 4.44 % 3.25 % 4.25 % ____________________________________ (1) Fully repaid in the three-month period ended March 31, 2016. (2) Subject to a 1.75% base rate floor and a 0.75% LIBO rate floor. |
PENSION AND POSTRETIREMENT EM34
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
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 three-month and six-month periods ended June 30, 2016 and 2015 : Pension Benefit Plans Postretirement Benefit Plan U.S. Plan Non-U.S. Plans Three Months Ended June 30, 2016 2015 2016 2015 2016 2015 Service cost $ 0.6 $ 0.4 $ 0.7 $ 0.8 $ 0.1 $ 0.5 Interest cost 1.9 2.4 1.3 1.6 0.5 0.5 Expected return on plan assets (3.2 ) (3.6 ) (1.7 ) (2.0 ) — (0.1 ) Amortization of prior service credit — — (0.2 ) (0.2 ) (0.6 ) (0.7 ) Amortization of net loss — — 0.2 0.4 — — Net periodic (benefit) cost $ (0.7 ) $ (0.8 ) $ 0.3 $ 0.6 $ — $ 0.2 Pension Benefit Plans Postretirement Benefit Plan U.S. Plan Non-U.S. Plans Six Months Ended June 30, 2016 2015 2016 2015 2016 2015 Service cost $ 1.1 $ 0.8 $ 1.3 $ 1.6 $ 0.3 $ 1.0 Interest cost 3.9 4.8 2.7 3.2 0.9 1.0 Expected return on plan assets (6.5 ) (7.2 ) (3.4 ) (4.0 ) — (0.2 ) Amortization of prior service credit — — (0.3 ) (0.3 ) (1.2 ) (1.3 ) Amortization of net loss — — 0.3 0.7 — — Net periodic (benefit) cost $ (1.5 ) $ (1.6 ) $ 0.6 $ 1.2 $ — $ 0.5 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 restricted share units (“RSUs”) for the three-month and six-month periods ended June 30, 2016 and 2015 : Three Months Ended Six Months Ended 2016 2015 2016 2015 Stock options $ 3.5 $ 3.5 $ 6.7 $ 7.4 RSUs 30.2 22.4 90.5 53.5 Share-based compensation expense $ 33.7 $ 25.9 $ 97.2 $ 60.9 Research and development expenses $ 1.6 $ 1.5 $ 3.3 $ 3.0 Selling, general and administrative expenses 32.1 24.4 93.9 57.9 Share-based compensation expense $ 33.7 $ 25.9 $ 97.2 $ 60.9 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of shareholders' equity | Valeant Pharmaceuticals International, Inc. Shareholders Common Shares Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Valeant Pharmaceuticals International, Inc. Shareholders’ Equity Noncontrolling Interest Total Equity Shares (in millions) Amount Balance, January 1, 2015 (restated) 334.4 $ 8,349.2 $ 243.9 $ (2,397.8 ) $ (915.9 ) $ 5,279.4 $ 122.3 $ 5,401.7 Issuance of common stock (see below) 7.5 1,481.0 — — — 1,481.0 — 1,481.0 Common shares issued under share-based compensation plans 1.1 57.0 (34.9 ) — — 22.1 — 22.1 Repurchases of common shares (0.2 ) (6.4 ) — (43.6 ) — (50.0 ) — (50.0 ) Share-based compensation — — 60.9 — — 60.9 — 60.9 Employee withholding taxes related to share-based awards — — (61.5 ) — — (61.5 ) — (61.5 ) Excess tax benefits from share-based compensation — — 25.6 — — 25.6 — 25.6 Noncontrolling interest distributions — — — — — — (1.1 ) (1.1 ) 342.8 9,880.8 234.0 (2,441.4 ) (915.9 ) 6,757.5 121.2 6,878.7 Comprehensive loss: Net income (restated) — — — 44.7 — 44.7 2.2 46.9 Other comprehensive loss — — — — (375.6 ) (375.6 ) (0.4 ) (376.0 ) Total comprehensive loss (restated) (330.9 ) 1.8 (329.1 ) Balance, June 30, 2015 (restated) 342.8 $ 9,880.8 $ 234.0 $ (2,396.7 ) $ (1,291.5 ) $ 6,426.6 $ 123.0 $ 6,549.6 Balance, January 1, 2016 342.9 $ 9,897.4 $ 304.9 $ (2,749.7 ) $ (1,541.6 ) $ 5,911.0 $ 118.8 $ 6,029.8 Common shares issued under share-based compensation plans 0.1 17.5 (13.0 ) — — 4.5 — 4.5 Share-based compensation — — 97.2 — — 97.2 — 97.2 Employee withholding taxes related to share-based awards — — (7.3 ) — — (7.3 ) — (7.3 ) Excess tax expense from share-based compensation — — (1.4 ) — — (1.4 ) — (1.4 ) Noncontrolling interest distributions — — — — — — (9.1 ) (9.1 ) 343.0 9,914.9 380.4 (2,749.7 ) (1,541.6 ) 6,004.0 109.7 6,113.7 Comprehensive loss: Net loss — — — (676.0 ) — (676.0 ) (0.9 ) (676.9 ) Other comprehensive loss — — — — (32.1 ) (32.1 ) (1.6 ) (33.7 ) Total comprehensive loss (708.1 ) (2.5 ) (710.6 ) Balance, June 30, 2016 343.0 $ 9,914.9 $ 380.4 $ (3,425.7 ) $ (1,573.7 ) $ 5,295.9 $ 107.2 $ 5,403.1 |
ACCUMULATED OTHER COMPREHENSI37
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 as of June 30, 2016 and 2015, were as follows: Foreign Currency Translation Adjustment Pension Adjustment Total Balance, January 1, 2015 $ (886.5 ) $ (29.4 ) $ (915.9 ) Foreign currency translation adjustment (374.7 ) — (374.7 ) Pension adjustment (1) — (0.9 ) (0.9 ) Balance, June 30, 2015 $ (1,261.2 ) $ (30.3 ) $ (1,291.5 ) Balance, January 1, 2016 $ (1,529.4 ) $ (12.2 ) $ (1,541.6 ) Foreign currency translation adjustment (31.1 ) — (31.1 ) Pension adjustment (1) — (1.0 ) (1.0 ) Balance, June 30, 2016 $ (1,560.5 ) $ (13.2 ) $ (1,573.7 ) ____________________________________ (1) 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 (see Note 11). |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of earnings per share | (Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc. for the three-month and six-month periods ended June 30, 2016 and 2015 were calculated as follows: Three Months Ended Six Months Ended 2016 2015 2016 2015 Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. $ (302.3 ) $ (53.0 ) $ (676.0 ) $ 44.7 Basic weighted-average number of common shares outstanding 345.0 344.4 344.9 340.5 Diluted effect of stock options, RSUs and other (a) — — — 6.6 Diluted weighted-average number of common shares outstanding 345.0 344.4 344.9 347.1 (Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: Basic $ (0.88 ) $ (0.15 ) $ (1.96 ) $ 0.13 Diluted $ (0.88 ) $ (0.15 ) $ (1.96 ) $ 0.13 ____________________________________ (a) In the three-month periods ended June 30, 2016 and 2015 and the six-month period ended June 30, 2016, all potential common shares issuable for stock options and RSUs 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 and RSUs on the weighted-average number of common shares outstanding would have been as follows: Three Months Ended Six Months Ended 2016 2015 2016 Basic weighted-average number of common shares outstanding 345.0 344.4 344.9 Diluted effect of stock options, RSUs and other 4.1 6.5 4.5 Diluted weighted-average number of common shares outstanding 349.1 350.9 349.4 |
Schedule of antidilutive securities excluded from earnings per share | The dilutive effect of potential common shares issuable for stock options and RSUs on the weighted-average number of common shares outstanding would have been as follows: Three Months Ended Six Months Ended 2016 2015 2016 Basic weighted-average number of common shares outstanding 345.0 344.4 344.9 Diluted effect of stock options, RSUs and other 4.1 6.5 4.5 Diluted weighted-average number of common shares outstanding 349.1 350.9 349.4 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment revenues and profit | Segment revenues and profit for the three-month and six-month periods ended June 30, 2016 and 2015 were as follows: Three Months Ended Six Months Ended 2016 2015 2016 2015 Revenues: Developed Markets (1) $ 1,923.5 $ 2,237.6 $ 3,853.4 $ 3,981.2 Emerging Markets (2) 496.7 494.8 938.4 921.3 Total revenues 2,420.2 2,732.4 4,791.8 4,902.5 Segment profit: Developed Markets (3) 107.6 678.5 367.2 1,346.2 Emerging Markets (4) 48.4 78.3 66.7 132.9 Total segment profit 156.0 756.8 433.9 1,479.1 Corporate (5) (77.0 ) (61.5 ) (223.4 ) (130.7 ) Restructuring, integration and other costs (19.5 ) (143.4 ) (57.5 ) (198.4 ) In-process research and development impairments and other charges (17.4 ) (12.3 ) (17.9 ) (12.3 ) Acquisition-related costs — (9.5 ) (1.8 ) (23.4 ) Acquisition-related contingent consideration (6.9 ) (11.7 ) (9.3 ) (18.8 ) Other income (expense) 45.3 (176.9 ) 22.7 (183.0 ) Operating income 80.5 341.5 146.7 912.5 Interest income 2.1 0.9 3.0 1.8 Interest expense (472.5 ) (412.7 ) (899.1 ) (710.5 ) Loss on extinguishment of debt — — — (20.0 ) Foreign exchange and other 13.1 5.6 6.9 (65.5 ) (Loss) income before (recovery of) provision for income taxes $ (376.8 ) $ (64.7 ) $ (742.5 ) $ 118.3 ____________________________________ (1) Developed Markets segment revenues reflect incremental product sales revenue in the three-month and six-month periods ended June 30, 2016 from 2015 acquisitions of $24 million and $537 million , respectively, in the aggregate, primarily from the Salix Acquisition and the acquisition of certain assets of Dendreon. (2) Emerging Markets segment revenues reflect incremental product sales revenue in the three-month and six-month periods ended June 30, 2016 from 2015 acquisitions of $57 million and $115 million , respectively, in the aggregate, primarily from the Amoun Acquisition. (3) Developed Markets segment profit in the three-month and six-month periods ended June 30, 2016 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $808 million and $1.45 billion , respectively, in the aggregate, primarily from the Salix Acquisition, compared with $555 million and $870 million in the corresponding periods of 2015 . (4) Emerging Markets segment profit in the three-month and six-month periods ended June 30, 2016 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $87 million and $173 million , respectively, in the aggregate, compared with $76 million and $151 million in the corresponding periods of 2015 . (5) Corporate reflects non-restructuring-related share-based compensation expense of $20 million and $70 million in the three-month and six-month periods ended June 30, 2016 , respectively, compared with $14 million and $38 million in the corresponding periods of 2015 . The expense in the three-month and six-month periods ended June 30, 2016 , included a charge relating to the acceleration of vesting of the performance-based RSUs held by the Company's former Chief Executive Officer. See Note 12 for additional information. |
Schedule of total assets by segment | Total assets by segment as of June 30, 2016 and December 31, 2015 were as follows: As of As of Assets: Developed Markets $ 39,897.8 $ 41,182.7 Emerging Markets 6,693.6 6,897.4 46,591.4 48,080.1 Corporate 1,070.8 884.4 Total assets $ 47,662.2 $ 48,964.5 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | Jun. 30, 2016country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Countries in which Entity Operates (over 100 countries) | 100 |
RESTATEMENT OF PREVIOUSLY ISS41
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 15, 2014 | |
Revenue Recognition Correction | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reduction of revenue | $ 21 | $ 58 | |
Increase in net income | $ 24 | ||
Increase in diluted earnings per share (in dollars per share) | $ 0.07 | ||
Provision for managed care rebates | $ 21 | ||
Reduction of pre-tax profit | $ 39 | ||
Philidor | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Percentage of interest acquired | 100.00% |
RESTATEMENT OF PREVIOUSLY ISS42
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Income Statement (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | ||||
Product sales | $ 2,388.7 | $ 2,695 | $ 4,724.8 | $ 4,821.1 |
Other revenues | 31.5 | 37.4 | 67 | 81.4 |
Total revenues | 2,420.2 | 2,732.4 | 4,791.8 | 4,902.5 |
Operating Expenses | ||||
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | 647.3 | 669.9 | 1,267.5 | 1,177.8 |
Cost of other revenues | 10.5 | 15.2 | 20.2 | 29.5 |
Selling, general and administrative | 671.5 | 685.5 | 1,484.1 | 1,259.3 |
Research and development | 124.3 | 81.1 | 227.4 | 136.9 |
Amortization and impairments of finite-lived intangible assets | 887.6 | 585.4 | 1,582.1 | 950.6 |
Restructuring, integration and other costs | 19.5 | 143.4 | 57.5 | 198.4 |
In-process research and development impairments and other charges | 17.4 | 12.3 | 17.9 | 12.3 |
Acquisition-related costs | 0 | 9.5 | 1.8 | 23.4 |
Acquisition-related contingent consideration | 6.9 | 11.7 | 9.3 | 18.8 |
Other income (expense) | (45.3) | 176.9 | (22.7) | 183 |
Total expenses | 2,339.7 | 2,390.9 | 4,645.1 | 3,990 |
Operating income | 80.5 | 341.5 | 146.7 | 912.5 |
Interest income | 2.1 | 0.9 | 3 | 1.8 |
Interest expense | (472.5) | (412.7) | (899.1) | (710.5) |
Loss on extinguishment of debt | 0 | 0 | 0 | (20) |
Foreign exchange and other | 13.1 | 5.6 | 6.9 | (65.5) |
(Loss) income before (recovery of) provision for income taxes | (376.8) | (64.7) | (742.5) | 118.3 |
(Recovery of) provision for income taxes | (72.8) | (13.1) | (65.6) | 71.4 |
Net (loss) income | (304) | (51.6) | (676.9) | 46.9 |
Less: Net (loss) income attributable to noncontrolling interest | (1.7) | 1.4 | (0.9) | 2.2 |
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ (302.3) | $ (53) | $ (676) | $ 44.7 |
Loss per share attributable to Valeant Pharmaceuticals International, Inc.: | ||||
Basic (in usd per share) | $ (0.88) | $ (0.15) | $ (1.96) | $ 0.13 |
Diluted (in usd per share) | $ (0.88) | $ (0.15) | $ (1.96) | $ 0.13 |
Weighted-average common shares outstanding (in millions) | ||||
Basic (in shares) | 345 | 344.4 | 344.9 | 340.5 |
Diluted (in shares) | 345 | 344.4 | 344.9 | 347.1 |
Revenue Recognition Correction | ||||
Revenues | ||||
Product sales | $ 4,821.1 | |||
Other revenues | 81.4 | |||
Total revenues | 4,902.5 | |||
Operating Expenses | ||||
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | 1,177.8 | |||
Cost of other revenues | 29.5 | |||
Selling, general and administrative | 1,259.3 | |||
Research and development | 136.9 | |||
Amortization and impairments of finite-lived intangible assets | 950.6 | |||
Restructuring, integration and other costs | 198.4 | |||
In-process research and development impairments and other charges | 12.3 | |||
Acquisition-related costs | 23.4 | |||
Acquisition-related contingent consideration | 18.8 | |||
Other income (expense) | 183 | |||
Total expenses | 3,990 | |||
Operating income | 912.5 | |||
Interest income | 1.8 | |||
Interest expense | (710.5) | |||
Loss on extinguishment of debt | (20) | |||
Foreign exchange and other | (65.5) | |||
(Loss) income before (recovery of) provision for income taxes | 118.3 | |||
(Recovery of) provision for income taxes | 71.4 | |||
Net (loss) income | 46.9 | |||
Less: Net (loss) income attributable to noncontrolling interest | 2.2 | |||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ 44.7 | |||
Loss per share attributable to Valeant Pharmaceuticals International, Inc.: | ||||
Basic (in usd per share) | $ 0.13 | |||
Diluted (in usd per share) | $ 0.13 | |||
Weighted-average common shares outstanding (in millions) | ||||
Basic (in shares) | 340.5 | |||
Diluted (in shares) | 347.1 | |||
Revenue Recognition Correction | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Revenues | ||||
Product sales | $ 4,841.9 | |||
Other revenues | 81.4 | |||
Total revenues | 4,923.3 | |||
Operating Expenses | ||||
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | 1,230.3 | |||
Cost of other revenues | 29.5 | |||
Selling, general and administrative | 1,259.3 | |||
Research and development | 136.9 | |||
Amortization and impairments of finite-lived intangible assets | 950.6 | |||
Restructuring, integration and other costs | 198.4 | |||
In-process research and development impairments and other charges | 12.3 | |||
Acquisition-related costs | 19.3 | |||
Acquisition-related contingent consideration | 18.8 | |||
Other income (expense) | 183 | |||
Total expenses | 4,038.4 | |||
Operating income | 884.9 | |||
Interest income | 1.8 | |||
Interest expense | (710.5) | |||
Loss on extinguishment of debt | (20) | |||
Foreign exchange and other | (65.5) | |||
(Loss) income before (recovery of) provision for income taxes | 90.7 | |||
(Recovery of) provision for income taxes | 67.8 | |||
Net (loss) income | 22.9 | |||
Less: Net (loss) income attributable to noncontrolling interest | 2.2 | |||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ 20.7 | |||
Loss per share attributable to Valeant Pharmaceuticals International, Inc.: | ||||
Basic (in usd per share) | $ 0.06 | |||
Diluted (in usd per share) | $ 0.06 | |||
Weighted-average common shares outstanding (in millions) | ||||
Basic (in shares) | 340.5 | |||
Diluted (in shares) | 347.1 | |||
Revenue Recognition Correction | Restatement Adjustment | ||||
Revenues | ||||
Product sales | $ (20.8) | |||
Other revenues | 0 | |||
Total revenues | (20.8) | |||
Operating Expenses | ||||
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below) | (52.5) | |||
Cost of other revenues | 0 | |||
Selling, general and administrative | 0 | |||
Research and development | 0 | |||
Amortization and impairments of finite-lived intangible assets | 0 | |||
Restructuring, integration and other costs | 0 | |||
In-process research and development impairments and other charges | 0 | |||
Acquisition-related costs | 4.1 | |||
Acquisition-related contingent consideration | 0 | |||
Other income (expense) | 0 | |||
Total expenses | (48.4) | |||
Operating income | 27.6 | |||
Interest income | 0 | |||
Interest expense | 0 | |||
Loss on extinguishment of debt | 0 | |||
Foreign exchange and other | 0 | |||
(Loss) income before (recovery of) provision for income taxes | 27.6 | |||
(Recovery of) provision for income taxes | 3.6 | |||
Net (loss) income | 24 | |||
Less: Net (loss) income attributable to noncontrolling interest | 0 | |||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ 24 | |||
Loss per share attributable to Valeant Pharmaceuticals International, Inc.: | ||||
Basic (in usd per share) | $ 0.07 | |||
Diluted (in usd per share) | $ 0.07 |
RESTATEMENT OF PREVIOUSLY ISS43
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS - Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Cash Flows From Operating Activities | |||||
Net (loss) income | $ (304) | $ (51.6) | $ (676.9) | $ 46.9 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Depreciation and amortization, including impairments of finite-lived intangible assets | 1,681.9 | 1,042 | |||
Amortization and write-off of debt discounts and debt issuance costs | 56.6 | 103.2 | |||
In-process research and development impairments | 14.5 | 12.3 | |||
Acquisition accounting adjustment on inventory sold | 36.4 | 70.5 | |||
Acquisition-related contingent consideration | 9.3 | 18.8 | |||
Allowances for losses on accounts receivable and inventories | 52.5 | 26.8 | |||
Deferred income tax (benefit) expense | (164.6) | 37.7 | |||
(Reductions) additions to accrued legal settlements | (32.7) | 6.3 | |||
Payments of accrued legal settlements | (51.4) | (5.9) | |||
Share-based compensation | 97.2 | 60.9 | |||
Tax expense (benefit) from share-based compensation | 1.4 | (25.6) | |||
Foreign exchange (gain) loss | (15.5) | 65.6 | |||
Loss on extinguishment of debt | 0 | 0 | 0 | 20 | |
Payment of contingent consideration adjustments, including accretion | (7.9) | (12.1) | |||
Other | (9.5) | (9.9) | |||
Changes in operating assets and liabilities: | |||||
Trade receivables | (43.2) | (308.8) | |||
Inventories | (145.1) | (139.3) | |||
Prepaid expenses and other current assets | 161.7 | (163.5) | |||
Accounts payable, accrued and other liabilities | 34.1 | 55.7 | |||
Net cash provided by operating activities | 1,006.2 | 901.6 | |||
Net cash used in investing activities | (62.1) | (13,885.7) | |||
Net cash provided by financing activities | (692.3) | 13,631.6 | |||
Effect of exchange rate changes on cash and cash equivalents | 3.3 | (12.1) | |||
Net increase in cash and cash equivalents | 255.1 | 635.4 | |||
Cash and cash equivalents, beginning of period | 597.3 | 322.6 | $ 322.6 | ||
Cash and cash equivalents, end of period | $ 852.4 | 958 | 852.4 | 958 | 597.3 |
Non-Cash Investing and Financing Activities | |||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value (Restated) | 0 | (635.8) | |||
Acquisition of businesses, debt assumed | $ 0 | (3,123.1) | |||
Deferred Income Taxes Payable | |||||
Non-Cash Investing and Financing Activities | |||||
Reclassification adjustment | (22) | ||||
Accounts Payable and Accrued Liabilities | |||||
Non-Cash Investing and Financing Activities | |||||
Reclassification adjustment | 22 | ||||
Revenue Recognition Correction | |||||
Cash Flows From Operating Activities | |||||
Net (loss) income | 46.9 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Depreciation and amortization, including impairments of finite-lived intangible assets | 1,042 | ||||
Amortization and write-off of debt discounts and debt issuance costs | 103.2 | ||||
In-process research and development impairments | 12.3 | ||||
Acquisition accounting adjustment on inventory sold | 70.5 | ||||
Acquisition-related contingent consideration | 18.8 | ||||
Allowances for losses on accounts receivable and inventories | 26.8 | ||||
Deferred income tax (benefit) expense | 37.7 | ||||
(Reductions) additions to accrued legal settlements | 6.3 | ||||
Payments of accrued legal settlements | (5.9) | ||||
Share-based compensation | 60.9 | ||||
Tax expense (benefit) from share-based compensation | (25.6) | ||||
Foreign exchange (gain) loss | 65.6 | ||||
Loss on extinguishment of debt | 20 | ||||
Payment of contingent consideration adjustments, including accretion | (12.1) | ||||
Other | (9.9) | ||||
Changes in operating assets and liabilities: | |||||
Trade receivables | (308.8) | ||||
Inventories | (139.3) | ||||
Prepaid expenses and other current assets | (163.5) | ||||
Accounts payable, accrued and other liabilities | 55.7 | ||||
Net cash provided by operating activities | 901.6 | ||||
Net cash used in investing activities | (13,885.7) | ||||
Net cash provided by financing activities | 13,631.6 | ||||
Effect of exchange rate changes on cash and cash equivalents | (12.1) | ||||
Net increase in cash and cash equivalents | 635.4 | ||||
Cash and cash equivalents, beginning of period | 322.6 | 322.6 | |||
Cash and cash equivalents, end of period | 958 | 958 | |||
Non-Cash Investing and Financing Activities | |||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value (Restated) | (635.8) | ||||
Acquisition of businesses, debt assumed | (3,123.1) | ||||
Revenue Recognition Correction | Amounts Recognized as of Acquisition Date (as previously reported) | |||||
Cash Flows From Operating Activities | |||||
Net (loss) income | 22.9 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Depreciation and amortization, including impairments of finite-lived intangible assets | 1,042 | ||||
Amortization and write-off of debt discounts and debt issuance costs | 103.2 | ||||
In-process research and development impairments | 12.3 | ||||
Acquisition accounting adjustment on inventory sold | 70.5 | ||||
Acquisition-related contingent consideration | 18.8 | ||||
Allowances for losses on accounts receivable and inventories | 26.8 | ||||
Deferred income tax (benefit) expense | 34.1 | ||||
(Reductions) additions to accrued legal settlements | 6.3 | ||||
Payments of accrued legal settlements | (5.9) | ||||
Share-based compensation | 60.9 | ||||
Tax expense (benefit) from share-based compensation | (25.6) | ||||
Foreign exchange (gain) loss | 65.6 | ||||
Loss on extinguishment of debt | 20 | ||||
Payment of contingent consideration adjustments, including accretion | (12.1) | ||||
Other | (9.9) | ||||
Changes in operating assets and liabilities: | |||||
Trade receivables | (308.8) | ||||
Inventories | (86.8) | ||||
Prepaid expenses and other current assets | (163.5) | ||||
Accounts payable, accrued and other liabilities | 30.8 | ||||
Net cash provided by operating activities | 901.6 | ||||
Net cash used in investing activities | (13,885.7) | ||||
Net cash provided by financing activities | 13,631.6 | ||||
Effect of exchange rate changes on cash and cash equivalents | (12.1) | ||||
Net increase in cash and cash equivalents | 635.4 | ||||
Cash and cash equivalents, beginning of period | 322.6 | 322.6 | |||
Cash and cash equivalents, end of period | 958 | 958 | |||
Non-Cash Investing and Financing Activities | |||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value (Restated) | (674.6) | ||||
Acquisition of businesses, debt assumed | (3,123.1) | ||||
Revenue Recognition Correction | Restatement Adjustment | |||||
Cash Flows From Operating Activities | |||||
Net (loss) income | 24 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
Depreciation and amortization, including impairments of finite-lived intangible assets | 0 | ||||
Amortization and write-off of debt discounts and debt issuance costs | 0 | ||||
In-process research and development impairments | 0 | ||||
Acquisition accounting adjustment on inventory sold | 0 | ||||
Acquisition-related contingent consideration | 0 | ||||
Allowances for losses on accounts receivable and inventories | 0 | ||||
Deferred income tax (benefit) expense | 3.6 | ||||
Payments of accrued legal settlements | 0 | ||||
Share-based compensation | 0 | ||||
Tax expense (benefit) from share-based compensation | 0 | ||||
Foreign exchange (gain) loss | 0 | ||||
Loss on extinguishment of debt | 0 | ||||
Payment of contingent consideration adjustments, including accretion | 0 | ||||
Other | 0 | ||||
Changes in operating assets and liabilities: | |||||
Trade receivables | 0 | ||||
Inventories | (52.5) | ||||
Prepaid expenses and other current assets | 0 | ||||
Accounts payable, accrued and other liabilities | 24.9 | ||||
Net cash provided by operating activities | 0 | ||||
Net cash used in investing activities | 0 | ||||
Net cash provided by financing activities | 0 | ||||
Effect of exchange rate changes on cash and cash equivalents | 0 | ||||
Net increase in cash and cash equivalents | 0 | ||||
Cash and cash equivalents, beginning of period | 0 | $ 0 | |||
Cash and cash equivalents, end of period | $ 0 | 0 | |||
Non-Cash Investing and Financing Activities | |||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value (Restated) | 38.8 | ||||
Acquisition of businesses, debt assumed | $ 0 |
SIGNIFICANT ACCOUNTING POLICI44
SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Deferred Income Taxes Payable | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Reclassification adjustment | $ 22 |
Accounts Payable and Accrued Liabilities | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Reclassification adjustment | $ (22) |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) | Oct. 19, 2015USD ($) | Oct. 01, 2015USD ($) | Apr. 01, 2015USD ($)product$ / shares | Feb. 23, 2015USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Oct. 31, 2015USD ($) | Feb. 10, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||||||
Acquisition-related contingent consideration | $ 170,900,000 | $ 196,800,000 | $ 170,900,000 | $ 196,800,000 | ||||||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value | 0 | $ 635,800,000 | ||||||||||
Purchase price net of cash received | 18,500,000 | $ 13,885,900,000 | ||||||||||
Pro forma acquisition accounting adjustment on inventory sold subsequent to acquisition date | 24,000,000 | |||||||||||
Amoun | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total fair value of consideration transferred | $ 911,000,000 | |||||||||||
Acquisition of noncontrolling interest | 847,000,000 | |||||||||||
Acquisition-related contingent consideration | 75,000,000 | |||||||||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value | $ 64,000,000 | |||||||||||
Aggregate purchase price | 911,200,000 | 911,200,000 | ||||||||||
Sprout Pharmaceuticals, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total fair value of consideration transferred | $ 530,000,000 | $ 500,000,000 | ||||||||||
Acquisition-related contingent consideration | 422,000,000 | |||||||||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value | $ 495,000,000 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest | 1,450,000,000 | |||||||||||
Purchase obligation | 200,000,000 | |||||||||||
Commencement trigger, sales revenue | 1,000,000,000 | |||||||||||
Aggregate purchase price | $ 1,446,500,000 | |||||||||||
Salix | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total fair value of consideration transferred | $ 13,132,000,000 | |||||||||||
Number of products in product portfolio (more than) | product | 20 | |||||||||||
Par value per share of common stock (in dollars per share) | $ / shares | $ 0.001 | |||||||||||
Business Acquisition, Share Price | $ / shares | 173 | |||||||||||
Aggregate purchase price | 13,132,000,000 | 13,132,000,000 | ||||||||||
Range of potential milestone payment, high | 650,000,000 | 650,000,000 | ||||||||||
Salix | Restricted Stock | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Business Acquisition, Share Price | $ / shares | $ 173 | |||||||||||
Other 2015 Acquisitions | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total fair value of consideration transferred | 1,410,000,000 | |||||||||||
Acquisition of businesses, contingent and deferred consideration obligations at fair value | 186,000,000 | |||||||||||
Aggregate purchase price | 1,406,800,000 | 1,406,800,000 | ||||||||||
Dendreon | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquisition of noncontrolling interest | $ 495,000,000 | |||||||||||
Purchase price net of cash received | 415,000,000 | |||||||||||
Cash received from acquisition | 80,000,000 | |||||||||||
Stock consideration transferred | $ 50,000,000 | |||||||||||
Marathon | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Purchase price net of cash received | 17,000,000 | 27,000,000 | 35,000,000 | |||||||||
Aggregate purchase price | $ 286,000,000 | |||||||||||
Assumed liability owed to a third party | $ 64,000,000 | |||||||||||
Range of potential milestone payment, high | 200,000,000 | 200,000,000 | ||||||||||
Brodalumab [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Upfront payment | $ 100,000,000 | |||||||||||
Brodalumab [Member] | Pre-launch Milestone Payments | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Range of potential milestone payment, high | $ 150,000,000 | 170,000,000 | $ 150,000,000 | 170,000,000 | ||||||||
Brodalumab [Member] | Sales Based Milestone Payments | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Range of potential milestone payment, high | 175,000,000 | $ 175,000,000 | ||||||||||
Other (Income) Expense | Amoun | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments to employees | $ 12,000,000 |
ACQUISITIONS - Estimated fair v
ACQUISITIONS - Estimated fair values of the assets acquired and liabilities assumed (Details) - USD ($) | Oct. 19, 2015 | Oct. 01, 2015 | Apr. 01, 2015 | Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Feb. 10, 2015 |
Assets acquired and liabilities assumed | |||||||||
Goodwill | $ 18,511,800,000 | $ 18,511,800,000 | $ 18,552,800,000 | ||||||
Purchase price net of cash received | 18,500,000 | $ 13,885,900,000 | |||||||
Convertible Debt | |||||||||
Assets acquired and liabilities assumed | |||||||||
Long-term debt, including current portion | $ (3,123,100,000) | ||||||||
Convertible Debt | 1.5% Convertible Notes Due March 2019 | |||||||||
Assets acquired and liabilities assumed | |||||||||
Long-term debt, including current portion | $ (1,837,100,000) | ||||||||
Stated interest rate on debt (as a percent) | 1.50% | ||||||||
Estimated fair value of warrant transactions | 1,080,000,000 | ||||||||
Convertible Debt | 2.75% Convertible Notes Due May 2015 | |||||||||
Assets acquired and liabilities assumed | |||||||||
Long-term debt, including current portion | $ (1,286,000,000) | ||||||||
Stated interest rate on debt (as a percent) | 2.75% | ||||||||
Amoun | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 43,500,000 | 43,500,000 | |||||||
Accounts receivable, net | 64,200,000 | 64,200,000 | |||||||
Inventories | 37,900,000 | 37,900,000 | |||||||
Other current assets | 12,200,000 | 12,200,000 | |||||||
Property, plant and equipment, net | 95,400,000 | 95,400,000 | |||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 527,800,000 | 527,800,000 | |||||||
Acquired IPR&D | 17,400,000 | 17,400,000 | |||||||
Other non-current assets | 100,000 | 100,000 | |||||||
Current liabilities | (30,800,000) | (30,800,000) | |||||||
Deferred tax liabilities, net | (132,100,000) | (132,100,000) | |||||||
Other non-current liabilities | (7,200,000) | (7,200,000) | |||||||
Total identifiable net assets | 628,400,000 | 628,400,000 | |||||||
Goodwill | 282,800,000 | 282,800,000 | |||||||
Total fair value of consideration transferred | 911,200,000 | 911,200,000 | |||||||
Accounts receivable, gross | 66,000,000 | 66,000,000 | |||||||
Expected uncollectible of trade accounts receivable acquired | 2,000,000 | 2,000,000 | |||||||
Weighted- average useful lives (Years) | 9 years | ||||||||
Amoun | Amounts Recognized as of Acquisition Date (as previously reported) | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | $ 43,500,000 | ||||||||
Accounts receivable, net | 64,200,000 | ||||||||
Inventories | 37,900,000 | ||||||||
Other current assets | 12,200,000 | ||||||||
Property, plant and equipment, net | 96,400,000 | ||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 528,000,000 | ||||||||
Acquired IPR&D | 18,500,000 | ||||||||
Other non-current assets | 100,000 | ||||||||
Current liabilities | (30,800,000) | ||||||||
Deferred tax liabilities, net | (130,500,000) | ||||||||
Other non-current liabilities | (11,200,000) | ||||||||
Total identifiable net assets | 628,300,000 | ||||||||
Goodwill | 282,000,000 | ||||||||
Total fair value of consideration transferred | $ 910,300,000 | ||||||||
Amoun | Measurement Period Adjustments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 0 | 0 | |||||||
Accounts receivable, net | 0 | 0 | |||||||
Inventories | 0 | 0 | |||||||
Other current assets | 0 | 0 | |||||||
Property, plant and equipment, net | (1,000,000) | (1,000,000) | |||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | (200,000) | (200,000) | |||||||
Acquired IPR&D | (1,100,000) | (1,100,000) | |||||||
Other non-current assets | 0 | 0 | |||||||
Current liabilities | 0 | 0 | |||||||
Deferred tax liabilities, net | (1,600,000) | (1,600,000) | |||||||
Other non-current liabilities | 4,000,000 | 4,000,000 | |||||||
Total identifiable net assets | 100,000 | 100,000 | |||||||
Goodwill | 800,000 | 800,000 | |||||||
Total fair value of consideration transferred | 900,000 | 900,000 | |||||||
Amoun | Product brands | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 490,700,000 | 490,700,000 | |||||||
Weighted- average useful lives (Years) | 9 years | ||||||||
Amoun | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | $ 490,800,000 | ||||||||
Amoun | Product brands | Measurement Period Adjustments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | (100,000) | (100,000) | |||||||
Sprout Pharmaceuticals, Inc. | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | $ 26,600,000 | ||||||||
Inventories | 11,000,000 | ||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 993,700,000 | ||||||||
Other non-current assets | 1,600,000 | ||||||||
Current liabilities | (4,400,000) | ||||||||
Deferred income taxes, net | (351,900,000) | ||||||||
Total identifiable net assets | 676,600,000 | ||||||||
Goodwill | 769,900,000 | ||||||||
Total fair value of consideration transferred | $ 1,446,500,000 | ||||||||
Sprout Pharmaceuticals, Inc. | Product brands | |||||||||
Assets acquired and liabilities assumed | |||||||||
Weighted- average useful lives (Years) | 11 years | ||||||||
Salix | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 113,700,000 | ||||||||
Inventories | 232,600,000 | ||||||||
Other current assets | 1,410,400,000 | ||||||||
Property, plant and equipment, net | 24,300,000 | ||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 6,756,300,000 | ||||||||
Acquired IPR&D | 5,182,900,000 | ||||||||
Current liabilities | (1,939,200,000) | ||||||||
Deferred tax liabilities, net | (3,730,000,000) | ||||||||
Contingent consideration, short term portion | (334,100,000) | ||||||||
Long-term debt, including current portion | (3,123,100,000) | ||||||||
Deferred income taxes, net | (3,427,900,000) | ||||||||
Other non-current liabilities | (43,300,000) | ||||||||
Total identifiable net assets | 4,852,600,000 | ||||||||
Goodwill | 8,279,400,000 | ||||||||
Total fair value of consideration transferred | 13,132,000,000 | ||||||||
Weighted- average useful lives (Years) | 11 years | ||||||||
Inventory adjustments | $ 108,000,000 | ||||||||
Estimated fair value of derivatives | 1,270,000,000 | ||||||||
Estimated insurance recoveries | 80,000,000 | ||||||||
Accrual for potential losses and legal costs | 336,000,000 | ||||||||
Accrual for returns and rebates | 375,000,000 | ||||||||
Range of potential milestone payment, high | 650,000,000 | ||||||||
Deferred tax assets | 303,000,000 | ||||||||
Salix | Amounts Recognized as of Acquisition Date (as previously reported) | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 113,700,000 | ||||||||
Inventories | 233,200,000 | ||||||||
Other current assets | 1,400,300,000 | ||||||||
Property, plant and equipment, net | 24,300,000 | ||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 6,756,300,000 | ||||||||
Acquired IPR&D | 5,366,800,000 | ||||||||
Current liabilities | (1,764,200,000) | ||||||||
Contingent consideration, short term portion | (327,900,000) | ||||||||
Long-term debt, including current portion | (3,123,100,000) | ||||||||
Deferred income taxes, net | (3,512,000,000) | ||||||||
Other non-current liabilities | (7,300,000) | ||||||||
Total identifiable net assets | 5,160,100,000 | ||||||||
Goodwill | 7,971,900,000 | ||||||||
Total fair value of consideration transferred | $ 13,132,000,000 | ||||||||
Salix | Measurement Period Adjustments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 0 | ||||||||
Inventories | (600,000) | ||||||||
Other current assets | 10,100,000 | ||||||||
Property, plant and equipment, net | 0 | ||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 0 | ||||||||
Acquired IPR&D | (183,900,000) | ||||||||
Current liabilities | (175,000,000) | ||||||||
Contingent consideration, short term portion | (6,200,000) | ||||||||
Long-term debt, including current portion | 0 | ||||||||
Deferred income taxes, net | 84,100,000 | ||||||||
Other non-current liabilities | (36,000,000) | ||||||||
Total identifiable net assets | (307,500,000) | ||||||||
Goodwill | 307,500,000 | ||||||||
Total fair value of consideration transferred | 0 | ||||||||
Salix | Development and Sales Based Milestones | |||||||||
Assets acquired and liabilities assumed | |||||||||
Range of potential milestone payment, high | 250,000,000 | ||||||||
Salix | Xifaxan | |||||||||
Assets acquired and liabilities assumed | |||||||||
IPR&D asset fair value | 4,790,000,000 | ||||||||
Salix | Oral Relistor | |||||||||
Assets acquired and liabilities assumed | |||||||||
IPR&D asset fair value | $ 304,000,000 | ||||||||
Salix | Acquired IPR&D | |||||||||
Assets acquired and liabilities assumed | |||||||||
Weighted- average useful lives (Years) | 10 years | ||||||||
Salix | Acquired IPR&D | Maximum | |||||||||
Assets acquired and liabilities assumed | |||||||||
Fair value discount rate | 9.50% | ||||||||
Salix | Acquired IPR&D | Minimum | |||||||||
Assets acquired and liabilities assumed | |||||||||
Fair value discount rate | 11.00% | ||||||||
Salix | Convertible Debt | 1.5% Convertible Notes Due March 2019 | |||||||||
Assets acquired and liabilities assumed | |||||||||
Stated interest rate on debt (as a percent) | 1.50% | 1.50% | |||||||
Salix | Convertible Debt | 2.75% Convertible Notes Due May 2015 | |||||||||
Assets acquired and liabilities assumed | |||||||||
Stated interest rate on debt (as a percent) | 2.75% | ||||||||
Salix | Product brands | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | $ 6,089,600,000 | ||||||||
Weighted- average useful lives (Years) | 10 years | ||||||||
Salix | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | $ 6,088,300,000 | ||||||||
Salix | Product brands | Measurement Period Adjustments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 1,300,000 | ||||||||
Salix | Acquired IPR&D | |||||||||
Assets acquired and liabilities assumed | |||||||||
Weighted- average useful lives (Years) | 12 years | ||||||||
Brodalumab [Member] | Sales Based Milestone Payments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Range of potential milestone payment, high | 175,000,000 | ||||||||
Brodalumab [Member] | Sales Based Milestone Payments | Forecast | |||||||||
Assets acquired and liabilities assumed | |||||||||
Payments related to various milestones | $ 50,000,000 | ||||||||
Other 2015 Acquisitions | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 92,200,000 | 92,200,000 | |||||||
Accounts receivable, net | 46,500,000 | 46,500,000 | |||||||
Inventories | 140,300,000 | 140,300,000 | |||||||
Other current assets | 19,700,000 | 19,700,000 | |||||||
Property, plant and equipment, net | 79,800,000 | 79,800,000 | |||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 1,078,400,000 | 1,078,400,000 | |||||||
Acquired IPR&D | 53,800,000 | 53,800,000 | |||||||
Other non-current assets | 2,900,000 | 2,900,000 | |||||||
Current liabilities | (128,000,000) | (128,000,000) | |||||||
Deferred tax asset, net | 6,100,000 | 6,100,000 | |||||||
Non-current liabilities | (117,200,000) | (117,200,000) | |||||||
Long-term debt, including current portion | (6,100,000) | (6,100,000) | |||||||
Total identifiable net assets | 1,268,400,000 | 1,268,400,000 | |||||||
Goodwill | 138,400,000 | 138,400,000 | |||||||
Total fair value of consideration transferred | 1,406,800,000 | 1,406,800,000 | |||||||
Accounts receivable, gross | 51,000,000 | $ 51,000,000 | |||||||
Weighted- average useful lives (Years) | 8 years | ||||||||
Allowance for doubtful accounts | 4,000,000 | $ 4,000,000 | |||||||
Other 2015 Acquisitions | Amounts Recognized as of Acquisition Date (as previously reported) | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 92,200,000 | ||||||||
Accounts receivable, net | 49,500,000 | ||||||||
Inventories | 142,900,000 | ||||||||
Other current assets | 20,200,000 | ||||||||
Property, plant and equipment, net | 94,600,000 | ||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 1,121,600,000 | ||||||||
Acquired IPR&D | 57,500,000 | ||||||||
Other non-current assets | 2,900,000 | ||||||||
Current liabilities | (123,900,000) | ||||||||
Deferred tax liabilities, net | (54,700,000) | ||||||||
Non-current liabilities | (117,400,000) | ||||||||
Long-term debt, including current portion | (6,100,000) | ||||||||
Total identifiable net assets | 1,279,300,000 | ||||||||
Goodwill | 141,900,000 | ||||||||
Total fair value of consideration transferred | 1,421,200,000 | ||||||||
Other 2015 Acquisitions | Measurement Period Adjustments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Cash and cash equivalents | 0 | 0 | |||||||
Accounts receivable, net | (3,000,000) | (3,000,000) | |||||||
Inventories | (2,600,000) | (2,600,000) | |||||||
Other current assets | (500,000) | (500,000) | |||||||
Property, plant and equipment, net | (14,800,000) | (14,800,000) | |||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | (43,200,000) | (43,200,000) | |||||||
Acquired IPR&D | (3,700,000) | (3,700,000) | |||||||
Other non-current assets | 0 | 0 | |||||||
Current liabilities | (4,100,000) | (4,100,000) | |||||||
Deferred tax asset, net | 60,800,000 | 60,800,000 | |||||||
Non-current liabilities | 200,000 | 200,000 | |||||||
Long-term debt, including current portion | 0 | 0 | |||||||
Total identifiable net assets | (10,900,000) | (10,900,000) | |||||||
Goodwill | (3,500,000) | (3,500,000) | |||||||
Total fair value of consideration transferred | (14,400,000) | (14,400,000) | |||||||
Other 2015 Acquisitions | Product brands | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 735,200,000 | $ 735,200,000 | |||||||
Weighted- average useful lives (Years) | 7 years | ||||||||
Other 2015 Acquisitions | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | 741,200,000 | ||||||||
Other 2015 Acquisitions | Product brands | Measurement Period Adjustments | |||||||||
Assets acquired and liabilities assumed | |||||||||
Identifiable intangible assets, excluding acquired in-process research and development (IPR&D) | (6,000,000) | $ (6,000,000) | |||||||
Marathon | |||||||||
Assets acquired and liabilities assumed | |||||||||
Current liabilities | (41,000,000) | ||||||||
Non-current liabilities | (46,000,000) | ||||||||
Total fair value of consideration transferred | $ 286,000,000 | ||||||||
Range of potential milestone payment, high | 200,000,000 | ||||||||
Purchase price net of cash received | $ 17,000,000 | $ 27,000,000 | $ 35,000,000 |
ACQUISITIONS - Identifiable int
ACQUISITIONS - Identifiable intangible assets (Details) - USD ($) $ in Millions | Oct. 19, 2015 | Apr. 01, 2015 | Jun. 30, 2016 | Dec. 31, 2015 |
Amoun | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 9 years | |||
Total identifiable intangible assets acquired | $ 527.8 | |||
Amoun | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 528 | |||
Amoun | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | (0.2) | |||
Amoun | Product brands | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 9 years | |||
Total identifiable intangible assets acquired | 490.7 | |||
Amoun | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 490.8 | |||
Amoun | Product brands | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | (0.1) | |||
Amoun | Corporate brand | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 15 years | |||
Total identifiable intangible assets acquired | 37.1 | |||
Amoun | Corporate brand | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 37.2 | |||
Amoun | Corporate brand | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ (0.1) | |||
Salix | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 11 years | |||
Total identifiable intangible assets acquired | $ 6,756.3 | |||
Salix | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 6,756.3 | |||
Salix | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 0 | |||
Salix | Product brands | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 10 years | |||
Total identifiable intangible assets acquired | 6,089.6 | |||
Salix | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 6,088.3 | |||
Salix | Product brands | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 1.3 | |||
Salix | Corporate brand | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 20 years | |||
Total identifiable intangible assets acquired | 666.7 | |||
Salix | Corporate brand | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 668 | |||
Salix | Corporate brand | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | (1.3) | |||
Other 2015 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 8 years | |||
Total identifiable intangible assets acquired | $ 1,078.4 | |||
Other 2015 Acquisitions | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 1,121.6 | |||
Other 2015 Acquisitions | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ (43.2) | |||
Other 2015 Acquisitions | Product brands | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 7 years | |||
Total identifiable intangible assets acquired | $ 735.2 | |||
Other 2015 Acquisitions | Product brands | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 741.2 | |||
Other 2015 Acquisitions | Product brands | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ (6) | |||
Other 2015 Acquisitions | Corporate brand | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 16 years | |||
Total identifiable intangible assets acquired | $ 6.6 | |||
Other 2015 Acquisitions | Corporate brand | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 6.6 | |||
Other 2015 Acquisitions | Corporate brand | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 0 | |||
Other 2015 Acquisitions | Product rights | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 3 years | |||
Total identifiable intangible assets acquired | $ 42 | |||
Other 2015 Acquisitions | Product rights | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 42.7 | |||
Other 2015 Acquisitions | Product rights | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ (0.7) | |||
Other 2015 Acquisitions | Partner relationships | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 8 years | |||
Total identifiable intangible assets acquired | $ 7.8 | |||
Other 2015 Acquisitions | Partner relationships | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 7.8 | |||
Other 2015 Acquisitions | Partner relationships | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 0 | |||
Other 2015 Acquisitions | Technology/know-how | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 10 years | |||
Total identifiable intangible assets acquired | $ 284.8 | |||
Other 2015 Acquisitions | Technology/know-how | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | 321.3 | |||
Other 2015 Acquisitions | Technology/know-how | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ (36.5) | |||
Other 2015 Acquisitions | Other | ||||
Business Acquisition [Line Items] | ||||
Weighted- Average Useful Lives (Years) | 6 years | |||
Total identifiable intangible assets acquired | $ 2 | |||
Other 2015 Acquisitions | Other | Amounts Recognized as of Acquisition Date (as previously reported) | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 2 | |||
Other 2015 Acquisitions | Other | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Total identifiable intangible assets acquired | $ 0 |
ACQUISITIONS - Fair Value of Co
ACQUISITIONS - Fair Value of Consideration Transferred (Details) - Salix $ / shares in Units, shares in Millions, $ in Millions | Apr. 01, 2015USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Number of shares of Salix common stock outstanding as of acquisition date | shares | 64.3 |
Per share consideration (in usd per share) | $ / shares | $ 173 |
Fair value of equity consideration transferred | $ 11,329 |
Cash consideration paid for Salix’s restricted stock that was accelerated at the closing of the Salix Acquisition | (164.5) |
Total fair value of consideration transferred | 13,132 |
Term Loan B Facility | |
Business Acquisition [Line Items] | |
Payment of acquiree debt | 1,125.2 |
6.00% Senior Notes due 2021 | |
Business Acquisition [Line Items] | |
Payment of acquiree debt | $ 842.3 |
Stated interest rate on debt (as a percent) | 6.00% |
Stock options | |
Business Acquisition [Line Items] | |
Number of outstanding equity awards | shares | 0.1 |
Fair value of equity canceled and exchanged for cash | $ 10.1 |
Restricted Stock | |
Business Acquisition [Line Items] | |
Number of outstanding equity awards | shares | 1.1 |
Fair value of equity canceled and exchanged for cash | $ 195 |
Cash consideration paid for Salix’s restricted stock that was accelerated at the closing of the Salix Acquisition | (165) |
Common Shares | |
Business Acquisition [Line Items] | |
Fair value of common stock | $ 11,123.9 |
ACQUISITIONS - Fair Value of De
ACQUISITIONS - Fair Value of Debt Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Apr. 01, 2015 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, amount recognized as of acquisition date | $ 3,123.1 | |
Convertible Debt | 1.5% Convertible Notes Due March 2019 | ||
Debt Instrument [Line Items] | ||
Long-term debt, amount recognized as of acquisition date | $ 1,837.1 | |
Stated interest rate on debt (as a percent) | 1.50% | |
Convertible Debt | 2.75% Convertible Notes Due May 2015 | ||
Debt Instrument [Line Items] | ||
Long-term debt, amount recognized as of acquisition date | $ 1,286 | |
Stated interest rate on debt (as a percent) | 2.75% | |
Salix | ||
Debt Instrument [Line Items] | ||
Long-term debt, amount recognized as of acquisition date | $ 3,123.1 | |
Salix | Convertible Debt | 1.5% Convertible Notes Due March 2019 | ||
Debt Instrument [Line Items] | ||
Stated interest rate on debt (as a percent) | 1.50% | 1.50% |
Salix | Convertible Debt | 2.75% Convertible Notes Due May 2015 | ||
Debt Instrument [Line Items] | ||
Stated interest rate on debt (as a percent) | 2.75% |
ACQUISITIONS - Pro forma impact
ACQUISITIONS - Pro forma impact of business combinations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
Pro forma of consolidated results of operations | ||
Revenues | $ 2,805 | $ 5,076.2 |
Net loss attributable to Valeant Pharmaceuticals International, Inc. | $ (30.1) | $ (299.9) |
Loss per share attributable to Valeant Pharmaceuticals International, Inc.: | ||
Basic (in usd per share) | $ (0.09) | $ (0.87) |
Diluted (in usd per share) | $ (0.09) | $ (0.87) |
RESTRUCTURING, INTEGRATION AN51
RESTRUCTURING, INTEGRATION AND OTHER COSTS - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)employee | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Cost-rationalization and integration initiatives | ||||||
Acquisition-related costs, since acquisition date | $ 0 | $ 9.5 | $ 1.8 | $ 23.4 | ||
Salix | ||||||
Cost-rationalization and integration initiatives | ||||||
Estimated integration costs | 300 | |||||
Restructuring and acquisition-related costs since acquisition date | 240 | |||||
Integration expenses related to acquisition, since acquisition date | 125 | |||||
Restructuring expenses related to acquisition, since acquisition date | 100 | |||||
Acquisition-related costs, since acquisition date | $ 15 | |||||
Approximate number of employees expected to be terminated | employee | 475 | |||||
Integration/other charges incurred | $ 15 | 29 | ||||
Payments for integration costs | 19 | 16 | ||||
Restructuring payments | $ 11.4 | $ 11.4 | $ 58.1 | |||
Other Restructuring, Integration-related and Other Costs | ||||||
Cost-rationalization and integration initiatives | ||||||
Integration/other charges incurred | 1 | |||||
Incurred restructuring costs | 34 | 87 | ||||
Restructuring costs integration consulting duplicate labor transition service and other | 24 | 60 | ||||
Severance costs | 6 | 23 | ||||
Business exit costs | 4 | 3 | ||||
Restructuring payments | $ 39 | $ 101 |
RESTRUCTURING, INTEGRATION AN52
RESTRUCTURING, INTEGRATION AND OTHER COSTS (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Restructuring reserve | ||||||
Costs incurred and/or charged to expense | $ 19.5 | $ 143.4 | $ 57.5 | $ 198.4 | ||
Salix | ||||||
Restructuring reserve | ||||||
Balance at the beginning of the period | 32.6 | $ 35.6 | 35.6 | 0 | $ 0 | |
Costs incurred and/or charged to expense | (0.3) | 8.4 | 91.5 | |||
Cash payments | (11.4) | (11.4) | (58.1) | |||
Non-cash adjustments | 2.2 | |||||
Balance at the end of the period | 20.9 | 32.6 | 20.9 | 35.6 | ||
Salix | Employee Termination Costs - Severance and Related Benefits | ||||||
Restructuring reserve | ||||||
Balance at the beginning of the period | 24.6 | 35 | 35 | 0 | 0 | |
Costs incurred and/or charged to expense | (1.2) | 0.7 | 82 | 90.6 | ||
Cash payments | (10.2) | (11.1) | (26) | (57.8) | ||
Non-cash adjustments | 2.2 | |||||
Balance at the end of the period | 13.2 | 24.6 | 13.2 | 35 | ||
Salix | Contract Termination, Facility Closure and Other Costs | ||||||
Restructuring reserve | ||||||
Balance at the beginning of the period | 8 | 0.6 | 0.6 | $ 0 | 0 | |
Costs incurred and/or charged to expense | 0.9 | 7.7 | 0.9 | |||
Cash payments | (1.2) | (0.3) | (0.3) | |||
Non-cash adjustments | 0 | |||||
Balance at the end of the period | $ 7.7 | $ 8 | $ 7.7 | $ 0.6 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Liabilities: | ||
Highly liquid investments, maturity period (in months) | 3 months | |
Recurring basis | ||
Assets: | ||
Cash equivalents | $ 416.6 | $ 167.2 |
Liabilities: | ||
Acquisition-related contingent consideration | (1,074.6) | (1,155.9) |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash equivalents | 344.2 | 156.1 |
Liabilities: | ||
Acquisition-related contingent consideration | 0 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash equivalents | 72.4 | 11.1 |
Liabilities: | ||
Acquisition-related contingent consideration | 0 | 0 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Liabilities: | ||
Acquisition-related contingent consideration | $ (1,074.6) | $ (1,155.9) |
FAIR VALUE MEASUREMENTS (Deta54
FAIR VALUE MEASUREMENTS (Details 2) € in Millions | Mar. 27, 2015EUR (€) | Mar. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016EUR (€) | Dec. 31, 2015USD ($) |
Assets Measured at Fair Value on a Recurring Basis | |||||
Transfers between level 1 and level 2 | $ 0 | ||||
Significant Other Observable Inputs (Level 2) | Prepaid Expenses and Other Current Assets | |||||
Assets Measured at Fair Value on a Recurring Basis | |||||
Carrying value of time deposits | $ 1,000,000 | $ 16,000,000 | |||
4.50% Senior Notes due May 2023 | |||||
Assets Measured at Fair Value on a Recurring Basis | |||||
Aggregate principal amount of debt | € | € 1,500 | ||||
Stated interest rate on debt (as a percent) | 4.50% | 4.50% | 4.50% | ||
Foreign Exchange Forward | Foreign Exchange and Other | |||||
Assets Measured at Fair Value on a Recurring Basis | |||||
Foreign exchange contracts included on the Income Statement | $ 26,000,000 | ||||
Foreign Exchange Forward | Designated as Hedging Instrument | |||||
Assets Measured at Fair Value on a Recurring Basis | |||||
Foreign currency forward-exchange contract | € | € 1,530 |
FAIR VALUE MEASUREMENTS (Deta55
FAIR VALUE MEASUREMENTS (Details 3) - Acquisition-related contingent consideration $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | |
Balance at the beginning of the period | $ (1,155.9) |
Payments | 76.9 |
Net Unrealized Loss | (9.3) |
Foreign Exchange | 8 |
Adjustments | 5.7 |
Balance at the end of the period | $ (1,074.6) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 357.5 | $ 289.3 |
Work in process | 148.5 | 152.7 |
Finished goods | 830.7 | 814.6 |
Total Inventories | $ 1,336.7 | $ 1,256.6 |
INTANGIBLE ASSETS AND GOODWIL57
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | |
Finite-lived intangible assets: | |||||
Gross Carrying Amount | $ 27,731.6 | $ 28,186.7 | |||
Accumulated Amortization, Including Impairments | (8,680.6) | (7,411.6) | |||
Net Carrying Amount | 19,051 | 20,775.1 | |||
Total intangible assets | |||||
Gross Carrying Amount | 30,016.4 | 30,494.6 | |||
Net Carrying Amount | 21,335.8 | 23,083 | |||
Recognized impairment charge | 215 | $ 16 | 79 | ||
Tangible Asset Impairment Charges | 23 | ||||
Corporate brand | |||||
Finite-lived intangible assets: | |||||
Accumulated Amortization, Including Impairments | 0 | 0 | |||
Indefinite-lived intangible assets: | |||||
Indefinite-lived intangible assets | 1,697.5 | 1,697.5 | |||
IPR&D | |||||
Finite-lived intangible assets: | |||||
Accumulated Amortization, Including Impairments | 0 | 0 | |||
Indefinite-lived intangible assets: | |||||
Indefinite-lived intangible assets | 587.3 | 610.4 | |||
Total intangible assets | |||||
IPR&D write-off | 14 | 28 | $ 90 | $ 12 | |
Product brands | |||||
Finite-lived intangible assets: | |||||
Gross Carrying Amount | 21,774 | 22,082.8 | |||
Accumulated Amortization, Including Impairments | (6,291.5) | (5,236.4) | |||
Net Carrying Amount | 15,482.5 | 16,846.4 | |||
Corporate brand | |||||
Finite-lived intangible assets: | |||||
Gross Carrying Amount | 1,041.9 | 1,066.1 | |||
Accumulated Amortization, Including Impairments | (128.6) | (107.1) | |||
Net Carrying Amount | 913.3 | 959 | |||
Product rights | |||||
Finite-lived intangible assets: | |||||
Gross Carrying Amount | 4,305.9 | 4,339.9 | |||
Accumulated Amortization, Including Impairments | (1,954.8) | (1,711.7) | |||
Net Carrying Amount | 2,351.1 | 2,628.2 | |||
Partner relationships | |||||
Finite-lived intangible assets: | |||||
Gross Carrying Amount | 167.5 | 217.6 | |||
Accumulated Amortization, Including Impairments | (131.6) | (170.3) | |||
Net Carrying Amount | 35.9 | 47.3 | |||
Technology and other | |||||
Finite-lived intangible assets: | |||||
Gross Carrying Amount | 442.3 | 480.3 | |||
Accumulated Amortization, Including Impairments | (174.1) | (186.1) | |||
Net Carrying Amount | 268.2 | 294.2 | |||
Ezogabine Retigabine | |||||
Total intangible assets | |||||
Recognized impairment charge | $ 27 | ||||
Zelapar | |||||
Total intangible assets | |||||
Recognized impairment charge | $ 26 | ||||
Pharming Group N.V., North American Commercialization Rights to Ruconest | |||||
Total intangible assets | |||||
Impairment loss | 199 | ||||
Goodwill impairment loss | $ 37 |
INTANGIBLE ASSETS AND GOODWIL58
INTANGIBLE ASSETS AND GOODWILL (Details 2) $ in Millions | Jun. 30, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 2,666.4 |
2,017 | 2,583.9 |
2,018 | 2,454.5 |
2,019 | 2,327.6 |
2,020 | $ 2,120.4 |
INTANGIBLE ASSETS AND GOODWIL59
INTANGIBLE ASSETS AND GOODWILL (Details 3) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($)segmentunit | |
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 18,552.8 |
Additions | 0.7 |
Divestiture | (36.2) |
Allocations to assets held for sale | (37.1) |
Foreign exchange and other | 31.6 |
Balance at the end of the period | $ 18,511.8 |
Number of operating segments | segment | 2 |
Number of reportable segments | segment | 2 |
Hypothetical decrease to reporting unit fair value | 15.00% |
Developed Markets | |
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 16,141.3 |
Additions | 0.7 |
Divestiture | (36.2) |
Allocations to assets held for sale | (37.1) |
Foreign exchange and other | 45 |
Balance at the end of the period | $ 16,113.7 |
Number of reporting units | unit | 4 |
Emerging Markets | |
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 2,411.5 |
Additions | 0 |
Divestiture | 0 |
Allocations to assets held for sale | 0 |
Foreign exchange and other | (13.4) |
Balance at the end of the period | $ 2,398.1 |
Number of reporting units | unit | 3 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Millions | Jun. 30, 2016 | May 19, 2016 | Apr. 22, 2016 | Apr. 12, 2016 | Dec. 31, 2015 | Mar. 27, 2015 |
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | $ 31,067.3 | $ 31,088.4 | ||||
Less current portion | (294.1) | (823) | ||||
Total long-term debt | 30,773.2 | 30,265.4 | ||||
Series A-1 Tranche A Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 0 | 140.4 | ||||
Series A-2 Tranche A Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 0 | 137.3 | ||||
Series A-3 Tranche A Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 1,424.1 | 1,881.5 | ||||
Series A-4 Tranche Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 835.6 | 951.3 | ||||
Series D-2 Tranche B Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 1,053.1 | 1,087.5 | ||||
Series C-2 Tranche B Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 808.9 | 835.1 | ||||
Series E-1 Tranche B Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 2,445.7 | 2,531.2 | ||||
Series F Tranche B Term Loan Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | $ 3,879.5 | $ 4,055.8 | ||||
7.00% Senior Notes due in October 2020 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 7.00% | 7.00% | ||||
Total long-term debt | $ 688.2 | $ 688 | ||||
6.75% Senior Notes due in August 2021 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 6.75% | 6.75% | ||||
Total long-term debt | $ 646.4 | $ 646.1 | ||||
7.25% Senior Notes due in July 2022 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 7.25% | 7.25% | 7.25% | 7.25% | ||
Total long-term debt | $ 542.7 | $ 542.1 | ||||
6.375% Senior Notes due in October 2020 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 6.375% | 6.375% | 6.375% | |||
Total long-term debt | $ 2,228.9 | $ 2,226.5 | ||||
6.75% Senior Notes due in August 2018 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 6.75% | 6.75% | ||||
Total long-term debt | $ 1,590.9 | $ 1,588.8 | ||||
7.50% Senior Notes due in July 2021 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 7.50% | 7.50% | 7.50% | 7.50% | ||
Total long-term debt | $ 1,611.1 | $ 1,609.7 | ||||
5.625% Senior Notes due in December 2021 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 5.625% | 5.625% | ||||
Total long-term debt | $ 893.8 | $ 893.2 | ||||
5.50% Senior Notes due March 2023 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% | ||
Total long-term debt | $ 991.3 | $ 990.6 | ||||
5.375% Senior Notes due March 2020 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 5.375% | 5.375% | 5.375% | |||
Total long-term debt | $ 1,982.2 | $ 1,979.9 | ||||
5.875% Senior Notes due May 2023 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 5.875% | 5.875% | ||||
Total long-term debt | $ 3,217.3 | $ 3,215 | ||||
4.50% Senior Notes due May 2023 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 4.50% | 4.50% | 4.50% | |||
Total long-term debt | $ 1,649.1 | $ 1,611.8 | ||||
6.125% Senior Notes due April 2025 | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Stated interest rate on debt (as a percent) | 6.125% | 6.125% | ||||
Total long-term debt | $ 3,216.2 | $ 3,214.3 | ||||
Other | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | 12.3 | 12.3 | ||||
Revolving Credit Facility | ||||||
Long-term debt, net of unamortized debt discount | ||||||
Total long-term debt | $ 1,350 | $ 250 |
LONG-TERM DEBT (Details 2)
LONG-TERM DEBT (Details 2) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 31,067.3 | $ 31,088.4 |
Total fair value of long-term debt | 27,630 | $ 29,600 |
Voluntary prepayment | 1,270 | |
Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Voluntary prepayment | 1,150 | |
Prepayments related to asset sale proceeds | 62 | |
Additional voluntary payments | 275 | |
Mandatory excess cash flow payments | 125 | |
Net borrowings | 1,100 | |
Payments Scheduled March and June 2016 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Principal reduction | 283 | |
Payments Scheduled September and December 2016 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Principal reduction | 273 | |
Series A-1 and A-2 Tranche A Term Loan Facilities | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Principal reduction | $ 260 |
LONG-TERM DEBT - Credit Agreeme
LONG-TERM DEBT - Credit Agreement Amendment (Details) - Amended Credit Agreement | Apr. 11, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||
Interest coverage ratio | 2.75 | 3 |
Costs, fees and expenses permitted to be added back to earnings before EBITDA | $ 175,000,000 | |
Restructuring charges permitted to be added back to earnings before EBITDA | 200,000,000 | $ 125,000,000 |
Fees and expenses permitted to be added back to earnings before EBITDA | $ 150,000,000 | $ 75,000,000 |
Leverage ratio | 4.50 | |
Aggregate cap on acquisitions | $ 250,000,000 | |
Transaction cap, leverage ratio | 4 | |
Interest rate increase (decrease) | 1.00% |
LONG-TERM DEBT - Notices of Def
LONG-TERM DEBT - Notices of Default Under Senior Note Indentures (Details) | Jun. 30, 2016 | May 19, 2016 | Apr. 22, 2016 | Apr. 12, 2016 | Dec. 31, 2015 |
5.50% Senior Notes due March 2023 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate on debt (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% | |
5.375% Senior Notes due March 2020 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate on debt (as a percent) | 5.375% | 5.375% | 5.375% | ||
7.50% Senior Notes due in July 2021 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate on debt (as a percent) | 7.50% | 7.50% | 7.50% | 7.50% | |
6.375% Senior Notes due in October 2020 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate on debt (as a percent) | 6.375% | 6.375% | 6.375% | ||
7.25% Senior Notes due in July 2022 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate on debt (as a percent) | 7.25% | 7.25% | 7.25% | 7.25% |
LONG-TERM DEBT - Senior Secured
LONG-TERM DEBT - Senior Secured Credit Facilities Interest Rate Schedule (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 3.41% |
Revolving Credit Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 2.25% |
Revolving Credit Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.25% |
Series A-1 Tranche A Term Loan Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 2.68% |
Series A-1 Tranche A Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 2.25% |
Series A-1 Tranche A Term Loan Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.25% |
Series A-2 Tranche A Term Loan Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 2.68% |
Series A-2 Tranche A Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 2.25% |
Series A-2 Tranche A Term Loan Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.25% |
Series A-3 Tranche A Term Loan Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 3.20% |
Series A-3 Tranche A Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 2.25% |
Series A-3 Tranche A Term Loan Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.25% |
Series A-4 Tranche Term Loan Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 3.37% |
Series A-4 Tranche Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 2.25% |
Series A-4 Tranche Term Loan Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.25% |
Term Loan B Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 4.07% |
Term Loan B Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 2.75% |
Term Loan B Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.75% |
Incremental Term Loan B Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 4.32% |
Incremental Term Loan B Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.00% |
Incremental Term Loan B Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 4.00% |
Series E-1 Tranche B Term Loan Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 4.19% |
Series E-1 Tranche B Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.00% |
Series E-1 Tranche B Term Loan Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 4.00% |
Series F Tranche B Term Loan Facility | |
Debt Instrument [Line Items] | |
Effective rate (as a percent) | 4.44% |
Series F Tranche B Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 3.25% |
Variable rate floor | 1.75% |
Series F Tranche B Term Loan Facility | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate (as a percentage) | 4.25% |
Variable rate floor | 0.75% |
PENSION AND POSTRETIREMENT EM65
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS - Components of net periodic benefit cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
U.S. Pension Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.6 | $ 0.4 | $ 1.1 | $ 0.8 |
Interest cost | 1.9 | 2.4 | 3.9 | 4.8 |
Expected return on plan assets | (3.2) | (3.6) | (6.5) | (7.2) |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Amortization of net loss | 0 | 0 | 0 | 0 |
Net periodic (benefit) cost | (0.7) | (0.8) | (1.5) | (1.6) |
Non-U.S. Pension Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.7 | 0.8 | 1.3 | 1.6 |
Interest cost | 1.3 | 1.6 | 2.7 | 3.2 |
Expected return on plan assets | (1.7) | (2) | (3.4) | (4) |
Amortization of prior service credit | (0.2) | (0.2) | (0.3) | (0.3) |
Amortization of net loss | 0.2 | 0.4 | 0.3 | 0.7 |
Net periodic (benefit) cost | 0.3 | 0.6 | 0.6 | 1.2 |
Postretirement Benefit Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.1 | 0.5 | 0.3 | 1 |
Interest cost | 0.5 | 0.5 | 0.9 | 1 |
Expected return on plan assets | 0 | (0.1) | 0 | (0.2) |
Amortization of prior service credit | (0.6) | (0.7) | (1.2) | (1.3) |
Amortization of net loss | 0 | 0 | 0 | 0 |
Net periodic (benefit) cost | $ 0 | $ 0.2 | $ 0 | $ 0.5 |
PENSION AND POSTRETIREMENT EM66
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS - Narrative (Details) - Non-U.S. Pension Benefit Plans $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined benefit plan contributions made | $ 4 |
Estimated Company contributions in current fiscal year | $ 6 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | May 31, 2014 | |
Stock option activity | ||||||
Share-based compensation expense | $ 33.7 | $ 25.9 | $ 97.2 | $ 60.9 | ||
Share-based compensation expense reversal | 6 | |||||
Share-based expense related to modified awards | $ 12 | |||||
Stock options | ||||||
Stock option activity | ||||||
Granted (in shares) | 1,349,800 | 97,000 | ||||
Weighted average exercise price (in usd per share) | $ 23.96 | $ 201.70 | ||||
Weighted average grant date fair value of stock options (in usd per share) | $ 13.87 | $ 66.81 | ||||
Share-based compensation expense | 3.5 | 3.5 | $ 6.7 | $ 7.4 | ||
Time-based RSUs | ||||||
Stock option activity | ||||||
Granted (in shares) | 1,408,000 | 45,000 | ||||
Weighted average grant date fair value of stock options (in usd per share) | $ 31.51 | $ 224.45 | ||||
Performance-based RSUs | ||||||
Stock option activity | ||||||
Granted (in shares) | 1,374,800 | 693,000 | ||||
Weighted average grant date fair value of stock options (in usd per share) | $ 37.22 | $ 310.56 | ||||
RSUs | ||||||
Stock option activity | ||||||
Share-based compensation expense | 30.2 | $ 22.4 | $ 90.5 | $ 53.5 | ||
Remaining unrecognized compensation expense related to non-vested awards | 298 | $ 298 | ||||
Weighted average service period over which compensation cost is expected to be recognized (in years) | 2 years 6 months 29 days | |||||
Chief Executive Officer [Member] | ||||||
Stock option activity | ||||||
Share-based compensation expense | $ 3 | $ 28 | ||||
Chief Executive Officer [Member] | Employee Severance [Member] | ||||||
Stock option activity | ||||||
Restructuring payments | 9 | |||||
Chief Executive Officer [Member] | Special Termination Benefits [Member] | ||||||
Stock option activity | ||||||
Restructuring payments | $ 2 | |||||
2014 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares approved for grant under the share based compensation plan (in shares) | 18,000,000 | |||||
Common shares available for issuance (in shares) | 20,000,000 | |||||
Number of shares available for future grant (in shares) | 11,142,870 | 11,142,870 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Components and classification of share-based compensation expense | ||||
Share-based compensation expense | $ 33.7 | $ 25.9 | $ 97.2 | $ 60.9 |
Research and development expenses | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation expense | 1.6 | 1.5 | 3.3 | 3 |
Selling, general and administrative expenses | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation expense | 32.1 | 24.4 | 93.9 | 57.9 |
Stock options | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation expense | 3.5 | 3.5 | 6.7 | 7.4 |
RSUs | ||||
Components and classification of share-based compensation expense | ||||
Share-based compensation expense | $ 30.2 | $ 22.4 | $ 90.5 | $ 53.5 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Millions | Jun. 10, 2016 | Mar. 27, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance (in shares) | 342,926,531 | |||||
Beginning Balance | $ 6,029.8 | $ 5,401.7 | ||||
Issuance of common stock (in shares) | 213,610 | 7,286,432 | ||||
Issuance of common stock | $ 1,450 | 1,481 | ||||
Common shares issued under share-based compensation plans | 4.5 | 22.1 | ||||
Repurchases of common shares | (50) | |||||
Share-based compensation | 97.2 | 60.9 | ||||
Employee withholding taxes related to share-based awards | (7.3) | (61.5) | ||||
Excess tax benefits from share-based compensation | (1.4) | 25.6 | ||||
Noncontrolling interest distributions | (9.1) | (1.1) | ||||
Total before comprehensive income (loss) | $ 6,113.7 | $ 6,878.7 | 6,113.7 | 6,878.7 | ||
Comprehensive loss: | ||||||
Net (loss) income | (304) | (51.6) | (676.9) | 46.9 | ||
Other comprehensive loss | (33.7) | (376) | ||||
Comprehensive loss | $ (401.2) | (15.7) | $ (710.6) | (329.1) | ||
Ending Balance (in shares) | 343,030,673 | 343,030,673 | ||||
Ending Balance | $ 5,403.1 | 6,549.6 | $ 5,403.1 | 6,549.6 | ||
Valeant Pharmaceuticals International, Inc. Shareholders’ Equity | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance | 5,911 | 5,279.4 | ||||
Issuance of common stock | 1,481 | |||||
Common shares issued under share-based compensation plans | 4.5 | 22.1 | ||||
Repurchases of common shares | (50) | |||||
Share-based compensation | 97.2 | 60.9 | ||||
Employee withholding taxes related to share-based awards | (7.3) | (61.5) | ||||
Excess tax benefits from share-based compensation | (1.4) | 25.6 | ||||
Total before comprehensive income (loss) | 6,004 | 6,757.5 | 6,004 | 6,757.5 | ||
Comprehensive loss: | ||||||
Net (loss) income | (676) | 44.7 | ||||
Other comprehensive loss | (32.1) | (375.6) | ||||
Comprehensive loss | (708.1) | (330.9) | ||||
Ending Balance | $ 5,295.9 | $ 6,426.6 | $ 5,295.9 | $ 6,426.6 | ||
Common Shares | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance (in shares) | 342,900,000 | 334,400,000 | ||||
Beginning Balance | $ 9,897.4 | $ 8,349.2 | ||||
Issuance of common stock (in shares) | 7,500,000 | |||||
Issuance of common stock | $ 1,481 | |||||
Common shares issued under share-based compensation plans (in shares) | 100,000 | 1,100,000 | ||||
Common shares issued under share-based compensation plans | $ 17.5 | $ 57 | ||||
Repurchase of commons shares (in shares) | (200,000) | |||||
Repurchases of common shares | $ (6.4) | |||||
Total before comprehensive income (loss) (in shares) | 343,000,000 | 342,800,000 | 343,000,000 | 342,800,000 | ||
Total before comprehensive income (loss) | $ 9,914.9 | $ 9,880.8 | $ 9,914.9 | $ 9,880.8 | ||
Comprehensive loss: | ||||||
Ending Balance (in shares) | 343,000,000 | 342,800,000 | 343,000,000 | 342,800,000 | ||
Ending Balance | $ 9,914.9 | $ 9,880.8 | $ 9,914.9 | $ 9,880.8 | ||
Additional Paid-In Capital | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance | 304.9 | 243.9 | ||||
Common shares issued under share-based compensation plans | (13) | (34.9) | ||||
Share-based compensation | 97.2 | 60.9 | ||||
Employee withholding taxes related to share-based awards | (7.3) | (61.5) | ||||
Excess tax benefits from share-based compensation | (1.4) | 25.6 | ||||
Total before comprehensive income (loss) | 380.4 | 234 | 380.4 | 234 | ||
Comprehensive loss: | ||||||
Ending Balance | 380.4 | 234 | 380.4 | 234 | ||
Accumulated Deficit | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance | (2,749.7) | (2,397.8) | ||||
Repurchases of common shares | (43.6) | |||||
Total before comprehensive income (loss) | (2,749.7) | (2,441.4) | (2,749.7) | (2,441.4) | ||
Comprehensive loss: | ||||||
Net (loss) income | (676) | 44.7 | ||||
Ending Balance | (3,425.7) | (2,396.7) | (3,425.7) | (2,396.7) | ||
Accumulated Other Comprehensive Loss | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance | (1,541.6) | (915.9) | ||||
Total before comprehensive income (loss) | (1,541.6) | (915.9) | (1,541.6) | (915.9) | ||
Comprehensive loss: | ||||||
Other comprehensive loss | (32.1) | (375.6) | ||||
Ending Balance | (1,573.7) | (1,291.5) | (1,573.7) | (1,291.5) | ||
Noncontrolling Interest | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||
Beginning Balance | 118.8 | 122.3 | ||||
Noncontrolling interest distributions | (9.1) | (1.1) | ||||
Total before comprehensive income (loss) | 109.7 | 121.2 | 109.7 | 121.2 | ||
Comprehensive loss: | ||||||
Net (loss) income | (0.9) | 2.2 | ||||
Other comprehensive loss | (1.6) | (0.4) | ||||
Comprehensive loss | (2.5) | 1.8 | ||||
Ending Balance | $ 107.2 | $ 123 | $ 107.2 | $ 123 |
SHAREHOLDERS' EQUITY - Narrativ
SHAREHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 10, 2016 | Mar. 27, 2015 | Jun. 30, 2015 |
Stockholders' Equity Note [Abstract] | |||
Issuance of common stock (in shares) | 213,610 | 7,286,432 | |
Price per share (in dollars per share) | $ 199 | ||
Issuance of common stock | $ 1,450 | $ 1,481 | |
Issuance costs | $ 18 | ||
Additional purchase option as a percentage of shares issued in IPO, maximum | 15.00% | ||
Stock Issued | $ 50 |
ACCUMULATED OTHER COMPREHENSI71
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Components of accumulated other comprehensive loss | ||
Balance at the beginning of the period | $ (1,541.6) | $ (915.9) |
Foreign currency translation adjustment | (31.1) | (374.7) |
Pension adjustment | (1) | (0.9) |
Balance at the end of the period | (1,573.7) | (1,291.5) |
Foreign Currency Translation Adjustment | ||
Components of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (1,529.4) | (886.5) |
Foreign currency translation adjustment | (31.1) | (374.7) |
Balance at the end of the period | (1,560.5) | (1,261.2) |
Pension Adjustment | ||
Components of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (12.2) | (29.4) |
Pension adjustment | (1) | (0.9) |
Balance at the end of the period | $ (13.2) | $ (30.3) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax [Line Items] | |||||
(Recovery of) provision for income taxes | $ 72.8 | $ 13.1 | $ 65.6 | $ (71.4) | |
Valuation allowance against deferred tax assets | 1,800 | 1,800 | $ 1,370 | ||
Unrecognized tax benefits including interest and penalties | 346 | 346 | |||
Unrecognized tax benefits related to interest and penalties | 46 | 46 | |||
Portion of unrecognized tax benefits, if recognized, would reduce the Company's effective tax rate | 126 | 126 | |||
Accrued interest related to unrecognized tax benefits | 40 | 40 | 46 | ||
Accrued penalties related to unrecognized tax benefits | 6 | 6 | $ 7 | ||
Outside of Canada | |||||
Income Tax [Line Items] | |||||
(Recovery of) provision for income taxes | $ 73 | $ 66 |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income attributable to Valeant Pharmaceuticals International, Inc. | $ (302.3) | $ (53) | $ (676) | $ 44.7 |
Basic weighted-average number of common shares outstanding (in shares) | 345 | 344.4 | 344.9 | 340.5 |
Diluted effect of stock options, RSUs and other (in shares) | 0 | 0 | 0 | 6.6 |
Diluted weighted-average number of common shares outstanding (in shares) | 345 | 344.4 | 344.9 | 347.1 |
(Loss) earnings per share attributable to Valeant Pharmaceuticals International, Inc.: | ||||
Basic (in usd per share) | $ (0.88) | $ (0.15) | $ (1.96) | $ 0.13 |
Diluted (in usd per share) | $ (0.88) | $ (0.15) | $ (1.96) | $ 0.13 |
(LOSS) EARNINGS PER SHARE (De74
(LOSS) EARNINGS PER SHARE (Details 2) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Anti-dilutive shares not included in the computation of diluted earnings per share | ||||
Basic (in shares) | 345,000 | 344,400 | 344,900 | 340,500 |
Diluted weighted average number of shares outstanding (in shares) | 349,100 | 350,900 | 349,400 | |
Stock Compensation Plan | ||||
Anti-dilutive shares not included in the computation of diluted earnings per share | ||||
Dilutive effect of stock options and RSUs (in shares) | 4,100 | 6,500 | 4,500 | |
Stock options | ||||
Anti-dilutive shares not included in the computation of diluted earnings per share | ||||
Dilutive effect of stock options and RSUs (in shares) | 7,075 | 1,197 | 6,854 | 1,207 |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) RUB in Millions, $ in Millions | Oct. 30, 2015case | Sep. 28, 2015USD ($) | Sep. 02, 2015case | Apr. 06, 2015case | Nov. 07, 2014case | Dec. 04, 2013USD ($) | Dec. 04, 2013RUB | Feb. 01, 2013USD ($) | Jun. 24, 2016action | Apr. 30, 2016USD ($) | Jan. 31, 2016deposition | Mar. 12, 2015case | Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015case |
Legal proceedings and other matters | |||||||||||||||
Number of depositions | deposition | 2 | ||||||||||||||
Salix | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Number of suits filed | case | 2 | 2 | 6 | ||||||||||||
Number of putative class action cases filed | case | 3 | ||||||||||||||
Natur Produkt | AntiGrippin Trademark | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Damages awarded to plaintiff | RUB | RUB 1,660 | ||||||||||||||
Natur Produkt | AntiGrippin Trademark | Other (Income) Expense | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Recognized charge loss during period | $ | $ 25 | $ 50 | $ 25 | ||||||||||||
NEW JERSEY | Unfavorable Regulatory Action | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Number of suits filed | 4 | 2 | |||||||||||||
CANADA | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Number of suits filed | case | 6 | ||||||||||||||
CANADA | Violation of Canadian Provincial Securities Legislation | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Number of suits filed | case | 5 | ||||||||||||||
Investigation by the State of Texas, State's Medicaid Program | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Damages sought | $ | $ 20 | ||||||||||||||
Synergetics Shareholder Class Action | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Number of suits filed | case | 4 | ||||||||||||||
Synergetics Shareholder Class Action | MISSOURI | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Number of suits filed | case | 3 | ||||||||||||||
DOJ Subpoena, Salix | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Settlement, amount paid | $ | $ 54 | ||||||||||||||
DOJ Subpoena, Salix, Federal Portion | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Settlement, amount paid | $ | 47 | ||||||||||||||
DOJ Subpoena, Salix, State Medicaid Fraud Control Portion | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Settlement, amount paid | $ | $ 8 | ||||||||||||||
DOJ Subpoena, Salix, State Medicaid Fraud Control Portion | Other (Income) Expense | |||||||||||||||
Legal proceedings and other matters | |||||||||||||||
Loss Contingency Accrual, Period Increase (Decrease) | $ | $ 39 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)segment | Jun. 30, 2015USD ($) | |
Segment reporting information | ||||
Number of operating segments | segment | 2 | |||
Number of reportable segments | segment | 2 | |||
Total revenues | $ 2,420.2 | $ 2,732.4 | $ 4,791.8 | $ 4,902.5 |
Net (loss) income | (304) | (51.6) | (676.9) | 46.9 |
Restructuring, integration and other costs | (19.5) | (143.4) | (57.5) | (198.4) |
In-process research and development impairments and other charges | (17.4) | (12.3) | (17.9) | (12.3) |
Acquisition-related costs | 0 | (9.5) | (1.8) | (23.4) |
Acquisition-related contingent consideration | (6.9) | (11.7) | (9.3) | (18.8) |
Other income (expense) | (45.3) | 176.9 | (22.7) | 183 |
Operating income | 80.5 | 341.5 | 146.7 | 912.5 |
Interest income | 2.1 | 0.9 | 3 | 1.8 |
Interest expense | (472.5) | (412.7) | (899.1) | (710.5) |
Loss on extinguishment of debt | 0 | 0 | 0 | (20) |
Foreign exchange and other | 13.1 | 5.6 | 6.9 | (65.5) |
(Loss) income before (recovery of) provision for income taxes | (376.8) | (64.7) | (742.5) | 118.3 |
Share-based compensation expense | 33.7 | 25.9 | 97.2 | 60.9 |
Operating Segment | ||||
Segment reporting information | ||||
Total revenues | 2,420.2 | 2,732.4 | 4,791.8 | 4,902.5 |
Net (loss) income | 156 | 756.8 | 433.9 | 1,479.1 |
Segment Reconciling Items | ||||
Segment reporting information | ||||
Net (loss) income | (77) | (61.5) | (223.4) | (130.7) |
Restructuring, integration and other costs | (19.5) | (143.4) | (57.5) | (198.4) |
In-process research and development impairments and other charges | (17.4) | (12.3) | (17.9) | (12.3) |
Acquisition-related costs | 0 | (9.5) | (1.8) | (23.4) |
Acquisition-related contingent consideration | (6.9) | (11.7) | (9.3) | (18.8) |
Other income (expense) | 45.3 | (176.9) | 22.7 | (183) |
Corporate | ||||
Segment reporting information | ||||
Share-based compensation expense | 70 | 14 | 20 | 38 |
Developed Markets | Fair Value Adjustment to Inventory and Identifiable Intangible Assets | ||||
Segment reporting information | ||||
Net (loss) income | 808 | 555 | 1,450 | 870 |
Developed Markets | 2014 and 2015 Acquisitions | ||||
Segment reporting information | ||||
Total revenues | 24 | 537 | ||
Developed Markets | Operating Segment | ||||
Segment reporting information | ||||
Total revenues | 1,923.5 | 2,237.6 | 3,853.4 | 3,981.2 |
Net (loss) income | 107.6 | 678.5 | 367.2 | 1,346.2 |
Emerging Markets | Fair Value Adjustment to Inventory and Identifiable Intangible Assets | ||||
Segment reporting information | ||||
Net (loss) income | 87 | 76 | 173 | 151 |
Emerging Markets | 2014 and 2015 Acquisitions | ||||
Segment reporting information | ||||
Total revenues | 57 | 115 | ||
Emerging Markets | Operating Segment | ||||
Segment reporting information | ||||
Total revenues | 496.7 | 494.8 | 938.4 | 921.3 |
Net (loss) income | $ 48.4 | $ 78.3 | $ 66.7 | $ 132.9 |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 47,662.2 | $ 48,964.5 |
Operating Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 46,591.4 | 48,080.1 |
Corporate | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 1,070.8 | 884.4 |
Developed Markets | Operating Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 39,897.8 | 41,182.7 |
Emerging Markets | Operating Segment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 6,693.6 | $ 6,897.4 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Aug. 09, 2016 | Jun. 30, 2016 | Aug. 08, 2016 |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Lenders percentage of of principal held required to approve amendment | 50.00% | ||
Pharming Group N.V., North American Commercialization Rights to Ruconest | |||
Subsequent Event [Line Items] | |||
Impairment loss | $ 199 | ||
Pharming Group N.V., North American Commercialization Rights to Ruconest | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Upfront purchase price | $ 125 | ||
Upfront fee | 60 | ||
Sales based milestone payments receivable (up to) | $ 65 |