Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data in Millions, unless otherwise specified | Dec. 31, 2013 | Feb. 14, 2014 | Jun. 30, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Central Index Key | '0000936402 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Registrant Name | 'Shire plc | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 597.7 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Public Float | ' | ' | $17.40 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $2,239.40 | $1,482.20 |
Restricted cash | 22.2 | 17.1 |
Accounts receivable, net | 961.2 | 824.2 |
Inventories | 455.3 | 436.9 |
Assets held for sale | 31.6 | 0 |
Deferred tax asset | 315.6 | 229.9 |
Prepaid expenses and other current assets | 263 | 221.8 |
Total current assets | 4,288.30 | 3,212.10 |
Non-current assets: | ' | ' |
Investments | 31.8 | 38.7 |
Property, plant and equipment, net | 891.8 | 955.8 |
Goodwill | 624.6 | 644.5 |
Other intangible assets, net | 2,312.60 | 2,388.10 |
Deferred tax asset | 141.1 | 46.5 |
Other non-current assets | 32.8 | 31.5 |
Total assets | 8,323 | 7,317.20 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 1,688.40 | 1,501.50 |
Other current liabilities | 119.5 | 144.1 |
Total current liabilities | 1,807.90 | 1,645.60 |
Non-current liabilities | ' | ' |
Convertible bonds | 0 | 1,100 |
Deferred tax liability | 560.6 | 520.8 |
Other non-current liabilities | 588.5 | 241.6 |
Total liabilities | 2,957 | 3,508 |
Commitments and contingencies | ' | ' |
Equity: | ' | ' |
Common stock of 5p par value; 1,000 million shares authorized; and 597.5 million shares issued and outstanding (2012: 1,000 million shares authorized; and 562.5 million shares issued and outstanding) | 58.6 | 55.7 |
Additional paid-in capital | 4,186.30 | 2,981.50 |
Treasury stock: 13.4 million shares (2012: 10.7 million shares) | -450.6 | -310.4 |
Accumulated other comprehensive income | 110.2 | 86.9 |
Retained earnings | 1,461.50 | 995.5 |
Total equity | 5,366 | 3,809.20 |
Total liabilities and equity | $8,323 | $7,317.20 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (GBP £) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Common Stock, Par Value (in USD per share) | £ 0.05 | £ 0.05 |
Common Stock, Shares Authorized | 1,000 | 1,000 |
Common Stock, Shares, Issued | 597.5 | 562.5 |
Common Stock, Shares, Outstanding | 597.5 | 562.5 |
Treasury Stock, Shares | 13.4 | 10.7 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Revenues: | ' | ' | ' | |||
Product sales | $4,757.50 | $4,252.90 | $3,844.90 | |||
Royalties | 153.7 | 241.6 | 283.5 | |||
Other revenues | 23.1 | 32.9 | 29.7 | |||
Total revenues | 4,934.30 | 4,527.40 | 4,158.10 | |||
Costs and expenses: | ' | ' | ' | |||
Cost of product sales | 670.8 | 585.8 | 551.7 | |||
Research and development | 933.4 | [1] | 953 | [1] | 764.5 | [1] |
Selling, general and administrative | 1,651.30 | [1] | 1,948 | [1] | 1,675.70 | [1] |
Goodwill impairment charge | 7.1 | 0 | 0 | |||
(Gain)/ loss on sale of product rights | -15.9 | -18.1 | 6 | |||
Reorganization costs | 88.2 | 0 | 24.3 | |||
Integration and acquisition costs | -134.1 | 13.5 | 0.1 | |||
Total operating expenses | 3,200.80 | 3,482.20 | 3,022.30 | |||
Operating income from continuing operations | 1,733.50 | 1,045.20 | 1,135.80 | |||
Interest income | 2.1 | 3 | 1.9 | |||
Interest expense | -38.1 | -38.2 | -39.1 | |||
Other (expense)/income, net | -3.9 | -2.2 | 18.5 | |||
Total other expense, net | -39.9 | -37.4 | -18.7 | |||
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,693.60 | 1,007.80 | 1,117.10 | |||
Income taxes | -277.9 | -203.1 | -236.9 | |||
Equity in earnings of equity method investees, net of taxes | 3.9 | 1 | 2.5 | |||
Income from continuing operations, net of taxes | 1,419.60 | 805.7 | 882.7 | |||
Loss from discontinued operations, net of taxes | -754.5 | -60.3 | -17.7 | |||
Net income | $665.10 | $745.40 | $865 | |||
Earnings from continuing operations (in USD per share) | $2.57 | $1.45 | $1.60 | |||
Loss from discontinued operations (in USD per share) | ($1.37) | ($0.11) | ($0.03) | |||
Earnings per ordinary share - basic (in USD per share) | $1.21 | $1.34 | $1.57 | |||
Earnings from continuing operations (in USD per share) | $2.45 | $1.41 | $1.54 | |||
Loss from discontinued operations (in USD per share) | ($1.28) | ($0.10) | ($0.03) | |||
Earnings per ordinary share - diluted (in USD per share) | $1.18 | $1.31 | $1.51 | |||
Weighted average number of shares: | ' | ' | ' | |||
Basic (in shares) | 552 | [2] | 555.4 | [2] | 551.1 | [2] |
Diluted (in shares) | 590.3 | 593.5 | 595.4 | |||
[1] | Research and development (bR&Db) includes intangible asset impairment charges of $19.9 million (2012: $71.2 million, 2011: $16.0 million) for the year to December 31, 2013. Selling, general and administrative (bSG&Ab) costs include amortization and impairment charges of intangible assets relating to intellectual property rights acquired of $152.0 million for the year to December 31, 2013 (2012: $280.3 million, 2011: $145.0 million). | |||||
[2] | Excludes shares purchased by the EBT and under the share buy-back program and presented by Shire as treasury stock |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Impairment of unamortized intangible assets | $19.90 | $71.20 | $16 |
Impairment charges | 19.9 | 197.9 | 16 |
Acquired Intellectual Property Rights | ' | ' | ' |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Amortization and impairment charges of intangible assets | $152 | $280.30 | $145 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Income and Comprehensive Income [Abstract] | ' | ' | ' |
Net income | $665.10 | $745.40 | $865 |
Other comprehensive income: | ' | ' | ' |
Foreign currency translation adjustments | 25.3 | 23.7 | -24 |
Unrealized holding (loss)/gain on available-for-sale securities (net of taxes of $0.1 million, $2.5 million and $0.2 million) | -2 | 2.9 | 16.2 |
Other than temporary impairment of available-for-sale securities (net of taxes of $nil in all periods) | 0 | 0 | 2.4 |
Realized gain on divestment of available-for-sale securities (net of taxes of $nil, $nil million and $3.5 million) | 0 | 0 | -20 |
Comprehensive income | 688.4 | 772 | 839.6 |
Components of accumulated other comprehensive income | ' | ' | ' |
Foreign currency translation adjustments | 110.4 | 85.1 | ' |
Unrealized holding (loss)/gain on available-for-sale securities, net of taxes | -0.2 | 1.8 | ' |
Accumulated other comprehensive income | $110.20 | $86.90 | ' |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Income and Comprehensive Income [Abstract] | ' | ' | ' |
Unrealized holding (loss)/gain on available-for-sale securities, tax | $0.10 | $2.50 | $0.20 |
Other than temporary impairment of available-for-sale securities, tax | 0 | 0 | 0 |
Realized gain on divestment of available-for-sale securities, tax | $0 | $0 | $3.50 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | EBT | Share Buy-back Program | Common stock | Additional paid-in capital | Treasury stock | Treasury stock | Treasury stock | Accumulated other comprehensive income | Retained earnings/(accumulated deficit) | Retained earnings/(accumulated deficit) | |
In Millions, except Share data | EBT | Share Buy-back Program | EBT | |||||||||
As at Dec. 31, 2010 | $2,451.40 | ' | ' | $55.70 | $2,746.40 | ($276.10) | ' | ' | $85.70 | ($160.30) | ' | |
Shares as at Dec. 31, 2010 | ' | ' | ' | 562,200,000 | ' | ' | ' | ' | ' | ' | ' | |
Net income | 865 | ' | ' | ' | ' | ' | ' | ' | ' | 865 | ' | |
Other comprehensive income, net of tax | -25.4 | ' | ' | ' | ' | ' | ' | ' | -25.4 | ' | ' | |
Options exercised | 0.7 | ' | ' | ' | 0.7 | ' | ' | ' | ' | ' | ' | |
Option exercised (in shares) | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | |
Share-based compensation | 76.8 | ' | ' | ' | 76.8 | ' | ' | ' | ' | ' | ' | |
Tax benefit associated with exercise of stock options (in US dollar) | 29.4 | ' | ' | ' | 29.4 | ' | ' | ' | ' | ' | ' | |
Shares repurchased | ' | -151.8 | ' | ' | ' | ' | -151.8 | ' | ' | ' | ' | |
Shares released by EBT to satisfy exercise of stock options | 12.7 | ' | ' | ' | ' | ' | 140.7 | ' | ' | ' | -128 | |
Dividends | [1] | -73.8 | ' | ' | ' | ' | ' | ' | ' | ' | -73.8 | ' |
As at Dec. 31, 2011 | 3,185 | ' | ' | 55.7 | 2,853.30 | -287.2 | ' | ' | 60.3 | 502.9 | ' | |
Shares as at Dec. 31, 2011 | ' | ' | ' | 562,500,000 | ' | ' | ' | ' | ' | ' | ' | |
Net income | 745.4 | ' | ' | ' | ' | ' | ' | ' | ' | 745.4 | ' | |
Other comprehensive income, net of tax | 26.6 | ' | ' | ' | ' | ' | ' | ' | 26.6 | ' | ' | |
Options exercised | 0.1 | ' | ' | ' | 0.1 | ' | ' | ' | ' | ' | ' | |
Share-based compensation | 88 | ' | ' | ' | 88 | ' | ' | ' | ' | ' | ' | |
Tax benefit associated with exercise of stock options (in US dollar) | 40.1 | ' | ' | ' | 40.1 | ' | ' | ' | ' | ' | ' | |
Shares repurchased | ' | -99.3 | -106.5 | ' | ' | ' | -99.3 | -106.5 | ' | ' | ' | |
Shares released by EBT to satisfy exercise of stock options | 16.1 | ' | ' | ' | ' | ' | 182.6 | ' | ' | -166.5 | ' | |
Dividends | [2] | -86.3 | ' | ' | ' | ' | ' | ' | ' | ' | -86.3 | ' |
As at Dec. 31, 2012 | 3,809.20 | ' | ' | 55.7 | 2,981.50 | -310.4 | ' | ' | 86.9 | 995.5 | ' | |
Shares as at Dec. 31, 2012 | 562,500,000 | ' | ' | 562,500,000 | ' | ' | ' | ' | ' | ' | ' | |
Net income | 665.1 | ' | ' | ' | ' | ' | ' | ' | ' | 665.1 | ' | |
Other comprehensive income, net of tax | 23.3 | ' | ' | ' | ' | ' | ' | ' | 23.3 | ' | ' | |
Options exercised | 16.2 | ' | ' | 0.1 | 16.1 | ' | ' | ' | ' | ' | ' | |
Option exercised (in shares) | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | |
Convertible Bonds, conversion to Ordinary shares | 1,101.50 | ' | ' | 2.8 | 1,098.70 | ' | ' | ' | ' | ' | ' | |
Convertible Bonds, conversion to Ordinary shares (in shares) | ' | ' | ' | 33,800,000 | ' | ' | ' | ' | ' | ' | ' | |
Share-based compensation | 78.1 | ' | ' | ' | 78.1 | ' | ' | ' | ' | ' | ' | |
Tax benefit associated with exercise of stock options (in US dollar) | 11.9 | ' | ' | ' | 11.9 | ' | ' | ' | ' | ' | ' | |
Shares repurchased | ' | -50 | -193.8 | ' | ' | ' | -50 | -193.8 | ' | ' | ' | |
Shares released by EBT to satisfy exercise of stock options | 0.9 | ' | ' | ' | ' | 103.6 | ' | ' | ' | -102.7 | ' | |
Dividends | [3] | -96.4 | ' | ' | ' | ' | ' | ' | ' | ' | -96.4 | ' |
As at Dec. 31, 2013 | $5,366 | ' | ' | $58.60 | $4,186.30 | ($450.60) | ' | ' | $110.20 | $1,461.50 | ' | |
Shares as at Dec. 31, 2013 | 597,500,000 | ' | ' | 597,500,000 | ' | ' | ' | ' | ' | ' | ' | |
[1] | Dividends per share During the year to December 31, 2011 Shire plc declared and paid dividends of 13.33 US cents per ordinary share (equivalent to 39.99 US cents per ADS) totaling $73.8 million. | |||||||||||
[2] | Dividends per share During the year to December 31, 2012 Shire plc declared and paid dividends of 15.32 US cents per ordinary share (equivalent to 45.96 US cents per ADS) totaling $86.3 million | |||||||||||
[3] | Dividends per share During the year to December 31, 2013 Shire plc declared and paid dividends of 17.60 US cents per ordinary share (equivalent to 52.80 US cents per ADS) totalling $96.4 million |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | 12 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Dividends paid (in USD) | $96.40 | [1] | $86.30 | [2] | $73.80 | [3] |
Ordinary Shares | ' | ' | ' | |||
Dividends per share declared | $0.18 | $0.15 | $0.13 | |||
Dividends per share paid | $0.18 | $0.15 | $0.13 | |||
ADS | ' | ' | ' | |||
Dividends per share declared | $0.53 | $0.46 | $0.40 | |||
Dividends per share paid | $0.53 | $0.46 | $0.40 | |||
[1] | Dividends per share During the year to December 31, 2013 Shire plc declared and paid dividends of 17.60 US cents per ordinary share (equivalent to 52.80 US cents per ADS) totalling $96.4 million | |||||
[2] | Dividends per share During the year to December 31, 2012 Shire plc declared and paid dividends of 15.32 US cents per ordinary share (equivalent to 45.96 US cents per ADS) totaling $86.3 million | |||||
[3] | Dividends per share During the year to December 31, 2011 Shire plc declared and paid dividends of 13.33 US cents per ordinary share (equivalent to 39.99 US cents per ADS) totaling $73.8 million. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net income | $665.10 | $745.40 | $865 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 324.4 | 308.6 | 294.8 |
Share based compensation | 77.4 | 87.1 | 75.7 |
Change in fair value of contingent consideration | -159.1 | 9.2 | 0 |
Impairment of intangible assets | 19.9 | 197.9 | 16 |
Goodwill impairment charge | 7.1 | 0 | 0 |
Impairment of assets held for sale | 636.9 | 0 | 0 |
Write down of assets | 58.2 | 0.9 | 0 |
Gain on sale of non-current investments | 0 | 0 | -23.5 |
(Gain)/ loss on sale of product rights | -15.9 | -18.1 | 6 |
Other, net | 8.3 | 7.4 | 16.1 |
Movement in deferred taxes | -349.9 | -58.3 | -14.5 |
Equity in earnings of equity method investees | -3.9 | -1 | -2.5 |
Changes in operating assets and liabilities: | ' | ' | ' |
(Increase)/decrease in accounts receivable | -148.3 | 22.2 | -134 |
Increase in sales deduction accruals | 177.5 | 42.7 | 80.5 |
Increase in inventory | -36.6 | -88.2 | -64.4 |
Increase in prepayments and other assets | -60.9 | -14.5 | -36.8 |
Increase/(decrease) in accounts payable and other liabilities | 67.9 | 136.7 | -10 |
Returns on investment from joint venture | 3.1 | 4.9 | 5.2 |
Net cash provided by operating activities | 1,463 | 1,382.90 | 1,073.60 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Movements in restricted cash | -5.3 | 3.5 | 6.2 |
Purchases of subsidiary undertakings and businesses, net of cash acquired | -227.8 | -97 | -725 |
Purchases of non-current investments | -10.6 | -18 | -10.7 |
Purchases of property, plant and equipment ("PP&E") | -157 | -149.6 | -194.3 |
Purchases of intangible assets | 0 | -43.5 | -5.2 |
Proceeds from disposal of non-current investments and PP&E | 12.1 | 7.2 | 106 |
Proceeds received on sale of product rights | 19.2 | 17.8 | 12 |
Returns from equity investments | 5.4 | 0 | 0 |
Other, net | 3.1 | 8.6 | 1.8 |
Net cash used in investing activities | -360.9 | -271 | -809.2 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Payments to acquire shares (in USD) | -243.8 | -205.8 | -151.8 |
Payment of dividend | -96.4 | -86.3 | -73.8 |
Proceeds from exercise of options | 17.2 | 16.2 | 13.4 |
Proceeds from drawing of revolving credit facility ("RCF") | 0 | 0 | 30 |
Repayment of RCF | 0 | 0 | -30 |
Repayment of debt acquired through business combinations | -6 | 0 | -13.1 |
Facility arrangement fee | -13.9 | 0 | 0 |
Excess tax benefit associated with exercise of stock options | 13.4 | 40.7 | 31.4 |
Contingent consideration payments | -14.1 | -5.8 | 0 |
Other, net | -1 | -3.3 | -1.5 |
Net cash used in financing activities | -344.6 | -244.3 | -195.4 |
Effect of foreign exchange rate changes on cash and cash equivalents | -0.3 | -5.4 | 0.4 |
Net increase in cash and cash equivalents | 757.2 | 862.2 | 69.4 |
Cash and cash equivalents at beginning of period | 1,482.20 | 620 | 550.6 |
Cash and cash equivalents at end of period | 2,239.40 | 1,482.20 | 620 |
Supplemental information associated with continuing operations: | ' | ' | ' |
Interest paid | -29.9 | -34.6 | -33.3 |
Income taxes paid | -290.2 | -199.2 | -286.1 |
Continung operations | ' | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Goodwill impairment charge | 7.1 | ' | ' |
Discontinued operations | ' | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Goodwill impairment charge | 191.8 | ' | ' |
Goowill impairment charge total | ' | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Goodwill impairment charge | 198.9 | ' | ' |
EBT | ' | ' | ' |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Payments to acquire shares (in USD) | -50 | -99.3 | -151.8 |
Share Buy-back Program | ' | ' | ' |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Payments to acquire shares (in USD) | ($193.80) | ($106.50) | $0 |
Shire_Income_Access_Share_Trus
Shire Income Access Share Trust Balance Sheet (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
ASSETS | ' | ' |
Total assets | $8,323 | $7,317.20 |
LIABILITIES AND EQUITY | ' | ' |
Total liabilities | 2,957 | 3,508 |
Equity: | ' | ' |
Total equity | 5,366 | 3,809.20 |
Total liabilities and equity | 8,323 | 7,317.20 |
Shire Income Access Share Trust | ' | ' |
ASSETS | ' | ' |
Total assets | 0 | 0 |
LIABILITIES AND EQUITY | ' | ' |
Total liabilities | 0 | 0 |
Equity: | ' | ' |
Total equity | 0 | 0 |
Total liabilities and equity | $0 | $0 |
Shire_Income_Access_Share_Trus1
Shire Income Access Share Trust Statement of Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $665.10 | $745.40 | $865 |
Shire Income Access Share Trust [Member] | ' | ' | ' |
Dividend income | 91.1 | 81.5 | 67.6 |
Net income | $91.10 | $81.50 | $67.60 |
Shire_Income_Access_Share_Trus2
Shire Income Access Share Trust Statements of Changes in Equity (USD $) | Total | Shire Income Access Share Trust | Shire Income Access Share Trust | Shire Income Access Share Trust | |
In Millions | Capital account | Revenue account | |||
As at Dec. 31, 2010 | $2,451.40 | $0 | $0 | $0 | |
Net income | 865 | 67.6 | 0 | 67.6 | |
Distributions made | -73.8 | [1] | -67.6 | 0 | -67.6 |
As at Dec. 31, 2011 | 3,185 | 0 | 0 | 0 | |
Net income | 745.4 | 81.5 | 0 | 81.5 | |
Distributions made | -86.3 | [2] | -81.5 | 0 | -81.5 |
As at Dec. 31, 2012 | 3,809.20 | 0 | 0 | 0 | |
Net income | 665.1 | 91.1 | 0 | 91.1 | |
Distributions made | -96.4 | [3] | -91.1 | 0 | -91.1 |
As at Dec. 31, 2013 | $5,366 | $0 | $0 | $0 | |
[1] | Dividends per share During the year to December 31, 2011 Shire plc declared and paid dividends of 13.33 US cents per ordinary share (equivalent to 39.99 US cents per ADS) totaling $73.8 million. | ||||
[2] | Dividends per share During the year to December 31, 2012 Shire plc declared and paid dividends of 15.32 US cents per ordinary share (equivalent to 45.96 US cents per ADS) totaling $86.3 million | ||||
[3] | Dividends per share During the year to December 31, 2013 Shire plc declared and paid dividends of 17.60 US cents per ordinary share (equivalent to 52.80 US cents per ADS) totalling $96.4 million |
Shire_Income_Access_Share_Trus3
Shire Income Access Share Trust Statements of Cashflows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net income | $665.10 | $745.40 | $865 |
Net cash provided by operating activities | 1,463 | 1,382.90 | 1,073.60 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Net cash provided by investing activities | -360.9 | -271 | -809.2 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Net cash used in financing activities | -344.6 | -244.3 | -195.4 |
Net increase in cash and cash equivalents | 757.2 | 862.2 | 69.4 |
Cash and cash equivalents at beginning of period | 1,482.20 | 620 | 550.6 |
Cash and cash equivalents at end of period | 2,239.40 | 1,482.20 | 620 |
Shire Income Access Share Trust | ' | ' | ' |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net income | 91.1 | 81.5 | 67.6 |
Net cash provided by operating activities | 91.1 | 81.5 | 67.6 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Net cash provided by investing activities | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Distributions made | -91.1 | -81.5 | -67.6 |
Net cash used in financing activities | -91.1 | -81.5 | -67.6 |
Net increase in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Cash and cash equivalents at end of period | $0 | $0 | $0 |
Description_of_Operations
Description of Operations | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Description of Operations | ' |
1. Description of operations | |
Shire plc and its subsidiaries (collectively referred to as either “Shire”, or the “Company”) is a leading specialty biopharmaceutical company that focuses on developing and marketing innovative specialty medicines that address significant unmet patient needs. | |
The Company has grown through acquisition, completing a series of major transactions that have brought therapeutic, geographic and pipeline growth and diversification. The Company will continue to evaluate companies, products and pipeline opportunities that offer a good strategic fit and have the potential to deliver demonstrable value to all of the Company's stakeholders: patients, physicians, policy makers, payors, investors and employees. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of significant accounting policies | |
(a) Basis of preparation | |
The accompanying consolidated financial statements include the accounts of Shire plc, all of its subsidiary undertakings and the Income Access Share trust, after elimination of inter-company accounts and transactions. They have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and US Securities and Exchange Commission (“SEC”) regulations for annual reporting. | |
(b) Use of estimates in consolidated financial statements | |
The preparation of consolidated financial statements, in conformity with US GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of intangible assets, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestments, contingent consideration payable in respect of business combinations and asset purchases and assets held for sale. If actual results differ from the Company's estimates, or to the extent these estimates are adjusted in future periods, the Company's results of operations could either benefit from, or be adversely affected by, any such change in estimate. | |
(c) Revenue recognition | |
The Company recognizes revenue when all of the following conditions are met: | |
• there is persuasive evidence of an agreement or arrangement; | |
• delivery of products has occurred or services have been rendered; | |
• the seller's price to the buyer is fixed or determinable; and | |
• collectability is reasonably assured. | |
Where applicable, all revenues are stated net of value added and similar taxes, and trade discounts. No revenue is recognized for consideration, the value or receipt of which is dependent on future events or future performance. | |
The Company's principal revenue streams and their respective accounting treatments are discussed below: | |
Product sales | |
Revenue for the sale of products is recognized when delivery has occurred and substantially all the risks and rewards of ownership have been transferred to the customer. Provisions for rebates, product returns and discounts to customers are provided for as reductions to revenue in the same period as the related sales are recorded. The provisions made at the time of revenue recognition are based on historical experience and updated for changes in facts and circumstances including the impact of new legislation. The provisions are recognized as a reduction to revenues. | |
Royalty income | |
Royalty income relating to licensed technology is recognized when the licensee sells the underlying product, with the amount of royalty income recorded based on sales information received from the relevant licensee. The Company estimates sales amounts and related royalty income based on the historical product information for any period that the sales information is not available from the relevant licensee. | |
Licensing revenues | |
Other revenue includes revenues derived from product out-licensing arrangements, which typically consist of an initial upfront payment on inception of the license and subsequent milestone payments contingent on the achievement of certain clinical and sales milestones. Product out-licensing arrangements often require the Company to provide multiple deliverables to the licensee. | |
Initial license fees received in connection with product out-licensing agreements entered into prior to January 1, 2011 are deferred and recognized over the period in which the Company has continuing substantive performance obligations, typically the period over which the Company participates in the development of the out-licensed product, even where such fees are non-refundable and not creditable against future royalty payments. | |
For product out-licensing arrangements entered into, or subject to material modification, after January 1, 2011, consideration received is allocated between each of the separable elements in the arrangement using the relative selling price method. An element is considered separable if it has value to the customer on a stand-alone basis. The selling price used for each separable element will be based on vendor specific objective evidence (“VSOE”) if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third party evidence is available. Revenue is then recognized as each of the separable elements to which the revenue has been allocated is delivered. | |
Milestone payments which are non-refundable, non creditable and contingent on achieving certain clinical milestones are recognized as revenues either on achievement of such milestones if the milestones are considered substantive or over the period the Company has continuing substantive performance obligations, if the milestones are not considered substantive. If milestone payments are creditable against future royalty payments, the milestones are deferred and released over the period in which the royalties are anticipated to be paid. | |
(d) Sales deductions | |
(i) Rebates | |
Rebates primarily consist of statutory rebates to state Medicaid agencies and contractual rebates with health-maintenance organizations. These rebates are based on price differentials between a base price and the selling price. As a result, rebates generally increase as a percentage of the selling price over the life of the product (as prices increase). Provisions for rebates are recorded as reductions to revenue in the same period as the related sales are recorded, with the amount of the rebate based on the Company's best estimate if any uncertainty exists over the unit rebate amount, and with estimates of future utilization derived from historical trends. | |
(ii) Returns | |
The Company estimates the proportion of recorded revenue that will result in a return, based on historical trends and when applicable, specific factors affecting certain products at the balance sheet date. The accrual is recorded as a reduction to revenue in the same period as the related sales are recorded. | |
(iii) Coupons | |
The Company uses coupons as a form of sales incentive. An accrual is established based on the Company's expectation of the level of coupon redemption, estimated using historical trends. The accrual is recorded as a reduction to revenue in the same period as the related sales are recorded or the date the coupon is offered, if later than the date the related sales are recorded. | |
(iv) Discounts | |
The Company offers cash discounts to customers for the early payment of receivables which are recorded as reductions to revenue and accounts receivable in the same period as the related sale is recorded. | |
(v) Wholesaler chargebacks | |
The Company has contractual agreements whereby it supplies certain products to third parties at predetermined prices. Wholesalers acting as intermediaries in these transactions are reimbursed by the Company if the predetermined prices are less than the prices paid by the wholesaler to the Company. Accruals for wholesaler chargebacks, which are based on historical trends, are recorded as reductions to revenue in the same period as the related sales are recorded. | |
(e) Collaborative arrangements | |
The Company enters into collaborative arrangements to develop and commercialize drug candidates. These collaborative arrangements often require up-front, milestone, royalty or profit share payments, or a combination of these, with payments often contingent upon the success of the related development and commercialization efforts. Collaboration agreements entered into by the Company may also include expense reimbursements or other such payments to the collaborating partner. | |
The Company reports costs incurred and revenue generated from transactions with third parties as well as payments between parties to collaborative arrangements either on a gross or net basis, depending on the characteristics of the collaborative relationship. | |
(f) Cost of product sales | |
Cost of product sales includes the cost of purchasing finished product for sale, the cost of raw materials and manufacturing for those products that are manufactured by the Company, shipping and handling costs, depreciation and amortization of intangible assets in respect of favorable manufacturing contracts. Royalties payable on products to which the Company does not own the rights are also included in Cost of product sales. | |
(g) Leased assets | |
The costs of operating leases are charged to operations on a straight-line basis over the lease term, even if rental payments are not made on such a basis. | |
Assets acquired under capital leases are included in the consolidated balance sheet as property, plant and equipment and are depreciated over the shorter of the period of the lease or their useful lives. The capital element of future lease payments is recorded as a liability, while the interest element is charged to operations over the period of the lease to produce a level yield on the balance of the capital lease obligation. | |
(h) Advertising expense | |
The Company expenses the cost of advertising as incurred. Advertising costs amounted to $60.9 million, $85.8 million and $122.5 million for the years to December 31, 2013, 2012 and 2011 respectively and were included within Selling, general and administrative (“SG&A”) expenses. | |
(i) Research and development (“R&D”) expense | |
R&D costs are expensed as incurred. Upfront and milestone payments made to third parties for in-licensed products that have not yet received marketing approval and for which no alternative future use has been identified are also expensed as incurred. | |
Milestone payments made to third parties on and subsequent to regulatory approval are capitalized as intangible assets, and amortized over the remaining useful life of the related product. | |
(j) Valuation and impairment of long-lived assets other than goodwill, indefinite lived intangible assets and investments | |
The Company evaluates the carrying value of long-lived assets other than goodwill, indefinite lived intangible assets and investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of the relevant assets may not be recoverable. When such a determination is made, management's estimate of undiscounted cash flows to be generated by the use and ultimate disposition of these assets is compared to the carrying value of the assets to determine whether the carrying value is recoverable. If the carrying value is deemed not to be recoverable, the amount of the impairment recognized in the consolidated financial statements is determined by estimating the fair value of the relevant assets and recording an impairment loss for the amount by which the carrying value exceeds the estimated fair value. This fair value is usually determined based on estimated discounted cash flows. | |
(k) Finance costs of debt | |
Finance costs relating to debt issued are recorded as a deferred charge and amortized to the consolidated statements of income over the period to the earliest redemption date of the debt, using the effective interest rate method. On extinguishment of the related debt, any unamortized deferred financing costs are written off and charged to interest expense in the consolidated statements of income. | |
(l) Foreign currency | |
Monetary assets and liabilities in foreign currencies are translated into the functional currency of the relevant subsidiary in which they arise at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into the relevant functional currency at the rate of exchange ruling at the date of the transaction. Transaction gains and losses, other than those related to current and deferred tax assets and liabilities, are recognized in arriving at income from operations before income taxes and equity in earnings of equity method investees. Transaction gains and losses arising on foreign currency denominated current and deferred tax assets and liabilities are included within income taxes in the consolidated statements of income. | |
The results of operations for subsidiaries, whose functional currency is not the US dollar, are translated into the US dollar at the average rates of exchange during the period, with the subsidiaries' balance sheets translated at the rates ruling at the balance sheet date. The cumulative effect of exchange rate movements is included in a separate component of Other comprehensive income. | |
Foreign currency exchange transaction losses included in consolidated statements of income in the years to December 31, 2013, 2012 and 2011 amounted to $8.7 million, $3.5 million and $2.1 million, respectively. | |
(m) Income taxes | |
Uncertain tax positions are recognized in the consolidated financial statements for positions which are considered more likely than not of being sustained, based on the technical merits of the position on audit by the tax authorities. The measurement of the tax benefit recognized in the consolidated financial statements is based upon the largest amount of tax benefit that, in management's judgment, is greater than 50% likely of being realized based on a cumulative probability assessment of the possible outcomes. The Company recognizes interest relating to unrecognized tax benefits and penalties within income taxes. | |
Deferred tax assets and liabilities are recognized for differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. | |
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |
(n) Earnings per share | |
Basic earnings per share is based upon net income attributable to Shire plc divided by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is based upon net income attributable to Shire plc adjusted for the impact of interest expense on convertible debt on an “if-converted” basis (when the effect is dilutive and prior to the actual conversion or redemption of debt) divided by the weighted average number of ordinary share equivalents outstanding during the period, adjusted for the dilutive effect of all potential ordinary shares equivalents that were outstanding during the year. Such potentially dilutive shares are excluded when the effect would be to increase diluted earnings per share or reduce the diluted loss per share. | |
(o) Share-based compensation | |
Share-based compensation represents the cost of share-based awards granted to employees. The Company measures share-based compensation cost for awards classified as equity at the grant date, based on the estimated fair value of the award. Predominantly all of the Company's awards have service and/or performance conditions and the fair values of these awards are estimated using a Black-Scholes valuation model. | |
For share-based compensation awards which cliff vest, the Company recognizes the cost of the relevant share based payment award as an expense on a straight-line basis (net of estimated forfeitures) over the employee's requisite service period. For those share-based compensation awards with a graded vesting schedule, the Company recognizes the cost of the relevant share based payment award as an expense on a straight-line basis (net of estimated forfeitures) over the requisite service period for the entire award (that is, over the requisite service period for the last separately vesting portion of the award). The share based compensation expense is recorded in Cost of product sales, R&D, and SG&A in the consolidated statements of income based on the employees' respective functions. | |
The Company records deferred tax assets for awards that result in deductions on the Company's income tax returns, based on the amount of compensation cost recognized and the Company's statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company's income tax return are recorded in additional paid-in capital (if the tax deduction exceeds the deferred tax asset) or in the consolidated statements of income (if the deferred tax asset exceeds the tax deduction and no additional paid-in capital exists from previous awards). | |
The Company's share-based compensation plans are described more fully in Note 27. | |
(p) Cash and cash equivalents | |
Cash and cash equivalents are defined as short-term highly liquid investments with original maturities of ninety days or less. | |
(q) Financial instruments - derivatives | |
The Company uses derivative financial instruments to manage its exposure to foreign exchange risk associated with intercompany financing. These instruments consist of swap and forward foreign exchange contracts. The Company does not apply hedge accounting for these instruments. The fair values of these instruments are included on the balance sheet in current assets / liabilities, with changes in the fair value recognized in the consolidated statements of income. The cash flows relating to these instruments are presented within net cash provided by operating activities in the consolidated statement of cash flows, unless the derivative instruments are economically hedging specific investing or financing activities. | |
(r) Inventories | |
Inventories are stated at the lower of cost or market. Cost incurred in bringing each product to its present location and condition is based on purchase costs calculated on a first-in, first-out basis, including transportation costs. | |
Inventories include costs relating to both marketed products and, for certain products, cost incurred prior to regulatory approval. Inventories are capitalized prior to regulatory approval if the Company considers that it is probable that the US Food and Drug Administration (“FDA”) or another regulatory body will grant commercial and manufacturing approval for the relevant product, and it is probable that the value of capitalized inventories will be recovered through commercial sale. | |
Inventories are written down for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those anticipated, inventory adjustments may be required. | |
(s) Assets held-for-sale | |
An asset or asset disposal group is classified as held-for-sale when, amongst other things, the Company has committed to a plan of disposition, the asset or asset disposal group is available for immediate sale, and the plan is not expected to change significantly. Assets held-for-sale are carried at the lower of their carrying amount or fair value less cost to sell. | |
The Company does not record depreciation or amortization on assets classified as held-for-sale. | |
(t) Investments | |
The Company has certain investments in pharmaceutical and biotechnology companies. | |
Investments are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors such as representation on the investee's Board of Directors and the nature of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the Company records its investments in equity-method investees in the consolidated balance sheet under Investments and its share of the investees' earnings or losses together with other-than-temporary impairments in value under equity in earnings of equity method investees in the consolidated statements of income. | |
All other equity investments, which consist of investments for which the Company does not have the ability to exercise significant influence, are accounted for under the cost method or at fair value. Investments in private companies are carried at cost, less provisions for other-than-temporary impairment in value. For public companies that have readily determinable fair values, the Company classifies its equity investments as available-for-sale and, accordingly, records these investments at their fair values with unrealized holding gains and losses included in the consolidated statement of comprehensive income, net of any related tax effect. Realized gains and losses, and declines in value of available-for-sale securities judged to be other-than-temporary, are included in other income, net. The cost of securities sold is based on the specific identification method. Interest on securities classified as available-for-sale are included as interest income. | |
(u) Property, plant and equipment | |
Property, plant and equipment is shown at cost reduced for impairment losses, net of accumulated depreciation. The cost of significant assets includes capitalized interest incurred during the construction period. Depreciation is recorded on a straight-line basis at rates calculated to write off the cost less estimated residual value of each asset over its estimated useful life as follows: | |
Buildings 15 to 50 years | |
Office furniture, fittings and equipment 3 to 10 years | |
Warehouse, laboratory and manufacturing equipment 3 to 15 years | |
The cost of land is not depreciated. Assets under the course of construction are not depreciated until the relevant assets are available and ready for their intended use. | |
Expenditures for maintenance and repairs are charged to the consolidated statements of income as incurred. The costs of major renewals and improvements are capitalized. At the time property, plant and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the asset and accumulated depreciation accounts. The profit or loss on such disposition is reflected in operating income. | |
(v) Goodwill and other intangible assets | |
(i) Goodwill | |
In business combinations completed subsequent to January 1, 2009, goodwill represents the excess of the fair value of the consideration given and the fair value of any non-controlling interest in the acquiree over the fair value of the identifiable assets and liabilities acquired. For business combinations completed prior to January 1, 2009 goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired. | |
Goodwill is not amortized, but instead is reviewed for impairment, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For the purpose of assessing the carrying value of goodwill for impairment, goodwill is allocated at the Company's reporting unit level. Events or changes in circumstances which could trigger an impairment review include but are not limited to: significant underperformance of a reporting unit relative to expected historical or projected future operating results; significant changes in the manner of the Company's use of acquired assets or the strategy for the overall business; and significant negative industry trends. | |
Goodwill is reviewed for impairment by comparing the carrying value of the reporting unit's net assets (including allocated goodwill) to the fair value of the reporting unit. If the reporting unit's carrying amount is greater than its fair value, a second step is performed whereby the portion of the reporting unit's fair value relating to goodwill is compared to the carrying value of the reporting unit's goodwill. The Company recognizes a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds its estimated fair value. In the year to December 31, 2013 the Company has recorded an impairment charge of $198.9 million related to the goodwill allocated to the Company's former Regenerative Medicine (“RM”) reporting unit. See Note 11 for further details. | |
(ii) Other intangible assets | |
Other intangible assets principally comprise intellectual property rights for products with a defined revenue stream, acquired product technology and IPR&D. Intellectual property rights for currently marketed products and acquired product technology are recorded at fair value and amortized over the estimated useful life of the related product, which ranges from 1 to 20 years (weighted average 10.1 years). IPR&D acquired through a business combination is capitalized as an indefinite lived intangible asset until the completion or abandonment of the associated R&D efforts. IPR&D is reviewed for impairment using a “one-step” approach which compares the fair value of the IPR&D asset with its carrying amount. An impairment loss is recognized to the extent that the carrying value exceeds the fair value of the IPR&D asset. Once the R&D efforts are completed the useful life of the relevant assets will be determined, and the IPR&D asset amortized over this useful economic life. | |
The following factors, where applicable, are considered in estimating the useful lives of Other intangible assets: | |
expected use of the asset; | |
regulatory, legal or contractual provisions, including the regulatory approval and review process, patent issues and actions by government agencies; | |
the effects of obsolescence, changes in demand, competing products and other economic factors, including the stability of the market, known technological advances, development of competing drugs that are more effective clinically or economically; | |
actions of competitors, suppliers, regulatory agencies or others that may eliminate current competitive advantages; and | |
historical experience of renewing or extending similar arrangements. | |
When a number of factors apply to an intangible asset, these factors are considered in combination when determining the appropriate useful life for the relevant asset. | |
(w) Non-monetary transactions | |
The Company enters into certain non-monetary transactions that involve either the granting of a license over the Company's patents or the disposal of an asset or group of assets in exchange for a non–monetary asset, usually equity. The Company accounts for these transactions at fair value if the Company is able to determine the fair value within reasonable limits. To the extent the Company concludes that it is unable to determine the fair value of a transaction that transaction is accounted for at the recorded amounts of the assets exchanged. Management is required to exercise its judgment in determining whether or not the fair value of the asset received or given up can be determined. | |
(x) New accounting pronouncements | |
Adopted during the period | |
Indefinite-Lived Intangible Assets (Other than Goodwill) Impairment Testing | |
In July 2012 the Financial Accounting Standard Board (“FASB”) issued guidance on the testing of indefinite-lived intangible assets for impairment. The guidance permits an entity to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, performing the impairment test is unnecessary. The more-likely-than-not threshold is defined as a likelihood of more than 50 percent. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the impairment test and may resume performing the qualitative assessment in any subsequent period. The guidance has been adopted prospectively from January 1, 2013. The adoption of the guidance did not impact the Company's consolidated financial position, results of operations or cash flows. | |
Disclosure about offsetting assets and liabilities | |
In December 2011 the FASB issued guidance on disclosures about offsetting assets and liabilities. In January 2013 the FASB amended the previous guidance to clarify the scope of guidance issued in December 2011. The amended guidance requires entities to disclose both gross and net information about derivatives including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with FASB guidance on topics “Balance Sheet” and “Derivatives and Hedging” or subject to an enforceable master netting arrangement or similar agreement; to enable users of financial statements to understand the effects or potential effects of those arrangements on its financial position. The guidance has been adopted prospectively from January 1, 2013. The adoption of the guidance did not impact the Company's consolidated financial position, results of operations or cash flows. Enhanced disclosure of balance sheet offsetting as required by this guidance is included in Note 20. | |
Amounts reclassified out of Comprehensive Income | |
In February 2013 the FASB issued guidance on reporting amounts reclassified out of accumulated other comprehensive income. The guidance requires entities to provide information about the amount reclassified out of comprehensive income by component and present either on the face of the financial statements or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under US GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts. The guidance has been adopted prospectively from January 1, 2013. The adoption of the guidance did not impact the Company's consolidated financial position, results of operations or cash flows. | |
Presentation of an unrecognized tax benefit | |
In July 2013 the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists. The guidance requires entities to present an unrecognized tax benefit or a portion of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, except as follows: to the extent a net operating loss carry forward, a similar tax loss, or a tax credit carry forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company has adopted this guidance in the period. The adoption of the guidance did not materially impact the Company's consolidated financial position, results of operations or cash flows. | |
(y) Statutory accounts | |
The consolidated financial statements as at December 31, 2013 and 2012, and for each of the three years in the period to December 31, 2013 do not comprise statutory accounts within the meaning of Section 434 of the UK Companies Act 2006 or Article 104 of the Companies (Jersey) Law 1991. | |
Statutory accounts of Shire, consisting of the solus accounts of Shire plc for the year to December 31, 2012 prepared under UK GAAP and in compliance with Jersey law have been delivered to the Registrar of Companies for Jersey. The consolidated accounts of the Company for the year ended December 31, 2012 prepared in accordance with US GAAP, in fulfillment of the Company's United Kingdom Listing Authority (“UKLA”) annual reporting requirements were filed with the UKLA. The auditor's reports on these accounts were unqualified. | |
Statutory accounts of Shire, consisting of the solus accounts of Shire plc for the year to December 31, 2013 prepared under UK GAAP and in compliance with Jersey law will be delivered to the Registrar of Companies in Jersey in 2014. The Company further expects to file the consolidated accounts of the Company for the year to December 31, 2013, prepared in accordance with US GAAP, in fulfillment of the Company's UKLA annual reporting requirements with the UKLA in 2014. |
Business_Combinations
Business Combinations | 12 Months Ended | |
Dec. 31, 2013 | ||
Business Combinations [Abstract] | ' | |
Business Combination Disclosure | ' | |
3. Business combinations | ||
Acquisition of ViroPharma Inc. (“ViroPharma”) | ||
On November 11, 2013, Shire signed a definitive agreement to acquire all of the outstanding share capital of ViroPharma for $50 per share in cash or approximately $4,200 million. The transaction was completed on January 24, 2014 at which time ViroPharma became a wholly-owned subsidiary. | ||
ViroPharma is a high growth, rare disease biopharmaceutical company, whose commercial product CINRYZE (C1 esterase inhibitor [human]), is a leading brand for the prophylactic treatment of Hereditary Angioedema (“HAE”). | ||
The acquisition of ViroPharma will be accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from ViroPharma will be recorded at the date of acquisition, at their fair value. Shire's consolidated financial statements will reflect these fair values at, and the results of ViroPharma will be included in Shire's consolidated statement of income from, January 24, 2014. As the initial accounting for the business combination has not yet been completed, further disclosure relating to this acquisition will be included in the Company's Form 10-Q for the three months ended March 31, 2014. | ||
In the year to December 31, 2013 the Company expensed costs of $12.8 million (2012: $nil) relating to the acquisition of ViroPharma, which have been recorded within integration and acquisition costs in the Company's consolidated income statement. | ||
Acquisition of SARcode Bioscience Inc. (“SARcode”) | ||
On April 17, 2013 Shire completed the acquisition of 100% of the outstanding share capital of SARcode. The acquisition date fair value of consideration totaled $368 million, comprising cash consideration paid on closing of $151 million and the acquisition date fair value of contingent consideration payable of $217 million. Following top-line Phase 3 study results in December 2013, the maximum amount of contingent cash consideration which may now be payable by Shire in future periods is $225 million dependent upon achievement of certain net sales milestones. | ||
This acquisition brings the global rights of a new Phase 3 compound, Lifitegrast, currently under development for the treatment of Dry Eye disease, into Shire's portfolio. Top-line results from OPUS-2, a Phase 3 efficacy and safety study of 5.0% Lifitegrast ophthalmic solution, were announced on December 6, 2013. Shire intends to investigate the full data from OPUS-2 and is planning further interactions with the FDA in the first half of 2014 in order to advance this program. | ||
The acquisition of SARcode has been accounted as a business combination using the acquisition method. The assets and liabilities assumed from SARcode have been recorded at their fair values at the date of acquisition, being April 17, 2013. The Company's consolidated financial statements and results of operations include the results of SARcode from April 17, 2013. In the year to December 31, 2013 the Company's consolidated income statement includes pre-tax losses of $26.0 million in relation to the post acquisition results of SARcode. | ||
The purchase price has been allocated to acquired in process research and development (“IPR&D”) in respect of Lifitegrast ($412 million), net current liabilities assumed ($8.2 million), net non-current liabilities assumed, including deferred tax liabilities ($122.4 million) and goodwill ($86.6 million). This acquisition resulted in goodwill of $86.6 million, which is not deductible for tax purposes. Goodwill includes the value of the assembled workforce and the related scientific expertise in ophthalmology which allows for potential expansion into a new therapeutic area. | ||
In the year to December 31, 2013 the Company recorded a net credit of $170.7 million (2012: $nil) within Integration and acquisition costs relating to the acquisition of SARcode. This amount principally comprises a credit of $176.0 million on re-measuring the fair value of the contingent consideration payable following OPUS-2 trial results. In addition, acquisition and integration costs related to SARcode amounted to $5.3 million. | ||
Acquisition of Premacure AB (“Premacure”) | ||
On March 8, 2013 Shire completed the acquisition of 100% of the outstanding share capital of Premacure. The acquisition date fair value of the consideration totaled $140.2 million, comprising cash consideration paid on closing of $30.6 million, and the fair value of contingent consideration payable of $109.6 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods, dependent upon the successful completion of certain development and commercial milestones, is $169 million. Shire will also pay royalties on relevant net sales. | ||
Premacure is developing a protein replacement therapy (“PREMIPLEX”), currently in Phase 2 development, for the prevention of Retinopathy of Prematurity (“ROP”). ROP is a rare and potentially blinding eye disorder that primarily affects premature infants and is one of the most common causes of visual loss in childhood. Together, the acquisitions of SARcode and Premacure build Shire's presence in the ophthalmology therapeutic area. | ||
The acquisition of Premacure has been accounted for as a business combination using the acquisition method. The assets and the liabilities assumed from Premacure have been recorded at their fair values at the date of acquisition, being March 8, 2013. The Company's consolidated financial statements and results of operations include the results of Premacure from March 8, 2013. | ||
The purchase price has been allocated to acquired IPR&D in respect of PREMIPLEX ($151.8 million), net current liabilities assumed ($11.7 million), net non-current liabilities assumed, including deferred tax liabilities ($29.5 million) and goodwill ($29.6 million). This acquisition resulted in goodwill of $29.6 million, which is not deductible for tax purposes. | ||
In the year to December 31, 2013 the Company expensed costs of $9.5 million (2012: nil) relating to the acquisition of Premacure (including charges related to the change in fair value of contingent consideration payable), which have been recorded within integration and acquisition costs in the Company's consolidated income statement. | ||
Acquisition of Lotus Tissue Repair, Inc. (“Lotus Tissue Repair”) | ||
On February 12, 2013 Shire completed the acquisition of 100% of the outstanding share capital of Lotus Tissue Repair. The acquisition date fair value of consideration totaled $174.2 million, comprising cash consideration paid on closing of $49.4 million, and the fair value of contingent consideration payable of $124.8 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $275 million. The amount of contingent cash consideration ultimately payable by Shire is dependent upon achievement of certain pre-clinical and clinical development milestones. | ||
Lotus Tissue Repair is developing a proprietary recombinant form of human collagen Type VII (“rC7”) as the first and only intravenous protein replacement therapy currently being investigated for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”). DEB is a devastating orphan disease for which there is no currently approved treatment option other than palliative care. The acquisition adds to Shire's pipeline a late stage pre-clinical product for the treatment of DEB with global rights. | ||
The acquisition of Lotus Tissue Repair has been accounted for as a business combination using the acquisition method. The assets and the liabilities assumed from Lotus Tissue Repair have been recorded at their fair values at the date of acquisition, being February 12, 2013. The Company's consolidated financial statements and results of operations include the results of Lotus Tissue Repair from February 12, 2013. | ||
The purchase price has been allocated to acquired IPR&D in respect of rC7 ($176.7 million), net current assets assumed ($6.8 million), net non-current liabilities assumed, including deferred tax liabilities ($63.4 million) and goodwill ($54.1 million). This acquisition resulted in goodwill of $54.1 million, which is not deductible for tax purposes. | ||
In the year to December 31, 2013 the Company expensed costs of $2.3 million (2012: $0.5 million) relating to the acquisition of Lotus Tissue Repair, which have been recorded within integration and acquisition costs in the Company's consolidated income statement. | ||
Acquisition of FerroKin BioSciences, Inc. (“FerroKin”) | ||
On April 2, 2012 Shire completed the acquisition of 100% of the outstanding share capital of FerroKin. The acquisition-date fair value of consideration totalled $159.3 million, comprising cash consideration paid on closing of $94.5 million and the fair value of contingent consideration payable of $64.8 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $225.0 million. The amount of contingent cash consideration ultimately payable by Shire is dependent upon the achievement of certain clinical development, regulatory and net sales milestones. | ||
The acquisition of FerroKin adds global rights to a Phase 2 product, SHP 602 (formerly referred to as FBS0701), to Shire's SP pipeline. SHP 602 is intended to serve a chronic patient need for treatment of iron overload following numerous blood transfusions. Together with the Company's collaboration with Sangamo Biosciences Inc. (“Sangamo”), this acquisition is a strategic step in building Shire's hematology business, which already includes XAGRID and a growing development pipeline. | ||
The acquisition of FerroKin has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from FerroKin have been recorded at their fair values at the date of acquisition, being April 2, 2012. The Company's consolidated financial statements and results of operations include the results of FerroKin from April 2, 2012. In the year to December 31, 2012 the Company included pre-tax losses of $19.1 million, for FerroKin within its consolidated statement of income. | ||
The purchase price has been allocated to acquired in-process research and development (“IPR&D”) in respect of SHP602 ($166.0 million), net current liabilities assumed ($6.6 million), net non-current liabilities assumed (including deferred tax liabilities) ($46.2 million) and goodwill ($46.1 million). Goodwill arising of $46.1 million is not deductible for tax purposes. | ||
In the year to December 31, 2013 the Company expensed costs of $10.4 million (2012: $12.1 million) relating to the FerroKin acquisition, which have been recorded within Integration and acquisition costs in the Company's consolidated statement of income. | ||
Acquisition of certain assets & liabilities of Pervasis Therapeutics, Inc. (“Pervasis”) | ||
On April 19, 2012 Shire acquired substantially all the assets and certain liabilities of Pervasis. The acquisition date fair value of the consideration totaled $26.1 million, comprising cash consideration paid on closing of $2.5 million and the fair value of contingent consideration payable of $23.6 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is up to $169.5 million. The amount of contingent cash consideration ultimately payable by Shire is dependent upon achievement of certain clinical development, regulatory and net sales milestones. The acquisition adds SHP613 (formerly VASCUGEL) to Shire's pipeline. SHP613 is currently in Phase 2 development for acute vascular repair, focused on improving hemodialysis access for patients with end-stage renal disease. | ||
The acquisition has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from Pervasis have been recorded at their fair values at the date of acquisition, being April 19, 2012. The Company's consolidated financial statements and results of operations include the results of the assets acquired and the liabilities assumed from Pervasis from April 19, 2012. The purchase price has been allocated to acquired IPR&D (principally for VASCUGEL) ($24.3 million), current liabilities assumed ($0.2 million) and goodwill ($2.0 million). Goodwill arising of $2.0 million is not deductible for tax purposes. | ||
Acquisition of Advanced BioHealing, Inc. (“ABH”) | ||
On June 28, 2011 Shire completed its acquisition of 100% of the outstanding shares and other equity instruments of ABH. The fair value of cash consideration paid by the Company during 2011 was $739.6 million. | ||
On January 16, 2014, the Company sold and transferred certain of the assets relating to the manufacturing, marketing, sale and distribution of DERMAGRAFT to Organogenesis Inc. For further information, see Note 8, “Results of discontinued operations and other assets held for sale” to the consolidated financial statements set forth in this Annual Report on Form 10-K. | ||
The acquisition of ABH was accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from ABH have been recorded at their fair values at the date of acquisition, being June 28, 2011. The determination of final fair values was completed on June 28, 2012. The Company's consolidated financial statements and results of operations include the results of ABH from June 28, 2011. The amount of ABH's revenues and pre-tax losses included in the Company's consolidated statement of income for the year ended December 31, 2011 were $105.3 million and $15.3 million (after intangible asset amortization of $20.0 million) respectively. | ||
The Company's allocation of the purchase price to the assets acquired and liabilities assumed is outlined below: | ||
Fair value | ||
$’M | ||
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | 14.6 | |
Accounts receivable | 30.1 | |
Inventories | 30.7 | |
Deferred tax assets | 51.1 | |
Other current assets | 7.9 | |
_______________ | ||
Total current assets | 134.4 | |
Non-current assets: | ||
Property, plant and equipment | 16.6 | |
Goodwill | 197 | |
Other intangible assets | ||
- DERMAGRAFT product technology | 710 | |
- other intangible assets | 1.5 | |
Other non-current assets | 0.2 | |
_______________ | ||
Total assets | 1,059.70 | |
_______________ | ||
LIABILITIES | ||
Current liabilities: | ||
Accounts payable and other current liabilities | 52.4 | |
Non-current liabilities: | ||
Long term debt, less current portion | 9.1 | |
Deferred tax liabilities | 258.5 | |
Other non-current liabilities | 0.1 | |
_______________ | ||
Total liabilities | 320.1 | |
_______________ | ||
Fair value of identifiable assets acquired and liabilities assumed | 739.6 | |
Consideration | _______________ | |
Cash consideration paid | 739.6 | |
_______________ | ||
Supplemental disclosure of pro forma information | ||
The unaudited pro forma financial information to present the combined results of the operations of Shire, SARcode, Premacure and Lotus Tissue Repair are not provided as the impacts of these acquisitions were not material to the Company's results of continuing operations for any period presented. | ||
Divestment_of_Product_Rights
Divestment of Product Rights | 12 Months Ended |
Dec. 31, 2013 | |
Gains (Losses) on Sales of Assets [Abstract] | ' |
Divestment of product rights | ' |
4. Divestment of product rights | |
On October 1, 2010 the Company completed the divestment of DAYTRANA to Noven (Noven developed and manufactures DAYTRANA, and Shire licensed DAYTRANA from Noven in 2003). No consideration was received at the time of divestment, however consideration is receivable from Noven dependent on DAYTRANA's performance in the period subsequent to divestment. On divestment Shire recorded the fair value of contingent consideration receivable from Noven within current and non-current assets. During the year to December 31, 2013 the Company recognized a gain of $15.9 million (2012: gain of $18.1 million, 2011: loss of $6.0 million) due to changes in the fair value of this contingent consideration. At December 31, 2013 the Company has recorded a receivable based on the fair value of future contingent consideration totaling $36.1 million (2012: $39.2 million), split between current assets $9.6 million (2012: $11.6 million) and non-current assets $26.5 million (2012: $27.6 million). |
Reorganization_Costs
Reorganization Costs | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Restructuring and Related Activities [Abstract] | ' | ||||
Reorganization Costs Disclosure | ' | ||||
5. Reorganization costs | |||||
Turnhout, Belgium Site Closure | |||||
On January 23, 2013 Shire announced that it had decided to proceed with a collective dismissal and business closure at its site in Turnhout, Belgium. This decision follows the conclusion of an information and consultation process. Shire will continue to sell RESOLOR in Europe and the supply of RESOLOR for patients in Europe who rely on the medicine will not be affected. The closure of the Turnhout site was completed during 2013. In the year to December 31, 2013 the Company incurred reorganization costs totaling $23.6 million, relating to employee involuntary termination benefits and other re-organization costs. | |||||
One Shire business reorganization | |||||
On May 2, 2013, the Company announced that there would be a reorganization of the business to integrate the three divisions into a simplified One Shire organization in order to drive future growth and innovation. | |||||
On November 7, 2013 the Company announced that, as part of the One Shire reorganization, the Company had undertaken a review of all of Shire's pipeline programs to identify those projects that fit with Shire's new strategic direction and have an acceptable likelihood of success. Shire's pre-clinical investments will now be primarily focused on Rare Diseases, meaning that the majority of other pre-clinical projects will not continue. Several clinical programs have also been discontinued. The impact of the prioritization and rationalization of the Company's development portfolio means many of the R&D programs currently run from Basingstoke, UK will cease. Taken together with the overall streamlining of the R&D organization, this has resulted in a significant number of R&D roles in Basingstoke being eliminated and some positions being re-located. A small number of functional roles that support R&D in Basingstoke have also been affected. | |||||
In addition the Company also announced plans to relocate its international commercial hub from Nyon, Switzerland to Zug, Switzerland. All Nyon-based employees have been impacted by the One Shire transition and the proposed move to Zug. Shire is planning for the new Zug office to be ready for occupancy in summer 2014, and will phase out the Nyon office over a reasonable period of time to enable employees and their families to manage their re-locations. | |||||
In the year to December 31, 2013 the Company incurred reorganization costs totaling $64.6 million, relating to employee involuntary termination benefits and other reorganization costs. The One Shire reorganization is expected to be substantially completed by the end of 2014. Currently, the Company estimates that further costs in respect of the One Shire reorganization of approximately $150 million will be expensed as incurred during 2014. | |||||
The liability for reorganization costs arising on the closure of Company's site in Turnhout, Belgium and the One Shire business reorganization at December 31, 2013 is as follows:. | |||||
Opening liability | Amount | Closing liability at | |||
at January 1, | charged to re- | December 31, | |||
2013 | organization | Paid/Utilized | 2013 | ||
$'M | $'M | $'M | $'M | ||
___________ | ____________ | ___________ | ___________ | ||
Involuntary termination benefits | - | 44.7 | -29.4 | 15.3 | |
Other reorganization costs | - | 43.5 | -34 | 9.5 | |
___________ | ____________ | ___________ | ___________ | ||
- | 88.2 | -63.4 | 24.8 | ||
___________ | ___________ | ___________ | ___________ | ||
At December 31, 2013 the closing reorganization cost liability was recorded within accounts payable and accrued expenses ($24.8 million). |
Accounts_Receivable_Net
Accounts Receivable, Net | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Receivables [Abstract] | ' | |||
Accounts Receivable Disclosure | ' | |||
6. Accounts receivable, net | ||||
Accounts receivable at December 31, 2013 of $961.2 million (December 31, 2012: $824.2 million), are stated net of a provision for discounts and doubtful accounts of $47.9 million (December 31, 2012: $41.7 million, December 31, 2011: $31.1 million). | ||||
Provision for discounts and doubtful accounts: | ||||
2013 | 2012 | 2011 | ||
$’M | $’M | $’M | ||
_____________ | _____________ | _____________ | ||
As at January 1, | 41.7 | 31.1 | 23.4 | |
Provision charged to operations | 306.8 | 283.3 | 240.8 | |
Provision utilization | -300.6 | -272.7 | -233.1 | |
_____________ | _____________ | _____________ | ||
As at December 31, | 47.9 | 41.7 | 31.1 | |
_____________ | _____________ | _____________ | ||
At December 31, 2013 accounts receivable included $37.8 million (December 31, 2012: $38.5 million) related to royalty income. | ||||
Inventories
Inventories | 12 Months Ended | ||
Dec. 31, 2013 | |||
Inventory Disclosure [Abstract] | ' | ||
Inventory Disclosure | ' | ||
7. Inventories | |||
Inventories are stated at the lower of cost or market and comprise: | |||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Finished goods | 156.6 | 124.4 | |
Work-in-progress | 240.5 | 220.6 | |
Raw materials | 58.2 | 91.9 | |
____________ | ____________ | ||
455.3 | 436.9 | ||
____________ | ____________ |
Results_of_discontinued_operat
Results of discontinued operations and other assets held for sale | 12 Months Ended | |||
Dec. 31, 2013 | ||||
DiscontinuedOperationsAndDisposalGroupsAbstract | ' | |||
Assets of discontinued operations and other assets held for sale Disclosure | ' | |||
8. Results of discontinued operations and assets held for sale | ||||
On January 16, 2014 the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Organogenesis Inc. (the “Purchaser” or “Organogenesis”), pursuant to which, on January 16, 2014 the Company sold and transferred to the Purchaser certain of the assets (the “Transferred Assets”) relating to the manufacturing, marketing, sale and distribution of DERMAGRAFT (the “Business”), and the Purchaser assumed certain of the liabilities relating to the Business. The Company will receive no upfront payment from the Purchaser but is entitled to receive total milestone payments of up to $300 million in cash if the Purchaser meets certain annual net sales targets during the five consecutive calendar years ending with the calendar year ending December 31, 2018. | ||||
The Transferred Assets include intellectual property relating to DERMAGRAFT, including patents, trademarks and know-how, regulatory filings and registrations relating to DERMAGRAFT ($611.4 million), certain manufacturing plant, equipment and materials relating to the Business ($29.1 million), and DERMAGRAFT product inventory ($16.2 million) and accounts receivable ($11.8 million). The Company is generally retaining liabilities incurred prior to the date of the Asset Purchase Agreement relating to the DERMAGRAFT business, including the previously disclosed investigation by the US Department of Justice relating to the sales and marketing practices of Advanced Biohealing, Inc. (“ABH”). | ||||
The Transferred Assets have been measured at their fair value less costs to sell, amounting to $31.6 million, and are presented within “Assets held-for-sale” in the consolidated balance sheet as at December 31, 2013. The fair value of these assets was determined using the income approach, which used significant unobservable (Level 3) inputs (see Note 21 for further details). | ||||
On October 22, 2013 Shire announced that it had decided to discontinue the construction of its new manufacturing facility in San Diego. Shire is currently assessing disposal options for this facility. In the year to December 31, 2013, the Company recorded charges of $99.6 million, comprising charges to write down the carrying value of the assets related to this manufacturing facility, accruals for non-cancellable contractual costs in relation to the construction, and a provision for the onerous land lease. These costs have been presented within discontinued operations in the consolidated income statement. | ||||
The operating results associated with the DERMAGRAFT business, including the costs of discontinuing the second manufacturing facility, have been classified as discontinued operations in the consolidated statements of income for all periods presented. | ||||
The components of discontinued operations which relate to the DERMAGRAFT business are as follows | ||||
2013 | 2012 | 2011 | ||
$’M | $’M | $’M | ||
Revenues: | _______________ | _______________ | _______________ | |
Product revenues | 89.8 | 153.8 | 105.3 | |
_______________ | _______________ | _______________ | ||
Loss from discontinued operations before income taxes | -1,080.90 | -96.4 | -27 | |
Income taxes | 326.4 | 36.1 | 9.3 | |
_______________ | _______________ | _______________ | ||
Loss from discontinued operations, net of taxes | -754.5 | -60.3 | -17.7 | |
_______________ | _______________ | _______________ | ||
The loss from discontinued operations before income taxes in 2013 includes: $191.8 million, being the proportion of the RM reporting unit goodwill impairment charge (recorded in the first quarter of 2013) that relates to the DERMAGRAFT business, $636.9 million being the impairment charge recorded upon re-measurement of the divested assets to their fair value less costs to sell in the fourth quarter of 2013, and $99.6 million being amounts previously recorded to Reorganization costs in relation to the DERMAGRAFT business. | ||||
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 12 Months Ended | ||
Dec. 31, 2013 | |||
Prepaid Expense and Other Assets, Current [Abstract] | ' | ||
Prepaid Expense and Other Assets, Current | ' | ||
9. Prepaid expenses and other current assets | |||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
______________ | ____________ | ||
Prepaid expenses | 29.4 | 31.7 | |
Income tax receivable | 177.4 | 130.6 | |
Value added taxes receivable | 14.5 | 20.9 | |
Other current assets | 41.7 | 38.6 | |
______________ | ______________ | ||
263 | 221.8 | ||
______________ | ______________ |
Property_Plant_and_Equipment_N
Property, Plant and Equipment, Net | 12 Months Ended | ||
Dec. 31, 2013 | |||
Property, Plant and Equipment [Abstract] | ' | ||
Property, Plant and Equipment Disclosure | ' | ||
10. Property, plant and equipment, net | |||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Land and buildings | 695 | 701.2 | |
Office furniture, fittings and equipment | 467 | 383.8 | |
Warehouse, laboratory and manufacturing equipment | 276.2 | 287.2 | |
Assets under construction | 45.6 | 93.8 | |
____________ | ____________ | ||
1,483.80 | 1,466.00 | ||
Less: Accumulated depreciation | -592 | -510.2 | |
____________ | ____________ | ||
891.8 | 955.8 | ||
____________ | ____________ | ||
Depreciation expense for the years to December 31, 2013, 2012 and 2011 was $127.6 million, $109.0 million, and $119.5 million respectively. |
Goodwill
Goodwill | 12 Months Ended | ||
Dec. 31, 2013 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||
Goodwill Disclosure | ' | ||
11. Goodwill | |||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Goodwill arising on businesses acquired | 624.6 | 644.5 | |
____________ | ____________ | ||
In the year to December 31, 2013 the Company completed the acquisitions of SARcode, Premacure and Lotus Tissue Repair, which resulted in goodwill of $86.6 million, $29.6 million and $54.1 million, respectively (see Note 3 for details). | |||
As a result of the re-alignment of the business into a simplified One Shire organization, the Company now comprises one operating and one reportable segment (see note 24 for further details). | |||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
As at January 1, | 644.5 | 592.6 | |
Acquisitions | 170.3 | 48.1 | |
Goodwill impairment charge related to continuing operations | -7.1 | - | |
Goodwill impairment charge related to DERMAGRAFT business and transferred to discontinued operations | -191.8 | - | |
Foreign currency translation | 8.7 | 3.8 | |
____________ | ____________ | ||
As at December 31, | 624.6 | 644.5 | |
____________ | ____________ | ||
Goodwill is tested for impairment at least annually as at October 1 each year. This assessment is also performed whenever there is a change in circumstances that indicates the carrying value of these assets may not be recoverable. | |||
In the first quarter of 2013 the Company identified circumstances which indicated that the carrying value of goodwill in the Company's former RM reporting unit may not be recoverable, which triggered an impairment test in advance of the annual testing date. | |||
Those circumstances included the results of an independent market research study of the DERMAGRAFT sales potential, commissioned by the Company, which was finalized late in the first quarter of 2013. In addition, the recently completed restructuring of the RM sales and marketing organization and the implementation of a new commercial model had a more pronounced impact than previously expected. As a result of those and other factors forecast future sales were lower than at the time of acquisition. | |||
The results of the Company's March 31, 2013 impairment test showed that the carrying amount of the former RM reporting unit exceeded its fair value and the implied value of the goodwill was $nil. As a result the Company recorded an impairment charge of $198.9 million related to the goodwill allocated to the former RM reporting unit. The RM goodwill impairment charge is not deductible for tax purposes. Accumulated goodwill impairment as at December 31, 2013 was $198.9 million (December 31, 2012: $nil). | |||
The Company determined the estimated fair value of the former RM reporting unit using discounted cash flow analyses, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, expected cash flows for the period from March 31, 2013 to December 31, 2023 and the associated discount rate of 15.1%, which was derived from management's best estimate of the after-tax weighted average cost of capital for the RM reporting unit. | |||
Discounted cash flow analyses are dependent upon a number of quantitative and qualitative factors including estimates of forecasted revenue, profitability, earnings before interest, taxes, depreciation and amortization, and terminal values. The discount rates applied in the discounted cash flow analyses also have an impact on the estimates of fair value, as use of a higher rate will result in a lower estimate of fair value. | |||
Following the divestment of DERMAGRAFT (see Note 8) the Company has reclassified the Goodwill and related accumulated impairment of $191.8 million (being the portion of the former RM reporting unit goodwill impairment charge that relates to the DERMAGRAFT business) to discontinued operations. | |||
Other_Intangible_Assets_Net
Other Intangible Assets, Net | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||
Other Intangible Assets Disclosure | ' | |||
12. Other intangible assets, net | ||||
December 31, | December 31, | |||
2013 | 2012 | |||
$’M | $’M | |||
________________ | ________________ | |||
Amortized intangible assets | ||||
Intellectual property rights acquired for currently marketed products | 2,573.30 | 2,462.00 | ||
Acquired product technology | - | 710 | ||
Other intangible assets | 46.1 | 44.5 | ||
________________ | ________________ | |||
2,619.40 | 3,216.50 | |||
Unamortized intangible assets | ||||
Intellectual property rights acquired for IPR&D | 951.5 | 231 | ||
________________ | ________________ | |||
3,570.90 | 3,447.50 | |||
Less: Accumulated amortization | -1,258.30 | -1,059.40 | ||
________________ | ________________ | |||
2,312.60 | 2,388.10 | |||
________________ | ________________ | |||
The change in the net book value of other intangible assets for the year to to December 31, 2013 and 2012 is shown in the table below: | ||||
Other intangible assets | ||||
2013 | 2012 | |||
$’M | $’M | |||
________________ | ________________ | |||
As at January 1, | 2,388.10 | 2,493.00 | ||
Acquisitions | 731.8 | 281.6 | ||
Amortization charged | -152 | -153.6 | ||
Amortization charged on DERMAGRAFT product technology, presented within discontinued operations in the consolidated income statement | -39.4 | -40.5 | ||
Impairment charges | -19.9 | -197.9 | ||
Reclassification of DERMAGRAFT product technology to assets held for sale | -611.4 | - | ||
Foreign currency translation | 15.4 | 5.5 | ||
________________ | ________________ | |||
As at December 31, | 2,312.60 | 2,388.10 | ||
________________ | ________________ | |||
In the year to December 31, 2013 the Company acquired intangible assets totaling $731.8 million, relating to intangible assets acquired with SARcode, Premacure and Lotus Tissue Repair (see Note 3 for further details). | ||||
In the second quarter of 2013 the Company reviewed certain IPR&D intangible assets acquired through Movetis N.V. (“Movetis”) for impairment and recognized an impairment charge of $19.9 million (2012: $197.9 million) recorded within R&D in the consolidated income statement, to write-down these IPR&D assets to their fair value. The fair values of these assets were determined using the income approach, which used significant unobservable (Level 3) inputs (see Note 21 for further details). | ||||
Following the divestment of DERMAGRAFT (see Note 8) the Company has reclassified $611.4 million of intangible assets related to the DERMAGRAFT product technology to the assets held for sale. | ||||
Management estimates that the annual amortization charge in respect of intangible assets held at December 31, 2013 will be approximately $127 million for each of the five years to December 31, 2018. Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights, regulatory approval and subsequent amortization of acquired IPR&D projects, foreign exchange movements and the technological advancement and regulatory approval of competitor products. |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounts Payable and Accrued Liabilities, Current [Abstract] | ' | ||
Accounts Payable and Accrued Expenses Disclosure | ' | ||
13. Accounts payable and accrued expenses | |||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
________________ | ________________ | ||
Trade accounts payable and accrued purchases | 202.6 | 208.1 | |
Accrued rebates – Medicaid | 549.1 | 455.6 | |
Accrued rebates – Managed care | 258.1 | 184.9 | |
Sales return reserve | 98.8 | 90.5 | |
Accrued bonuses | 130.9 | 109 | |
Accrued employee compensation and benefits payable | 79.4 | 64.5 | |
R&D accruals | 69.6 | 73.5 | |
Provisions for litigation losses and other claims | 71.7 | 118.2 | |
Other accrued expenses | 228.2 | 197.2 | |
________________ | ________________ | ||
1,688.40 | 1,501.50 | ||
________________ | ________________ |
Other_Current_Liabilities
Other Current Liabilities | 12 Months Ended | ||
Dec. 31, 2013 | |||
Other Liabilities, Current [Abstract] | ' | ||
Other Current Liabilities | ' | ||
14. Other current liabilities | |||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Income taxes payable | 69 | 78.4 | |
Value added taxes | 15.8 | 23.6 | |
Contingent consideration payable | 12.9 | 16 | |
Other current liabilities | 21.8 | 26.1 | |
_____________ | _____________ | ||
119.5 | 144.1 | ||
_____________ | _____________ |
Convertible_Bonds
Convertible Bonds | 12 Months Ended |
Dec. 31, 2013 | |
Convertible Debt [Abstract] | ' |
Convertible Bonds Disclosure | ' |
15. Convertible bonds | |
Shire 2.75% Convertible Bonds due 2014 | |
On May 9, 2007 Shire issued $1,100 million in principal amount of 2.75% convertible bonds due in 2014 and convertible into fully paid ordinary shares of Shire plc (the “Bonds”). As of December 31, 2013 all of the Bonds had been converted or redeemed as described below. | |
On November 26, 2013, Shire issued an optional redemption notice under the Trust Deed to the holders of the Bonds. The aggregate outstanding principal amount of the Bonds on November 25, 2013, the last practicable date prior to the date of the optional redemption notice, was $1,075,070,000. The last day on which holders were able to exercise their conversion rights was December 13, 2013. Those Bonds which were not voluntarily converted by holders were redeemed by the Company on December 27, 2013 at par together with interest accrued to that date. As at December 31, 2013, Bonds in an aggregate principal amount of the $1,099,050,000 had been voluntarily converted into 33,806,464 fully paid ordinary shares at a conversion price of US$32.51 per ordinary share, in the capital of the Company, with par value of £0.05 each. The remaining outstanding Bonds in an aggregate principal amount of $950,000 were redeemed pursuant to the Optional Redemption Notice issued on November 26, 2013. Following the redemption of all the outstanding Bonds, the Company cancelled the listing of the Bonds on the Official List maintained by the UK Listing Authority and the admission to trading of the Bonds on the Professional Securities Market of the London Stock Exchange. |
Other_LongTerm_Debt
Other Long-Term Debt | 12 Months Ended |
Dec. 31, 2013 | |
LongTermDebtAbstract | ' |
Term Loan Agreeement | ' |
16. Other long term debt | |
Term Loan Agreement | |
On November 11, 2013, Shire entered into a $2.60 billion Facilities Agreement with, among others, Morgan Stanley Bank International Limited (acting as lead arranger and agent) (the “Facilities Agreement”). The Facilities Agreement comprises two credit facilities: (i) a $1.75 billion term loan facility and (ii) a $0.85 billion term loan facility. | |
On December 13, 2013 and on February 21, 2014, the Company cancelled part of the $2.60 billion term loan facility. The revised Facilities Agreement of $1.40 billion now comprises two credit facilities: (i) a $0.55 billion term loan facility and (ii) a $0.85 billion term loan facility. All other terms and conditions remain unchanged. | |
The $0.55 billion term loan facility, which matures on November 10, 2014, may be used only to finance the purchase price payable in respect of Shire's proposed acquisition of ViroPharma (including certain related costs) and for the redemption of Shire's Bonds. Shire has the option to extend the maturity of the $0.55 billion term loan facility once by a further 364 days. | |
The $0.85 billion term loan facility, which matures on November 11, 2015, may be used only to finance the purchase price payable in respect of Shire's proposed acquisition of ViroPharma (including certain related costs). | |
Interest on any loans made under the facilities will be payable on the last day of each interest period, which may be one week or one, two, three or six months at the election of Shire, or as otherwise agreed with the lenders. The interest rate applicable to the $0.55 billion term loan facility is LIBOR plus 0.75% per annum and increases by 0.25% per annum on August 11, 2014 and on three-month intervals thereafter. | |
The interest rate applicable to the $0.85 billion term loan facility commenced at LIBOR plus 1.15% per annum until delivery of the compliance certificate for the year ending December 31, 2013 and thereafter is subject to change depending upon the prevailing ratio of Net Debt to EBITDA of the Group (each as defined in the Facilities Agreement), in respect of the most recently completed financial year or financial half year. | |
Shire shall also pay a commitment fee on the available but unutilized commitments under the $0.55 billion term loan facility and the $0.85 billion term loan facility for the availability period applicable to each facility. With effect from first utilization, the commitment fee rate will be 35% of the applicable margin. Before first utilization, the commitment fee rate will increase in stages from 0% to 35% of the applicable margin over a period of 3 months. | |
The Facilities Agreement includes customary representations and warranties, covenants and events of default, including requirements that the ratio of Net Debt to EBITDA of the Group (each as defined in the Facilities Agreement) must not, at any time, exceed 3.5:1 for the Relevant Period (as defined in the Facilities Agreement), except that following certain acquisitions, including the ViroPharma acquisition, Shire may elect to increase the ratio to 4.0:1 in the relevant period in which the acquisition was completed and the immediately following relevant period. In addition, for each 12-month period ending December 31 or June 30, the ratio of EBITDA of the Group to Net Interest (each as defined in the Facilities Agreement) must not be less than 4.0:1. | |
The Facilities Agreement restricts (subject to certain covenants) Shire's ability to incur additional financial indebtedness, grant security over its assets or provide or guarantee loans. Further, any lender may require mandatory prepayment of its participation if there is a change of control of Shire. In addition, in certain circumstances, the net proceeds of certain shares, undertakings or business disposals by Shire must be applied towards the mandatory prepayment of the facilities, subject to certain exceptions. | |
Events of default under the facilities include: (i) non-payment of any amounts due under the facilities, (ii) failure to satisfy any financial covenants, (iii) material misrepresentation in any of the finance documents, (iv) failure to pay, or certain other defaults, under other financial indebtedness, (v) certain insolvency events or proceedings, (vi) material adverse changes in the business, operations, assets or financial condition of Shire and its subsidiaries, (vii) if it becomes unlawful for Shire or any of its subsidiaries that are parties to the Facilities Agreement to perform their obligations or (viii) if Shire or any subsidiary of Shire which is a party to the Facilities Agreement repudiates the Facilities Agreement or any other finance document, among others.The Facilities Agreement is governed by English law. |
Other_Noncurrent_Liabilities
Other Non-current Liabilities | 12 Months Ended | ||
Dec. 31, 2013 | |||
Other Liabilities, Noncurrent [Abstract] | ' | ||
Other Noncurrent Liabilities Disclosure | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Income taxes payable | 115.7 | 58.9 | |
Deferred revenue | 9.8 | 11.4 | |
Deferred rent | 11.3 | 11.9 | |
Insurance provisions | 1 | 12.3 | |
Contingent consideration payable | 393 | 120.4 | |
Other non-current liabilities | 57.7 | 26.7 | |
____________ | ____________ | ||
588.5 | 241.6 | ||
____________ | ____________ |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Commitments and Contingencies Disclosure | ' | ||
18. Commitments and contingencies | |||
(a) Leases | |||
Future minimum lease payments under operating leases at December 31, 2013 are presented below: | |||
Operating | |||
leases | |||
$’M | |||
_____________ | |||
2014 | 44.9 | ||
2015 | 33.6 | ||
2016 | 23.9 | ||
2017 | 17.9 | ||
2018 | 12.2 | ||
Thereafter | 83.4 | ||
_____________ | |||
215.9 | |||
_____________ | |||
The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2032. Lease and rental expense amounted to $44.0 million, $43.2 million and $37.6 million for the year to December 31, 2013, 2012 and 2011 respectively, which is predominately included in SG&A expenses in the Company's consolidated income statement. | |||
(b) Letters of credit and guarantees | |||
At December 31, 2013 the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companies totaling $51.0 million, providing security for the Company's performance of various obligations. These obligations are primarily in respect of the recoverability of insurance claims, lease obligations and supply commitments. | |||
(c) Collaborative arrangements | |||
Details of significant updates in collaborative arrangements are included below: | |||
In-licensing arrangements | |||
(i) Research Collaboration with Santaris Pharma A/S (“Santaris”) on Locked Nucleic Acid (“LNA”) Drug Platform | |||
On August 24, 2009 Shire announced that it had entered into a research collaboration with Santaris, to develop its proprietary LNA technology in a range of rare diseases. LNA technology has the benefit of shortened target validation and proof of concept, potentially increasing the speed and lowering the cost of development. As part of the joint research project Santaris will design, develop and deliver pre-clinical LNA oligonucleotides for Shire-selected orphan disease targets, and Shire will have the exclusive right to further develop and commercialize these candidate compounds on a worldwide basis. | |||
In the year to December 31, 2013 Shire paid success milestones and other support costs of $1.5 million (2012: $3.0 million; 2011: $2.5 million) and $4.5 million (2012: $8.1 million; 2011: $5.3 million) to Santaris respectively, which were expensed to R&D. Shire has remaining obligations to pay Santaris development and sales milestones up to a maximum of $71.0 million for each current indication. Shire will also pay single or double digit tiered royalties on net sales of the product. | |||
Shire and Santaris have formed a joint research committee to monitor R&D activities through preclinical lead candidate selection at which point all development and commercialization costs will be the responsibility of Shire. | |||
(ii) Collaboration and license agreement with Sangamo to develop therapeutics for hemophilia | |||
On February 1, 2012 Shire and Sangamo announced that they had entered into a collaboration and license agreement to develop therapeutics for hemophilia and other monogenic diseases based on Sangamo's ZFP technology. Sangamo is responsible for all activities through submission of Investigational New Drug Applications and European Clinical Trial Applications for each product and Shire will reimburse Sangamo for its internal and external research program-related costs. Shire is responsible for clinical development and commercialization of products arising from the collaboration. | |||
In the year to December 31, 2012 Shire made an upfront payment to Sangamo of $13.0 million, for technology access and R&D funding, which was expensed to R&D. | |||
In the year to December 31, 2013 Shire's share of R&D costs under this collaboration agreement was $15.2 million (2012: $8.9 million; 2011: $nil) which were expensed to R&D. Shire may be required to pay research, regulatory, development and commercial milestone payments up to a maximum of $213.5 million and to pay royalties on net sales of the product. | |||
Out-licensing arrangements | |||
Shire has entered into various collaborative arrangements under which the Company has out-licensed certain product or intellectual property rights for consideration such as up-front payments, development milestones, sales milestones and/or royalty payments. In some of these arrangements Shire and the licensee are both actively involved in the development and commercialization of the licensed product and have exposure to risks and rewards dependent on its commercial success. Under the terms of these arrangements, the Company may receive development milestone payments up to an aggregate amount of $39.0 million and sales milestones up to an aggregate amount of $71.5 million. The receipt of these substantive milestones is uncertain and contingent on the achievement of certain development milestones or the achievement of a specified level of annual net sales by the licensee. In the year to December 31, 2013 Shire received up-front and milestone payments totaling $3.0 million (2012: $18.3 million, 2011: $11.5 million). In the year to December 31, 2013 Shire recognized milestone income of $5.0 million (2012: $19.4 million, 2011: $17.5 million) in other revenues and $58.3 million (2012: $83.8 million, 2011: $65.2 million) in product sales for shipment of product to the relevant licensee. | |||
(d) Commitments | |||
(i) Clinical testing | |||
At December 31, 2013 the Company had committed to pay approximately $ 346 million (December 31, 2012: $ 425 million) to contract vendors for administering and executing clinical trials. The timing of these payments is dependent upon actual services performed by the organizations as determined by patient enrollment levels and related activities. | |||
(ii) Contract manufacturing | |||
At December 31, 2013 the Company had committed to pay approximately $ 109 million (December 31, 2012: $ 125 million) in respect of contract manufacturing. The Company expects to pay $ 109 million of these commitments in 2014. | |||
(iii) Other purchasing commitments | |||
At December 31, 2013 the Company had committed to pay approximately $ 128 million (December 31, 2012: $ 145 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $ 121 million of these commitments in 2014. | |||
(iv) Investment commitments | |||
At December 31, 2013 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $ 14 million (December 31, 2012: $ 15 million) which may all be payable in 2014, depending on the timing of capital calls. The investment commitments include additional funding to Nimbus Neptune, Inc., a variable interest entity of which Shire is not the primary beneficiary. Under the terms of the agreement Nimbus Neptune, Inc. controls and conducts all related research up to achievement of drug candidate status at which point Shire will have an exclusive option to acquire the program. Shire will then be responsible for all clinical development and future commercialization activities. Nimbus Neptune Inc. will be eligible to receive further consideration contingent upon achievement of certain development and commercial milestones. | |||
(v) Capital commitments | |||
At December 31, 2013 the Company had committed to spend $ 12 million (December 31, 2012: $ 97 million) on capital projects. | |||
(e) Legal and other proceedings | |||
The Company expenses legal costs as they are incurred. | |||
The Company recognizes loss contingency provisions for probable losses when management is able to reasonably estimate the loss. When the estimated loss lies within a range, the Company records a loss contingency provision based on its best estimate of the probable loss. If no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded. Estimates of losses may be developed substantially before the ultimate loss is known, and are therefore refined each accounting period as additional information becomes known. In instances where the Company is unable to develop a reasonable estimate of loss, no loss contingency provision is recorded at that time. As information becomes known a loss contingency provision is recorded when a reasonable estimate can be made. The estimates are reviewed quarterly and the estimates are changed when expectations are revised. An outcome that deviates from the Company's estimate may result in an additional expense or release in a future accounting period. At December 31, 2013 provisions for litigation losses, insurance claims and other disputes totaled $72.7 million (December 31, 2012: $130.5 million). | |||
The Company's principal pending legal and other proceedings are disclosed below. The outcomes of these proceedings are not always predictable and can be affected by various factors. For those legal and other proceedings for which it is considered at least reasonably possible that a loss has been incurred, the Company discloses the possible loss or range of possible loss in excess of the recorded loss contingency provision, if any, where such excess is both material and estimable. | |||
VYVANSE | |||
In May and June 2011, Shire was notified that six separate Abbreviated New Drug Applications ("ANDAs") were submitted under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of VYVANSE. The notices were from Sandoz, Inc. ("Sandoz"); Amneal Pharmaceuticals LLC ("Amneal"); Watson Laboratories, Inc.; Roxane Laboratories, Inc. ("Roxane"); Mylan Pharmaceuticals, Inc.; and Actavis Elizabeth LLC and Actavis Inc. (collectively, "Actavis"). Within the requisite 45 day period, Shire filed lawsuits for infringement of certain of Shire's VYVANSE patents in the US District Court for the District of New Jersey against each of Sandoz, Roxane, Amneal and Actavis; in the US District Court for the Central District of California against Watson Laboratories, Inc.; and in the US District Court for the Eastern District of New York against Mylan Pharmaceuticals, Inc. and Mylan Inc. (collectively "Mylan"). In February 2013, Shire withdrew its lawsuit against Watson following Watson's withdrawal of its ANDA. On December 9, 2011, the District Court of New Jersey consolidated the Sandoz, Roxane, Amneal and Actavis cases. The filing of the lawsuits triggered a stay of approval of all six ANDAs for up to 30 months from the expiration of the new chemical entity exclusivity, which will expire on August 23, 2014. In December 2011 and February 2012, Shire received additional notifications that Mylan had filed further certifications challenging other VYVANSE patents listed in the Orange Book. Within the requisite 45 day period, Shire filed a new lawsuit against Mylan, Johnson Matthey Pharmaceutical Materials and Johnson Matthey Inc. in New Jersey. In May 2012, the Mylan case that was filed in the Eastern District of New York was transferred and consolidated with the Mylan, Sandoz, Roxane, Amneal and Actavis cases in New Jersey. In December 2012, the parties completed a Markman briefing. A Markman hearing took place on August 5, 2013 and a ruling was rendered on August 8, 2013. No trial dates have been set. | |||
INTUNIV | |||
Between March 2010 and March 2011, Shire was notified that seven separate ANDAs had been submitted to the FDA under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of INTUNIV. The ANDA filers were Actavis Inc., Teva Pharmaceuticals USA, Inc., Anchen, Inc., Watson Pharmaceuticals, Inc., Impax Laboratories, Inc., Mylan Pharmaceuticals, Inc., Sandoz, Inc., and certain of their respective affiliates. Shire filed lawsuits against each of these ANDA filers. All of the lawsuits have now been settled. Under the terms of the Actavis settlement, Actavis has a license to make and market Actavis' generic versions of INTUNIV in the United States on December 1, 2014. Such sales will require the payment of a royalty of 25% of gross profits to Shire during the 180 day period of Actavis' exclusivity. All other parties with whom Shire has settled will be able to enter the market with their respective ANDA-approved products after Actavis' 180 day exclusivity period has expired. Each of the settlements included a consent judgment confirming that the proposed ANDA products infringe the patents-in-suit, U.S. Patents 6,287,599 and 6,811,794, and that those patents are valid and enforceable with respect to their respective proposed ANDA products. U.S. Patent 5,854,290, which was originally asserted in some of the litigations, has been dedicated to the public. | |||
FOSRENOL | |||
Between February 2009 and December 2010 Shire was notified that four separate ANDAs had been submitted to the FDA under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of FOSRENOL. The ANDA filers were Barr Laboratories, Inc.; Mylan, Inc.; Natco Pharma Limited and Alkem Laboratories Ltd., and certain of their respective affiliates. Shire filed lawsuits against each of these ANDA filers. In April 2011, Shire and Barr reached a settlement and the lawsuit against Barr was dismissed. The settlement provides Barr with a license to market its own generic version of FOSRENOL upon receiving FDA approval in the US on the earlier of the date of entry of another company's generic version of FOSRENOL to the US market, or October 1, 2021. Shire's lawsuits against Mylan, Alkem and Natco have each been dismissed, and consequently, each of Mylan, Alkem and Natco may enter the US market upon FDA approval of their respective ANDA products. | |||
LIALDA | |||
In May 2010 Shire was notified that Zydus Pharmaceuticals USA, Inc. (“Zydus”) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the District of Delaware against Zydus and Cadila Healthcare Limited, doing business as Zydus Cadila. As of February 22, 2013, the case has been administratively closed. No further activity will take place until after one of the parties files a motion to reopen the case. | |||
In February 2012, Shire was notified that Osmotica Pharmaceutical Corporation ("Osmotica") had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Northern District of Georgia against Osmotica. The filing of the lawsuit triggered a stay of approval of the ANDA for up to 30 months. The court has appointed a special master to assist with a Markman hearing and to preside over any discovery disputes. A Markman hearing took place on August 22, 2013 but no ruling has been rendered. No trial date has been set. | |||
In March 2012, Shire was notified that Watson Laboratories Inc.-Florida had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Southern District of Florida against Watson Laboratories Inc.-Florida and Watson Pharmaceuticals, Inc. The filing of the lawsuit triggered a stay of approval of the ANDA for up to 30 months. In August 2012, Shire filed an amended complaint adding Watson Pharma, Inc. and Watson Laboratories, Inc. as defendants. A Markman hearing was held on December 20, 2012 and a written Markman decision was given by the court on January 17, 2013. A trial took place in April, 2013 and on May 9, 2013 the trial court issued a decision finding that the proposed generic product infringes the patent-in-suit and that the patent is not invalid. Watson has appealed the trial court's ruling to the Court of Appeals of the Federal Circuit (“CAFC”) and a hearing took place on December 2, 2013. No ruling has been issued by the CAFC. | |||
In April 2012, Shire was notified that Mylan Pharmaceuticals, Inc. (“Mylan”) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Middle District of Florida against Mylan. The filing of the lawsuit triggered a stay of approval of the ANDA for up to 30 months. No date for a Markman hearing has been set. A trial is scheduled to occur in September, 2014. | |||
ADDERALL XR | |||
On November 1, 2010 Impax Laboratories, Inc. (“Impax”) filed suit against Shire in the US District Court for the Southern District of New York claiming that Shire was in breach of its supply contract for the authorized generic version of ADDERALL XR. On February 7, 2013 Shire and Impax settled this dispute and agreed to discontinue all court and related proceedings. Under the terms of the settlement Shire made a one-time cash payment to Impax of $48 million in the first quarter of 2013. Also as part of the settlement, the parties have entered into an amended supply agreement which will govern the supply of authorized generic ADDERALL XR from Shire to Impax until the end of the supply term on September 30, 2014. | |||
In February 2011, Shire was notified that Watson Laboratories, Inc.-Florida had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of all approved strengths of ADDERALL XR. Shire filed a lawsuit in the U.S. District Court for the Southern District of New York against Watson Pharmaceuticals, Inc. and certain of its affiliates for infringement of certain of Shire's ADDERALL XR patents. Par Pharmaceutical, Inc. (the successor in interest to Watson's ANDA for ADDERALL XR) has withdrawn its ANDA, and the litigation was dismissed on January 23, 2013 by agreement between Shire, Watson and Par Pharmaceutical, Inc.. | |||
In February 2013, Shire was notified that Neos Therapeutics, Inc. had submitted a New Drug Application under section 505(b)(2) of the Hatch Waxman Act (“505(b)(2) Application”). The 505(b)(2) Application was submitted with a paragraph IV certification for U.S. Reissued Patent Nos. RE41,148 and 42,096 listed in the Orange Book. Within the requisite 45 day period, Shire filed a lawsuit in the Northern District of Texas against Neos Therapeutics, Inc. for infringement of those patents. The filing of the lawsuit triggered a stay of final approval of the 505(b)(2) Application for 30 months. No trial date has been set. | |||
Subpoena related to ADDERALL XR, DAYTRANA and VYVANSE | |||
On September 23, 2009 the Company received a civil subpoena from the US Department of Health and Human Services Office of Inspector General in coordination with the US Attorney for the Eastern District of Pennsylvania seeking production of documents related to the sales and marketing of ADDERALL XR, DAYTRANA and VYVANSE. The investigation covered whether Shire engaged in off-label promotion and other conduct that may implicate the civil False Claims Act. | |||
On February 1, 2013 the Company announced it had reached an agreement in principle to resolve this matter. The agreement also addresses sales and marketing practices relating to LIALDA and PENTASA pursuant to a subsequent voluntary disclosure made by the Company. Shire cooperated with the US Government throughout the process that led to this agreement in principle. | |||
The Company has recorded a $57.5 million charge comprised of the agreement in principle amount, interest and costs, which has been charged to SG&A in the fourth quarter of 2012. The agreement in principle is subject to change until this matter is finally resolved. Discussions between the Company and the US Government are ongoing to establish a final resolution to the investigation. | |||
Louisiana Complaint related to ADDERALL, ADDERALL XR, DAYTRANA, VYVANSE and INTUNIV | |||
On July 22 and July 23, 2013, the State of Louisiana served Shire LLC and Shire US Inc., respectively, with a civil complaint filed in the 19th Judicial District Court for the Parish of East Baton Rouge. The complaint alleges that Shire's sales, marketing, and promotion of ADDERALL, ADDERALL XR, DAYTRANA, VYVANSE and INTUNIV violated state law. The State is seeking monetary relief for its claims of fraud, redhibition, and unjust enrichment, as well as violations of Louisiana's Medical Assistance Programs Integrity Law, Unfair Trade Practices Act, and anti-trust laws. Shire intends vigorously to defend these claims. Shire is not in a position at this time to predict the timing, result or outcome of these claims. | |||
Investigation related to DERMAGRAFT | |||
Shire understands that the Department of Justice, including the US Attorney's Office for the Middle District of Florida, Tampa Division and the US Attorney's Office for Washington, DC, is conducting civil and criminal investigations into the sales and marketing practices of Advanced BioHealing Inc. (“ABH”) relating to DERMAGRAFT. Shire is cooperating fully with these investigations. Shire is not in a position at this time to predict the scope, duration or outcome of these investigations. | |||
Civil Investigative Demand for ADDERALL XR, ADDERALL XR Authorized Generics and VYVANSE | |||
On April 5, 2012 Shire received a Civil Investigative Demand (“CID”) from the United States Federal Trade Commission (“FTC”) requesting that Shire provide it with certain information regarding the supply and reported shortages of ADDERALL XR and its authorized generics and the marketing and sale of ADDERALL XR, its authorized generics and VYVANSE. Shire believes the CID was triggered by reports of product shortages of ADDERALL XR and the authorized generic products in 2011. Shire responded to the CID in 2012. On August 29, 2013, the FTC informed Shire that it was closing the investigation without taking any further action. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||
19. Accumulated Other Comprehensive Income | |||||||
The changes in accumulated other comprehensive income, net of their related tax effects, in the year to to December 31, 2013 are included below: | |||||||
Foreign currency translation adjustment | Unrealized holding gain/(loss) on available-for-sale securities | Accumulated other comprehensive income | |||||
$M | $M | $M | |||||
As at January 1, 2013 | 85.1 | 1.8 | 86.9 | ||||
Current period change: | |||||||
Other Comprehensive income before reclassification | 25.3 | 1.5 | 26.8 | ||||
Gain transferred to the income statement (within Other (expense)/income, net) on disposal of available-for-sale securities | 0 | -3.5 | -3.5 | ||||
Net current period other comprehensive income | 25.3 | -2 | 23.3 | ||||
As at December 31, 2013 | 110.4 | -0.2 | 110.2 | ||||
Financial_Instruments
Financial Instruments | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Derivative Instrument Detail [Abstract] | ' | ||||
Financial Instruments Disclosure | ' | ||||
20. Financial instruments | |||||
Treasury policies and organization | |||||
The Company's principal treasury operations are coordinated by its corporate treasury function. All treasury operations are conducted within a framework of policies and procedures approved annually by the Board. As a matter of policy, the Company does not undertake speculative transactions that would increase its currency or interest rate exposure. | |||||
Interest rate risk | |||||
The Company is exposed to interest rate risk on its $1,200 million Revolving Credit Facility, its $0.55 billion term loan facility, its $0.85 billion term loan facility (the “Facilities”), to the extent the Facilities are utilized, restricted cash, cash and cash equivalents and on foreign exchange contracts on which interest is at floating rates. This exposure is primarily to US dollar, Pounds sterling, Euro and Canadian dollar interest rates. The Company has evaluated the interest rate risk on its debt facilities and considers the floating rate as appropriate. As the Company maintains all of its cash, liquid investments and foreign exchange contracts on a short term basis for liquidity purposes, this risk is not actively managed. In the year to to December 31, 2013 the average interest rate received on cash and liquid investments was less than 1% per annum. The largest proportion of these cash and liquid investments was in US dollar money market and liquidity funds. At December 31, 2013 the Facilities were not utilized. | |||||
The Company incurred interest at a fixed rate of 2.75% on its $1,100 million in principal amount convertible bonds which were converted and redeemed at December 31, 2013. | |||||
No derivative instruments were entered into during the year to December 31, 2013 to manage interest rate exposure. The Company continues to review its interest rate risk and the policies in place to manage the risk. | |||||
Credit risk | |||||
Financial instruments that potentially expose Shire to concentrations of credit risk consist primarily of short-term cash investments, derivative contracts and trade accounts receivable (from product sales and from third parties from which the Company receives royalties). Cash is invested in short-term money market instruments, including money market and liquidity funds and bank term deposits. The money market and liquidity funds in which Shire invests are all triple A rated by both Standard and Poor's and by Moody's credit rating agencies. | |||||
The Company is exposed to the credit risk of the counterparties with which it enters into derivative instruments. The Company limits this exposure through a system of internal credit limits which vary according to ratings assigned to the counterparties by the major rating agencies. The internal credit limits are approved by the Board and exposure against these limits is monitored by the corporate treasury function. The counterparties to these derivatives contracts are major international financial institutions. | |||||
The Company's revenues from product sales in the US are mainly governed by agreements with major pharmaceutical wholesalers and relationships with other pharmaceutical distributors and retail pharmacy chains. For the year to December 31, 2013 there were three customers in the US that accounted for 52% of the Company's product sales. However, such customers typically have significant cash resources and as such the risk from concentration of credit is considered acceptable. The Company has taken positive steps to manage any credit risk associated with these transactions and operates clearly defined credit evaluation procedures. However, an inability of one or more of these wholesalers to honor their debts to the Company could have an adverse effect on the Company's financial condition and results of operations. | |||||
A substantial portion of the Company's accounts receivable in countries outside of the United States is derived from product sales to government-owned or government-supported healthcare providers. The Company's recovery of these accounts receivable is therefore dependent upon the financial stability and creditworthiness of the relevant governments. In recent years the creditworthiness and general economic condition of a number of Eurozone countries (including Greece, Italy, Portugal and Spain (the “Relevant Countries”)) has deteriorated. As a result, in some of these countries the Company is experiencing delays in the remittance of receivables due from government-owned or government-supported healthcare providers. The Company continued to receive remittances in relation to government-owned or government-supported healthcare providers in all the Relevant Countries in the year to December 31, 2013, including receipts of $116.8 million and $144.7 million in respect of Spanish and Italian receivables, respectively. | |||||
To date the Company has not incurred significant losses on accounts receivable in the Relevant Countries, and continues to consider that such accounts receivable are recoverable. The Company will continue to evaluate all its accounts receivable for potential collection risks and has made provision for amounts where collection is considered to be doubtful. If the financial condition of the Relevant Countries or other Eurozone countries suffer significant deterioration, such that their ability to make payments becomes uncertain, or if one or more Eurozone member countries withdraws from the Euro, additional allowances for doubtful accounts may be required, and losses may be incurred, in future periods. Any such loss could have an adverse effect on the Company's financial condition and results of operations. | |||||
Foreign exchange risk | |||||
The Company trades in numerous countries and as a consequence has transactional and translational foreign exchange exposures. | |||||
Transactional exposure arises where transactions occur in currencies different to the functional currency of the relevant subsidiary. The main trading currencies of the Company are the US dollar, Pounds Sterling, Swiss Franc and the Euro. It is the Company's policy that these exposures are minimized to the extent practicable by denominating transactions in the subsidiary's functional currency. | |||||
Where significant exposures remain, the Company uses foreign exchange contracts (being spot, forward and swap contracts) to manage the exposure for balance sheet assets and liabilities that are denominated in currencies different to the functional currency of the relevant subsidiary. These assets and liabilities relate predominantly to intercompany financing. The foreign exchange contracts have not been designated as hedging instruments. Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated cash flow statement, unless the derivative instruments are economically hedging specific investing or financing activities. | |||||
Translational foreign exchange exposure arises on the translation into US dollars of the financial statements of non-US dollar functional subsidiaries. | |||||
At December 31, 2013 the Company had 29 swap and forward foreign exchange contracts outstanding to manage currency risk. The swap and forward contracts mature within 90 days. The Company did not have credit risk related contingent features or collateral linked to the derivatives. The Company has master netting agreements with a number of counterparties to these foreign exchange contracts and on the occurrence of specified events, the Company has the ability to terminate contracts and settle them with a net payment by one party to the other. The Company has elected to present derivative assets and derivative liabilities on a gross basis in the consolidated balance sheet. As at December 31, 2013 the potential effect of rights of set off associated with the foreign exchange contracts would be an offset to both assets and liabilities of $0.7 million, resulting in net derivative assets and derivative liabilities of $3.3 million and $2.1 million, respectively. Further details are included below: | |||||
Fair value | Fair value | ||||
December 31, | December 31, | ||||
2013 | 2012 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Assets | Prepaid expenses and other current assets | 4 | 1.3 | ||
Liabilities | Other current liabilities | 2.8 | 3 | ||
_____________ | _____________ | ||||
Net (losses)/ gains (both realized and unrealized) arising on foreign exchange contracts have been classified in the consolidated statements of income as follows: | |||||
Location of net (loss)/gain recognized in income | Amount of net (loss)/gain recognized in income | ||||
__________________________________ | ____________ | ____________ | |||
In the year to | December 31, | December 31, | December 31, | ||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
_____________ | _____________ | _____________ | |||
Foreign exchange contracts | Other income, net | -1.8 | 6.2 | 21.3 | |
_____________ | _____________ | _____________ | |||
These net foreign exchange (losses)/gains are offset within Other income, net by net foreign exchange losses arising on the balance sheet items that these contracts were put in place to manage. |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Fair Value Disclosures [Abstract] | ' | ||||||
Fair Value Disclosures | ' | ||||||
21. Fair value measurement | |||||||
Assets and liabilities that are measured at fair value on a recurring basis | |||||||
As at December 31, 2013 and December 31, 2012 the following financial assets and liabilities are measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3). | |||||||
Carrying | Fair value | ||||||
value | |||||||
Total | Level 1 | Level 2 | Level 3 | ||||
At December 31, 2013 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 6.7 | 6.7 | 6.7 | - | - | ||
Contingent consideration receivable (2) | 36.1 | 36.1 | - | - | 36.1 | ||
Foreign exchange contracts | 4 | 4 | - | 4 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 2.8 | 2.8 | - | 2.8 | - | ||
Contingent consideration payable(3) | 405.9 | 405.9 | - | - | 405.9 | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Total | Level 1 | Level 2 | Level 3 | ||||
At December 31, 2012 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 14.2 | 14.2 | 14.2 | - | - | ||
Contingent consideration receivable (2) | 38.3 | 38.3 | - | - | 38.3 | ||
Foreign exchange contracts | 1.3 | 1.3 | - | 1.3 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 3 | 3 | - | 3 | - | ||
Contingent consideration payable(3) | 1 | 136.4 | 136.4 | - | - | 136.4 | |
____________ | ____________ | ___________ | ___________ | ___________ | |||
(1) Available-for-sale securities are included within Investments in the consolidated balance sheet. | |||||||
(2) Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet. | |||||||
(3) Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet. | |||||||
Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown above are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company's intent or ability to dispose of the financial instrument. | |||||||
The following methods and assumptions were used to estimate the fair value of each material class of financial instrument: | |||||||
Available-for-sale securities – the fair values of available-for-sale securities are estimated based on quoted market prices for those investments. | |||||||
Contingent consideration receivable – the fair value of the contingent consideration receivable has been estimated using the income approach (using a probability weighted discounted cash flow method). | |||||||
Foreign exchange contracts – the fair values of the swap and forward foreign exchange contracts have been determined using an income approach based on current market expectations about the future cash flows. | |||||||
Contingent consideration payable – the fair value of the contingent consideration payable has been estimated using the income approach (using a probability weighted discounted cash flow method). | |||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | |||||||
The change in the fair value of the Company's contingent consideration receivable and payables, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), are as follows: | |||||||
Contingent consideration receivable | |||||||
2013 | 2012 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 38.3 | 37.8 | |||||
Gain recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | 15.9 | 18.1 | |||||
Reclassification of amounts to Other receivables within Other current assets | -19.5 | -18.7 | |||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 1.4 | 1.1 | |||||
Balance at December 31, | 36.1 | 38.3 | |||||
Contingent consideration payable | |||||||
2013 | 2012 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 136.4 | - | |||||
Initial recognition of contingent consideration payable | 451.4 | 127.8 | |||||
Change in fair value during the period with the corresponding adjustment recognized as a gain in the income statement (within Integration and acquisition costs) | -159.1 | 9.2 | |||||
Reclassification of amounts to Other current liabilities | -13.9 | -8.8 | |||||
Change in fair value during the period with corresponding adjustment to the associated intangible asset | -8.9 | 8.2 | |||||
Balance at December 31, | 405.9 | 136.4 | |||||
Quantitative Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | |||||||
Quantitative information about the Company's recurring Level 3 fair value measurements is included below: | |||||||
Financial assets: | Fair Value at the Measurement Date | ||||||
At December 31, 2013 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration receivable ("CCR") | 36.1 | Income approach (probability weighted discounted cash flow) | • Probability weightings applied to different sales scenarios • Future forecast royalties receivable at relevant contractual royalty rates • Assumed market participant discount rate | • 10 to 45% • $40 million to $148 million • 6.2% | |||
____________ | ____________ | ____________ | ____________ | ||||
Financial liabilities: | Fair Value at the Measurement Date | ||||||
At December 31, 2013 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration payable | 405.9 | Income approach (probability weighted discounted cash flow) | • Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products | • 18 to 57% (Weighted average) • 2.9 to 15% (Weighted average) • 2014 to 2025 • $2.4 to $7.6 million | |||
____________ | ____________ | ____________ | ____________ | ||||
The Company re-measures the CCR (relating to contingent consideration due to the Company following divestment of one of the Company's products) at fair value at each balance sheet date, with the fair value measurement based on forecast cash flows, over a number of scenarios which vary depending on the expected performance outcome of the product following divestment. The forecast cash flows under each of these differing outcomes have been included in probability weighted estimates used by the Company in determining the fair value of the CCR. | |||||||
Contingent consideration payable represents future milestones the Company may be required to pay in conjunction with various business combinations and future royalties payable as a result of certain business combinations and licenses. The amount ultimately payable by Shire in relation to business combinations is dependent upon the achievement of specified future milestones, such as the achievement of certain future development, regulatory and sales milestones. The Company assesses the probability, and estimated timing, of these milestones being achieved and re-measures the related contingent consideration to fair value each balance sheet date. The amount of contingent consideration which may ultimately be payable by Shire in relation to future royalties is dependent upon future net sales of the relevant products over the life of the royalty term. The Company assesses the present value of forecast future net sales of the relevant products and re-measures the related contingent consideration to fair value each balance sheet date. | |||||||
The fair value of the Company's contingent consideration receivable and payable could significantly increase or decrease due to changes in certain assumptions which underpin the fair value measurements. Each set of assumptions and milestones are specific to the individual contingent consideration receivable or payable. The assumptions include, among other things, the probability and expected timing of certain milestones being achieved, the forecast future net sales of the relevant products and related future royalties payable, the probability weightings applied to different sales scenarios of one of the Company's divested products and forecast future royalties receivable under scenarios developed by the Company, and the discount rates used to determine the present value of contingent future cash flows. The Company regularly reviews these assumptions, and makes adjustments to the fair value measurements as required by facts and circumstances. | |||||||
Assets Measured At Fair Value on a Non-Recurring Basis in the period using Significant Unobservable Inputs (Level 3) | |||||||
In the second quarter of 2013 the Company reviewed certain IPR&D intangible assets acquired through Movetis for impairment and recognized an impairment charge of $19.9 million, recorded within R&D in the consolidated income statement, to write-down these assets to their fair value. The fair value of these assets was determined using the income approach, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, risk-adjusted forecast future cash flows to be generated by these assets and the determination of an appropriate discount rate to be applied in calculating the present value of forecast future cash flows. The fair value of these assets, determined at the time of the impairment review, was $20.3 million. | |||||||
On January 16, 2014, the Company sold and transferred certain of the assets relating to the manufacturing, marketing, sale and distribution of DERMAGRAFT to Organogenesis Inc (see Note 8 for details). The Transferred Assets include intellectual property relating to DERMAGRAFT, including patents, trademarks and know-how, regulatory filings and registrations relating to DERMAGRAFT, certain manufacturing plant, equipment and materials relating to the Business, and DERMAGRAFT product inventory and accounts receivable. The Transferred Assets have been measured at their fair value less costs to sell as at December 31, 2013. An impairment charge of $636.9 million was recorded within discontinued operations in the consolidated income statement upon re-measurement of the divested assets to their fair value less costs to sell. The fair value of these assets was determined using the income approach, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, risk-adjusted forecast future cash flows to be generated by Shire following the divestment of these assets and the determination of an appropriate discount rate to be applied in calculating the present value of forecast future cash flows. The fair value of these assets at the date the held-for-sale conditions were met amounted to $31.6 million. | |||||||
Quantitative information about Non-Recurring Level 3 Fair Value Measurements which occurred in the period is included below: | |||||||
Fair Value at the Measurement Date | |||||||
At December 31, 2013 | Fair value | Valuation Technique | Significant unobservable Inputs | Rate used | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Movetis-related IPR&D intangible assets | 20.3 | Income approach (discounted cash flow) | • Decline in forecast peak sales since last impairment test • Assumed market participant discount rate | • 50% • 8.9% | |||
DERMAGRAFT assets held-for-sale | 31.6 | Income approach (discounted cash flow) | • Future forecast milestones to be received • Assumed market participant discount rate | • $15 -$95 million • 11.5% | |||
____________ | ____________ | ____________ | ____________ | ||||
Financial assets and liabilities that are not measured at fair value on a recurring basis | |||||||
The carrying amounts and estimated fair values as at December 31, 2013 and December 31, 2012 of the Company's financial assets and liabilities which are not measured at fair value on a recurring basis are as follows: | |||||||
31-Dec-13 | 31-Dec-12 | ||||||
Carrying | Carrying | ||||||
amount | Fair value | amount | Fair value | ||||
$’M | $’M | $’M | $’M | ||||
____________ | ____________ | ____________ | ___________ | ||||
Financial liabilities: | |||||||
Convertible bonds (Level 1) | - | - | 1,100.00 | 1,228.20 | |||
Building financing obligation (Level 3) | 7.8 | 10.1 | 8 | 10.3 | |||
____________ | ____________ | ____________ | ___________ | ||||
Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown above are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company's intent or ability to dispose of the financial instrument. | |||||||
The following methods and assumptions were used to estimate the fair value of each material class of financial instrument: | |||||||
Building finance obligations - the fair value of building finance obligations are estimated based on the present value of future cash flows, and an estimate of the residual value of the underlying property at the end of the lease term, associated with these obligations. | |||||||
The carrying amounts of other financial assets and liabilities materially approximate to their fair value because of the short-term maturity of these amounts. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure | ' |
22. Shareholders' equity | |
Authorized common stock | |
The authorized stock of Shire plc as at December 31, 2013 was 1,000,000,000 ordinary shares and 2 subscriber ordinary shares. | |
Dividends | |
Under Jersey law, Shire plc is entitled to make payments of dividends from its accumulated profits and other distributable reserves. At December 31, 2013 Shire plc's distributable reserves were approximately $10.4 billion. | |
Treasury stock | |
The Company records the purchase of its own shares by the EBT and under share buy-back program as a reduction of shareholders' equity based on the price paid for the shares. At December 31, 2013, the EBT held 2.4 million ordinary shares (2012: 3.8 million; 2011: 4.6 million) and 0.4 million ADSs (2012: 1.1 million; 2011: 2.4 million) and shares held under share buy-back program were 7.1 million ordinary shares (2012: 2.7 million; 2011: nil) and 0.9 million ADSs (2012: 0.3 million; 2011: nil). During the year to December 31, 2013 a total of 4.2 million (2012: 4.5 million; 2011: 2.7 million) ordinary shares and 0.8 million (2012: 0.9 million; 2011: 0.8 million) ADSs had been purchased for total consideration of $243.8 million (2012: $205.8 million; 2011: $151.8 million), including stamp duty and broker commission. | |
Share buy-back Program | |
In 2012 the Company commenced a share buy-back program of up to $500 million through both direct purchases of ordinary shares and through the purchase of ordinary shares underlying ADRs. The purchases have been made through independent third parties who have made trading decisions independently of, and uninfluenced by, the Company. The independence of the third parties enabled the Company to purchase ordinary shares (including ordinary shares underlying ADRs) during close periods and other prohibited periods, should they arise. The amount, timing or prices of purchases, varied based on market conditions and other factors. The shares purchased to date are held as treasury shares. | |
During the year ending December 31, 2013, the Company made on-market repurchases totaling 6,191,965 ordinary shares at a cost of $193 million (excluding transaction costs). This represents 1.0% of the issued share capital of the Company as at the end of the quarter. Ordinary shares purchased may be cancelled or be held as treasury shares, in accordance with the authority renewed by shareholders at the Company's Annual General Meeting (“AGM”). At its AGM on April 24, 2012 the Company was authorized to make market purchases of up to 56,253,208 of its own ordinary shares. That authority expired at the AGM held on April 30, 2013 and was renewed. Under the new authority, which expires on the earlier of July 29, 2014 or the conclusion of the 2014 AGM, the Company was authorized to make market purchases of up to 55,741,587 of its own ordinary shares. | |
On November 11, 2013, contemporaneous with Shire's announcement of its acquisition of ViroPharma, the Company's share buyback program was terminated. Since the inception of the share buyback program the Company had purchased $300 million of ordinary shares and ordinary shares underlying ADRs. | |
Conversion of Shire's 2.75% Convertible Bonds | |
On November 26, 2013, Shire issued an optional redemption notice under the Trust Deed dated May 9, 2007 to holders of the Company's Bonds. Consequently, as of December 31, 2013, Bondholders had voluntarily converted the Bonds into 33,806,464 fully paid ordinary shares. See Note 15 for further details. | |
Income Access Share Arrangements (“IAS Trust”) | |
Shire has put into place income access arrangements which enable ordinary shareholders, other than ADS holders, to choose whether they receive their dividends from Shire, a company tax resident in the Republic of Ireland, or from Shire Biopharmaceutical Holdings (“Old Shire”), a Shire group company tax resident in the UK. | |
Old Shire has issued one income access share to the Income Access Trust (the “IAS Trust”) which is held by the trustee of the IAS Trust (the “Trustee”). The mechanics of the arrangements are as follows: | |
If a dividend is announced or declared by Shire plc on its ordinary shares, an amount is paid by Old Shire by way of a dividend on the income access share to the Trustee, and such amount is paid by the Trustee to ordinary shareholders who have elected (or are deemed to have elected) to receive dividends under these arrangements. The dividend which would otherwise be payable by Shire plc to its ordinary shareholders will be reduced by an amount equal to the amount paid to its ordinary shareholders by the Trustee. | |
If the dividend paid on the income access share and on-paid by the Trustee to ordinary shareholders is less than the total amount of the dividend announced or declared by Shire plc on its ordinary shares, Shire plc will be obliged to pay a dividend on the relevant ordinary shares equivalent to the amount of the shortfall. In such a case, any dividend paid on the ordinary shares will generally be subject to Irish withholding tax at the rate of 20% or such lower rate as may be applicable under exemptions from withholding tax contained in Irish law. | |
An ordinary shareholder is entitled to make an income access share election such that she/he will receive his/her dividends (which would otherwise be payable by Shire plc) under these arrangements from Old Shire. | |
An ordinary shareholder who holds 25,000 or fewer ordinary shares at the first record date after she/he first becomes an ordinary shareholder, and who does not make a contrary election, will be deemed to have made an election (pursuant to the Shire plc articles of association) such that she/he will receive his/her dividends under these arrangements from Old Shire. | |
The ADS Depositary has made an election on behalf of all holders of ADSs such that they will receive dividends from Old Shire under the income access share arrangements. Dividends paid by Old Shire under the income access share arrangements will not, under current legislation, be subject to any UK or Irish withholding taxes. If a holder of ADSs does not wish to receive dividends from Old Shire under the income access share arrangements, she/he must withdraw his/her ordinary shares from the ADS program prior to the dividend record date set by the Depositary and request delivery of the Shire plc ordinary shares. This will enable him/her to receive dividends from Shire plc (if necessary, by making an election to that effect). | |
It is the expectation, although there can be no certainty, that Old Shire will distribute dividends on the income access share to the Trustee for the benefit of all ordinary shareholders who make (or are deemed to make) an income access share election in an amount equal to what would have been such ordinary shareholders' entitlement to dividends from Shire plc in the absence of the income access share election. If any dividend paid on the income access share and or paid to the ordinary shareholders is less than such ordinary shareholders' entitlement to dividends from Shire plc in the absence of the income access share election, the dividend on the income access share will be allocated pro rata among the ordinary shareholders and Shire plc will pay the balance to these ordinary shareholders by way of dividend. In such circumstances, there will be no grossing up by Shire plc in respect of, and Old Shire and Shire plc will not compensate those ordinary shareholders for, any adverse consequences including any Irish withholding tax consequences. | |
Shire will be able to suspend or terminate these arrangements at any time, in which case the full Shire plc dividend will be paid directly by Shire plc to those ordinary shareholders (including the Depositary) who have made (or are deemed to have made) an income access share election. In such circumstances, there will be no grossing up by Shire plc in respect of, and Old Shire and Shire plc will not compensate those ordinary shareholders for, any adverse consequences including any Irish withholding tax consequences. | |
In the year ended December 31, 2013 Old Shire paid dividends totaling $91.1 million (2012: $81.5 million; 2011: $67.6 million) on the income access share to the Trustee in an amount equal to the dividend Shire ordinary shareholders would have received from Shire. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Earnings Per Share Disclosure | ' | |||||
23. Earnings per share | ||||||
The following table reconciles net income and the weighted average ordinary shares outstanding for basic and diluted earnings per share for the periods presented: | ||||||
2013 | 2012 | 2011 | ||||
$’M | $’M | $’M | ||||
_________________ | _________________ | _________________ | ||||
Income from continuing operations, net of taxes | 1,419.60 | 805.7 | 882.7 | |||
Loss from discontinued operations1 | -754.5 | -60.3 | -17.7 | |||
_________________ | _________________ | _________________ | ||||
Numerator for basic earnings per share | 665.1 | 745.4 | 865 | |||
Interest on convertible bonds, net of tax | 28.3 | 31.3 | 33.6 | |||
_________________ | _________________ | _________________ | ||||
Numerator for diluted earnings per share | 693.4 | 776.7 | 898.6 | |||
_________________ | _________________ | _________________ | ||||
Weighted average number of shares: | ||||||
Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | ||||
Basic 1 | 552 | 555.4 | 551.1 | |||
Effect of dilutive shares: | ||||||
Share based awards to employees 2 | 4.8 | 4.6 | 10.9 | |||
Convertible bonds 2.75% due 2014 3 | 33.5 | 33.5 | 33.4 | |||
_________________ | _________________ | _________________ | ||||
Diluted | 590.3 | 593.5 | 595.4 | |||
_________________ | _________________ | _________________ | ||||
1. Excludes shares purchased by the EBT and under the share buy-back program and presented by Shire as treasury stock. | ||||||
2. Calculated using the treasury stock method. | ||||||
3. At December 31, 2013, Bondholders had voluntarily converted $1,099,050,000 aggregate principal amount of the Bonds into 33,806,464 fully paid Ordinary Shares. The remaining outstanding Bonds in an aggregate principle amount of $950,000 were redeemed pursuant to the option redemption notice issued on November 26, 2013. The Company has calculated the impact of the Bonds on diluted EPS from the beginning of the period to the actual date of Bonds conversion using the 'if-converted' method. | ||||||
Year to December 31, | 2013 | 2012 | 2011 | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share - basic | ||||||
Earnings from continuing operations | 257.2c | 145.1c | 160.1c | |||
Loss from discontinued operations | (136.7c) | (10.9c) | (3.2c) | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share - basic | 120.5c | 134.2c | 156.9c | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share - diluted | ||||||
Earnings from continuing operations | 245.3c | 141.0c | 153.9c | |||
Loss from discontinued operations | (127.8c) | (10.1c) | (3.0c) | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share – diluted | 117.5c | 130.9c | 150.9c | |||
_______________ | _______________ | _______________ | ||||
The share equivalents not included in the calculation of the diluted weighted average number of shares are shown below: | ||||||
2013 | 2012 | 2011 | ||||
No. of shares | No. of shares | No. of shares | ||||
Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | ||||
Share based awards to employees1 | 0.5 | 6.7 | 2.9 | |||
_________________ | _________________ | _________________ | ||||
Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plc's average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. | ||||||
Segmental_Reporting
Segmental Reporting | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Segment Reporting [Abstract] | ' | ||||||
Segment Reporting Disclosure | ' | ||||||
24. Segmental reporting | |||||||
Historically the Company had three business units and three reportable segments: Specialty Pharmaceuticals (“SP”), Human Genetic Therapies (“HGT”) and RM. | |||||||
On May 2, 2013 the Company announced that there would be a reorganization of the Company's business to integrate the operation of these business units into a simplified One Shire organization in order to drive future growth and innovation. Consequently the SP, HGT and RM segments no longer exist. | |||||||
Shire now comprises a single operating and reportable segment, consistent with the One Shire approach that underpins the business simplification. This segment is engaged in the research, development, licensing, manufacturing, marketing, distribution and sale of innovative specialist medicines to meet significant unmet patient needs. | |||||||
This segment is supported by several key functions: a Pipeline group, consisting of R&D and Business Development, will prioritize its activities towards late stage development programs across a variety of therapeutic areas, while focusing its pre-clinical development activities primarily in rare diseases; a Technical Operations group will be responsible for the Company's global supply chain; and an In-line marketed products group will focus on commercialized products. The In-Line marketed products group currently consists of four commercial units focused exclusively on commercial delivery to drive optimum performance of currently marketed products. The business is also supported by a simplified, centralized corporate function group. None of these functional groups meets all of the criteria to be an operating segment. | |||||||
The reorganization to a single operating and reportable segment is consistent with the financial information regularly reviewed by the Executive Committee (which is Shire's chief operating decision maker) for the purposes of evaluating performance, allocating resources, and planning and forecasting future periods. | |||||||
Geographic information | |||||||
Revenues (based on the geographic location from which the sale originated): | |||||||
2013 | 2012 | 2011 | |||||
Year to December 31, | $’M | $’M | $’M | ||||
___________ | ___________ | ___________ | |||||
Ireland | 22.5 | 20.6 | 21.1 | ||||
United Kingdom | 206.7 | 207 | 219.9 | ||||
North America | 3,386.20 | 3,006.10 | 2,761.80 | ||||
Rest of World | 1,318.90 | 1,293.70 | 1,155.30 | ||||
____________ | ____________ | ____________ | |||||
Total revenues | 4,934.30 | 4,527.40 | 4,158.10 | ||||
____________ | ____________ | ____________ | |||||
Long-lived assets comprise all non-current assets, (excluding goodwill and other intangible assets, deferred contingent consideration assets, deferred tax assets, investments and financial instruments) based on the geographic location within which the economic benefits arise: | |||||||
2013 | 2012 | ||||||
Year to December 31, | $’M | $’M | |||||
___________ | ___________ | ||||||
Ireland | 5.8 | 5.2 | |||||
United Kingdom | 70.3 | 72.2 | |||||
North America | 802.9 | 861 | |||||
Rest of World | 13.8 | 18.8 | |||||
____________ | ____________ | ||||||
Total | 892.8 | 957.2 | |||||
____________ | ____________ | ||||||
Material customers | |||||||
In the periods set out below, certain customers, accounted for greater than 10% of the Company's product revenues: | |||||||
2013 | 2013 | 2012 | 2012 | 2011 | 2011 | ||
Year to December 31, | $’M | % product revenue | $’M | % product revenue | $’M | % product revenue | |
___________ | ___________ | ___________ | ___________ | ___________ | ___________ | ||
McKesson Corp. | 902.9 | 19 | 835.9 | 20 | 742.9 | 19 | |
Cardinal Health Inc. | 853.7 | 18 | 1,035.70 | 24 | 923.9 | 24 | |
AmerisourceBergen Corp | 721 | 15 | 307.4 | 7 | 276.4 | 7 | |
____________ | ___________ | ____________ | ___________ | ____________ | ___________ | ||
Amounts outstanding as at December 31, in respect of these material customers were as follows: | |||||||
2013 | 2012 | ||||||
December 31, | $’M | $’M | |||||
___________ | ___________ | ||||||
McKesson Corp. | 161.3 | 127.4 | |||||
Cardinal Health Inc. | 149.5 | 166.1 | |||||
AmerisourceBergen Corp | 164.6 | 47.4 | |||||
____________ | ___________ | ||||||
In the periods set out below, revenues by major product were as follows: | |||||||
2013 | 2012 | 2011 | |||||
$’M | $’M | $’M | |||||
___________ | ___________ | ___________ | |||||
VYVANSE | 1,227.80 | 1,029.80 | 805 | ||||
ELAPRASE | 545.6 | 497.6 | 464.9 | ||||
LIALDA/MEZAVANT | 528.9 | 399.9 | 372.1 | ||||
REPLAGAL | 467.9 | 497.5 | 475.2 | ||||
ADDERALL XR | 375.4 | 429 | 532.8 | ||||
VPRIV | 342.7 | 306.6 | 256.2 | ||||
INTUNIV | 334.9 | 287.8 | 223 | ||||
PENTASA | 280.6 | 265.8 | 251.4 | ||||
FIRAZYR | 234.8 | 116.3 | 33 | ||||
FOSRENOL | 183.4 | 172 | 166.9 | ||||
XAGRID | 99.4 | 97.2 | 90.6 | ||||
Other product sales | 136.1 | 153.4 | 173.8 | ||||
____________ | ____________ | ____________ | |||||
Total product sales | 4,757.50 | 4,252.90 | 3,844.90 | ||||
____________ | ____________ | ____________ |
Retirement_Benefits
Retirement Benefits | 12 Months Ended |
Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Retirement Benefits Disclosure | ' |
25. Retirement benefits | |
The Company makes contributions to defined contribution retirement plans that together cover substantially all employees. The level of the Company's contribution is fixed at a set percentage of employee's pay. | |
Company contributions to personal defined contribution pension plans totaled $45.7 million, $46.4 million and $44.4 million for the years to December 31, 2013, 2012 and 2011, respectively, and were charged to operations as they became payable. |
Taxation
Taxation | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Income Tax Disclosure [Abstract] | ' | ||||
Income Tax Disclosure | ' | ||||
26. Taxation | |||||
The components of pre tax income from continuing operations are as follows: | |||||
2013 | 2012 | 2011 | |||
Year to December 31, | $’M | $’M | $’M | ||
___________ | ___________ | ___________ | |||
Republic of Ireland | -47.8 | -74.7 | -65.9 | ||
UK | 10.9 | 30.7 | 45.4 | ||
US | 1,153.30 | 683.8 | 774.6 | ||
Other jurisdictions | 577.2 | 368 | 363 | ||
___________ | ___________ | ___________ | |||
1,693.60 | 1,007.80 | 1,117.10 | |||
___________ | ___________ | ___________ | |||
The provision for income taxes by location of the taxing jurisdiction for the years to December 31, 2013, 2012 and 2011 consisted of the following: | |||||
Year to December 31, | |||||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
__________ | __________ | __________ | |||
Current income taxes: | |||||
Republic of Ireland | - | - | -1.8 | ||
US federal tax | 274.3 | 230 | 201.4 | ||
US state and local taxes | 17.9 | 11.3 | 9.2 | ||
Other | 63.4 | 29 | 40 | ||
__________ | __________ | __________ | |||
Total current taxes | 355.6 | 270.3 | 248.8 | ||
__________ | __________ | __________ | |||
Deferred taxes: | |||||
US federal tax | 23.8 | -63.8 | 23.3 | ||
US state and local taxes | -8.3 | -6.5 | -4.6 | ||
UK corporation tax | 11.5 | 13.1 | -1 | ||
Other | -104.7 | -10 | -29.6 | ||
__________ | __________ | __________ | |||
Total deferred taxes | -77.7 | -67.2 | -11.9 | ||
__________ | __________ | __________ | |||
Total income taxes | 277.9 | 203.1 | 236.9 | ||
__________ | __________ | __________ | |||
The operating results associated with the DERMAGRAFT business have been classified as discontinued operations for all periods presented. | |||||
The Group has determined the amount of income tax expense or benefit allocable to continuing operations using the incremental approach described in ASC 740-20-45-8 and the relevant examples. As a result $9 million of income tax expense associated with the US operations was allocated to income from continuing operations for 2013 based on the primacy of continuing operations, due to changes in circumstances that caused a change in judgment about the realization of deferred tax assets in future years, and in accordance with the rules prescribed under ASC 740-20-45. | |||||
The amount of Income tax attributed to discontinued operations is disclosed in Note 8. | |||||
The reconciliation of income from continuing operations before income taxes, noncontrolling interests and equity in earnings/(losses) of equity method investees at the statutory tax rate to the provision for income taxes is shown in the table below: | |||||
Year to December 31, | |||||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
___________ | ___________ | ___________ | |||
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,693.60 | 1,007.80 | 1,117.10 | ||
___________ | ___________ | ___________ | |||
Statutory tax rate(1) | 25.00% | 25.00% | 25.00% | ||
Adjustments to derive effective rate: | |||||
Non-deductable items: | |||||
US R&D credit | -4.50% | -2.60% | -4.50% | ||
Effect of the convertible bond | 0.50% | 0.80% | 0.80% | ||
Intra-group items(2) | -9.20% | -16.00% | -7.50% | ||
Recognition of foreign tax credits | - | -6.60% | - | ||
Other permanent items | -0.70% | 0.80% | -0.50% | ||
Other items: | |||||
Change in valuation allowance | 0.90% | 3.40% | 3.20% | ||
Impact of RESOLOR impairment | - | 4.90% | - | ||
Difference in taxation rates | 7.80% | 7.60% | 4.60% | ||
Change in provisions for uncertain tax positions | 3.80% | 1.10% | -1.20% | ||
Prior year adjustment | -3.40% | 0.80% | 0.80% | ||
Change in fair value of contingent consideration | -3.60% | - | - | ||
Change in tax rates | -0.20% | 0.80% | 0.20% | ||
Other | 0.00% | 0.10% | 0.30% | ||
___________ | ___________ | ___________ | |||
Provision for income taxes on continuing operations | 16.40% | 20.10% | 21.20% | ||
___________ | ___________ | ___________ | |||
(1) In addition to being subject to the Irish Corporation tax rate of 25%, in 2013 the Company is also subject to income tax in other territories in which the Company operates, including: Canada (15%); France (33.3%); Germany (15%); Italy (27.5%); Luxembourg (21.0%); the Netherlands (25%); Belgium (33.99%); Spain (30%); Sweden (22%); Switzerland (8.5%); United Kingdom (23.25%) and the US (35%). The rates quoted represent the statutory federal income tax rates in each territory, and do not include any state taxes or equivalents or surtaxes or other taxes charged in individual territories, and do not purport to represent the effective tax rate for the Company in each territory. | |||||
(2) Intra-group items principally relate to the effect of inter-company dividends, capital receipts (either taxable or non-taxable) and other intra-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Company's consolidated income from continuing operations before income taxes, noncontrolling interests and equity in earnings/(losses) of equity method investees. | |||||
Provisions for uncertain tax positions | |||||
The Company files income tax returns in the Republic of Ireland, the UK, the US (both federal and state) and various other jurisdictions (see footnote (1) to the table above for major jurisdictions). With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 1999. Tax authorities in various jurisdictions are in the process of auditing the Company's tax returns for fiscal periods from 1999; these tax audits cover a range of issues, including transfer pricing, potential restrictions on the utilization of net operating losses, potential taxation of overseas dividends and controlled foreign companies' rules. | |||||
While tax audits remain open, the Company also considers it reasonably possible that issues may be raised by tax authorities resulting in increases to the balance of unrecognized tax benefits, however, an estimate of such increase cannot be made. | |||||
The Company is required in certain tax jurisdictions to make advance deposits to tax authorities on receipt of tax assessments. These payments have been offset against the income tax liability within the balance sheet but have not reduced the provision for unrecognized tax benefits. | |||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
___________ | ___________ | ___________ | |||
Balance at January 1 | 278.7 | 265.5 | 290.8 | ||
Increases based on tax positions related to the current year | 56.8 | 20.5 | 18.2 | ||
Decreases based on tax positions taken in the current year | -0.5 | - | -2.5 | ||
Increases for tax positions taken in prior years | 34.5 | 0.4 | 1.4 | ||
Decreases for tax positions taken in prior years | -0.8 | -3.3 | -12 | ||
Decreases resulting from settlements with the taxing authorities | - | -10.6 | -25.7 | ||
Decreases as a result of expiration of the statute of limitations | -0.6 | -0.3 | -0.5 | ||
Foreign currency translation adjustments(1) | -12.9 | 6.5 | -4.2 | ||
___________ | ___________ | ___________ | |||
Balance at December 31(2) | 355.2 | 278.7 | 265.5 | ||
___________ | ___________ | ___________ | |||
(1) Recognized within Other Comprehensive Income | |||||
(2) The full amount of which would affect the effective rate if recognized | |||||
The Company considers it reasonably possible that certain audits currently being conducted will be concluded in the next twelve months, and as a result the total amount of unrecognized tax benefits recorded at December 31, 2013 could decrease by up to approximately $210 million. As at the balance sheet date, the Company believes that its reserves for uncertain tax positions are adequate to cover the resolution of these audits. However, the resolution of these audits could have a significant impact on the financial statements if the settlement differs from the amount reserved. | |||||
The Company recognizes interest and penalties accrued related to unrecognized tax benefits within income taxes. During the years ended December 31, 2013, 2012 and 2011, the Company recognized $0.4 million, $5.1 million and $4.0 million in interest and penalties and the Company had a liability of $112.2 million, $119.6 million and $114.5 million for the payment of interest and penalties accrued at December 31, 2013, 2012 and 2011, respectively. | |||||
Deferred taxes | |||||
The significant components of deferred tax assets and liabilities and their balance sheet classifications, as at December 31, are as follows: | |||||
December 31, | December 31, | ||||
2013 | 2012 | ||||
$’M | $’M | ||||
____________ | ____________ | ||||
Deferred tax assets: | |||||
Deferred revenue | 5.2 | 5.5 | |||
Inventory & warranty provisions | 48.6 | 52.5 | |||
Losses carried forward (including tax credits)1 | 500.6 | 425.7 | |||
Provisions for sales deductions and doubtful accounts | 151.8 | 144.9 | |||
Intangible assets | 10.7 | 36.7 | |||
Share-based compensation | 25.5 | 32.7 | |||
Excess of tax value over book value of assets | 22.1 | - | |||
Accruals and provisions | 55.1 | 44.1 | |||
Other | 2.6 | 21.6 | |||
____________ | ____________ | ||||
Gross deferred tax assets | 822.2 | 763.7 | |||
Less: valuation allowance | -282.4 | -268.6 | |||
____________ | ____________ | ||||
539.8 | 495.1 | ||||
Deferred tax liabilities: | |||||
Intangible assets | -586.8 | -702.7 | |||
Excess of book value over tax value of assets and investments | -56.9 | -36.8 | |||
____________ | ____________ | ||||
Net deferred tax liabilities | -103.9 | -244.4 | |||
____________ | ____________ | ||||
Balance sheet classifications: | |||||
Deferred tax assets - current | 315.6 | 229.9 | |||
Deferred tax assets - non-current | 141.1 | 46.5 | |||
Deferred tax liabilities - non-current | -560.6 | -520.8 | |||
____________ | ____________ | ||||
-103.9 | -244.4 | ||||
____________ | ____________ | ||||
Excluding $15.0 million of deferred tax assets at December 31, 2013 (2012: $6.8 million), related to the net operating losses that result from excess stock based compensation and for which any benefit realized will be recorded to stockholders' equity. | |||||
At December 31, 2013, the Company had a valuation allowance of $282.4 million (2012: $268.6 million) to reduce its deferred tax assets to estimated realizable value. These valuation allowances related primarily to operating loss, capital loss and tax-credit carry-forwards in Ireland (2013: $78.8 million; 2012: $73.9 million); the US (2013: $60.9 million; 2012: $37.2 million); Germany (2013: $30.8 million; 2012: $96.9 million); and other foreign tax jurisdictions (2013: $111.9 million; 2012: $60.6 million). | |||||
Management is required to exercise judgement in determining whether deferred tax assets will more likely than not be realized. A valuation allowance is established where there is an expectation that on the balance of probabilities management considers it is more likely than not that the relevant deferred tax assets will not be realized. In assessing the need for a valuation allowance, management weighs all available positive and negative evidence including cumulative losses in recent years, projection of future taxable income, carry forward and carry back potential under relevant tax law, expiration period of tax attributes, taxable temporary differences, and prudent and feasible tax-planning strategies. | |||||
The net increase in valuation allowances of $13.8 million includes (i) increases of $104.5 million primarily in respect of losses and other temporary differences in various jurisdictions where management consider that there is insufficient positive evidence in respect of the factors described above to overcome cumulative losses and therefore it is more likely than not that the relevant deferred tax assets will not be realized in full, and (ii) a decrease of $90.7 million primarily in respect of German tax losses ($67.4m), which based on the assessment of the factors described above now provides sufficient positive evidence to support that the losses are more likely than not to be realized. The release of this valuation allowance has been recorded in the current period due to changes in the financing of the German subsidiary. | |||||
At December 31, 2013, based upon a consideration of the factors described above management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the valuation allowances. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if these factors are revised in the future periods. | |||||
The approximate tax effect of NOLs, capital losses and tax credit carry-forwards as at December 31, are as follows: | |||||
2013 | 2012 | ||||
$’M | $’M | ||||
____________ | ____________ | ||||
US federal tax NOLs | 32.2 | 26.1 | |||
US state tax NOLs | 61.5 | 31.4 | |||
UK NOLs | 6.7 | 20.7 | |||
Republic of Ireland NOLs | 78.8 | 72.6 | |||
Foreign tax jurisdictions | 273.1 | 208.8 | |||
R&D and other tax credits | 48.3 | 66.2 | |||
____________ | ____________ | ||||
The approximate gross value of NOLs and capital losses at December 31, 2013 is $2,583.7 million (2012: $1,783.5 million). The tax effected NOLs, capital losses and tax credit carry-forwards shown above have the following expiration dates: | |||||
December 31, | |||||
2013 | |||||
$’M | |||||
___________ | |||||
Within 1 year | 0.9 | ||||
Within 1 to 2 years | 1.1 | ||||
Within 2 to 3 years | 0.7 | ||||
Within 3 to 4 years | 2.9 | ||||
Within 4 to 5 years | 3 | ||||
Within 5 to 6 years | 35.6 | ||||
After 6 years | 142.7 | ||||
Indefinitely | 313.7 | ||||
The Company does not provide for deferred taxes on the excess of the financial reporting over the tax basis in investments in foreign subsidiaries that are essentially permanent in duration. At December 31, 2013, that excess totalled approximately $8.5 billion. The determination of additional deferred taxes is not practicable and is not provided. |
Sharebased_Compensation_Plans
Share-based Compensation Plans | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||
Share-based Compensation Plans Disclosure | ' | |||||
27. Share-based compensation plans | ||||||
The following table shows the total share-based compensation expense (see below for types of share-based awards) included in the consolidated statements of income: | ||||||
2013 | 2012 | 2011 | ||||
$’M | $’M | $’M | ||||
____________ | ____________ | ____________ | ||||
Cost of product sales | 4.4 | 6.3 | 8.8 | |||
Research and development | 22.8 | 25.8 | 21.8 | |||
Selling, general and administrative | 46.9 | 55 | 45.1 | |||
Reorganization costs | 3.3 | - | - | |||
____________ | ____________ | ____________ | ||||
Total | 77.4 | 87.1 | 75.7 | |||
Less tax | -18.1 | -23.8 | -23.6 | |||
____________ | ____________ | ____________ | ||||
59.3 | 63.3 | 52.1 | ||||
____________ | ____________ | ____________ | ||||
There were no capitalized share-based compensation costs at December 31, 2013 and 2012. | ||||||
At December 31, 2013 $97.0 million (2012: $102.3 million) of total unrecognized compensation cost relating to non-vested awards is expected to be recognized over a period of 3 years. | ||||||
At December 31, 2013 $90.3 million (2012: $74.6 million) of total unrecognized compensation cost relating to non-vested in the money awards (based on the average share price during the year) is expected to be recognized over a weighted average period of 1.7 years (2012: 1.7 years). The total fair value of in the money awards vested during the year to December 31, 2013 was $70.5 million (2012: $113.9 million). | ||||||
Share-based compensation plans | ||||||
The Company grants stock-settled share appreciation rights (“SARs”) and performance share awards over ordinary shares and ADSs to Executive Directors and employees under the Shire Portfolio Share Plan (Parts A and B). The SARs and PSAs granted under the Shire Portfolio Share Plan (Part A & B) to Executive Directors are exercisable subject to performance and service criteria. | ||||||
The principal terms and conditions of SARs and PSAs are as follows: (i) the contractual life of SARs is seven years, (ii) the vesting period of SARs and PSAs granted to employees below the level of Executive Vice President allows for graded vesting, and (iii) awards granted to Executive Directors contain performance conditions based on growth in adjusted return on invested capital (“Adjusted ROIC”) and earnings before interest, taxation, depreciation and amortization (“Non-GAAP EBITDA”). | ||||||
The Company also operates an Employee Share Purchase Plan and a Sharesave Scheme. | ||||||
The following awards were outstanding as at December 31, 2013: | ||||||
Compensation type | Number of awards* | Expiration period from date of issue | Vesting period | |||
____________ | ____________ | ____________ | ____________ | |||
Portfolio Share Plan - Part A | SARs | 14,083,748 | 5 - 7 years | 3 years cliff or graded vesting, subject to market or performance criteria for Executive Directors only | ||
Sharesave Scheme | Stock options | 243,783 | 6 months after vesting | 3 or 5 years | ||
Stock Purchase Plan | Stock options | 568,828 | On vesting date | 1 to 5 years | ||
Legacy Plans | Stock options | 132,823 | 7 to 10 years | 3-10 years, subject to market or performance criteria | ||
__________________ | ||||||
Stock-settled SARs and stock options | 15,029,182 | |||||
__________________ | ||||||
Portfolio Share Plan - Part B | Performance share awards | 2,701,299 | 3 years | 3 years cliff or graded vesting, subject to market or performance criteria for Executive Directors only | ||
__________________ | ||||||
Performance share awards | 2,701,299 | |||||
__________________ | ||||||
* Number of awards are stated in terms of ordinary share equivalents. | ||||||
Stock settled SARs and stock options | ||||||
(a) Portfolio Share Plan – Part A | ||||||
Stock-settled share appreciation rights granted under the Portfolio Share Plan – Part A are exercisable subject to performance and service criteria. | ||||||
In respect of any award made to Executive Directors performance criteria are based on Non-GAAP EBITDA and Adjusted ROIC targets. These performance measures provide increased alignment to the core activities and strategy of the Company. | ||||||
Awards granted to employees below Executive Director level are not subject to performance conditions and are only subject to service conditions. | ||||||
Once awards have vested, participants will have until the seventh anniversary of the date of grant to exercise their awards. | ||||||
(b) Shire Sharesave Scheme (Sharesave Scheme) | ||||||
Options granted under the Sharesave Scheme are granted with an exercise price equal to 80% and 75% of the mid-market price on the day before invitations are issued to UK and Ireland employees, respectively. Employees may enter into three or five year savings contracts. No performance conditions apply. | ||||||
(c) Shire Employee Stock Purchase Plan (Stock Purchase Plan) | ||||||
Under the Stock Purchase Plan, options are granted with an exercise price equal to 85% of the fair market value of a share on the enrolment date (the first day of the offering period) or the exercise date (the last day of the offering period), whichever is the lower. Employees agree to save for a period up to 12 months. No performance conditions apply. | ||||||
(d) Legacy plans – principally the Shire 2000 Executive Share Option Scheme | ||||||
Options granted under this scheme were subject to certain performance criteria, which were based on the Company's share price or diluted EPS growth compared to a fixed growth rate. At December 31, 2013 all stock options outstanding under this scheme had met the required conditions and were exercisable. | ||||||
A summary of the status of the Company's SARs and stock options as at December 31, 2013 and of the related transactions during the period then ended is presented below: | ||||||
Weighted average exercise price | ||||||
Year to December 31, 2013 | £ | Number of | Intrinsic Value | |||
shares* | £’ M | |||||
_______________ | _______________ | _______________ | ||||
Outstanding as at beginning of period | 16.66 | 18,536,947 | ||||
Granted | 20.05 | 6,914,026 | ||||
Exercised | 22.09 | -8,302,740 | ||||
Forfeited | 18.3 | -2,119,051 | ||||
_______________ | _______________ | ________________ | ||||
Outstanding as at end of period | 18.88 | 15,029,182 | 143.9 | |||
_______________ | _______________ | ________________ | ||||
Exercisable as at end of period | 15.67 | 3,670,446 | 46.9 | |||
_______________ | _______________ | ________________ | ||||
* Number of awards are stated in terms of ordinary share equivalents | ||||||
The weighted average grant date fair value of SARs and stock options granted in the year ended December 31, 2013 was £3.37. | ||||||
SARs and stock options outstanding as at December 31, 2013 have the following characteristics: | ||||||
Number of awards outstanding* | Exercise prices | Weighted Average remaining contractual term (Years) | Weighted average exercise price of awards outstanding | Number of awards exercisable | Weighted average exercise price of awards exercisable | |
£ | £ | £ | ||||
________________ | ______________ | __________ | _______________ | _____________ | _____________ | |
104,658 | 3.38-7.00 | 1.1 | 5.56 | 104,658 | 5.56 | |
810,822 | 7.01-14.00 | 2.8 | 11.27 | 804,402 | 11.25 | |
14,113,702 | 14.01-28.00 | 4.9 | 18.07 | 2,761,386 | 17.34 | |
________________ | _____________ | |||||
15,029,182 | 3,670,446 | |||||
________________ | _____________ | |||||
* Number of awards are stated in terms of ordinary share equivalents | ||||||
Performance shares | ||||||
Portfolio Share Plan – Part B | ||||||
Performance share awards granted to Executive Directors under the Portfolio Share Plan – Part B are exercisable subject to certain market, performance and service criteria. | ||||||
In respect of any award granted to Executive Directors, the performance criteria are based on Non-GAAP EBITDA and Adjusted ROIC targets. | ||||||
Awards granted to employees below Executive Director level are not subject to performance conditions and are only subject to service conditions. | ||||||
A summary of the status of the Company's performance share awards as at December 31, 2013 and of the related transactions during the period then ended is presented below: | ||||||
Performance share awards | Number of shares* | Aggregate intrinsic value £’M | Weighted average remaining life | |||
_______________ | _______________ | _______________ | ||||
Outstanding as at beginning of period | 3,518,138 | |||||
Granted | 1,508,631 | |||||
Exercised | -1,826,648 | |||||
Forfeited | -498,822 | |||||
_______________ | ||||||
Outstanding as at end of period | 2,701,299 | 76.9 | 5.5 | |||
_______________ | _______________ | ________________ | ||||
Exercisable as at end of period | - | N/A | N/A | |||
_______________ | _______________ | _______________ | ||||
* Number of awards are stated in terms of ordinary share equivalents | ||||||
The weighted-average grant date fair value of performance share awards granted in the year to December 31, 2013 is £19.71. | ||||||
Exercises of employee share-based awards | ||||||
The total intrinsic values of share-based awards exercised for the years to December 31, 2013, 2012 and 2011 were $298.3 million, $224.1 million and $189.3 million, respectively. The total cash received from employees as a result of employee share option exercises for the period to December 31, 2013, 2012 and 2011 was approximately $17.2 million, $16.2 million and $13.4 million, respectively. In connection with these exercises, the tax benefit credited to additional paid-in capital for the years to December 31, 2013, 2012 and 2011 was $11.9 million, $40.1 million and $29.4 million respectively. | ||||||
The Company will settle future employee share award exercises with either newly listed common shares or with shares held in the EBT. The number of shares to be purchased by the EBT during 2013 will be dependent on the number of employee share awards granted and exercised during the year and Shire plc's share price. At December 31, 2013 the EBT held 2.4 million ordinary shares and 0.4 million ADSs. | ||||||
Valuation methodologies | ||||||
The Company estimates the fair value of its share-based awards using a Black-Scholes valuation model. Key input assumptions used to estimate the fair value of share–based awards include the grant price of the award, the expected stock-based award term, volatility of the Company's share price, the risk-free rate and the Company's dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in estimating the fair values of Shire's stock-based awards. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company under guidance issued by the FASB on share based payment transactions. | ||||||
The fair value of share awards granted was estimated using the following assumptions: | ||||||
Period ended December 31, | 2013 | 2012 | 2011 | |||
______________ | ______________ | ______________ | ||||
Risk-free interest rate1 | 0.1-0.9% | 0.2-1% | 0.1-2.5% | |||
Expected dividend yield | 0.4-0.6% | 0-0.6% | 0-0.5% | |||
Expected life | 1-4 years | 1-4 years | 1-5 years | |||
Volatility | 23-26% | 24-32% | 19-33% | |||
Forfeiture rate | 5-9% | 5-7% | 5-7% | |||
(1) Risk free interest rate is for UK and US grants | ||||||
The following assumptions were used to value share-based awards: | ||||||
risk-free interest rate – for awards granted over ADSs, the US Federal Reserve treasury constant maturities rate with a term consistent with the expected life of the award is used. For awards granted over ordinary shares, the yield on UK government bonds with a term consistent with the expected life of the award is used; | ||||||
expected dividend yield – measured as the average annualized dividend estimated to be paid by the Company over the expected life of the award as a percentage of the share price at the grant date; | ||||||
expected life – estimated based on the contractual term of the awards and the effects of employees' expected exercise and post-vesting employment termination behaviour; | ||||||
expected volatility – measured using historical daily price changes of the Company's share price over the respective expected life of the share-based awards at the date of the award; and | ||||||
the forfeiture rate is estimated using historical trends of the number of awards forfeited prior to vesting. | ||||||
Quarterly_Results_of_Operation
Quarterly Results of Operations (Unaudited) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||
Quarterly Results of Operations (Unaudited) | ' | |||||||
Quarterly results of operations (Unaudited) | ||||||||
The following tables reconcile previously reported data with current year quarterly data which has been updated for discontinued operations related to the DERMAGRAFT business (see Note 8 for details): | ||||||||
First quarter of 2013 | Second quarter of 2013 | |||||||
Previously | Adjusted for | As | Previously | Adjusted for | As | |||
reported | DERMAGRAFT | reported | reported | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,161.90 | -18.5 | 1,143.40 | 1,274.50 | -22.3 | 1,252.20 | ||
Cost of product sales | 155.9 | -8.5 | 147.4 | 175.7 | -11.4 | 164.3 | ||
Income from continuing operations, net of taxes | 64.8 | 216.2 | 281 | 258.1 | 32.8 | 290.9 | ||
Loss from discontinued operations, net of taxes | - | -216.2 | -216.2 | - | -32.8 | -32.8 | ||
Net income | 64.8 | - | 64.8 | 258.1 | - | 258.1 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 11.7c | 39.3c | 51.0c | 46.9c | 6.0c | 52.9c | ||
Loss from discontinued operations | - | (39.3c) | (39.3c) | - | (6.0c) | (6.0c) | ||
Earnings per share - basic | 11.7c | - | 11.7c | 1 | 46.9c | - | 46.9c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 11.7c | 36.7c | 49.0c | 45.3c | 5.6c | 50.9c | ||
Loss from discontinued operations | - | (36.7c) | (36.7c) | - | (5.6c) | (5.6c) | ||
Earnings per share - diluted | 11.7c | - | 12.3c | 1 | 45.3c | - | 45.3c | |
Third quarter of 2013 | Fourth quarter of 2013 | |||||||
Previously | Adjusted for | As | Memo (prior | Adjusted for | As | |||
reported | DERMAGRAFT | reported | to adjustment) | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,236.60 | -23.9 | 1,212.70 | 1,351.10 | -25.1 | 1,326.00 | ||
Cost of product sales | 197.1 | -16.6 | 180.5 | 196.5 | -17.9 | 178.6 | ||
Income from continuing operations, net of taxes | 278.2 | 22.9 | 301.1 | 64 | 482.6 | 546.6 | ||
Loss from discontinued operations, net of taxes | - | -22.9 | -22.9 | - | -482.6 | -482.6 | ||
Net income | 278.2 | - | 278.2 | 64 | - | 64 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 50.7c | 4.2c | 54.9c | 11.5c | 86.5c | 98.0c | ||
Loss from discontinued operations | - | (4.2c) | (4.2c) | - | (86.5c) | (86.5c) | ||
Earnings per share - basic | 50.7c | - | 50.7c | 1 | 11.5c | - | 11.5c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 48.8c | 3.9c | 52.7c | 11.7c | 81.7c | 93.4c | ||
Loss from discontinued operations | - | (3.9c) | (3.9c) | - | (81.7c) | (81.7c) | ||
Earnings per share - diluted | 48.8c | - | 48.8c | 1 | 11.7c | - | 11.7c | |
First quarter of 2012 | Second quarter of 2012 | |||||||
Previously | Adjusted for | As | Previously | Adjusted for | As | |||
reported | DERMAGRAFT | reported | reported | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,171.80 | -48.8 | 1,123.00 | 1,207.80 | -52.4 | 1,155.40 | ||
Cost of product sales | 158.4 | -10 | 148.4 | 152.5 | -17 | 135.5 | ||
Income from continuing operations, net of taxes | 238.4 | 7.4 | 245.8 | 237.8 | 10.7 | 248.5 | ||
Loss from discontinued operations, net of taxes | - | -7.4 | -7.4 | - | -10.7 | -10.7 | ||
Net income | 238.4 | - | 238.4 | 237.8 | - | 237.8 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 43.1c | 1.3c | 44.4c | 42.7c | 1.9c | 44.6c | ||
Loss from discontinued operations | - | (1.3c) | (1.3c) | - | (1.9c) | (1.9c) | ||
Earnings per share - basic | 43.1c | - | 43.1c | 1 | 42.7c | - | 42.7c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 41.4c | 1.3c | 42.7c | 41.3c | 1.8c | 43.1c | ||
Loss from discontinued operations | - | (1.3c) | (1.3c) | - | (1.8c) | (1.8c) | ||
Earnings per share - diluted | 41.4c | - | 41.4c | 1 | 41.3c | - | 41.3c | |
Third quarter of 2012 | Fourth quarter of 2012 | |||||||
Previously | Adjusted for | As | Previously | Adjusted for | As | |||
reported | DERMAGRAFT | reported | reported | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,100.40 | -33.7 | 1,066.70 | 1,201.20 | -18.9 | 1,182.30 | ||
Cost of product sales | 167.9 | -16 | 151.9 | 166.6 | -16.6 | 150 | ||
Income from continuing operations, net of taxes | 227.2 | 16.2 | 243.4 | 42 | 26 | 68 | ||
Loss from discontinued operations, net of taxes | - | -16.2 | -16.2 | - | -26 | -26 | ||
Net income | 227.2 | - | 227.2 | 42 | - | 42 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 40.9c | 2.9c | 43.8c | 7.5c | 4.7c | 12.2c | ||
Loss from discontinued operations | - | (2.9c) | (2.9c) | - | (4.7c) | (4.7c) | ||
Earnings per share - basic | 40.9c | - | 40.9c | 1 | 7.5c | - | 7.5c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 39.6c | 2.7c | 42.3c | 7.4c | 4.7c | 12.1c | ||
Loss from discontinued operations | - | (2.7c) | (2.7c) | - | (4.7c) | (4.7c) | ||
Earnings per share - diluted | 39.6c | - | 39.6c | 1 | 7.4c | - | 7.4c | |
Notes_to_the_Shire_Income_Acce
Notes to the Shire Income Access Share Trust Financial Statements | 12 Months Ended |
Dec. 31, 2013 | |
Income Access Share Trust Disclosure [Abstract] | ' |
Shire Income Access Share Trust Disclosure | ' |
(a) The Trust | |
The Shire Income Access Share Trust (the “Trust”) was established on August 29, 2008 by Shire Biopharmaceuticals Holdings (formerly Shire plc). The Trust is governed by the applicable laws of England and Wales and is resident in Jersey. The Trustee of the Trust is Equiniti Trust (Jersey) Limited, 26 New Street, St Helier, Jersey, JE4 3RA. | |
The Trust was established as part of the Income Access Share mechanism, as outlined in Note 22 in this Annual Report on Form 10-K of Shire plc and its subsidiaries (collectively referred to as either “Shire” or the “Company”). | |
(b) Basis of preparation | |
The financial statements of the Trust have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The financial statements have been prepared under the historical cost convention. | |
The preparation of financial statements in conformity with US GAAP requires the use of certain accounting estimates. It also requires management to exercise its judgment in the process of applying the Trust's accounting policies. Actual results may differ from these estimates. | |
The results of operations, and the financial position and cash flows of the Trust are also consolidated in the Company's financial statements, as contained on pages F-1 to F-67. | |
(c) Summary of significant accounting policies | |
i) Functional currency | |
The functional currency of the Trust is US dollars. | |
ii) Foreign currency translation | |
Income and expense items denominated in currencies other than the functional currency are translated into the functional currency at the rate ruling on their transaction date. Monetary assets and liabilities recorded in currencies other than the functional currency have been expressed in the functional currency at the rates of exchange ruling at the respective balance sheet dates. Differences on translation are included in the consolidated statements of income. | |
iii) Dividend income | |
Interim dividends declared on the Income Access Share are recognized on a paid basis unless the dividend has been confirmed by a general meeting of Shire, in which case income is recognized on the record date of the dividend by Shire on its ordinary shares. | |
(d) Capital account | |
The Capital account is represented by the Income Access Share of 5 pence settled in the Trust by Old Shire. | |
(e) Distributions made | |
Distributions are made to those shareholders of Shire who have elected to receive dividends from the Trust in accordance with the Trust Deed. Unclaimed dividends are not included in distributions made. There were no unclaimed dividends at December 31, 2013. Amounts are recorded as distributed once a wire transfer or check is issued. All checks are valid for one year from the date of issue. Any wire transfers that are not completed are replaced by checks. To the extent that checks expire or are returned unrepresented, the Trust records a liability for unclaimed dividends and a corresponding amount of cash. | |
(f) Financial instruments | |
The Trust, in its normal course of business, is not subject to market risk, credit risk or liquidity risk. The Trustees do not consider that any foreign exchange exposure will materially affect the operations of the Trust. | |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Valuation and Qualifying Accounts [Abstract] | ' | ||||
Provision for sales rebates, returns and coupons | ' | ||||
Beginning balance | Provision charged to income(1) | Costs incurred/ utilization(1) | Ending balance | ||
Provision for sales rebates, returns and coupons | $’M | $’M | $’M | $’M | |
__________ | __________ | __________ | __________ | ||
2013 : | |||||
Accrued rebates – Medicaid and HMOs | 640.5 | 1,626.60 | -1,460.60 | 806.5 | |
Sales returns reserve | 90.5 | 34.5 | -27.1 | 97.9 | |
Accrued coupons | 8 | 107.4 | -94.7 | 20.7 | |
__________ | __________ | __________ | __________ | ||
739 | 1,768.50 | -1,582.40 | 925.1 | ||
__________ | __________ | __________ | __________ | ||
2012 : | |||||
Accrued rebates – Medicaid and HMOs | 612.6 | 1,228.00 | -1,200.10 | 640.5 | |
Sales returns reserve | 88.8 | 40.8 | -39.1 | 90.5 | |
Accrued coupons | 8.1 | 71.7 | -71.8 | 8 | |
__________ | __________ | __________ | __________ | ||
709.5 | 1,340.50 | -1,311.00 | 739 | ||
__________ | __________ | __________ | __________ | ||
2011 : | |||||
Accrued rebates – Medicaid and HMOs | 549.9 | 1,123.20 | -1,060.50 | 612.6 | |
Sales returns reserve | 69.8 | 51.2 | -32.2 | 88.8 | |
Accrued coupons | 5.2 | 60.5 | -57.6 | 8.1 | |
__________ | __________ | __________ | __________ | ||
624.9 | 1,234.90 | -1,150.30 | 709.5 | ||
__________ | __________ | __________ | __________ | ||
(1) In the analysis above, due to systems limitations, it is not practical and has not been necessary to break out current versus prior year activity. When applicable, Shire has performed general ledger reviews of sales deduction provisions charged to income, and the utilization of these provisions in subsequent years. Shire has determined that adjustments made in each year as a result of changes to estimates that related to prior year sales, and adjustments made as a result of differences between prior period provisions and actual payments, did not have a material impact on the Company's financial performance or position either in each individual year, or in the Company's performance over the reported period. | |||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Basis of preparation | ' |
The accompanying consolidated financial statements include the accounts of Shire plc, all of its subsidiary undertakings and the Income Access Share trust, after elimination of inter-company accounts and transactions. They have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and US Securities and Exchange Commission (“SEC”) regulations for annual reporting. | |
Use of estimates in consolidated financial statements | ' |
The preparation of consolidated financial statements, in conformity with US GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of intangible assets, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestments, contingent consideration payable in respect of business combinations and asset purchases and assets held for sale. If actual results differ from the Company's estimates, or to the extent these estimates are adjusted in future periods, the Company's results of operations could either benefit from, or be adversely affected by, any such change in estimate. | |
Revenue recognition | ' |
The Company recognizes revenue when all of the following conditions are met: | |
• there is persuasive evidence of an agreement or arrangement; | |
• delivery of products has occurred or services have been rendered; | |
• the seller's price to the buyer is fixed or determinable; and | |
• collectability is reasonably assured. | |
Where applicable, all revenues are stated net of value added and similar taxes, and trade discounts. No revenue is recognized for consideration, the value or receipt of which is dependent on future events or future performance. | |
The Company's principal revenue streams and their respective accounting treatments are discussed below: | |
Product sales | |
Revenue for the sale of products is recognized when delivery has occurred and substantially all the risks and rewards of ownership have been transferred to the customer. Provisions for rebates, product returns and discounts to customers are provided for as reductions to revenue in the same period as the related sales are recorded. The provisions made at the time of revenue recognition are based on historical experience and updated for changes in facts and circumstances including the impact of new legislation. The provisions are recognized as a reduction to revenues. | |
Royalty income | |
Royalty income relating to licensed technology is recognized when the licensee sells the underlying product, with the amount of royalty income recorded based on sales information received from the relevant licensee. The Company estimates sales amounts and related royalty income based on the historical product information for any period that the sales information is not available from the relevant licensee. | |
Licensing revenues | |
Other revenue includes revenues derived from product out-licensing arrangements, which typically consist of an initial upfront payment on inception of the license and subsequent milestone payments contingent on the achievement of certain clinical and sales milestones. Product out-licensing arrangements often require the Company to provide multiple deliverables to the licensee. | |
Initial license fees received in connection with product out-licensing agreements entered into prior to January 1, 2011 are deferred and recognized over the period in which the Company has continuing substantive performance obligations, typically the period over which the Company participates in the development of the out-licensed product, even where such fees are non-refundable and not creditable against future royalty payments. | |
For product out-licensing arrangements entered into, or subject to material modification, after January 1, 2011, consideration received is allocated between each of the separable elements in the arrangement using the relative selling price method. An element is considered separable if it has value to the customer on a stand-alone basis. The selling price used for each separable element will be based on vendor specific objective evidence (“VSOE”) if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third party evidence is available. Revenue is then recognized as each of the separable elements to which the revenue has been allocated is delivered. | |
Milestone payments which are non-refundable, non creditable and contingent on achieving certain clinical milestones are recognized as revenues either on achievement of such milestones if the milestones are considered substantive or over the period the Company has continuing substantive performance obligations, if the milestones are not considered substantive. If milestone payments are creditable against future royalty payments, the milestones are deferred and released over the period in which the royalties are anticipated to be paid. | |
Sales deductions | ' |
(i) Rebates | |
Rebates primarily consist of statutory rebates to state Medicaid agencies and contractual rebates with health-maintenance organizations. These rebates are based on price differentials between a base price and the selling price. As a result, rebates generally increase as a percentage of the selling price over the life of the product (as prices increase). Provisions for rebates are recorded as reductions to revenue in the same period as the related sales are recorded, with the amount of the rebate based on the Company's best estimate if any uncertainty exists over the unit rebate amount, and with estimates of future utilization derived from historical trends. | |
(ii) Returns | |
The Company estimates the proportion of recorded revenue that will result in a return, based on historical trends and when applicable, specific factors affecting certain products at the balance sheet date. The accrual is recorded as a reduction to revenue in the same period as the related sales are recorded. | |
(iii) Coupons | |
The Company uses coupons as a form of sales incentive. An accrual is established based on the Company's expectation of the level of coupon redemption, estimated using historical trends. The accrual is recorded as a reduction to revenue in the same period as the related sales are recorded or the date the coupon is offered, if later than the date the related sales are recorded. | |
(iv) Discounts | |
The Company offers cash discounts to customers for the early payment of receivables which are recorded as reductions to revenue and accounts receivable in the same period as the related sale is recorded. | |
(v) Wholesaler chargebacks | |
The Company has contractual agreements whereby it supplies certain products to third parties at predetermined prices. Wholesalers acting as intermediaries in these transactions are reimbursed by the Company if the predetermined prices are less than the prices paid by the wholesaler to the Company. Accruals for wholesaler chargebacks, which are based on historical trends, are recorded as reductions to revenue in the same period as the related sales are recorded. | |
Collaborative arrangements | ' |
The Company enters into collaborative arrangements to develop and commercialize drug candidates. These collaborative arrangements often require up-front, milestone, royalty or profit share payments, or a combination of these, with payments often contingent upon the success of the related development and commercialization efforts. Collaboration agreements entered into by the Company may also include expense reimbursements or other such payments to the collaborating partner. | |
The Company reports costs incurred and revenue generated from transactions with third parties as well as payments between parties to collaborative arrangements either on a gross or net basis, depending on the characteristics of the collaborative relationship. | |
Cost of product sales | ' |
Cost of product sales includes the cost of purchasing finished product for sale, the cost of raw materials and manufacturing for those products that are manufactured by the Company, shipping and handling costs, depreciation and amortization of intangible assets in respect of favorable manufacturing contracts. Royalties payable on products to which the Company does not own the rights are also included in Cost of product sales. | |
Leased assets | ' |
The costs of operating leases are charged to operations on a straight-line basis over the lease term, even if rental payments are not made on such a basis. | |
Assets acquired under capital leases are included in the consolidated balance sheet as property, plant and equipment and are depreciated over the shorter of the period of the lease or their useful lives. The capital element of future lease payments is recorded as a liability, while the interest element is charged to operations over the period of the lease to produce a level yield on the balance of the capital lease obligation. | |
Advertising expense | ' |
The Company expenses the cost of advertising as incurred. Advertising costs amounted to $60.9 million, $85.8 million and $122.5 million for the years to December 31, 2013, 2012 and 2011 respectively and were included within Selling, general and administrative (“SG&A”) expenses. | |
Research and development ("R&D") expense | ' |
R&D costs are expensed as incurred. Upfront and milestone payments made to third parties for in-licensed products that have not yet received marketing approval and for which no alternative future use has been identified are also expensed as incurred. | |
Milestone payments made to third parties on and subsequent to regulatory approval are capitalized as intangible assets, and amortized over the remaining useful life of the related product. | |
Valuation and impairment of long-lived assets other than goodwill, indefinite lived intangible assets and investments | ' |
The Company evaluates the carrying value of long-lived assets other than goodwill, indefinite lived intangible assets and investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of the relevant assets may not be recoverable. When such a determination is made, management's estimate of undiscounted cash flows to be generated by the use and ultimate disposition of these assets is compared to the carrying value of the assets to determine whether the carrying value is recoverable. If the carrying value is deemed not to be recoverable, the amount of the impairment recognized in the consolidated financial statements is determined by estimating the fair value of the relevant assets and recording an impairment loss for the amount by which the carrying value exceeds the estimated fair value. This fair value is usually determined based on estimated discounted cash flows. | |
Finance cost of debt | ' |
Finance costs relating to debt issued are recorded as a deferred charge and amortized to the consolidated statements of income over the period to the earliest redemption date of the debt, using the effective interest rate method. On extinguishment of the related debt, any unamortized deferred financing costs are written off and charged to interest expense in the consolidated statements of income. | |
Foreign currency | ' |
Monetary assets and liabilities in foreign currencies are translated into the functional currency of the relevant subsidiary in which they arise at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into the relevant functional currency at the rate of exchange ruling at the date of the transaction. Transaction gains and losses, other than those related to current and deferred tax assets and liabilities, are recognized in arriving at income from operations before income taxes and equity in earnings of equity method investees. Transaction gains and losses arising on foreign currency denominated current and deferred tax assets and liabilities are included within income taxes in the consolidated statements of income. | |
The results of operations for subsidiaries, whose functional currency is not the US dollar, are translated into the US dollar at the average rates of exchange during the period, with the subsidiaries' balance sheets translated at the rates ruling at the balance sheet date. The cumulative effect of exchange rate movements is included in a separate component of Other comprehensive income. | |
Foreign currency exchange transaction losses included in consolidated statements of income in the years to December 31, 2013, 2012 and 2011 amounted to $8.7 million, $3.5 million and $2.1 million, respectively. | |
Income taxes | ' |
Uncertain tax positions are recognized in the consolidated financial statements for positions which are considered more likely than not of being sustained, based on the technical merits of the position on audit by the tax authorities. The measurement of the tax benefit recognized in the consolidated financial statements is based upon the largest amount of tax benefit that, in management's judgment, is greater than 50% likely of being realized based on a cumulative probability assessment of the possible outcomes. The Company recognizes interest relating to unrecognized tax benefits and penalties within income taxes. | |
Deferred tax assets and liabilities are recognized for differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. | |
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |
Earnings per share | ' |
Basic earnings per share is based upon net income attributable to Shire plc divided by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is based upon net income attributable to Shire plc adjusted for the impact of interest expense on convertible debt on an “if-converted” basis (when the effect is dilutive and prior to the actual conversion or redemption of debt) divided by the weighted average number of ordinary share equivalents outstanding during the period, adjusted for the dilutive effect of all potential ordinary shares equivalents that were outstanding during the year. Such potentially dilutive shares are excluded when the effect would be to increase diluted earnings per share or reduce the diluted loss per share. | |
Share-based compensation | ' |
Share-based compensation represents the cost of share-based awards granted to employees. The Company measures share-based compensation cost for awards classified as equity at the grant date, based on the estimated fair value of the award. Predominantly all of the Company's awards have service and/or performance conditions and the fair values of these awards are estimated using a Black-Scholes valuation model. | |
For share-based compensation awards which cliff vest, the Company recognizes the cost of the relevant share based payment award as an expense on a straight-line basis (net of estimated forfeitures) over the employee's requisite service period. For those share-based compensation awards with a graded vesting schedule, the Company recognizes the cost of the relevant share based payment award as an expense on a straight-line basis (net of estimated forfeitures) over the requisite service period for the entire award (that is, over the requisite service period for the last separately vesting portion of the award). The share based compensation expense is recorded in Cost of product sales, R&D, and SG&A in the consolidated statements of income based on the employees' respective functions. | |
The Company records deferred tax assets for awards that result in deductions on the Company's income tax returns, based on the amount of compensation cost recognized and the Company's statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company's income tax return are recorded in additional paid-in capital (if the tax deduction exceeds the deferred tax asset) or in the consolidated statements of income (if the deferred tax asset exceeds the tax deduction and no additional paid-in capital exists from previous awards). | |
The Company's share-based compensation plans are described more fully in Note 27. | |
Cash and cash equivalents | ' |
Cash and cash equivalents are defined as short-term highly liquid investments with original maturities of ninety days or less. | |
Financial instruments - derivatives | ' |
The Company uses derivative financial instruments to manage its exposure to foreign exchange risk associated with intercompany financing. These instruments consist of swap and forward foreign exchange contracts. The Company does not apply hedge accounting for these instruments. The fair values of these instruments are included on the balance sheet in current assets / liabilities, with changes in the fair value recognized in the consolidated statements of income. The cash flows relating to these instruments are presented within net cash provided by operating activities in the consolidated statement of cash flows, unless the derivative instruments are economically hedging specific investing or financing activities. | |
Inventories | ' |
Inventories are stated at the lower of cost or market. Cost incurred in bringing each product to its present location and condition is based on purchase costs calculated on a first-in, first-out basis, including transportation costs. | |
Inventories include costs relating to both marketed products and, for certain products, cost incurred prior to regulatory approval. Inventories are capitalized prior to regulatory approval if the Company considers that it is probable that the US Food and Drug Administration (“FDA”) or another regulatory body will grant commercial and manufacturing approval for the relevant product, and it is probable that the value of capitalized inventories will be recovered through commercial sale. | |
Inventories are written down for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those anticipated, inventory adjustments may be required. | |
Assets held-for-Sale | ' |
An asset or asset disposal group is classified as held-for-sale when, amongst other things, the Company has committed to a plan of disposition, the asset or asset disposal group is available for immediate sale, and the plan is not expected to change significantly. Assets held-for-sale are carried at the lower of their carrying amount or fair value less cost to sell. | |
The Company does not record depreciation or amortization on assets classified as held-for-sale. | |
Investments | ' |
The Company has certain investments in pharmaceutical and biotechnology companies. | |
Investments are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors such as representation on the investee's Board of Directors and the nature of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the Company records its investments in equity-method investees in the consolidated balance sheet under Investments and its share of the investees' earnings or losses together with other-than-temporary impairments in value under equity in earnings of equity method investees in the consolidated statements of income. | |
All other equity investments, which consist of investments for which the Company does not have the ability to exercise significant influence, are accounted for under the cost method or at fair value. Investments in private companies are carried at cost, less provisions for other-than-temporary impairment in value. For public companies that have readily determinable fair values, the Company classifies its equity investments as available-for-sale and, accordingly, records these investments at their fair values with unrealized holding gains and losses included in the consolidated statement of comprehensive income, net of any related tax effect. Realized gains and losses, and declines in value of available-for-sale securities judged to be other-than-temporary, are included in other income, net. The cost of securities sold is based on the specific identification method. Interest on securities classified as available-for-sale are included as interest income. | |
Property, plant and equipment | ' |
Property, plant and equipment is shown at cost reduced for impairment losses, net of accumulated depreciation. The cost of significant assets includes capitalized interest incurred during the construction period. Depreciation is recorded on a straight-line basis at rates calculated to write off the cost less estimated residual value of each asset over its estimated useful life as follows: | |
Buildings 15 to 50 years | |
Office furniture, fittings and equipment 3 to 10 years | |
Warehouse, laboratory and manufacturing equipment 3 to 15 years | |
The cost of land is not depreciated. Assets under the course of construction are not depreciated until the relevant assets are available and ready for their intended use. | |
Expenditures for maintenance and repairs are charged to the consolidated statements of income as incurred. The costs of major renewals and improvements are capitalized. At the time property, plant and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the asset and accumulated depreciation accounts. The profit or loss on such disposition is reflected in operating income. | |
Goodwill and other intangible assets | ' |
(i) Goodwill | |
In business combinations completed subsequent to January 1, 2009, goodwill represents the excess of the fair value of the consideration given and the fair value of any non-controlling interest in the acquiree over the fair value of the identifiable assets and liabilities acquired. For business combinations completed prior to January 1, 2009 goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired. | |
Goodwill is not amortized, but instead is reviewed for impairment, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. For the purpose of assessing the carrying value of goodwill for impairment, goodwill is allocated at the Company's reporting unit level. Events or changes in circumstances which could trigger an impairment review include but are not limited to: significant underperformance of a reporting unit relative to expected historical or projected future operating results; significant changes in the manner of the Company's use of acquired assets or the strategy for the overall business; and significant negative industry trends. | |
Goodwill is reviewed for impairment by comparing the carrying value of the reporting unit's net assets (including allocated goodwill) to the fair value of the reporting unit. If the reporting unit's carrying amount is greater than its fair value, a second step is performed whereby the portion of the reporting unit's fair value relating to goodwill is compared to the carrying value of the reporting unit's goodwill. The Company recognizes a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds its estimated fair value. In the year to December 31, 2013 the Company has recorded an impairment charge of $198.9 million related to the goodwill allocated to the Company's former Regenerative Medicine (“RM”) reporting unit. See Note 11 for further details. | |
(ii) Other intangible assets | |
Other intangible assets principally comprise intellectual property rights for products with a defined revenue stream, acquired product technology and IPR&D. Intellectual property rights for currently marketed products and acquired product technology are recorded at fair value and amortized over the estimated useful life of the related product, which ranges from 1 to 20 years (weighted average 10.1 years). IPR&D acquired through a business combination is capitalized as an indefinite lived intangible asset until the completion or abandonment of the associated R&D efforts. IPR&D is reviewed for impairment using a “one-step” approach which compares the fair value of the IPR&D asset with its carrying amount. An impairment loss is recognized to the extent that the carrying value exceeds the fair value of the IPR&D asset. Once the R&D efforts are completed the useful life of the relevant assets will be determined, and the IPR&D asset amortized over this useful economic life. | |
The following factors, where applicable, are considered in estimating the useful lives of Other intangible assets: | |
expected use of the asset; | |
regulatory, legal or contractual provisions, including the regulatory approval and review process, patent issues and actions by government agencies; | |
the effects of obsolescence, changes in demand, competing products and other economic factors, including the stability of the market, known technological advances, development of competing drugs that are more effective clinically or economically; | |
actions of competitors, suppliers, regulatory agencies or others that may eliminate current competitive advantages; and | |
historical experience of renewing or extending similar arrangements. | |
When a number of factors apply to an intangible asset, these factors are considered in combination when determining the appropriate useful life for the relevant asset. | |
Non-monetary transactions | ' |
The Company enters into certain non-monetary transactions that involve either the granting of a license over the Company's patents or the disposal of an asset or group of assets in exchange for a non–monetary asset, usually equity. The Company accounts for these transactions at fair value if the Company is able to determine the fair value within reasonable limits. To the extent the Company concludes that it is unable to determine the fair value of a transaction that transaction is accounted for at the recorded amounts of the assets exchanged. Management is required to exercise its judgment in determining whether or not the fair value of the asset received or given up can be determined. | |
New accounting pronouncements | ' |
Adopted during the period | |
Indefinite-Lived Intangible Assets (Other than Goodwill) Impairment Testing | |
In July 2012 the Financial Accounting Standard Board (“FASB”) issued guidance on the testing of indefinite-lived intangible assets for impairment. The guidance permits an entity to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, performing the impairment test is unnecessary. The more-likely-than-not threshold is defined as a likelihood of more than 50 percent. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the impairment test and may resume performing the qualitative assessment in any subsequent period. The guidance has been adopted prospectively from January 1, 2013. The adoption of the guidance did not impact the Company's consolidated financial position, results of operations or cash flows. | |
Disclosure about offsetting assets and liabilities | |
In December 2011 the FASB issued guidance on disclosures about offsetting assets and liabilities. In January 2013 the FASB amended the previous guidance to clarify the scope of guidance issued in December 2011. The amended guidance requires entities to disclose both gross and net information about derivatives including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with FASB guidance on topics “Balance Sheet” and “Derivatives and Hedging” or subject to an enforceable master netting arrangement or similar agreement; to enable users of financial statements to understand the effects or potential effects of those arrangements on its financial position. The guidance has been adopted prospectively from January 1, 2013. The adoption of the guidance did not impact the Company's consolidated financial position, results of operations or cash flows. Enhanced disclosure of balance sheet offsetting as required by this guidance is included in Note 20. | |
Amounts reclassified out of Comprehensive Income | |
In February 2013 the FASB issued guidance on reporting amounts reclassified out of accumulated other comprehensive income. The guidance requires entities to provide information about the amount reclassified out of comprehensive income by component and present either on the face of the financial statements or in the notes, significant amounts reclassified out of other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under US GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts. The guidance has been adopted prospectively from January 1, 2013. The adoption of the guidance did not impact the Company's consolidated financial position, results of operations or cash flows. | |
Presentation of an unrecognized tax benefit | |
In July 2013 the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists. The guidance requires entities to present an unrecognized tax benefit or a portion of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, except as follows: to the extent a net operating loss carry forward, a similar tax loss, or a tax credit carry forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The Company has adopted this guidance in the period. The adoption of the guidance did not materially impact the Company's consolidated financial position, results of operations or cash flows. | |
Statutory accounts | ' |
The consolidated financial statements as at December 31, 2013 and 2012, and for each of the three years in the period to December 31, 2013 do not comprise statutory accounts within the meaning of Section 434 of the UK Companies Act 2006 or Article 104 of the Companies (Jersey) Law 1991. | |
Statutory accounts of Shire, consisting of the solus accounts of Shire plc for the year to December 31, 2012 prepared under UK GAAP and in compliance with Jersey law have been delivered to the Registrar of Companies for Jersey. The consolidated accounts of the Company for the year ended December 31, 2012 prepared in accordance with US GAAP, in fulfillment of the Company's United Kingdom Listing Authority (“UKLA”) annual reporting requirements were filed with the UKLA. The auditor's reports on these accounts were unqualified. | |
Statutory accounts of Shire, consisting of the solus accounts of Shire plc for the year to December 31, 2013 prepared under UK GAAP and in compliance with Jersey law will be delivered to the Registrar of Companies in Jersey in 2014. The Company further expects to file the consolidated accounts of the Company for the year to December 31, 2013, prepared in accordance with US GAAP, in fulfillment of the Company's UKLA annual reporting requirements with the UKLA in 2014. | |
The Trust | ' |
Foreign currency | ' |
Income and expense items denominated in currencies other than the functional currency are translated into the functional currency at the rate ruling on their transaction date. Monetary assets and liabilities recorded in currencies other than the functional currency have been expressed in the functional currency at the rates of exchange ruling at the respective balance sheet dates. Differences on translation are included in the consolidated statements of income. | |
Basis of preparation | ' |
The financial statements of the Trust have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The financial statements have been prepared under the historical cost convention. | |
The preparation of financial statements in conformity with US GAAP requires the use of certain accounting estimates. It also requires management to exercise its judgment in the process of applying the Trust's accounting policies. Actual results may differ from these estimates. | |
The results of operations, and the financial position and cash flows of the Trust are also consolidated in the Company's financial statements, as contained on pages F-1 to F-67. | |
Functional currency | ' |
The functional currency of the Trust is US dollars. | |
Dividend income | ' |
Interim dividends declared on the Income Access Share are recognized on a paid basis unless the dividend has been confirmed by a general meeting of Shire, in which case income is recognized on the record date of the dividend by Shire on its ordinary shares. | |
Business_Combinations_Tables
Business Combinations (Tables) (ABH) | 12 Months Ended | |
Dec. 31, 2013 | ||
ABH | ' | |
Business Acquisition [Line Items] | ' | |
Schedule of Purchase Price Allocation | ' | |
Fair value | ||
$’M | ||
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | 14.6 | |
Accounts receivable | 30.1 | |
Inventories | 30.7 | |
Deferred tax assets | 51.1 | |
Other current assets | 7.9 | |
_______________ | ||
Total current assets | 134.4 | |
Non-current assets: | ||
Property, plant and equipment | 16.6 | |
Goodwill | 197 | |
Other intangible assets | ||
- DERMAGRAFT product technology | 710 | |
- other intangible assets | 1.5 | |
Other non-current assets | 0.2 | |
_______________ | ||
Total assets | 1,059.70 | |
_______________ | ||
LIABILITIES | ||
Current liabilities: | ||
Accounts payable and other current liabilities | 52.4 | |
Non-current liabilities: | ||
Long term debt, less current portion | 9.1 | |
Deferred tax liabilities | 258.5 | |
Other non-current liabilities | 0.1 | |
_______________ | ||
Total liabilities | 320.1 | |
_______________ | ||
Fair value of identifiable assets acquired and liabilities assumed | 739.6 | |
Consideration | _______________ | |
Cash consideration paid | 739.6 | |
_______________ |
Reorganization_costs_Table
Reorganization costs (Table) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Restructuring and Related Activities [Abstract] | ' | ||||
ScheduleOfRestructuringAndRelatedCostsTextBlock | ' | ||||
Opening liability | Amount | Closing liability at | |||
at January 1, | charged to re- | December 31, | |||
2013 | organization | Paid/Utilized | 2013 | ||
$'M | $'M | $'M | $'M | ||
___________ | ____________ | ___________ | ___________ | ||
Involuntary termination benefits | - | 44.7 | -29.4 | 15.3 | |
Other reorganization costs | - | 43.5 | -34 | 9.5 | |
___________ | ____________ | ___________ | ___________ | ||
- | 88.2 | -63.4 | 24.8 | ||
___________ | ___________ | ___________ | ___________ |
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Receivables [Abstract] | ' | |||
Provision for discounts and doubtful accounts | ' | |||
2013 | 2012 | 2011 | ||
$’M | $’M | $’M | ||
_____________ | _____________ | _____________ | ||
As at January 1, | 41.7 | 31.1 | 23.4 | |
Provision charged to operations | 306.8 | 283.3 | 240.8 | |
Provision utilization | -300.6 | -272.7 | -233.1 | |
_____________ | _____________ | _____________ | ||
As at December 31, | 47.9 | 41.7 | 31.1 | |
_____________ | _____________ | _____________ |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Inventory Disclosure [Abstract] | ' | ||
Schedule of Inventory | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Finished goods | 156.6 | 124.4 | |
Work-in-progress | 240.5 | 220.6 | |
Raw materials | 58.2 | 91.9 | |
____________ | ____________ | ||
455.3 | 436.9 | ||
____________ | ____________ |
Results_of_discontinued_operat1
Results of discontinued operations and other assets held for sale (Table) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
DiscontinuedOperationIncomeLossFromDiscontinuedOperationDisclosuresAbstract | ' | |||
Schedule Of Disposal Groups Including Discontinued Operations Income Statement Balance Sheet And Additional Disclosures (Table Text Block) | ' | |||
2013 | 2012 | 2011 | ||
$’M | $’M | $’M | ||
Revenues: | _______________ | _______________ | _______________ | |
Product revenues | 89.8 | 153.8 | 105.3 | |
_______________ | _______________ | _______________ | ||
Loss from discontinued operations before income taxes | -1,080.90 | -96.4 | -27 | |
Income taxes | 326.4 | 36.1 | 9.3 | |
_______________ | _______________ | _______________ | ||
Loss from discontinued operations, net of taxes | -754.5 | -60.3 | -17.7 | |
_______________ | _______________ | _______________ |
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Prepaid Expense and Other Assets, Current [Abstract] | ' | ||
Prepaid Expense and Other Assets, Current | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
______________ | ____________ | ||
Prepaid expenses | 29.4 | 31.7 | |
Income tax receivable | 177.4 | 130.6 | |
Value added taxes receivable | 14.5 | 20.9 | |
Other current assets | 41.7 | 38.6 | |
______________ | ______________ | ||
263 | 221.8 | ||
______________ | ______________ |
Property_Plant_and_Equipment_N1
Property, Plant and Equipment, Net (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Property, Plant and Equipment [Abstract] | ' | ||
Property, Plant and Equipment | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Land and buildings | 695 | 701.2 | |
Office furniture, fittings and equipment | 467 | 383.8 | |
Warehouse, laboratory and manufacturing equipment | 276.2 | 287.2 | |
Assets under construction | 45.6 | 93.8 | |
____________ | ____________ | ||
1,483.80 | 1,466.00 | ||
Less: Accumulated depreciation | -592 | -510.2 | |
____________ | ____________ | ||
891.8 | 955.8 | ||
____________ | ____________ |
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||
Schedule of Acquired Goodwill | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Goodwill arising on businesses acquired | 624.6 | 644.5 | |
____________ | ____________ | ||
Schedule of Goodwill | ' | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
As at January 1, | 644.5 | 592.6 | |
Acquisitions | 170.3 | 48.1 | |
Goodwill impairment charge related to continuing operations | -7.1 | - | |
Goodwill impairment charge related to DERMAGRAFT business and transferred to discontinued operations | -191.8 | - | |
Foreign currency translation | 8.7 | 3.8 | |
____________ | ____________ | ||
As at December 31, | 624.6 | 644.5 | |
____________ | ____________ |
Other_Intangible_Assets_Net_Ta
Other Intangible Assets, Net (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||
Schedule of Other Intangible Assets | ' | |||
December 31, | December 31, | |||
2013 | 2012 | |||
$’M | $’M | |||
________________ | ________________ | |||
Amortized intangible assets | ||||
Intellectual property rights acquired for currently marketed products | 2,573.30 | 2,462.00 | ||
Acquired product technology | - | 710 | ||
Other intangible assets | 46.1 | 44.5 | ||
________________ | ________________ | |||
2,619.40 | 3,216.50 | |||
Unamortized intangible assets | ||||
Intellectual property rights acquired for IPR&D | 951.5 | 231 | ||
________________ | ________________ | |||
3,570.90 | 3,447.50 | |||
Less: Accumulated amortization | -1,258.30 | -1,059.40 | ||
________________ | ________________ | |||
2,312.60 | 2,388.10 | |||
________________ | ________________ | |||
Intangible Assets (Excluding Goodwill) Roll Forward | ' | |||
Other intangible assets | ||||
2013 | 2012 | |||
$’M | $’M | |||
________________ | ________________ | |||
As at January 1, | 2,388.10 | 2,493.00 | ||
Acquisitions | 731.8 | 281.6 | ||
Amortization charged | -152 | -153.6 | ||
Amortization charged on DERMAGRAFT product technology, presented within discontinued operations in the consolidated income statement | -39.4 | -40.5 | ||
Impairment charges | -19.9 | -197.9 | ||
Reclassification of DERMAGRAFT product technology to assets held for sale | -611.4 | - | ||
Foreign currency translation | 15.4 | 5.5 | ||
________________ | ________________ | |||
As at December 31, | 2,312.60 | 2,388.10 | ||
________________ | ________________ |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounts Payable and Accrued Liabilities, Current [Abstract] | ' | ||
Schedule of Accounts Payable and Accrued Expenses | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
________________ | ________________ | ||
Trade accounts payable and accrued purchases | 202.6 | 208.1 | |
Accrued rebates – Medicaid | 549.1 | 455.6 | |
Accrued rebates – Managed care | 258.1 | 184.9 | |
Sales return reserve | 98.8 | 90.5 | |
Accrued bonuses | 130.9 | 109 | |
Accrued employee compensation and benefits payable | 79.4 | 64.5 | |
R&D accruals | 69.6 | 73.5 | |
Provisions for litigation losses and other claims | 71.7 | 118.2 | |
Other accrued expenses | 228.2 | 197.2 | |
________________ | ________________ | ||
1,688.40 | 1,501.50 | ||
________________ | ________________ |
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Other Liabilities, Current [Abstract] | ' | ||
Schedule of Other Current Liabilities | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Income taxes payable | 69 | 78.4 | |
Value added taxes | 15.8 | 23.6 | |
Contingent consideration payable | 12.9 | 16 | |
Other current liabilities | 21.8 | 26.1 | |
_____________ | _____________ | ||
119.5 | 144.1 | ||
_____________ | _____________ |
Other_Noncurrent_Liabilities_T
Other Non-current Liabilities (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Other Liabilities, Noncurrent [Abstract] | ' | ||
Schedule of Other Noncurrent Liabilities | ' | ||
December 31, | December 31, | ||
2013 | 2012 | ||
$’M | $’M | ||
____________ | ____________ | ||
Income taxes payable | 115.7 | 58.9 | |
Deferred revenue | 9.8 | 11.4 | |
Deferred rent | 11.3 | 11.9 | |
Insurance provisions | 1 | 12.3 | |
Contingent consideration payable | 393 | 120.4 | |
Other non-current liabilities | 57.7 | 26.7 | |
____________ | ____________ | ||
588.5 | 241.6 | ||
____________ | ____________ |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Future Minimum Lease Payments under Operating Leases | ' | ||
Operating | |||
leases | |||
$’M | |||
_____________ | |||
2014 | 44.9 | ||
2015 | 33.6 | ||
2016 | 23.9 | ||
2017 | 17.9 | ||
2018 | 12.2 | ||
Thereafter | 83.4 | ||
_____________ | |||
215.9 | |||
_____________ |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ||||||
Changes in Accumulated Other Comprehensive Income, Net of Tax | ' | ||||||
Foreign currency translation adjustment | Unrealized holding gain/(loss) on available-for-sale securities | Accumulated other comprehensive income | |||||
$M | $M | $M | |||||
As at January 1, 2013 | 85.1 | 1.8 | 86.9 | ||||
Current period change: | |||||||
Other Comprehensive income before reclassification | 25.3 | 1.5 | 26.8 | ||||
Gain transferred to the income statement (within Other (expense)/income, net) on disposal of available-for-sale securities | 0 | -3.5 | -3.5 | ||||
Net current period other comprehensive income | 25.3 | -2 | 23.3 | ||||
As at December 31, 2013 | 110.4 | -0.2 | 110.2 | ||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Derivative Instrument Detail [Abstract] | ' | ||||
Schedule of Foreign Exchange Contracts, Statement of Financial Position | ' | ||||
Fair value | Fair value | ||||
December 31, | December 31, | ||||
2013 | 2012 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Assets | Prepaid expenses and other current assets | 4 | 1.3 | ||
Liabilities | Other current liabilities | 2.8 | 3 | ||
_____________ | _____________ | ||||
Schedule of Foreign Exchange Contracts, Gain (Loss) in Other Income (Expense) | ' | ||||
Location of net (loss)/gain recognized in income | Amount of net (loss)/gain recognized in income | ||||
__________________________________ | ____________ | ____________ | |||
In the year to | December 31, | December 31, | December 31, | ||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
_____________ | _____________ | _____________ | |||
Foreign exchange contracts | Other income, net | -1.8 | 6.2 | 21.3 | |
_____________ | _____________ | _____________ |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Fair Value Disclosures [Abstract] | ' | ||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||
Carrying | Fair value | ||||||
value | |||||||
Total | Level 1 | Level 2 | Level 3 | ||||
At December 31, 2013 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 6.7 | 6.7 | 6.7 | - | - | ||
Contingent consideration receivable (2) | 36.1 | 36.1 | - | - | 36.1 | ||
Foreign exchange contracts | 4 | 4 | - | 4 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 2.8 | 2.8 | - | 2.8 | - | ||
Contingent consideration payable(3) | 405.9 | 405.9 | - | - | 405.9 | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Total | Level 1 | Level 2 | Level 3 | ||||
At December 31, 2012 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 14.2 | 14.2 | 14.2 | - | - | ||
Contingent consideration receivable (2) | 38.3 | 38.3 | - | - | 38.3 | ||
Foreign exchange contracts | 1.3 | 1.3 | - | 1.3 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 3 | 3 | - | 3 | - | ||
Contingent consideration payable(3) | 1 | 136.4 | 136.4 | - | - | 136.4 | |
____________ | ____________ | ___________ | ___________ | ___________ | |||
(1) Available-for-sale securities are included within Investments in the consolidated balance sheet. | |||||||
(2) Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet. | |||||||
(3) Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet. | |||||||
Assets Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3) | ' | ||||||
Contingent consideration receivable | |||||||
2013 | 2012 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 38.3 | 37.8 | |||||
Gain recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | 15.9 | 18.1 | |||||
Reclassification of amounts to Other receivables within Other current assets | -19.5 | -18.7 | |||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 1.4 | 1.1 | |||||
Balance at December 31, | 36.1 | 38.3 | |||||
Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3) | ' | ||||||
Contingent consideration payable | |||||||
2013 | 2012 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 136.4 | - | |||||
Initial recognition of contingent consideration payable | 451.4 | 127.8 | |||||
Change in fair value during the period with the corresponding adjustment recognized as a gain in the income statement (within Integration and acquisition costs) | -159.1 | 9.2 | |||||
Reclassification of amounts to Other current liabilities | -13.9 | -8.8 | |||||
Change in fair value during the period with corresponding adjustment to the associated intangible asset | -8.9 | 8.2 | |||||
Balance at December 31, | 405.9 | 136.4 | |||||
Fair Value Inputs, Assets Quantitative Information Table | ' | ||||||
Financial assets: | Fair Value at the Measurement Date | ||||||
At December 31, 2013 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration receivable ("CCR") | 36.1 | Income approach (probability weighted discounted cash flow) | • Probability weightings applied to different sales scenarios • Future forecast royalties receivable at relevant contractual royalty rates • Assumed market participant discount rate | • 10 to 45% • $40 million to $148 million • 6.2% | |||
____________ | ____________ | ____________ | ____________ | ||||
Fair Value at the Measurement Date | |||||||
At December 31, 2013 | Fair value | Valuation Technique | Significant unobservable Inputs | Rate used | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Movetis-related IPR&D intangible assets | 20.3 | Income approach (discounted cash flow) | • Decline in forecast peak sales since last impairment test • Assumed market participant discount rate | • 50% • 8.9% | |||
DERMAGRAFT assets held-for-sale | 31.6 | Income approach (discounted cash flow) | • Future forecast milestones to be received • Assumed market participant discount rate | • $15 -$95 million • 11.5% | |||
____________ | ____________ | ____________ | ____________ | ||||
Fair Value Inputs, Liabilities Quantitative Information Table | ' | ||||||
Financial liabilities: | Fair Value at the Measurement Date | ||||||
At December 31, 2013 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration payable | 405.9 | Income approach (probability weighted discounted cash flow) | • Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products | • 18 to 57% (Weighted average) • 2.9 to 15% (Weighted average) • 2014 to 2025 • $2.4 to $7.6 million | |||
____________ | ____________ | ____________ | ____________ | ||||
Schedule of Fair Value, Assets and Liabilities Not Measured at Fair Value on Recurring Basis | ' | ||||||
31-Dec-13 | 31-Dec-12 | ||||||
Carrying | Carrying | ||||||
amount | Fair value | amount | Fair value | ||||
$’M | $’M | $’M | $’M | ||||
____________ | ____________ | ____________ | ___________ | ||||
Financial liabilities: | |||||||
Convertible bonds (Level 1) | - | - | 1,100.00 | 1,228.20 | |||
Building financing obligation (Level 3) | 7.8 | 10.1 | 8 | 10.3 | |||
____________ | ____________ | ____________ | ___________ |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | |||||
2013 | 2012 | 2011 | ||||
$’M | $’M | $’M | ||||
_________________ | _________________ | _________________ | ||||
Income from continuing operations, net of taxes | 1,419.60 | 805.7 | 882.7 | |||
Loss from discontinued operations1 | -754.5 | -60.3 | -17.7 | |||
_________________ | _________________ | _________________ | ||||
Numerator for basic earnings per share | 665.1 | 745.4 | 865 | |||
Interest on convertible bonds, net of tax | 28.3 | 31.3 | 33.6 | |||
_________________ | _________________ | _________________ | ||||
Numerator for diluted earnings per share | 693.4 | 776.7 | 898.6 | |||
_________________ | _________________ | _________________ | ||||
Schedule of Weighted Average Number of Shares | ' | |||||
Weighted average number of shares: | ||||||
Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | ||||
Basic 1 | 552 | 555.4 | 551.1 | |||
Effect of dilutive shares: | ||||||
Share based awards to employees 2 | 4.8 | 4.6 | 10.9 | |||
Convertible bonds 2.75% due 2014 3 | 33.5 | 33.5 | 33.4 | |||
_________________ | _________________ | _________________ | ||||
Diluted | 590.3 | 593.5 | 595.4 | |||
_________________ | _________________ | _________________ | ||||
1. Excludes shares purchased by the EBT and under the share buy-back program and presented by Shire as treasury stock. | ||||||
2. Calculated using the treasury stock method. | ||||||
3. At December 31, 2013, Bondholders had voluntarily converted $1,099,050,000 aggregate principal amount of the Bonds into 33,806,464 fully paid Ordinary Shares. The remaining outstanding Bonds in an aggregate principle amount of $950,000 were redeemed pursuant to the option redemption notice issued on November 26, 2013. The Company has calculated the impact of the Bonds on diluted EPS from the beginning of the period to the actual date of Bonds conversion using the 'if-converted' method. | ||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||
Year to December 31, | 2013 | 2012 | 2011 | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share - basic | ||||||
Earnings from continuing operations | 257.2c | 145.1c | 160.1c | |||
Loss from discontinued operations | (136.7c) | (10.9c) | (3.2c) | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share - basic | 120.5c | 134.2c | 156.9c | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share - diluted | ||||||
Earnings from continuing operations | 245.3c | 141.0c | 153.9c | |||
Loss from discontinued operations | (127.8c) | (10.1c) | (3.0c) | |||
_______________ | _______________ | _______________ | ||||
Earnings per ordinary share – diluted | 117.5c | 130.9c | 150.9c | |||
_______________ | _______________ | _______________ | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | |||||
2013 | 2012 | 2011 | ||||
No. of shares | No. of shares | No. of shares | ||||
Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | ||||
Share based awards to employees1 | 0.5 | 6.7 | 2.9 | |||
_________________ | _________________ | _________________ | ||||
Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plc's average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. | ||||||
Segmental_Reporting_Tables
Segmental Reporting (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Segment Reporting [Abstract] | ' | ||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | ' | ||||||
2013 | 2012 | 2011 | |||||
Year to December 31, | $’M | $’M | $’M | ||||
___________ | ___________ | ___________ | |||||
Ireland | 22.5 | 20.6 | 21.1 | ||||
United Kingdom | 206.7 | 207 | 219.9 | ||||
North America | 3,386.20 | 3,006.10 | 2,761.80 | ||||
Rest of World | 1,318.90 | 1,293.70 | 1,155.30 | ||||
____________ | ____________ | ____________ | |||||
Total revenues | 4,934.30 | 4,527.40 | 4,158.10 | ||||
____________ | ____________ | ____________ | |||||
2013 | 2012 | ||||||
Year to December 31, | $’M | $’M | |||||
___________ | ___________ | ||||||
Ireland | 5.8 | 5.2 | |||||
United Kingdom | 70.3 | 72.2 | |||||
North America | 802.9 | 861 | |||||
Rest of World | 13.8 | 18.8 | |||||
____________ | ____________ | ||||||
Total | 892.8 | 957.2 | |||||
____________ | ____________ | ||||||
Schedule of Revenue by Major Customers by Reporting Segments | ' | ||||||
2013 | 2013 | 2012 | 2012 | 2011 | 2011 | ||
Year to December 31, | $’M | % product revenue | $’M | % product revenue | $’M | % product revenue | |
___________ | ___________ | ___________ | ___________ | ___________ | ___________ | ||
McKesson Corp. | 902.9 | 19 | 835.9 | 20 | 742.9 | 19 | |
Cardinal Health Inc. | 853.7 | 18 | 1,035.70 | 24 | 923.9 | 24 | |
AmerisourceBergen Corp | 721 | 15 | 307.4 | 7 | 276.4 | 7 | |
____________ | ___________ | ____________ | ___________ | ____________ | ___________ | ||
Schedule of Trade Receivables by Major Customers by Reporting Segments | ' | ||||||
Amounts outstanding as at December 31, in respect of these material customers were as follows: | |||||||
2013 | 2012 | ||||||
December 31, | $’M | $’M | |||||
___________ | ___________ | ||||||
McKesson Corp. | 161.3 | 127.4 | |||||
Cardinal Health Inc. | 149.5 | 166.1 | |||||
AmerisourceBergen Corp | 164.6 | 47.4 | |||||
____________ | ___________ | ||||||
Schedule of Segment Revenue from Major Products | ' | ||||||
2013 | 2012 | 2011 | |||||
$’M | $’M | $’M | |||||
___________ | ___________ | ___________ | |||||
VYVANSE | 1,227.80 | 1,029.80 | 805 | ||||
ELAPRASE | 545.6 | 497.6 | 464.9 | ||||
LIALDA/MEZAVANT | 528.9 | 399.9 | 372.1 | ||||
REPLAGAL | 467.9 | 497.5 | 475.2 | ||||
ADDERALL XR | 375.4 | 429 | 532.8 | ||||
VPRIV | 342.7 | 306.6 | 256.2 | ||||
INTUNIV | 334.9 | 287.8 | 223 | ||||
PENTASA | 280.6 | 265.8 | 251.4 | ||||
FIRAZYR | 234.8 | 116.3 | 33 | ||||
FOSRENOL | 183.4 | 172 | 166.9 | ||||
XAGRID | 99.4 | 97.2 | 90.6 | ||||
Other product sales | 136.1 | 153.4 | 173.8 | ||||
____________ | ____________ | ____________ | |||||
Total product sales | 4,757.50 | 4,252.90 | 3,844.90 | ||||
____________ | ____________ | ____________ |
Taxation_Tables
Taxation (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Income Tax Disclosure [Abstract] | ' | ||||
Schedule of Income before Income Tax, Domestic and Foreign | ' | ||||
2013 | 2012 | 2011 | |||
Year to December 31, | $’M | $’M | $’M | ||
___________ | ___________ | ___________ | |||
Republic of Ireland | -47.8 | -74.7 | -65.9 | ||
UK | 10.9 | 30.7 | 45.4 | ||
US | 1,153.30 | 683.8 | 774.6 | ||
Other jurisdictions | 577.2 | 368 | 363 | ||
___________ | ___________ | ___________ | |||
1,693.60 | 1,007.80 | 1,117.10 | |||
___________ | ___________ | ___________ | |||
Schedule of Components of Income Tax Expense (Benefit) | ' | ||||
Year to December 31, | |||||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
__________ | __________ | __________ | |||
Current income taxes: | |||||
Republic of Ireland | - | - | -1.8 | ||
US federal tax | 274.3 | 230 | 201.4 | ||
US state and local taxes | 17.9 | 11.3 | 9.2 | ||
Other | 63.4 | 29 | 40 | ||
__________ | __________ | __________ | |||
Total current taxes | 355.6 | 270.3 | 248.8 | ||
__________ | __________ | __________ | |||
Deferred taxes: | |||||
US federal tax | 23.8 | -63.8 | 23.3 | ||
US state and local taxes | -8.3 | -6.5 | -4.6 | ||
UK corporation tax | 11.5 | 13.1 | -1 | ||
Other | -104.7 | -10 | -29.6 | ||
__________ | __________ | __________ | |||
Total deferred taxes | -77.7 | -67.2 | -11.9 | ||
__________ | __________ | __________ | |||
Total income taxes | 277.9 | 203.1 | 236.9 | ||
__________ | __________ | __________ | |||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||
Year to December 31, | |||||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
___________ | ___________ | ___________ | |||
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,693.60 | 1,007.80 | 1,117.10 | ||
___________ | ___________ | ___________ | |||
Statutory tax rate(1) | 25.00% | 25.00% | 25.00% | ||
Adjustments to derive effective rate: | |||||
Non-deductable items: | |||||
US R&D credit | -4.50% | -2.60% | -4.50% | ||
Effect of the convertible bond | 0.50% | 0.80% | 0.80% | ||
Intra-group items(2) | -9.20% | -16.00% | -7.50% | ||
Recognition of foreign tax credits | - | -6.60% | - | ||
Other permanent items | -0.70% | 0.80% | -0.50% | ||
Other items: | |||||
Change in valuation allowance | 0.90% | 3.40% | 3.20% | ||
Impact of RESOLOR impairment | - | 4.90% | - | ||
Difference in taxation rates | 7.80% | 7.60% | 4.60% | ||
Change in provisions for uncertain tax positions | 3.80% | 1.10% | -1.20% | ||
Prior year adjustment | -3.40% | 0.80% | 0.80% | ||
Change in fair value of contingent consideration | -3.60% | - | - | ||
Change in tax rates | -0.20% | 0.80% | 0.20% | ||
Other | 0.00% | 0.10% | 0.30% | ||
___________ | ___________ | ___________ | |||
Provision for income taxes on continuing operations | 16.40% | 20.10% | 21.20% | ||
___________ | ___________ | ___________ | |||
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits | ' | ||||
2013 | 2012 | 2011 | |||
$’M | $’M | $’M | |||
___________ | ___________ | ___________ | |||
Balance at January 1 | 278.7 | 265.5 | 290.8 | ||
Increases based on tax positions related to the current year | 56.8 | 20.5 | 18.2 | ||
Decreases based on tax positions taken in the current year | -0.5 | - | -2.5 | ||
Increases for tax positions taken in prior years | 34.5 | 0.4 | 1.4 | ||
Decreases for tax positions taken in prior years | -0.8 | -3.3 | -12 | ||
Decreases resulting from settlements with the taxing authorities | - | -10.6 | -25.7 | ||
Decreases as a result of expiration of the statute of limitations | -0.6 | -0.3 | -0.5 | ||
Foreign currency translation adjustments(1) | -12.9 | 6.5 | -4.2 | ||
___________ | ___________ | ___________ | |||
Balance at December 31(2) | 355.2 | 278.7 | 265.5 | ||
___________ | ___________ | ___________ | |||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||
December 31, | December 31, | ||||
2013 | 2012 | ||||
$’M | $’M | ||||
____________ | ____________ | ||||
Deferred tax assets: | |||||
Deferred revenue | 5.2 | 5.5 | |||
Inventory & warranty provisions | 48.6 | 52.5 | |||
Losses carried forward (including tax credits)1 | 500.6 | 425.7 | |||
Provisions for sales deductions and doubtful accounts | 151.8 | 144.9 | |||
Intangible assets | 10.7 | 36.7 | |||
Share-based compensation | 25.5 | 32.7 | |||
Excess of tax value over book value of assets | 22.1 | - | |||
Accruals and provisions | 55.1 | 44.1 | |||
Other | 2.6 | 21.6 | |||
____________ | ____________ | ||||
Gross deferred tax assets | 822.2 | 763.7 | |||
Less: valuation allowance | -282.4 | -268.6 | |||
____________ | ____________ | ||||
539.8 | 495.1 | ||||
Deferred tax liabilities: | |||||
Intangible assets | -586.8 | -702.7 | |||
Excess of book value over tax value of assets and investments | -56.9 | -36.8 | |||
____________ | ____________ | ||||
Net deferred tax liabilities | -103.9 | -244.4 | |||
____________ | ____________ | ||||
Balance sheet classifications: | |||||
Deferred tax assets - current | 315.6 | 229.9 | |||
Deferred tax assets - non-current | 141.1 | 46.5 | |||
Deferred tax liabilities - non-current | -560.6 | -520.8 | |||
____________ | ____________ | ||||
-103.9 | -244.4 | ||||
____________ | ____________ | ||||
Summary of Operating Loss and Tax Credit Carryforwards | ' | ||||
2013 | 2012 | ||||
$’M | $’M | ||||
____________ | ____________ | ||||
US federal tax NOLs | 32.2 | 26.1 | |||
US state tax NOLs | 61.5 | 31.4 | |||
UK NOLs | 6.7 | 20.7 | |||
Republic of Ireland NOLs | 78.8 | 72.6 | |||
Foreign tax jurisdictions | 273.1 | 208.8 | |||
R&D and other tax credits | 48.3 | 66.2 | |||
____________ | ____________ | ||||
Schedule of Carryforwards Available to Reduce Future Taxes, Expiration Periods | ' | ||||
December 31, | |||||
2013 | |||||
$’M | |||||
___________ | |||||
Within 1 year | 0.9 | ||||
Within 1 to 2 years | 1.1 | ||||
Within 2 to 3 years | 0.7 | ||||
Within 3 to 4 years | 2.9 | ||||
Within 4 to 5 years | 3 | ||||
Within 5 to 6 years | 35.6 | ||||
After 6 years | 142.7 | ||||
Indefinitely | 313.7 |
Sharebased_Compensation_Plans_
Share-based Compensation Plans (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||
Share-based Compensation Expense | ' | |||||
2013 | 2012 | 2011 | ||||
$’M | $’M | $’M | ||||
____________ | ____________ | ____________ | ||||
Cost of product sales | 4.4 | 6.3 | 8.8 | |||
Research and development | 22.8 | 25.8 | 21.8 | |||
Selling, general and administrative | 46.9 | 55 | 45.1 | |||
Reorganization costs | 3.3 | - | - | |||
____________ | ____________ | ____________ | ||||
Total | 77.4 | 87.1 | 75.7 | |||
Less tax | -18.1 | -23.8 | -23.6 | |||
____________ | ____________ | ____________ | ||||
59.3 | 63.3 | 52.1 | ||||
____________ | ____________ | ____________ | ||||
Share-based Awards Outstanding | ' | |||||
Compensation type | Number of awards* | Expiration period from date of issue | Vesting period | |||
____________ | ____________ | ____________ | ____________ | |||
Portfolio Share Plan - Part A | SARs | 14,083,748 | 5 - 7 years | 3 years cliff or graded vesting, subject to market or performance criteria for Executive Directors only | ||
Sharesave Scheme | Stock options | 243,783 | 6 months after vesting | 3 or 5 years | ||
Stock Purchase Plan | Stock options | 568,828 | On vesting date | 1 to 5 years | ||
Legacy Plans | Stock options | 132,823 | 7 to 10 years | 3-10 years, subject to market or performance criteria | ||
__________________ | ||||||
Stock-settled SARs and stock options | 15,029,182 | |||||
__________________ | ||||||
Portfolio Share Plan - Part B | Performance share awards | 2,701,299 | 3 years | 3 years cliff or graded vesting, subject to market or performance criteria for Executive Directors only | ||
__________________ | ||||||
Performance share awards | 2,701,299 | |||||
__________________ | ||||||
Summary of Status of Stock Appreciation Rights and Stock Options | ' | |||||
Weighted average exercise price | ||||||
Year to December 31, 2013 | £ | Number of | Intrinsic Value | |||
shares* | £’ M | |||||
_______________ | _______________ | _______________ | ||||
Outstanding as at beginning of period | 16.66 | 18,536,947 | ||||
Granted | 20.05 | 6,914,026 | ||||
Exercised | 22.09 | -8,302,740 | ||||
Forfeited | 18.3 | -2,119,051 | ||||
_______________ | _______________ | ________________ | ||||
Outstanding as at end of period | 18.88 | 15,029,182 | 143.9 | |||
_______________ | _______________ | ________________ | ||||
Exercisable as at end of period | 15.67 | 3,670,446 | 46.9 | |||
_______________ | _______________ | ________________ | ||||
Schedule of Stock Appreciation Rights and Stock Options Outstanding, by Exercise Price Range | ' | |||||
Number of awards outstanding* | Exercise prices | Weighted Average remaining contractual term (Years) | Weighted average exercise price of awards outstanding | Number of awards exercisable | Weighted average exercise price of awards exercisable | |
£ | £ | £ | ||||
________________ | ______________ | __________ | _______________ | _____________ | _____________ | |
104,658 | 3.38-7.00 | 1.1 | 5.56 | 104,658 | 5.56 | |
810,822 | 7.01-14.00 | 2.8 | 11.27 | 804,402 | 11.25 | |
14,113,702 | 14.01-28.00 | 4.9 | 18.07 | 2,761,386 | 17.34 | |
________________ | _____________ | |||||
15,029,182 | 3,670,446 | |||||
________________ | _____________ | |||||
Schedule of Performance Share Awards | ' | |||||
Performance share awards | Number of shares* | Aggregate intrinsic value £’M | Weighted average remaining life | |||
_______________ | _______________ | _______________ | ||||
Outstanding as at beginning of period | 3,518,138 | |||||
Granted | 1,508,631 | |||||
Exercised | -1,826,648 | |||||
Forfeited | -498,822 | |||||
_______________ | ||||||
Outstanding as at end of period | 2,701,299 | 76.9 | 5.5 | |||
_______________ | _______________ | ________________ | ||||
Exercisable as at end of period | - | N/A | N/A | |||
_______________ | _______________ | _______________ | ||||
Schedule of Share-based Payment Award, Valuation Assumptions | ' | |||||
Period ended December 31, | 2013 | 2012 | 2011 | |||
______________ | ______________ | ______________ | ||||
Risk-free interest rate1 | 0.1-0.9% | 0.2-1% | 0.1-2.5% | |||
Expected dividend yield | 0.4-0.6% | 0-0.6% | 0-0.5% | |||
Expected life | 1-4 years | 1-4 years | 1-5 years | |||
Volatility | 23-26% | 24-32% | 19-33% | |||
Forfeiture rate | 5-9% | 5-7% | 5-7% |
Quarterly_Results_of_Operation1
Quarterly Results of Operations (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||
Quarterly Results of Operations | ' | |||||||
First quarter of 2013 | Second quarter of 2013 | |||||||
Previously | Adjusted for | As | Previously | Adjusted for | As | |||
reported | DERMAGRAFT | reported | reported | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,161.90 | -18.5 | 1,143.40 | 1,274.50 | -22.3 | 1,252.20 | ||
Cost of product sales | 155.9 | -8.5 | 147.4 | 175.7 | -11.4 | 164.3 | ||
Income from continuing operations, net of taxes | 64.8 | 216.2 | 281 | 258.1 | 32.8 | 290.9 | ||
Loss from discontinued operations, net of taxes | - | -216.2 | -216.2 | - | -32.8 | -32.8 | ||
Net income | 64.8 | - | 64.8 | 258.1 | - | 258.1 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 11.7c | 39.3c | 51.0c | 46.9c | 6.0c | 52.9c | ||
Loss from discontinued operations | - | (39.3c) | (39.3c) | - | (6.0c) | (6.0c) | ||
Earnings per share - basic | 11.7c | - | 11.7c | 1 | 46.9c | - | 46.9c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 11.7c | 36.7c | 49.0c | 45.3c | 5.6c | 50.9c | ||
Loss from discontinued operations | - | (36.7c) | (36.7c) | - | (5.6c) | (5.6c) | ||
Earnings per share - diluted | 11.7c | - | 12.3c | 1 | 45.3c | - | 45.3c | |
Third quarter of 2013 | Fourth quarter of 2013 | |||||||
Previously | Adjusted for | As | Memo (prior | Adjusted for | As | |||
reported | DERMAGRAFT | reported | to adjustment) | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,236.60 | -23.9 | 1,212.70 | 1,351.10 | -25.1 | 1,326.00 | ||
Cost of product sales | 197.1 | -16.6 | 180.5 | 196.5 | -17.9 | 178.6 | ||
Income from continuing operations, net of taxes | 278.2 | 22.9 | 301.1 | 64 | 482.6 | 546.6 | ||
Loss from discontinued operations, net of taxes | - | -22.9 | -22.9 | - | -482.6 | -482.6 | ||
Net income | 278.2 | - | 278.2 | 64 | - | 64 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 50.7c | 4.2c | 54.9c | 11.5c | 86.5c | 98.0c | ||
Loss from discontinued operations | - | (4.2c) | (4.2c) | - | (86.5c) | (86.5c) | ||
Earnings per share - basic | 50.7c | - | 50.7c | 1 | 11.5c | - | 11.5c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 48.8c | 3.9c | 52.7c | 11.7c | 81.7c | 93.4c | ||
Loss from discontinued operations | - | (3.9c) | (3.9c) | - | (81.7c) | (81.7c) | ||
Earnings per share - diluted | 48.8c | - | 48.8c | 1 | 11.7c | - | 11.7c | |
First quarter of 2012 | Second quarter of 2012 | |||||||
Previously | Adjusted for | As | Previously | Adjusted for | As | |||
reported | DERMAGRAFT | reported | reported | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,171.80 | -48.8 | 1,123.00 | 1,207.80 | -52.4 | 1,155.40 | ||
Cost of product sales | 158.4 | -10 | 148.4 | 152.5 | -17 | 135.5 | ||
Income from continuing operations, net of taxes | 238.4 | 7.4 | 245.8 | 237.8 | 10.7 | 248.5 | ||
Loss from discontinued operations, net of taxes | - | -7.4 | -7.4 | - | -10.7 | -10.7 | ||
Net income | 238.4 | - | 238.4 | 237.8 | - | 237.8 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 43.1c | 1.3c | 44.4c | 42.7c | 1.9c | 44.6c | ||
Loss from discontinued operations | - | (1.3c) | (1.3c) | - | (1.9c) | (1.9c) | ||
Earnings per share - basic | 43.1c | - | 43.1c | 1 | 42.7c | - | 42.7c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 41.4c | 1.3c | 42.7c | 41.3c | 1.8c | 43.1c | ||
Loss from discontinued operations | - | (1.3c) | (1.3c) | - | (1.8c) | (1.8c) | ||
Earnings per share - diluted | 41.4c | - | 41.4c | 1 | 41.3c | - | 41.3c | |
Third quarter of 2012 | Fourth quarter of 2012 | |||||||
Previously | Adjusted for | As | Previously | Adjusted for | As | |||
reported | DERMAGRAFT | reported | reported | DERMAGRAFT | reported | |||
$’M | $’M | $’M | $’M | $’M | $’M | |||
____________ | ____________ | ____________ | ____________ | ____________ | ____________ | |||
Total revenues | 1,100.40 | -33.7 | 1,066.70 | 1,201.20 | -18.9 | 1,182.30 | ||
Cost of product sales | 167.9 | -16 | 151.9 | 166.6 | -16.6 | 150 | ||
Income from continuing operations, net of taxes | 227.2 | 16.2 | 243.4 | 42 | 26 | 68 | ||
Loss from discontinued operations, net of taxes | - | -16.2 | -16.2 | - | -26 | -26 | ||
Net income | 227.2 | - | 227.2 | 42 | - | 42 | ||
Earnings per ordinary share - basic | ||||||||
Earnings from continuing operations | 40.9c | 2.9c | 43.8c | 7.5c | 4.7c | 12.2c | ||
Loss from discontinued operations | - | (2.9c) | (2.9c) | - | (4.7c) | (4.7c) | ||
Earnings per share - basic | 40.9c | - | 40.9c | 1 | 7.5c | - | 7.5c | |
Earnings per ordinary share - diluted | ||||||||
Earnings from continuing operations | 39.6c | 2.7c | 42.3c | 7.4c | 4.7c | 12.1c | ||
Loss from discontinued operations | - | (2.7c) | (2.7c) | - | (4.7c) | (4.7c) | ||
Earnings per share - diluted | 39.6c | - | 39.6c | 1 | 7.4c | - | 7.4c | |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounting Policies [Abstract] | ' | ' | ' |
Advertising costs | $60.90 | $85.80 | $122.50 |
Foreign currency exchange transaction gain (loss) | -8.7 | -3.5 | -2.1 |
Former RM reporting unit | ' | ' | ' |
Goodwill and Intangible Assets | ' | ' | ' |
Goodwill impairment charge | $198.90 | ' | ' |
Minimum | ' | ' | ' |
Goodwill and Intangible Assets | ' | ' | ' |
Estimated useful life of intangible assets | '1 year | ' | ' |
Maximum | ' | ' | ' |
Goodwill and Intangible Assets | ' | ' | ' |
Estimated useful life of intangible assets | '20 years | ' | ' |
Weighted Average | ' | ' | ' |
Goodwill and Intangible Assets | ' | ' | ' |
Estimated useful life of intangible assets | '10 years 1 month | ' | ' |
Buildings | Minimum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life of PP&E | '15 years | ' | ' |
Buildings | Maximum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life of PP&E | '50 years | ' | ' |
Office furniture, fittings and equipment | Minimum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life of PP&E | '3 years | ' | ' |
Office furniture, fittings and equipment | Maximum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life of PP&E | '10 years | ' | ' |
Warehouse, laboratory and manufacturing equipment | Minimum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life of PP&E | '3 years | ' | ' |
Warehouse, laboratory and manufacturing equipment | Maximum | ' | ' | ' |
Property, Plant and Equipment | ' | ' | ' |
Estimated useful life of PP&E | '15 years | ' | ' |
Business_Combinations_Virophar
Business Combinations (Viropharma,SARcode, Premacure and Lotus) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 12, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 17, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 08, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 24, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Lotus | Lotus | Lotus | SARcode Biosciences Inc | SARcode Biosciences Inc | SARcode Biosciences Inc | SARcode Biosciences Inc | SARcode Biosciences Inc | Premacure | Premacure | Premacure | Viropharma | Viropharma | Viropharma | ||||
Acquisition and Integration Costs, Gross Amount | Acquisition and Integration Costs, Net Amount | ||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | 100.00% | ' | ' | 100.00% | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' |
Cash consideration paid | ' | ' | ' | $49.40 | ' | ' | $151 | ' | ' | ' | ' | $30.60 | ' | ' | $4,200 | ' | ' |
Maximum amount of contingent cash consideration | ' | ' | ' | 275 | ' | ' | 225 | ' | ' | ' | ' | 169 | ' | ' | ' | ' | ' |
Integration and acquisition costs | -134.1 | 13.5 | 0.1 | ' | 2.3 | 0.5 | ' | ' | 0 | 5.3 | -170.7 | ' | 9.5 | 0 | ' | 12.8 | 0 |
Acquisition-date fair value of consideration totaled | ' | ' | ' | 174.2 | ' | ' | 368 | ' | ' | ' | ' | 140.2 | ' | ' | ' | ' | ' |
Fair value of contingent consideration payable | ' | ' | ' | 124.8 | ' | ' | 217 | ' | ' | ' | ' | 109.6 | ' | ' | ' | ' | ' |
Net current assets assumed | ' | ' | ' | 6.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net non-current liabilities assumed (including deferred tax liabilities) | ' | ' | ' | 63.4 | ' | ' | 122.4 | ' | ' | ' | ' | 29.5 | ' | ' | ' | ' | ' |
Post acquisition pre-tax losses included in consolidated statement of income | ' | ' | ' | ' | ' | ' | ' | 26 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
IPR&D | ' | ' | ' | 176.7 | ' | ' | 412 | ' | ' | ' | ' | 151.8 | ' | ' | ' | ' | ' |
Goodwill arising on business acquired | 170.3 | 48.1 | ' | 54.1 | 54.1 | ' | 86.6 | 86.6 | ' | ' | ' | 29.6 | ' | ' | ' | ' | ' |
Net current liabilities assumed | ' | ' | ' | ' | ' | ' | 8.2 | ' | ' | ' | ' | 11.7 | ' | ' | ' | ' | ' |
Purchase price paid per share of acquiree (in USD per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50 | ' | ' |
Change in fair value of contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($176) | ' | ' | ' | ' | ' | ' |
Business_Combinations_FerroKin
Business Combinations (FerroKin and Pervasis) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 02, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 19, 2012 |
FerroKin | FerroKin | FerroKin | Pervasis | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | 100.00% | ' | ' | ' |
Acquisition-date fair value of consideration | ' | ' | ' | $159.30 | ' | ' | $26.10 |
Cash consideration paid | ' | ' | ' | 94.5 | ' | ' | 2.5 |
Fair value of contingent consideration payable | ' | ' | ' | 64.8 | ' | ' | 23.6 |
Maximum amount of contingent cash consideration | ' | ' | ' | 225 | ' | ' | 169.5 |
Integration and acquisition costs | -134.1 | 13.5 | 0.1 | ' | 10.4 | 12.1 | ' |
Post acquisition pre-tax losses included in consolidated statement of income | ' | ' | ' | ' | ' | 19.1 | ' |
Purchase Price Allocation | ' | ' | ' | ' | ' | ' | ' |
IPR&D | ' | ' | ' | 166 | ' | ' | 24.3 |
Net current liabilities assumed | ' | ' | ' | 6.6 | ' | ' | 0.2 |
Net non-current liabilities assumed (including deferred tax liabilities) | ' | ' | ' | 46.2 | ' | ' | ' |
Goodwill arising on business acquired | $170.30 | $48.10 | ' | $46.10 | ' | ' | $2 |
Business_Combinations_ABH_Deta
Business Combinations (ABH) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 28, 2011 | Dec. 31, 2011 | Jun. 28, 2011 | Jun. 28, 2011 |
ABH | ABH | ABH | ABH | ||||
DERMAGRAFT Product Technology | Other Intangible Assets | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | 100.00% | ' | ' | ' |
Cash consideration paid | ' | ' | ' | $739.60 | ' | ' | ' |
Current assets: | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | 14.6 | ' | ' | ' |
Accounts receivable | ' | ' | ' | 30.1 | ' | ' | ' |
Inventories | ' | ' | ' | 30.7 | ' | ' | ' |
Deferred tax assets | ' | ' | ' | 51.1 | ' | ' | ' |
Other current assets | ' | ' | ' | 7.9 | ' | ' | ' |
Total current assets | ' | ' | ' | 134.4 | ' | ' | ' |
Non-current assets: | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 16.6 | ' | ' | ' |
Goodwill | 624.6 | 644.5 | 592.6 | 197 | ' | ' | ' |
Other intangible assets, net | ' | ' | ' | ' | ' | 710 | 1.5 |
Other non-current assets | ' | ' | ' | 0.2 | ' | ' | ' |
Total assets | ' | ' | ' | 1,059.70 | ' | ' | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and other current liabilities | ' | ' | ' | 52.4 | ' | ' | ' |
Non-current liabilities: | ' | ' | ' | ' | ' | ' | ' |
Long term debt, less current portion | ' | ' | ' | 9.1 | ' | ' | ' |
Deferred tax liabilities | ' | ' | ' | 258.5 | ' | ' | ' |
Other non-current liabilities | ' | ' | ' | 0.1 | ' | ' | ' |
Total liabilities | ' | ' | ' | 320.1 | ' | ' | ' |
Fair value of identified assets acquired and liabilities assumed | ' | ' | ' | 739.6 | ' | ' | ' |
Pro Forma Information | ' | ' | ' | ' | ' | ' | ' |
Post acquisition revenues included in consolidated statement of income | ' | ' | ' | ' | 105.3 | ' | ' |
Post acquisition pre-tax losses included in consolidated statement of income | ' | ' | ' | ' | 15.3 | ' | ' |
Post acquisition amortization of intangible assets included in consolidated statement of income | ' | ' | ' | ' | 20 | ' | ' |
Integration and acquisition costs | ($134.10) | $13.50 | $0.10 | ' | ' | ' | ' |
Divestment_of_Product_Rights_D
Divestment of Product Rights (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Product Information [Line Items] | ' | ' | ' |
Total divestiture contingent consideration receivable | $300 | ' | ' |
DAYTRANA | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' |
Gain (loss) on change in the fair value of divestiture contingent consideration receivable | 15.9 | 18.1 | -6 |
Current divestiture contingent consideration receivable | 9.6 | 11.6 | ' |
Noncurrent divestiture contingent consideration receivable | 26.5 | 27.6 | ' |
Total divestiture contingent consideration receivable | $36.10 | $39.20 | ' |
Reorganization_Costs_Details
Reorganization Costs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reorganization Costs | ' | ' | ' |
Reorganization costs | $88.20 | $0 | $24.30 |
Restructuring Reserve (Roll Forward) | ' | ' | ' |
Reorganization Reserve Opening liability | 0 | ' | ' |
Amounts charged to re-organization | 88.2 | 0 | 24.3 |
Reorganization liability, Paid and Utilized | -63.4 | ' | ' |
Reorganization Reserve Closing liability | 24.8 | 0 | ' |
Reorganization liability, Current | 24.8 | ' | ' |
Involuntary termination benefits | ' | ' | ' |
Reorganization Costs | ' | ' | ' |
Reorganization costs | 44.7 | ' | ' |
Restructuring Reserve (Roll Forward) | ' | ' | ' |
Reorganization Reserve Opening liability | 0 | ' | ' |
Amounts charged to re-organization | 44.7 | ' | ' |
Reorganization liability, Paid and Utilized | -29.4 | ' | ' |
Reorganization Reserve Closing liability | 15.3 | ' | ' |
Other reorganization costs | ' | ' | ' |
Reorganization Costs | ' | ' | ' |
Reorganization costs | 43.5 | ' | ' |
Restructuring Reserve (Roll Forward) | ' | ' | ' |
Reorganization Reserve Opening liability | 0 | ' | ' |
Amounts charged to re-organization | 43.5 | ' | ' |
Reorganization liability, Paid and Utilized | -34 | ' | ' |
Reorganization Reserve Closing liability | 9.5 | ' | ' |
Turnhout | ' | ' | ' |
Reorganization Costs | ' | ' | ' |
Reorganization costs | 23.6 | ' | ' |
Restructuring Reserve (Roll Forward) | ' | ' | ' |
Amounts charged to re-organization | 23.6 | ' | ' |
"One Shire" business re-alignment | ' | ' | ' |
Reorganization Costs | ' | ' | ' |
Reorganization costs | 64.6 | ' | ' |
Restructuring Reserve (Roll Forward) | ' | ' | ' |
Amounts charged to re-organization | 64.6 | ' | ' |
"One Shire" business re-alignment | Reorganization costs, high estimate | ' | ' | ' |
Reorganization Costs | ' | ' | ' |
Reorganizations costs, expected costs | $150 | ' | ' |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Provision for discounts and doubtful accounts | ' | ' | ' |
As at January 1, | $41.70 | $31.10 | $23.40 |
Provision charged to operations | 306.8 | 283.3 | 240.8 |
Provision utilization | -300.6 | -272.7 | -233.1 |
As at December 31, | 47.9 | 41.7 | 31.1 |
Accounts receivable, net | 961.2 | 824.2 | ' |
Accounts receivable related to royalty income | $37.80 | $38.50 | ' |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Schedule of Inventory | ' | ' |
Finished goods | $156.60 | $124.40 |
Work-in-progress | 240.5 | 220.6 |
Raw materials | 58.2 | 91.9 |
Total inventories | $455.30 | $436.90 |
Results_of_discontinued_operat2
Results of discontinued operations and other assets helf for sale (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' |
Loss from discontinued operations, net of taxes | ($754.50) | ($60.30) | ($17.70) |
Loss on sale of discontinued operations before income taxes | 0 | 0 | 0 |
Divestiture, Contingent Consideration Receivable | 300 | ' | ' |
Impairment of assets held for sale | 636.9 | 0 | 0 |
Goodwill impairment charge | 7.1 | 0 | 0 |
Reorganization costs | 88.2 | 0 | 24.3 |
Transferred assets held for sale | 31.6 | 0 | ' |
Reclassification of Dermagraft product technology to assets held for sale | -611.4 | 0 | ' |
DERMAGRAFT | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' |
Product Revenues | 89.8 | 153.8 | 105.3 |
Loss from discontinuing operations before income taxes | -1,080.90 | -96.4 | -27 |
Income tax expense from discontinued operations | 326.4 | 36.1 | 9.3 |
Loss from discontinued operations, net of taxes | -754.5 | -60.3 | -17.7 |
Impairment of assets held for sale | 636.9 | ' | ' |
Historical goodwill impairment charge presented within discontinued operations | 191.8 | ' | ' |
Accounts receivable,net | 11.8 | ' | ' |
Inventories | 16.2 | ' | ' |
Property, plant and equipment, net | 29.1 | ' | ' |
Reclassification of Dermagraft product technology to assets held for sale | 611.4 | ' | ' |
Continung operations | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' |
Goodwill impairment charge | 7.1 | ' | ' |
Discontinued operations | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' |
Goodwill impairment charge | 191.8 | ' | ' |
Discontinued operations | DERMAGRAFT | ' | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' |
Reorganization costs | $99.60 | ' | ' |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Prepaid Expense and Other Assets, Current [Abstract] | ' | ' |
Prepaid expenses | $29.40 | $31.70 |
Income tax receivable | 177.4 | 130.6 |
Value added taxes receivable | 14.5 | 20.9 |
Other current assets | 41.7 | 38.6 |
Prepaid expenses and other current assets, total | $263 | $221.80 |
Property_Plant_and_Equipment_D
Property Plant and Equipment (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment, Net | ' | ' | ' |
Land and buildings | $695 | $701.20 | ' |
Office furniture, fittings and equipment | 467 | 383.8 | ' |
Warehouse, laboratory and manufacturing equipment | 276.2 | 287.2 | ' |
Assets under construction | 45.6 | 93.8 | ' |
Property, plant and equipment, gross | 1,483.80 | 1,466 | ' |
Less: Accumulated depreciation | -592 | -510.2 | ' |
Property, plant and equipment, net | 891.8 | 955.8 | ' |
Depreciation | $127.60 | $109 | $119.50 |
Goodwill_Details
Goodwill (Details) (USD $) | 12 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 02, 2012 | Jun. 28, 2011 | Feb. 12, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 19, 2012 | Apr. 17, 2013 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Continung operations | Continung operations | Discontinued operations | Discontinued operations | FerroKin | ABH | Lotus | Lotus | Premacure AB | Pervasis | SARcode Biosciences Inc | SARcode Biosciences Inc | Former RM reporting unit | Former RM reporting unit | One Shire | |||
number | |||||||||||||||||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | ' | ' | ' | ' | ' | ' | $159.30 | $739.60 | $174.20 | ' | ' | $26.10 | $368 | ' | ' | ' | ' |
Goodwill arising on business acquired | 170.3 | 48.1 | ' | ' | ' | ' | 46.1 | ' | 54.1 | 54.1 | 29.6 | 2 | 86.6 | 86.6 | 0 | ' | ' |
Goodwill facts and circumstances leading to impairment | 'Goodwill is tested for impairment at least annually as at October 1 each year. This assessment is also performed whenever there is a change in circumstances that indicates the carrying value of these assets may not be recoverable. In the first quarter of 2013 the Company identified circumstances which indicated that the carrying value of goodwill in the Company’s former RM reporting unit may not be recoverable, which triggered an impairment test in advance of the annual testing date. Those circumstances included the results of an independent market research study of the DERMAGRAFT sales potential, commissioned by the Company, which was finalized late in the first quarter of 2013. In addition, the recently completed restructuring of the RM sales and marketing organization and the implementation of a new commercial model had a more pronounced impact than previously expected. As a result of those and other factors forecast future sales were lower than at the time of acquisition. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount Rate | 15.10% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment method for fair value determination | 'The results of the Company’s March 31, 2013 impairment test showed that the carrying amount of the former RM reporting unit exceeded its fair value and the implied value of the goodwill was $nil. As a result the Company recorded an impairment charge of $198.9 million related to the goodwill allocated to the former RM reporting unit. The RM goodwill impairment charge is not deductible for tax purposes. Accumulated goodwill impairment as at December 31, 2013 was $198.9 million (December 31, 2012: $nil). The Company determined the estimated fair value of the former RM reporting unit using discounted cash flow analyses, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, expected cash flows for the period from March 31, 2013 to December 31, 2023 and the associated discount rate of 15.1%, which was derived from management’s best estimate of the after-tax weighted average cost of capital for the RM reporting unit. Discounted cash flow analyses are dependent upon a number of quantitative and qualitative factors including estimates of forecasted revenue, profitability, earnings before interest, taxes, depreciation and amortization, and terminal values. The discount rates applied in the discounted cash flow analyses also have an impact on the estimates of fair value, as use of a higher rate will result in a lower estimate of fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated Goodwill Impairment | 198.9 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
As at January 1, | 644.5 | 592.6 | ' | ' | ' | ' | ' | 197 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition | 170.3 | 48.1 | ' | ' | ' | ' | 46.1 | ' | 54.1 | 54.1 | 29.6 | 2 | 86.6 | 86.6 | 0 | ' | ' |
Goodwill impairment charge | ' | ' | -7.1 | 0 | -191.8 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 198.9 | ' |
Foreign currency translation | 8.7 | 3.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
As at December 31, | $624.60 | $644.50 | ' | ' | ' | ' | ' | $197 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Reportable segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Other_Intangible_Assets_Net_De
Other Intangible Assets, Net (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Amortized intangible assets | $2,619.40 | $3,216.50 | ' |
Other intangible assets, gross | 3,570.90 | 3,447.50 | ' |
Less: Accumulated amortization | -1,258.30 | -1,059.40 | ' |
Other intangible assets, net | 2,312.60 | 2,388.10 | 2,493 |
Estimates of Annual Amortization | ' | ' | ' |
2014 | 127 | ' | ' |
2015 | 127 | ' | ' |
2016 | 127 | ' | ' |
2017 | 127 | ' | ' |
2018 | 127 | ' | ' |
Currently Marketed Products | ' | ' | ' |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Amortized intangible assets | 2,573.30 | 2,462 | ' |
Acquired Product Technology | ' | ' | ' |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Amortized intangible assets | 0 | 710 | ' |
Other Intangible Assets | ' | ' | ' |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Amortized intangible assets | 46.1 | 44.5 | ' |
IPR&D | ' | ' | ' |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' |
Unamortized intangible assets | $951.50 | $231 | ' |
Other_Intangible_Assets_Net_Ro
Other Intangible Assets, Net (Roll Forward) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Intangible Assets Roll Forward | ' | ' | ' |
As at January 1, | $2,388.10 | $2,493 | ' |
Acquisitions | 731.8 | 281.6 | ' |
Impairment charges | -19.9 | -197.9 | -16 |
Reclassification of Dermagraft product technology to assets held for sale | -611.4 | 0 | ' |
Foreign currency translation | 15.4 | 5.5 | ' |
As at December 31, | 2,312.60 | 2,388.10 | 2,493 |
Continung operations | ' | ' | ' |
Other Intangible Assets Roll Forward | ' | ' | ' |
Amortization charged | -152 | -153.6 | ' |
Discontinued operations | ' | ' | ' |
Other Intangible Assets Roll Forward | ' | ' | ' |
Amortization charged | -39.4 | -40.5 | ' |
DERMAGRAFT | ' | ' | ' |
Other Intangible Assets Roll Forward | ' | ' | ' |
Reclassification of Dermagraft product technology to assets held for sale | $611.40 | ' | ' |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities, Current [Line Items] | ' | ' |
Trade accounts payable and accrued purchases | $202.60 | $208.10 |
Accrued rebates - Medicaid | 549.1 | 455.6 |
Accrued rebates - Managed care | 258.1 | 184.9 |
Sales return reserve | 98.8 | 90.5 |
Accrued bonuses | 130.9 | 109 |
Accrued employee compensation and benefits payable | 79.4 | 64.5 |
R&D accruals | 69.6 | 73.5 |
Provisions for litigation losses and other claims | 71.7 | 118.2 |
Other accrued expenses | 228.2 | 197.2 |
Accounts payable and accrued expenses, total | $1,688.40 | $1,501.50 |
Other_Current_Liabilities_Deta
Other Current Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Other Liabilities, Current [Abstract] | ' | ' |
Income taxes payable | $69 | $78.40 |
Value added taxes | 15.8 | 23.6 |
Contingent consideration payable | 12.9 | 16 |
Other current liabilities | 21.8 | 26.1 |
Other current liabilities, total | $119.50 | $144.10 |
Convertible_Bonds_Details
Convertible Bonds (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' |
Debt issuance date | 9-May-07 |
Conversion price (in USD per share) | $32.51 |
Stated interest rate | 2.75% |
Principal amount | $1,100,000,000 |
Principal amount extinguished | 1,075,070,000 |
Convertible bond, convertible into number of ordinary shares | 33,806,464 |
Redemption terms | 'On November 26, 2013, Shire issued an optional redemption notice under the Trust Deed to the Holders of the Bonds. The aggregate outstanding principal amount of the Bonds on November 25, 2013, the last practicable date prior to the date of the optional redemption notice, was $1,075,070,000. The last day on which Holders were able to exercise their conversion rights was December 13, 2013. Those Bonds which were not voluntarily converted by Holders were redeemed by the Company on December 27, 2013 at par together with interest accrued to that date. As at December 31, 2013, Holders had voluntarily converted $1,099,050,000 aggregate principal amount of the Convertible Bonds into 33,806,464 fully paid Ordinary Shares at a conversion price of US$32.51 per Ordinary Share, in the capital of the Company, with par value of £0.05 each. The remaining outstanding Bonds in an aggregate principal amount of $950,000 were redeemed pursuant to the Optional Redemption Notice issued on November 26, 2013. Following the redemption of all the outstanding Bonds, the Company cancelled the listing of the Bonds on the Official List maintained by the UK Listing Authority and the admission to trading of the Bonds on the Professional Securities Market of the London Stock Exchange |
Optional redemption notice | 26-Nov-13 |
Final redemption date | 27-Dec-13 |
Shire 2.75% Convertible Bond due 2014 | ' |
Debt Instrument [Line Items] | ' |
Stated interest rate | 2.75% |
Principal amount | 1,100,000,000 |
Cash redemption amount | ' |
Debt Instrument [Line Items] | ' |
Principal amount extinguished | 950,000 |
Share redemption amount | ' |
Debt Instrument [Line Items] | ' |
Principal amount extinguished | $1,099,050,000 |
Other_longterm_debt_Details
Other long-term debt (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
contract | |
Line of Credit Facility [Line Items] | ' |
Facility agreement initiation date | 11-Nov-13 |
Interest rate description | 'Interest on any loans made under the facilities will be payable on the last day of each interest period, which may be one week or one, two, three or six months at the election of Shire, or as otherwise agreed with the lenders. The interest rate applicable to the $0.55 billion term loan facility is LIBOR plus 0.75% per annum and increases by 0.25% per annum on August 11, 2014 and on three-month intervals thereafter. The interest rate applicable to the $0.85 billion term loan facility commenced at LIBOR plus 1.15% per annum until delivery of the compliance certificate for the year ending December 31, 2013 and thereafter is subject to change depending upon the prevailing ratio of Net Debt to EBITDA of the Group (each as defined in the Facilities Agreement), in respect of the most recently completed financial year or financial half year. 17. Other non-current liabilities |
Rate of commitment fee | 35.00% |
Covenant terms | 'The Facilities Agreement includes customary representations and warranties, covenants and events of default, including requirements that the ratio of Net Debt to EBITDA of the Group (each as defined in the Facilities Agreement) must not, at any time, exceed 3.5:1 for the Relevant Period (as defined in the Facilities Agreement), except that following certain acquisitions, including the ViroPharma acquisition, Shire may elect to increase the ratio to 4.0:1 in the relevant period in which the acquisition was completed and the immediately following relevant period. In addition, for each 12-month period ending December 31 or June 30, the ratio of EBITDA of the Group to Net Interest (each as defined in the Facilities Agreement) must not be less than 4.0:1. The Facilities Agreement restricts (subject to certain covenants) Shire’s ability to incur additional financial indebtedness, grant security over its assets or provide or guarantee loans. Further, any lender may require mandatory prepayment of its participation if there is a change of control of Shire. In addition, in certain circumstances, the net proceeds of certain shares, undertakings or business disposals by Shire must be applied towards the mandatory prepayment of the facilities, subject to certain exceptions. Events of default under the facilities include: (i) non-payment of any amounts due under the facilities, (ii) failure to satisfy any financial covenants, (iii) material misrepresentation in any of the finance documents, (iv) failure to pay, or certain other defaults, under other financial indebtedness, (v) certain insolvency events or proceedings, (vi) material adverse changes in the business, operations, assets or financial condition of Shire and its subsidiaries, (vii) if it becomes unlawful for Shire or any of its subsidiaries that are parties to the Facilities Agreement to perform their obligations or (viii) if Shire or any subsidiary of Shire which is a party to the Facilities Agreement repudiates the Facilities Agreement or any other finance document, among others.The Facilities Agreement is governed by English law |
Number of term loan facilities | 2 |
Commitment fee description | 'Before first utilization, the commitment fee rate will increase in stages from 0% to 35% of the applicable margin over a period of 3 months. |
Minimum commitment fee | ' |
Line of Credit Facility [Line Items] | ' |
Rate of commitment fee | 0.00% |
Maximum commitment fee | ' |
Line of Credit Facility [Line Items] | ' |
Rate of commitment fee | 35.00% |
Term Loan Facility One, to finance the acquisition of Viropharma and for the redemption of Shire's Bonds | ' |
Line of Credit Facility [Line Items] | ' |
Facility agreement expiration date | 10-Nov-14 |
Term loan facility | 550,000,000 |
Option to extend the maturity of credit facility | '364 days |
Term Loan Facilitly Two, to finance the acquisition of Viropharma only | ' |
Line of Credit Facility [Line Items] | ' |
Facility agreement expiration date | 11-Nov-15 |
Term loan facility | 850,000,000 |
Original facility | ' |
Line of Credit Facility [Line Items] | ' |
Facilitiy agreement total amount | 2,600,000,000 |
Original facility | Term Loan Facility One, to finance the acquisition of Viropharma and for the redemption of Shire's Bonds | ' |
Line of Credit Facility [Line Items] | ' |
Term loan facility | 1,750,000,000 |
Original facility | Term Loan Facilitly Two, to finance the acquisition of Viropharma only | ' |
Line of Credit Facility [Line Items] | ' |
Term loan facility | 850,000,000 |
Revised facility | ' |
Line of Credit Facility [Line Items] | ' |
Facilitiy agreement total amount | 1,400,000,000 |
Revised facility | Term Loan Facility One, to finance the acquisition of Viropharma and for the redemption of Shire's Bonds | ' |
Line of Credit Facility [Line Items] | ' |
Term loan facility | 550,000,000 |
Revised facility | Term Loan Facilitly Two, to finance the acquisition of Viropharma only | ' |
Line of Credit Facility [Line Items] | ' |
Term loan facility | 850,000,000 |
Other_Noncurrent_Liabilities_D
Other Non-current Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Other Liabilities, Noncurrent [Abstract] | ' | ' |
Income taxes payable | $115.70 | $58.90 |
Deferred revenue | 9.8 | 11.4 |
Deferred rent | 11.3 | 11.9 |
Insurance provisions | 1 | 12.3 |
Contingent consideration payable | 393 | 120.4 |
Other non-current liabilities | 57.7 | 26.7 |
Other noncurrent liabilities, total | $588.50 | $241.60 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Leases, and LC and Guarantees ) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Future Minimum Lease Payments under Operating Leases | ' | ' | ' |
2014 | $44.90 | ' | ' |
2015 | 33.6 | ' | ' |
2016 | 23.9 | ' | ' |
2017 | 17.9 | ' | ' |
2018 | 12.2 | ' | ' |
Thereafter | 83.4 | ' | ' |
Future minimum lease payments, total | 215.9 | ' | ' |
Operating Leases, Rent Expense | ' | ' | ' |
Lease and rental expense | 44 | 43.2 | 37.6 |
Letters of credit and guarantees | ' | ' | ' |
Irrevocable standby letters of credit and guarantees | $51 | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Collaborative Arrangements) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
In-licensing arrangements | ' | ' | ' | |||
Research and development | $933.40 | [1] | $953 | [1] | $764.50 | [1] |
In-licensing Arrangement | Research Collaboration with Santaris | ' | ' | ' | |||
In-licensing arrangements | ' | ' | ' | |||
Maximum conditional obligation | 71 | ' | ' | |||
Milestones payment | 1.5 | 3 | 2.5 | |||
Support costs | 4.5 | 8.1 | 5.3 | |||
In-licensing Arrangement | Collaboration and Licensse Agreement with Sangamo | ' | ' | ' | |||
In-licensing arrangements | ' | ' | ' | |||
Upfront payment | ' | 13 | ' | |||
Maximum conditional obligation | 213.5 | ' | ' | |||
Research and development | 15.2 | 8.9 | 0 | |||
Out-licensing Arrangement | ' | ' | ' | |||
Out-licensing arrangements | ' | ' | ' | |||
Milestone payments received | 3 | 18.3 | 11.5 | |||
Out-licensing Arrangement | Other Revenues | ' | ' | ' | |||
Out-licensing arrangements | ' | ' | ' | |||
Milestone revenues recognized | 5 | 19.4 | 17.5 | |||
Out-licensing Arrangement | Product Sales | ' | ' | ' | |||
Out-licensing arrangements | ' | ' | ' | |||
Milestone revenues recognized | 58.3 | 83.8 | 65.2 | |||
Out-licensing Arrangement | Development Milestone | ' | ' | ' | |||
Out-licensing arrangements | ' | ' | ' | |||
Maximum milestone payment receivable | 39 | ' | ' | |||
Out-licensing Arrangement | Sales Milestone | ' | ' | ' | |||
Out-licensing arrangements | ' | ' | ' | |||
Maximum milestone payment receivable | $71.50 | ' | ' | |||
[1] | Research and development (bR&Db) includes intangible asset impairment charges of $19.9 million (2012: $71.2 million, 2011: $16.0 million) for the year to December 31, 2013. Selling, general and administrative (bSG&Ab) costs include amortization and impairment charges of intangible assets relating to intellectual property rights acquired of $152.0 million for the year to December 31, 2013 (2012: $280.3 million, 2011: $145.0 million). |
Commitments_and_Contingencies_3
Commitments and Contingencies (Commitments and Loss Contingency) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | INTUNIV | Settlement costs related to agreement in principle to resolve a civil subpoena | Settlement costs related to ADDERALL XR supply agreement dispute | Clinical Testing | Clinical Testing | Contract Manufacturing | Contract Manufacturing | Other Purchasing Commitment | Other Purchasing Commitment | Investment Commitment | Investment Commitment | Capital Commitment | Capital Commitment | ||
Commitment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment amount | ' | ' | ' | ' | ' | $346 | $425 | $109 | $125 | $128 | $145 | $14 | $15 | $12 | $97 |
Commitments expected to be paid in next year | ' | ' | ' | ' | ' | ' | ' | 109 | ' | 121 | ' | ' | ' | ' | ' |
Legal Matters [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Provisions for litigation loss, insurance claims and other disputes | 72.7 | 130.5 | ' | 57.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash payment to Impax | ' | ' | ' | ' | $48 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement of litigation | ' | ' | 'Payment of a royalty of 25% of gross profits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
As at January 1, 2013 | $86.90 | ' | ' |
Other comprehensive income, net of tax | 23.3 | 26.6 | -25.4 |
As at December 31, 2013 | 110.2 | 86.9 | ' |
Foreign currency translation adjustment | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
As at January 1, 2013 | 85.1 | ' | ' |
Other Comprehensive income before reclassification | 25.3 | ' | ' |
Gain transferred to the income statement (within Other (expense)/income,net) on disposal of available-for-sale-securities | 0 | ' | ' |
Other comprehensive income, net of tax | 25.3 | ' | ' |
As at December 31, 2013 | 110.4 | ' | ' |
Unrealized holding gain/(loss) on available-for-sale securities | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
As at January 1, 2013 | 1.8 | ' | ' |
Other Comprehensive income before reclassification | 1.5 | ' | ' |
Gain transferred to the income statement (within Other (expense)/income,net) on disposal of available-for-sale-securities | -3.5 | ' | ' |
Other comprehensive income, net of tax | -2 | ' | ' |
As at December 31, 2013 | -0.2 | ' | ' |
Accumulated other comprehensive income | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
As at January 1, 2013 | 86.9 | ' | ' |
Other Comprehensive income before reclassification | 26.8 | ' | ' |
Gain transferred to the income statement (within Other (expense)/income,net) on disposal of available-for-sale-securities | -3.5 | ' | ' |
Other comprehensive income, net of tax | 23.3 | 26.6 | -25.4 |
As at December 31, 2013 | $110.20 | $86.90 | ' |
Financial_Instruments_Interest
Financial Instruments (Interest Rate and Credit Risks) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
contract | |
Interest rate risk | ' |
Average interest rate received on cash and liquid investments | 'less than 1% per annum |
Debt Instrument [Line Items] | ' |
Principal amount | $1,100,000,000 |
Stated interest rate | 2.75% |
Accounts Receivable | ' |
Number of major external customers | 3 |
Product Sales | ' |
Accounts Receivable | ' |
Concentration risk percentage | 52.00% |
Government-owned or Supported Healthcare Providers | Italy | ' |
Accounts Receivable | ' |
Accounts receivable received | 144,700,000 |
Government-owned or Supported Healthcare Providers | Spain | ' |
Accounts Receivable | ' |
Accounts receivable received | 116,800,000 |
Term Loan Facility One, to finance the acquisition of Viropharma and for the redemption of Shire's Bonds | ' |
Debt Instrument [Line Items] | ' |
Term loan facility | 550,000,000 |
Term Loan Facilitly Two, to finance the acquisition of Viropharma only | ' |
Debt Instrument [Line Items] | ' |
Term loan facility | 850,000,000 |
Revolving Credit Facility | ' |
Debt Instrument [Line Items] | ' |
Principal amount | 1,200,000,000 |
Shire 2.75% Convertible Bond due 2014 | ' |
Debt Instrument [Line Items] | ' |
Principal amount | $1,100,000,000 |
Stated interest rate | 2.75% |
Financial_Instruments_Foreign_
Financial Instruments (Foreign Exchange Risk and Its Classification on Balance Sheet) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Foreign Exchange Contract | Foreign Exchange Contract | Foreign Exchange Contract | Foreign Exchange Contract | Foreign Exchange Contract | ||
contract | Prepaid expenses and other current assets | Prepaid expenses and other current assets | Other current liabilities | Other current liabilities | ||
Derivatives, Fair Value | ' | ' | ' | ' | ' | ' |
Assets | ' | ' | $4 | $1.30 | ' | ' |
Liabilities | ' | ' | ' | ' | 2.8 | 3 |
Net derivative fair value assets | ' | 3.3 | ' | ' | ' | ' |
Net derivative fair value liabilities | ' | 2.1 | ' | ' | ' | ' |
Potential effect of rights of set off associated with the foreign exchange contracts | ' | $0.70 | ' | ' | ' | ' |
Number of swap and forward foreign exchange contracts outstanding | ' | 29 | ' | ' | ' | ' |
Swaps and forward contracts maturity | '90 days | ' | ' | ' | ' | ' |
Financial_Instruments_Foreign_1
Financial Instruments (Foreign Exchange Risk and Its Effect on Income Statement) (Details) (Foreign Exchange Contract, Other income, net, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Foreign Exchange Contract | Other income, net | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Amount of net income (loss) recognized in income | ($1.80) | $6.20 | $21.30 |
Fair_Value_Measurement_Assets_
Fair Value Measurement (Assets and Liabilities That are Measured and Not Measured at Fair Value on a Recurring Basis) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Financial liabilities: | ' | ' | ||
Convertible bonds | $0 | $1,100 | ||
Carrying value | ' | ' | ||
Financial liabilities: | ' | ' | ||
Building financing obligation | 7.8 | 8 | ||
Convertible bonds | 0 | ' | ||
Convertible bonds | ' | 1,100 | ||
Estimated fair value | ' | ' | ||
Financial liabilities: | ' | ' | ||
Convertible bond | 0 | 1,228.20 | ||
Building financing obligation | 10.1 | 10.3 | ||
Recurring Basis | Carrying value | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 6.7 | [1] | 14.2 | [1] |
Contingent consideration receivable | 36.1 | [2] | 38.3 | [2] |
Foreign exchange contracts, asset | 4 | 1.3 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 2.8 | 3 | ||
Contingent consideration payable | 405.9 | [3] | 136.4 | [3] |
Recurring Basis | Estimated fair value | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 6.7 | [1] | 14.2 | [1] |
Contingent consideration receivable | 36.1 | [2] | 38.3 | [2] |
Foreign exchange contracts, asset | 4 | 1.3 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 2.8 | 3 | ||
Contingent consideration payable | 405.9 | [3] | 136.4 | [3] |
Recurring Basis | Level 1 | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 6.7 | [1] | 14.2 | [1] |
Contingent consideration receivable | 0 | [2] | 0 | [2] |
Foreign exchange contracts, asset | 0 | 0 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 0 | 0 | ||
Contingent consideration payable | 0 | [3] | 0 | [3] |
Recurring Basis | Level 2 | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 0 | [1] | 0 | [1] |
Contingent consideration receivable | 0 | [2] | 0 | [2] |
Foreign exchange contracts, asset | 4 | 1.3 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 2.8 | 3 | ||
Contingent consideration payable | 0 | [3] | 0 | [3] |
Recurring Basis | Level 3 | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 0 | [1] | 0 | [1] |
Contingent consideration receivable | 36.1 | [2] | 38.3 | [2] |
Foreign exchange contracts, asset | 0 | 0 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 0 | 0 | ||
Contingent consideration payable | $405.90 | [3] | $136.40 | [3] |
[1] | Available-for-sale securities are included within Investments in the consolidated balance sheet. | |||
[2] | Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet. | |||
[3] | Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet. |
Fair_Value_Measurement_Assets_1
Fair Value Measurement (Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Change in the Fair Value of Contigent Consideration Receivable | ' | ' | ' |
Balance at beginning of period | $38.30 | $37.80 | ' |
Gain/(loss) recognized in the income statement (within Gain/(loss) on sale of product rights) due to change in fair value during the period | 15.9 | 18.1 | ' |
Reclassification of amounts due to Other receivables within Other current assets | -19.5 | -18.7 | ' |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 1.4 | 1.1 | ' |
Balance at end of period | 36.1 | 38.3 | 37.8 |
Change in the Fair Value of Contigent Consideration Payable | ' | ' | ' |
Balance at beginning of period | 136.4 | 0 | ' |
Initial recognition of contingent consideration payable | 451.4 | 127.8 | ' |
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs) | -159.1 | 9.2 | 0 |
Reclassification of amounts to Other current liabilities | -13.9 | -8.8 | ' |
Change in fair value during the period with corresponding adjustment to the associated intangible asset | -8.9 | 8.2 | ' |
Balance at end of period | $405.90 | $136.40 | $0 |
Fair_Value_Measurement_Quantit
Fair Value Measurement (Quantitative Information About Recurring and Non-recurring Level 3 Fair Value Measurements) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value Inputs | ' | ' | ' |
Impairment of intangible assets | $19.90 | $197.90 | $16 |
Impairment of assets held for sale | 636.9 | 0 | 0 |
Recurring Basis | Contingent Consideration Payable | Minimum | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Assumed market participant discount rate | 2.90% | ' | ' |
Cumulative probability of milestones being achieved | 18.00% | ' | ' |
Periods in which milestones are expected to be achieved | '2014 | ' | ' |
Forecast quarterly royalties payable on net sales of relevant products | 2.4 | ' | ' |
Recurring Basis | Contingent Consideration Payable | Maximum | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Assumed market participant discount rate | 15.00% | ' | ' |
Cumulative probability of milestones being achieved | 57.00% | ' | ' |
Periods in which milestones are expected to be achieved | '2025 | ' | ' |
Forecast quarterly royalties payable on net sales of relevant products | 7.6 | ' | ' |
Recurring Basis | Contingent Consideration Payable | Income approach (probability weighted discounted cash flow) | ' | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' |
Liabilities | 405.9 | ' | ' |
Recurring Basis | Contingent Consideration Receivable | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Assumed market participant discount rate | 6.20% | ' | ' |
Recurring Basis | Contingent Consideration Receivable | Minimum | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Probability weightings applied to different sales scenarios | 10.00% | ' | ' |
Future forecast royalties receivable at relevant contractual royalty rates | 40 | ' | ' |
Recurring Basis | Contingent Consideration Receivable | Maximum | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Probability weightings applied to different sales scenarios | 45.00% | ' | ' |
Future forecast royalties receivable at relevant contractual royalty rates | 148 | ' | ' |
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | ' | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' |
Assets | 36.1 | ' | ' |
Nonrecurring Basis | Movetis-related IPR&D intangible assets | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Assumed market participant discount rate | 8.90% | ' | ' |
Decline in forecast peak sales | 50.00% | ' | ' |
Nonrecurring Basis | Movetis-related IPR&D intangible assets | Income approach (discounted cash flow) | ' | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' |
Assets | 20.3 | ' | ' |
Nonrecurring Basis | DERMAGRAFT assets held for sale | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Assumed market participant discount rate | 11.50% | ' | ' |
Nonrecurring Basis | DERMAGRAFT assets held for sale | Minimum | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Future forecast milestones to be received | 15 | ' | ' |
Nonrecurring Basis | DERMAGRAFT assets held for sale | Maximum | ' | ' | ' |
Fair Value Inputs | ' | ' | ' |
Future forecast milestones to be received | 95 | ' | ' |
Nonrecurring Basis | DERMAGRAFT assets held for sale | Income approach (probability weighted discounted cash flow) | ' | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' |
Assets | $31.60 | ' | ' |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 12 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 11, 2013 | Apr. 30, 2014 | Apr. 24, 2012 |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' |
Ordinary shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ' | ' | ' | ' |
Subscriber ordinary shares authorized (in shares) | 2 | ' | ' | ' | ' | ' |
Distributable reserves | $10,400 | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Consideration paid for treasury stock purchased (in USD) | 243.8 | 205.8 | 151.8 | ' | ' | ' |
Share Buy-back Program | ' | ' | ' | ' | ' | ' |
Authorized amount of share buy-back program (in USD) | ' | 500 | ' | ' | ' | ' |
Cost of share repurchases (in USD) | ' | ' | ' | 300 | ' | ' |
Authorized number of shares under share buy-back program | ' | ' | ' | ' | 55,741,587 | 56,253,208 |
Income Access Share Arrangements | ' | ' | ' | ' | ' | ' |
Cash dividends paid to Income Access Share Trustee (in USD) | 91.1 | 81.5 | 67.6 | ' | ' | ' |
Irish Witholding Tax, Rate | 20.00% | ' | ' | ' | ' | ' |
Condition for Ordinary Shareholders, Shares | 25,000 | ' | ' | ' | ' | ' |
Shire 2.75% Convertible Bond due 2014 | ' | ' | ' | ' | ' | ' |
Convertible bond, convertible into number of ordinary shares | 33,806,464 | ' | ' | ' | ' | ' |
Ordinary Shares | ' | ' | ' | ' | ' | ' |
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' | ' | ' |
Treasury stock acquired (in shares) | 6,191,965 | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | 4,200,000 | 4,500,000 | 2,700,000 | ' | ' | ' |
Share Buy-back Program | ' | ' | ' | ' | ' | ' |
Treasury stock acquired (in shares) | 6,191,965 | ' | ' | ' | ' | ' |
Cost of share repurchases (in USD) | $193 | ' | ' | ' | ' | ' |
Percentage of total share issued that were repurchased during the period | 1.00% | ' | ' | ' | ' | ' |
Ordinary Shares | Shares held by EBT | ' | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | 2,400,000 | 3,800,000 | 4,600,000 | ' | ' | ' |
Ordinary Shares | Shares held under share buy-back program | ' | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | 7,100,000 | 2,700,000 | 0 | ' | ' | ' |
ADS | ' | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | 800,000 | 900,000 | 800,000 | ' | ' | ' |
ADS | Shares held by EBT | ' | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | 400,000 | 1,100,000 | 2,400,000 | ' | ' | ' |
ADS | Shares held under share buy-back program | ' | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | 900,000 | 300,000 | 0 | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | ' | ' | |||
Income from continuing operations, net of taxes | $1,419,600,000 | $805,700,000 | $882,700,000 | |||
Loss from discontinued operations, net of taxes | -754,500,000 | -60,300,000 | -17,700,000 | |||
Net income | 665,100,000 | 745,400,000 | 865,000,000 | |||
Interest on convertible bonds, net of tax (in USD) | 28,300,000 | 31,300,000 | 33,600,000 | |||
Numerator for diluted earnings per share (in USD) | 693,400,000 | 776,700,000 | 898,600,000 | |||
Schedule of Weighted Average Number of Shares | ' | ' | ' | |||
Basic (in shares) | 552,000,000 | [1] | 555,400,000 | [1] | 551,100,000 | [1] |
Effect of dilutive shares: | ' | ' | ' | |||
Share based awards to employees | 4,800,000 | [2] | 4,600,000 | [2] | 10,900,000 | [2] |
Convertible bonds 2.75% due 2014 | 33,500,000 | [3] | 33,500,000 | [3] | 33,400,000 | [3] |
Diluted (in shares) | 590,300,000 | 593,500,000 | 595,400,000 | |||
Earning per ordinary share - basic | ' | ' | ' | |||
Earnings from continuing operations (in USD per share) | $2.57 | $1.45 | $1.60 | |||
Loss from discontinued operations (in USD per share) | ($1.37) | ($0.11) | ($0.03) | |||
Earnings per ordinary share - basic | $1.21 | $1.34 | $1.57 | |||
Earnings per ordinary share - diluted | ' | ' | ' | |||
Earnings from continuing operations (in USD per share) | $2.45 | $1.41 | $1.54 | |||
Loss from discontinued operations (in USD per share) | ($1.28) | ($0.10) | ($0.03) | |||
Earnings per ordinary share - diluted | $1.18 | $1.31 | $1.51 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |||
Convertible bond, convertible into number of ordinary shares | 33,806,464 | ' | ' | |||
Principal amount | 1,100,000,000 | ' | ' | |||
Redemption terms | 'On November 26, 2013, Shire issued an optional redemption notice under the Trust Deed to the Holders of the Bonds. The aggregate outstanding principal amount of the Bonds on November 25, 2013, the last practicable date prior to the date of the optional redemption notice, was $1,075,070,000. The last day on which Holders were able to exercise their conversion rights was December 13, 2013. Those Bonds which were not voluntarily converted by Holders were redeemed by the Company on December 27, 2013 at par together with interest accrued to that date. As at December 31, 2013, Holders had voluntarily converted $1,099,050,000 aggregate principal amount of the Convertible Bonds into 33,806,464 fully paid Ordinary Shares at a conversion price of US$32.51 per Ordinary Share, in the capital of the Company, with par value of £0.05 each. The remaining outstanding Bonds in an aggregate principal amount of $950,000 were redeemed pursuant to the Optional Redemption Notice issued on November 26, 2013. Following the redemption of all the outstanding Bonds, the Company cancelled the listing of the Bonds on the Official List maintained by the UK Listing Authority and the admission to trading of the Bonds on the Professional Securities Market of the London Stock Exchange | ' | ' | |||
Stated interest rate | 2.75% | ' | ' | |||
Principal amount extinguished | 1,075,070,000 | ' | ' | |||
Shire 2.75% Convertible Bond due 2014 | ' | ' | ' | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |||
Principal amount | 1,100,000,000 | ' | ' | |||
Stated interest rate | 2.75% | ' | ' | |||
Cash redemption amount | ' | ' | ' | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |||
Principal amount extinguished | 950,000 | ' | ' | |||
Share redemption amount | ' | ' | ' | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |||
Principal amount extinguished | $1,099,050,000 | ' | ' | |||
Share Awards | ' | ' | ' | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |||
Antidilutive securities excluded from computation of earnings per share | 500,000 | [4] | 6,700,000 | [4] | 2,900,000 | [4] |
[1] | Excludes shares purchased by the EBT and under the share buy-back program and presented by Shire as treasury stock | |||||
[2] | Calculated using the treasury stock method | |||||
[3] | At December 31, 2013, Bondholders had voluntarily converted $1,099,050,000 aggregate principal amount of the Bonds into 33,806,464 fully paid Ordinary Shares. The remaining outstanding Bonds in an aggregate principle amount of $950,000 were redeemed pursuant to the option redemption notice issued on November 26, 2013. The Company has calculated the impact of the Bonds on diluted EPS from the beginning of the period to the actual date of Bonds conversion using the bif-convertedb method. | |||||
[4] | Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plcbs average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. |
Segmental_Reporting_by_Segment
Segmental Reporting (by Segment) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
number | |
One Shire | ' |
Segment Reporting Information [Line Items] | ' |
Reportable segments | 1 |
Commercial units | 4 |
Historical segments | ' |
Segment Reporting Information [Line Items] | ' |
Reportable segments | 3 |
Business units | 3 |
Segmental_Reporting_Revenues_a
Segmental Reporting (Revenues and Long-lived Assets by Geographic Location) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | $4,934.30 | $4,527.40 | $4,158.10 |
Long-lived assets | 892.8 | 957.2 | ' |
Ireland | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 22.5 | 20.6 | 21.1 |
Long-lived assets | 5.8 | 5.2 | ' |
United Kingdom | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 206.7 | 207 | 219.9 |
Long-lived assets | 70.3 | 72.2 | ' |
North America | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 3,386.20 | 3,006.10 | 2,761.80 |
Long-lived assets | 802.9 | 861 | ' |
Rest of World | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 1,318.90 | 1,293.70 | 1,155.30 |
Long-lived assets | $13.80 | $18.80 | ' |
Segmental_Reporting_Revenues_a1
Segmental Reporting (Revenues and Accounts Receivable by Major Customers) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Product sales | $4,757.50 | $4,252.90 | $3,844.90 |
Cardinal Health Inc. | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Product sales | 853.7 | 1,035.70 | 923.9 |
Accounts receivable by major customer | 149.5 | 166.1 | ' |
Revenue by major customer, percent | 18.00% | 24.00% | 24.00% |
McKesson Corp. | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Product sales | 902.9 | 835.9 | 742.9 |
Accounts receivable by major customer | 161.3 | 127.4 | ' |
Revenue by major customer, percent | 19.00% | 20.00% | 19.00% |
AmerisourceBergen Corp | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' |
Product sales | 721 | 307.4 | 276.4 |
Accounts receivable by major customer | $164.60 | $47.40 | ' |
Revenue by major customer, percent | 15.00% | 7.00% | 7.00% |
Segmental_Reporting_Revenue_by
Segmental Reporting (Revenue by Product) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | $4,757.50 | $4,252.90 | $3,844.90 |
VYVANSE | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 1,227.80 | 1,029.80 | 805 |
ADDERALL XR | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 375.4 | 429 | 532.8 |
INTUNIV | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 334.9 | 287.8 | 223 |
LIALDA and MEZAVANT | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 528.9 | 399.9 | 372.1 |
PENTASA | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 280.6 | 265.8 | 251.4 |
FOSRENOL | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 183.4 | 172 | 166.9 |
XAGRID | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 99.4 | 97.2 | 90.6 |
Other Products | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 136.1 | 153.4 | 173.8 |
REPLAGAL | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 467.9 | 497.5 | 475.2 |
ELAPRASE | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 545.6 | 497.6 | 464.9 |
VPRIV | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | 342.7 | 306.6 | 256.2 |
FIRAZYR | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' |
Product sales | $234.80 | $116.30 | $33 |
Retirement_Benefits_Details
Retirement Benefits (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Compensation and Retirement Disclosure [Abstract] | ' | ' | ' |
Contributions to personal defined contribution pension plans | $45.70 | $46.40 | $44.40 |
Taxation_Pretax_Income_from_Co
Taxation (Pretax Income from Continuing Operations and Provision for Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components of pre tax income from continuing operations | ' | ' | ' |
Income from continuing operations before income taxes and equity in earnings of equity method investees | $1,693.60 | $1,007.80 | $1,117.10 |
Current income taxes: | ' | ' | ' |
Other, current | 63.4 | 29 | 40 |
Total current taxes | 355.6 | 270.3 | 248.8 |
Deferred taxes: | ' | ' | ' |
Other, deferred | -104.7 | -10 | -29.6 |
Total deferred taxes | -77.7 | -67.2 | -11.9 |
Total income taxes | 277.9 | 203.1 | 236.9 |
Republic of Ireland | ' | ' | ' |
Current income taxes: | ' | ' | ' |
Current domestic tax expense (benefit) | 0 | 0 | -1.8 |
US federal tax | ' | ' | ' |
Current income taxes: | ' | ' | ' |
Current foreign tax expense (benefit) | 274.3 | 230 | 201.4 |
Deferred taxes: | ' | ' | ' |
Deferred foreign tax expense (benefit) | 23.8 | -63.8 | 23.3 |
US state and local taxes | ' | ' | ' |
Current income taxes: | ' | ' | ' |
Current foreign tax expense (benefit) | 17.9 | 11.3 | 9.2 |
Deferred taxes: | ' | ' | ' |
Deferred foreign tax expense (benefit) | -8.3 | -6.5 | -4.6 |
UK corporation tax | ' | ' | ' |
Current income taxes: | ' | ' | ' |
Current foreign tax expense (benefit) | ' | ' | 0 |
Deferred taxes: | ' | ' | ' |
Deferred foreign tax expense (benefit) | 11.5 | 13.1 | -1 |
US Operations | ' | ' | ' |
Deferred taxes: | ' | ' | ' |
Total income taxes | 9 | ' | ' |
Ireland | ' | ' | ' |
Components of pre tax income from continuing operations | ' | ' | ' |
Republic of Ireland | -47.8 | -74.7 | -65.9 |
United Kingdom | ' | ' | ' |
Components of pre tax income from continuing operations | ' | ' | ' |
Pre-tax income from continuing operations, foreign | 10.9 | 30.7 | 45.4 |
United States | ' | ' | ' |
Components of pre tax income from continuing operations | ' | ' | ' |
Pre-tax income from continuing operations, foreign | 1,153.30 | 683.8 | 774.6 |
Other jurisdictions | ' | ' | ' |
Components of pre tax income from continuing operations | ' | ' | ' |
Pre-tax income from continuing operations, foreign | $577.20 | $368 | $363 |
Taxation_Effective_Income_Tax_
Taxation (Effective Income Tax Rate Reconciliation, and Statutory Tax Rates) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Effective Income Tax Rate Reconciliation | ' | ' | ' | |||
Income from continuing operations before income taxes and equity in earnings of equity method investees | $1,693.60 | $1,007.80 | $1,117.10 | |||
Statutory tax rate | 25.00% | [1] | 25.00% | [1] | 25.00% | [1] |
Other permanent differences: | ' | ' | ' | |||
US R&D credit | -4.50% | -2.60% | -4.50% | |||
Effect of the convertible bond | 0.50% | 0.80% | 0.80% | |||
Intra-group items | -9.20% | [2] | -16.00% | [2] | -7.50% | [2] |
Recognition of foreign tax credits | ' | -6.60% | 0.00% | |||
Other permanent items | -0.70% | 0.80% | -0.50% | |||
Change in valuation allowance | 0.90% | 3.40% | 3.20% | |||
Impact of Resolor impairment | 0.00% | 4.90% | 0.00% | |||
Differences in taxation rates | 7.80% | 7.60% | 4.60% | |||
Change in provisions for uncertain tax positions | 3.80% | 1.10% | -1.20% | |||
Prior year adjustment | -3.40% | 0.80% | 0.80% | |||
Change in fair value of contingent consideration | -3.60% | 0.00% | 0.00% | |||
Change in tax rates | -0.20% | 0.80% | 0.20% | |||
Other | 0.00% | 0.10% | 0.30% | |||
Provision for income taxes on continuing operations | 16.40% | 20.10% | 21.20% | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 25.00% | ' | ' | |||
Canada | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 15.00% | ' | ' | |||
France | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 33.30% | ' | ' | |||
Germany | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 15.00% | ' | ' | |||
Italy | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 27.50% | ' | ' | |||
Luxembourg | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 21.00% | ' | ' | |||
The Netherlands | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 25.00% | ' | ' | |||
Belgium | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 33.99% | ' | ' | |||
Spain | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 30.00% | ' | ' | |||
Sweden | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 22.00% | ' | ' | |||
Switzerland | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 8.50% | ' | ' | |||
United Kingdom | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 23.25% | ' | ' | |||
United States | ' | ' | ' | |||
Statutory Tax Rates | ' | ' | ' | |||
Statutory tax rate | 35.00% | ' | ' | |||
[1] | In addition to being subject to the Irish Corporation tax rate of 25%, in 2013 the Company is also subject to income tax in other territories in which the Company operates, including: Canada (15%); France (33.3%); Germany (15%); Italy (27.5%); Luxembourg (21.0%); the Netherlands (25%); Belgium (33.99%); Spain (30%); Sweden (22%); Switzerland (8.5%); United Kingdom (23.25%) and the US (35%). The rates quoted represent the statutory federal income tax rates in each territory, and do not include any state taxes or equivalents or surtaxes or other taxes charged in individual territories, and do not purport to represent the effective tax rate for the Company in each territory | |||||
[2] | Intra-group items principally relate to the effect of inter-company dividends, capital receipts (either taxable or non-taxable) and other intra-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Companybs consolidated income from continuing operations before income taxes, noncontrolling interests and equity in earnings/(losses) of equity method investees |
Taxation_Unrecognized_Tax_Bene
Taxation (Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Reconciliation of Unrecognized Tax Benefits | ' | ' | ' | |||
Balance at January 1, | $278.70 | [1] | $265.50 | [1] | $290.80 | |
Increases based on tax positions related to the current year | 56.8 | 20.5 | 18.2 | |||
Decreases based on tax positions taken in the current year | -0.5 | 0 | -2.5 | |||
Increases for tax positions taken in prior years | 34.5 | 0.4 | 1.4 | |||
Decreases for tax positions taken in prior years | -0.8 | -3.3 | -12 | |||
Decreases resulting from settlements with the taxing authorities | 0 | -10.6 | -25.7 | |||
Decreases as a result of expiration of the statute of limitations | -0.6 | -0.3 | -0.5 | |||
Foreign currency translation adjustments | -12.9 | [2] | 6.5 | [2] | -4.2 | [2] |
Balance at December 31, | 355.2 | [1] | 278.7 | [1] | 265.5 | [1] |
Income tax penalties and interest expense | 0.4 | 5.1 | 4 | |||
Income tax penalties and interest expense accrued | 112.2 | 119.6 | 114.5 | |||
Future increase or decrease in the unrecognized tax benefit. | $210 | ' | ' | |||
[1] | The full amount of which would affect the effective rate if recognized | |||||
[2] | Recognized within Other Comprehensive Income |
Taxation_Deferred_Tax_Assets_a
Taxation (Deferred Tax Assets and Liabilities, and Valuation Allowances) (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Deferred tax assets: | ' | ' | ||
Deferred revenue | $5.20 | $5.50 | ||
Inventory & warranty provisions | 48.6 | 52.5 | ||
Losses carried forward (including tax credits) | 500.6 | [1] | 425.7 | [1] |
Provision for sales deductions and doubtful accounts | 151.8 | 144.9 | ||
Intangible assets | 10.7 | 36.7 | ||
Share-based compensation | 25.5 | 32.7 | ||
Excess of tax value over book value of fixed assets | 22.1 | 0 | ||
Accruals and provisions | 55.1 | 44.1 | ||
Other | 2.6 | 21.6 | ||
Gross deferred tax assets | 822.2 | 763.7 | ||
Less: valuation allowance | -282.4 | -268.6 | ||
Deferred tax assets, net | 539.8 | 495.1 | ||
Deferred tax liabilities: | ' | ' | ||
Intangible assets | -586.8 | -702.7 | ||
Excess of book value over tax value of assets and investments | -56.9 | -36.8 | ||
Net deferred tax liabilities | -103.9 | -244.4 | ||
Net operating losses that result from excess stock based compensation | 15 | 6.8 | ||
Balance Sheet Classifications | ' | ' | ||
Deferred tax assets - current | 315.6 | 229.9 | ||
Deferred tax assets - non-current | 141.1 | 46.5 | ||
Deferred tax liabilities - non-current | -560.6 | -520.8 | ||
Valuation Allowance [Line Items] | ' | ' | ||
Valuation Allowances | 282.4 | 268.6 | ||
Net increase in valuation allowances | 13.8 | ' | ||
ValuationAllowanceDeferredTaxAssetExplanationOfChange | 'The net increase in valuation allowances of $13.8 million includes (i) increases of $104.5 million primarily in respect of losses and other temporary differences in various jurisdictions where management consider that there is insufficient positive evidence in respect of the factors described above to overcome cumulative losses and therefore it is more likely than not that the relevant deferred tax assets will not be realized in full, and (ii) a decrease of $90.7 million primarily in respect of German tax losses ($67.4m), which based on the assessment of the factors described above now provides sufficient positive evidence to support that the losses are more likely than not to be realized. The release of this valuation allowance has been recorded in the current period due to changes in the financing of the German subsidiary. | ' | ||
Ireland | ' | ' | ||
Deferred tax assets: | ' | ' | ||
Less: valuation allowance | -78.8 | -73.9 | ||
Valuation Allowance [Line Items] | ' | ' | ||
Valuation Allowances | 78.8 | 73.9 | ||
United States | ' | ' | ||
Deferred tax assets: | ' | ' | ||
Less: valuation allowance | -60.9 | -37.2 | ||
Valuation Allowance [Line Items] | ' | ' | ||
Valuation Allowances | 60.9 | 37.2 | ||
Germany | ' | ' | ||
Deferred tax assets: | ' | ' | ||
Less: valuation allowance | -30.8 | -96.9 | ||
Valuation Allowance [Line Items] | ' | ' | ||
Valuation Allowances | 30.8 | 96.9 | ||
Other foreign tax jurisdictions | ' | ' | ||
Deferred tax assets: | ' | ' | ||
Less: valuation allowance | -111.9 | -60.6 | ||
Valuation Allowance [Line Items] | ' | ' | ||
Valuation Allowances | $111.90 | $60.60 | ||
[1] | Excluding $15.0 million of deferred tax assets at December 31, 2013 (2012: $6.8 million), related to the net operating losses that result from excess stock based compensation and for which any benefit realized will be recorded to stockholdersb equity |
Taxation_Operating_Loss_and_Ta
Taxation (Operating Loss and Tax Credit Carryforwards, and Their Expiration Dates) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
Gross value of NOLs and capital losses | $2,583.70 | $1,783.50 |
Expirations of Tax Benefit Carryforwards | ' | ' |
Within 1 year | 0.9 | ' |
Winthin 1 to 2 years | 1.1 | ' |
Winthin 2 to 3 years | 0.7 | ' |
Winthin 3 to 4 years | 2.9 | ' |
Winthin 4 to 5 years | 3 | ' |
Winthin 5 to 6 years | 35.6 | ' |
After 6 years | 142.7 | ' |
Indefinitely | 313.7 | ' |
Unremitted earnings of the Company's foreign subsidiaries | 8,500 | ' |
R&D and Other Tax Credits | ' | ' |
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
Tax credit carryforwards | 48.3 | 66.2 |
US Federal | ' | ' |
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
NOLs | 32.2 | 26.1 |
US State | ' | ' |
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
NOLs | 61.5 | 31.4 |
UK | ' | ' |
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
NOLs | 6.7 | 20.7 |
Republic of Ireland | ' | ' |
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
NOLs | 78.8 | 72.6 |
Foreign Tax Jurisdictions | ' | ' |
Operating Loss and Tax Credit Carryforwards [Line Items] | ' | ' |
NOLs | $273.10 | $208.80 |
Sharebased_Compensation_Plans_1
Share-based Compensation Plans (Share-based Compensation Expense) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Share-based compensation expense | $77.40 | $87.10 | $75.70 |
Less tax | -18.1 | -23.8 | -23.6 |
Share-based compensation expense, net | 59.3 | 63.3 | 52.1 |
Unrecognized compensation cost relating to non-vested awards | 97 | 102.3 | ' |
Unrecognized compensation cost relating to non-vested awards, expected period for recognition | '3 years | ' | ' |
Unrecognized compensation cost relating to non-vested in the money awards | 90.3 | 74.6 | ' |
Unrecognized compensation cost relating to non-vested in the money awards, expected period for recognition | '1 year 8 months | '1 year 8 months | ' |
Fair value of in the money awards vested | 70.5 | 113.9 | ' |
Cost of Product Sales | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Share-based compensation expense | 4.4 | 6.3 | 8.8 |
Research and Development | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Share-based compensation expense | 22.8 | 25.8 | 21.8 |
Selling, General and Administrative | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Share-based compensation expense | 46.9 | 55 | 45.1 |
Reorganization costs | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Share-based compensation expense | $3.30 | $0 | $0 |
Sharebased_Compensation_Plans_2
Share-based Compensation Plans (by Share-based Payment Award) (Details) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
SARs and Stock Options | SARs and Stock Options | Portfolio Share Plan - Part A | Portfolio Share Plan - Part A | Portfolio Share Plan - Part A | Portfolio Share Plan - Part A | Sharesave Scheme | Sharesave Scheme | Sharesave Scheme | Sharesave Scheme | Sharesave Scheme | Stock Purchase Plan | Stock Purchase Plan | Stock Purchase Plan | Legacy Plans | Legacy Plans | Legacy Plans | Portfolio Share Plan - Part B | |
SARs and Stock Options | SARs | SARs | SARs | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Stock Options | Performance Share Awards | |||
Minimum | Maximum | United Kingdom | Ireland | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Award outstanding (in shares) | 15,029,182 | 18,536,947 | 15,029,182 | 14,083,748 | ' | ' | 243,783 | ' | ' | ' | ' | 568,828 | ' | ' | 132,823 | ' | ' | 2,701,299 |
Award expiration period from the date of the issue | ' | ' | ' | ' | '5 years | '7 years | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '10 years | '3 years |
Vesting period | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | '3 years | '5 years | ' | '1 year | '5 years | ' | '3 years | '10 years | '3 years |
Exercise price of common stock, percent | ' | ' | ' | ' | ' | ' | ' | 80.00% | 75.00% | ' | ' | 85.00% | ' | ' | ' | ' | ' | ' |
Sharebased_Compensation_Plans_3
Share-based Compensation Plans (Stock Options and SARs) (Details) (GBP £) | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Weighted average grant date fair value of awards granted (per share) | £ 3.37 |
SARs and Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Outstanding as at beginning of period (in shares) | 18,536,947 |
Granted (in shares) | 6,914,026 |
Exercised (in shares) | -8,302,740 |
Forfeited (in shares) | -2,119,051 |
Outstanding as at end of period (in shares) | 15,029,182 |
Exercisable as at end of period (in shares) | 3,670,446 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Outstanding as at beginning of period (per share) | £ 16.66 |
Granted (per share) | £ 20.05 |
Exercised (per share) | £ 22.09 |
Forfeited (per share) | £ 18.3 |
Outstanding as at end of period (per share) | £ 18.88 |
Exercisable as at end of period (per share) | £ 15.67 |
Outstanding as at end of period Intrinsic Value (in GBP) | £ 143.9 |
Exercisable as at end of period Intrinsic Value (in GBP) | £ 46.9 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | ' |
Number of awards outstanding (in shares) | 15,029,182 |
Number of awards exercisable | 3,670,446 |
SARs and Stock Options | 3.38-7.00 GBP | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | ' |
Number of awards outstanding (in shares) | 104,658 |
Weighted average remaining contractual term | '1 year 1 month |
Weighted average exercise price of awards outstanding (per share) | £ 5.56 |
Number of awards exercisable | 104,658 |
Weighted average exercise price of awards exercisable (per share) | £ 5.56 |
SARs and Stock Options | 7.01-14.00 GBP | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | ' |
Number of awards outstanding (in shares) | 810,822 |
Weighted average remaining contractual term | '2 years 10 months |
Weighted average exercise price of awards outstanding (per share) | £ 11.27 |
Number of awards exercisable | 804,402 |
Weighted average exercise price of awards exercisable (per share) | £ 11.25 |
SARs and Stock Options | 14.01-28.00 GBP | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | ' |
Number of awards outstanding (in shares) | 14,113,702 |
Weighted average remaining contractual term | '4 years 11 months |
Weighted average exercise price of awards outstanding (per share) | £ 18.07 |
Number of awards exercisable | 2,761,386 |
Weighted average exercise price of awards exercisable (per share) | £ 17.34 |
Sharebased_Compensation_Plans_4
Share-based Compensation Plans (Performance Share Awards) (Details) | 12 Months Ended | 12 Months Ended | ||||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | USD ($) | USD ($) | Ordinary Shares | Ordinary Shares | Ordinary Shares | ADS | ADS | ADS | EBT | EBT | Performance Share Awards | |
Ordinary Shares | ADS | GBP (£) | ||||||||||
Performance Share Awards Outstanding [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding as at beginning of period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,518,138 |
Granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,508,631 |
Exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,826,648 |
Forfeited | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -498,822 |
Outstanding as at end of period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,701,299 |
Aggregate intrinsic value (in GBP) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | £ 76.9 |
Weighted average remaining life | '5 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value (in GBP per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | £ 19.71 |
Tax benefit associated with exercise of stock options (in US dollar) | 11.9 | 40.1 | 29.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic values of share-based awards exercised (in US dollar) | 298.3 | 224.1 | 189.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash received from employees as a result of employee share option exercises (in US dollar) | $17.20 | $16.20 | $13.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury stock held (in shares) | ' | ' | ' | 4,200,000 | 4,500,000 | 2,700,000 | 800,000 | 900,000 | 800,000 | 2,400,000 | 400,000 | ' |
Sharebased_Compensation_Plans_5
Share-based Compensation Plans (Fair Value Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Minimum | ' | ' | ' |
Fair Value Assumptions and Methodology | ' | ' | ' |
Risk-free interest rate, minimum | 0.10% | 0.20% | 0.10% |
Expected dividend yield | 0.40% | 0.00% | 0.00% |
Expected life | '1 year | '1 year | '1 year |
Volatility, minimum | 23.00% | 24.00% | 19.00% |
Forfeiture rate | 5.00% | 5.00% | 5.00% |
Maximum | ' | ' | ' |
Fair Value Assumptions and Methodology | ' | ' | ' |
Risk-free interest rate, maximum | 0.90% | 1.00% | 2.50% |
Expected dividend yield | 0.60% | 0.60% | 0.50% |
Expected life | '4 years | '4 years | '5 years |
Volatility, maximum | 26.00% | 32.00% | 33.00% |
Forfeiture rate | 9.00% | 7.00% | 7.00% |
Quarterly_Results_of_Operation2
Quarterly Results of Operations (Details) (USD $) | 12 Months Ended | 3 Months Ended | |||||||||||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 |
Previously reported | Previously reported | Previously reported | Previously reported | Previously reported | Previously reported | Previously reported | Previously reported | Adjusted for Dermagraft | Adjusted for Dermagraft | Adjusted for Dermagraft | Adjusted for Dermagraft | Adjusted for Dermagraft | Adjusted for Dermagraft | Adjusted for Dermagraft | Adjusted for Dermagraft | As reported | As reported | As reported | As reported | As reported | As reported | As reported | As reported | ||||
Quarterly Financial Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues | $4,934.30 | $4,527.40 | $4,158.10 | $1,351.10 | $1,236.60 | $1,274.50 | $1,161.90 | $1,201.20 | $1,100.40 | $1,207.80 | $1,171.80 | ($25.10) | ($23.90) | ($22.30) | ($18.50) | ($18.90) | ($33.70) | ($52.40) | ($48.80) | $1,326 | $1,212.70 | $1,252.20 | $1,143.40 | $1,182.30 | $1,066.70 | $1,155.40 | $1,123 |
Cost of product sales | 670.8 | 585.8 | 551.7 | 196.5 | 197.1 | 175.7 | 155.9 | 166.6 | 167.9 | 152.5 | 158.4 | -17.9 | -16.6 | -11.4 | -8.5 | -16.6 | -16 | -17 | -10 | 178.6 | 180.5 | 164.3 | 147.4 | 150 | 151.9 | 135.5 | 148.4 |
Income from continuing operations, net of taxes | 1,419.60 | 805.7 | 882.7 | 64 | 278.2 | 258.1 | 64.8 | 42 | 227.2 | 237.8 | 238.4 | 482.6 | 22.9 | 32.8 | 216.2 | 26 | 16.2 | 10.7 | 7.4 | 546.6 | 301.1 | 290.9 | 281 | 68 | 243.4 | 248.5 | 245.8 |
Loss from discontinued operations, net of taxes | -754.5 | -60.3 | -17.7 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -482.6 | -22.9 | -32.8 | -216.2 | -26 | -16.2 | -10.7 | -7.4 | -482.6 | -22.9 | -32.8 | -216.2 | -26 | -16.2 | -10.7 | -7.4 |
Net income | $665.10 | $745.40 | $865 | $64 | $278.20 | $258.10 | $64.80 | $42 | $227.20 | $237.80 | $238.40 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $64 | $278.20 | $258.10 | $64.80 | $42 | $227.20 | $237.80 | $238.40 |
Earnings from continuing operations (in USD per share) | $2.57 | $1.45 | $1.60 | $0.12 | $0.51 | $0.47 | $0.12 | $0.08 | $0.41 | $0.43 | $0.43 | $0.87 | $0.04 | $0.06 | $0.39 | $0.05 | $0.03 | $0.02 | $0.01 | $0.98 | $0.55 | $0.53 | $0.51 | $0.12 | $0.44 | $0.45 | $0.44 |
Loss from discontinued operations (in USD per share) | ($1.37) | ($0.11) | ($0.03) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ($0.87) | ($0.04) | ($0.06) | ($0.39) | ($0.05) | ($0.03) | ($0.02) | ($0.01) | ($0.87) | ($0.04) | ($0.06) | ($0.39) | ($0.05) | ($0.03) | ($0.02) | ($0.01) |
Earnings per ordinary share - basic | $1.21 | $1.34 | $1.57 | $0.12 | $0.51 | $0.47 | $0.12 | $0.08 | $0.41 | $0.43 | $0.43 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0.12 | $0.51 | $0.47 | $0.12 | $0.08 | $0.41 | $0.43 | $0.43 |
Earnings from continuing operations (in USD per share) | $2.45 | $1.41 | $1.54 | $0.12 | $0.49 | $0.45 | $0.12 | $0.07 | $0.40 | $0.41 | $0.41 | $0.82 | $0.04 | ($0.06) | $0.37 | $0.05 | $0.03 | $0.02 | $0.01 | $0.93 | $0.53 | $0.51 | $0.49 | $0.12 | $0.42 | $0.43 | $0.43 |
Loss from discontinued operations (in USD per share) | ($1.28) | ($0.10) | ($0.03) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ($0.82) | ($0.04) | ($0.06) | ($0.37) | ($0.05) | ($0.03) | ($0.02) | ($0.01) | ($0.82) | ($0.04) | ($0.06) | ($0.37) | ($0.05) | ($0.03) | ($0.02) | ($0.01) |
Earnings per ordinary share - diluted | $1.18 | $1.31 | $1.51 | $0.12 | $0.49 | $0.45 | $0.12 | $0.07 | $0.40 | $0.41 | $0.41 | $0 | $0 | ($0.11) | $0 | $0 | $0 | $0 | $0 | $0.12 | $0.49 | $0.45 | $0.12 | $0.07 | $0.40 | $0.41 | $0.41 |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Beginning balance | $739 | $709.50 | $624.90 | |||
Provision charged to income | 1,768.50 | [1] | 1,340.50 | [1] | 1,234.90 | [1] |
Costs incurred/utilization | -1,582.40 | [1] | -1,311 | [1] | -1,150.30 | [1] |
Ending balance | 925.1 | 739 | 709.5 | |||
Accrued rebates - Medicaid and HMOs | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Beginning balance | 640.5 | 612.6 | 549.9 | |||
Provision charged to income | 1,626.60 | [1] | 1,228 | [1] | 1,123.20 | [1] |
Costs incurred/utilization | -1,460.60 | [1] | -1,200.10 | [1] | -1,060.50 | [1] |
Ending balance | 806.5 | 640.5 | 612.6 | |||
Sales returns reserve | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Beginning balance | 90.5 | 88.8 | 69.8 | |||
Provision charged to income | 34.5 | [1] | 40.8 | [1] | 51.2 | [1] |
Costs incurred/utilization | -27.1 | [1] | -39.1 | [1] | -32.2 | [1] |
Ending balance | 97.9 | 90.5 | 88.8 | |||
Accrued coupons | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Beginning balance | 8 | 8.1 | 5.2 | |||
Provision charged to income | 107.4 | [1] | 71.7 | [1] | 60.5 | [1] |
Costs incurred/utilization | -94.7 | [1] | -71.8 | [1] | -57.6 | [1] |
Ending balance | $20.70 | $8 | $8.10 | |||
[1] | In the analysis above, due to systems limitations, it is not practical and has not been necessary to break out current versus prior year activity. When applicable, Shire has performed general ledger reviews of sales deduction provisions charged to income, and the utilization of these provisions in subsequent years. Shire has determined that adjustments made in each year as a result of changes to estimates that related to prior year sales, and adjustments made as a result of differences between prior period provisions and actual payments, did not have a material impact on the Companybs financial performance or position either in each individual year, or in the Companybs performance over the reported period. |