Document and Entity Information
Document and Entity Information - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 12, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Central Index Key | 936,402 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Trading Symbol | SHP, SHPG | ||
Entity Registrant Name | Shire plc | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Common Stock, Shares Outstanding | 601.1 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 47.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 135.5 | $ 2,982.4 |
Restricted cash | 86 | 54.6 |
Accounts receivable, net | 1,201.2 | 1,035.1 |
Inventories | 635.4 | 544.8 |
Deferred tax asset | 0 | 344.7 |
Prepaid expenses and other current assets | 197.4 | 221.5 |
Total current assets | 2,255.5 | 5,183.1 |
Non-current assets: | ||
Investments | 50.8 | 43.7 |
Property, plant and equipment, net ("PP&E") | 828.1 | 837.5 |
Goodwill | 4,147.8 | 2,474.9 |
Other intangible assets, net | 9,173.3 | 4,934.4 |
Deferred tax asset | 121 | 112.1 |
Other non-current assets | 33.3 | 46.4 |
Total assets | 16,609.8 | 13,632.1 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,050.6 | 1,909.4 |
Short-term borrowings | 1,511.5 | 850 |
Other current liabilities | 144 | 262.5 |
Total current liabilities | 3,706.1 | 3,021.9 |
Non-current liabilities | ||
Long-term borrowings | 69.9 | 0 |
Deferred tax liability | 2,205.9 | 1,210.6 |
Other non-current liabilities | 798.8 | 736.7 |
Total liabilities | $ 6,780.7 | $ 4,969.2 |
Commitments and contingencies | ||
Equity: | ||
Common stock of 5p par value; 1,000 million shares authorized; and 601.1 million shares issued and outstanding (2014: 1,000 million shares authorized; and 599.1 million shares issued and outstanding) | $ 58.9 | $ 58.7 |
Additional paid-in capital | 4,486.3 | 4,338 |
Treasury stock: 9.7 million shares (2014: 10.6 million shares) | (320.6) | (345.9) |
Accumulated other comprehensive loss | (183.8) | (31.5) |
Retained earnings | 5,788.3 | 4,643.6 |
Total equity | 9,829.1 | 8,662.9 |
Total liabilities and equity | $ 16,609.8 | $ 13,632.1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - £ / shares shares in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value (in GBP per share) | £ 0.05 | £ 0.05 |
Common Stock, Shares Authorized | 1,000 | 1,000 |
Common Stock, Shares, Issued | 601.1 | 599.1 |
Common Stock, Shares, Outstanding | 601.1 | 599.1 |
Treasury Stock, Shares | 9.7 | 10.6 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenues: | ||||
Product sales | $ 6,099.9 | $ 5,830.4 | $ 4,757.5 | |
Royalties | 300.5 | 160.8 | 153.7 | |
Other revenues | 16.3 | 30.9 | 23.1 | |
Total revenues | 6,416.7 | 6,022.1 | 4,934.3 | |
Costs and expenses: | ||||
Cost of product sales | 969 | 979.3 | 670.8 | |
Research and development | [1] | 1,564 | 1,067.5 | 933.4 |
Selling, general and administrative | [1] | 2,341.2 | 2,025.8 | 1,651.3 |
Goodwill impairment charge | 0 | 0 | 198.9 | |
Gain on sale of product rights | (14.7) | (54.6) | (15.9) | |
Reorganization costs | 97.9 | 180.9 | 88.2 | |
Integration and acquisition costs | 39.8 | 158.8 | (134.1) | |
Total operating expenses | 4,997.2 | 4,324.1 | 3,200.8 | |
Operating income from continuing operations | 1,419.5 | 1,698 | 1,733.5 | |
Interest income | 4.2 | 24.7 | 2.1 | |
Interest expense | (41.6) | (30.8) | (38.1) | |
Other income/(expense), net | 3.7 | 8.9 | (3.9) | |
Receipt of break fee | 1,635.4 | |||
Income from continuing operations before income taxes and equity in (losses)/earnings of equity method investees | 1,385.8 | 3,336.2 | 1,693.6 | |
Income taxes | (46.1) | (56.1) | (277.9) | |
Equity in (losses)/earnings of equity method investees, net of taxes | (2.2) | 2.7 | 3.9 | |
Income from continuing operations, net of taxes | 1,337.5 | 3,282.8 | 1,419.6 | |
(Loss)/gain from discontinued operations, net of taxes (in USD) | (34.1) | 122.7 | (754.5) | |
Net income | $ 1,303.4 | $ 3,405.5 | $ 665.1 | |
Earnings Per Share, Basic [Abstract] | ||||
Earnings from continuing operations (in USD per share) | $ 2.265 | $ 5.596 | $ 2.572 | |
(Loss)/gain from discontinued operations (in USD per share) | (0.058) | 0.209 | (1.367) | |
Earnings per ordinary share - basic (in USD per share) | 2.207 | 5.805 | 1.205 | |
Earnings Per Share, Diluted [Abstract] | ||||
Earnings from continuing operations (in USD per share) | 2.255 | 5.552 | 2.453 | |
(Loss)/gain from discontinued operations (in USD per share) | (0.058) | 0.208 | (1.278) | |
Earnings per ordinary share - diluted (in USD per share) | $ 2.197 | $ 5.760 | $ 1.175 | |
Weighted average number of shares: | ||||
Basic (in shares) | [2] | 590.4 | 586.7 | 552 |
Diluted (in shares) | 593.1 | 591.3 | 590.3 | |
Continung operations | ||||
Costs and expenses: | ||||
Goodwill impairment charge | $ 7.1 | |||
Gain on sale of product rights | $ (88.2) | |||
[1] | Research and development (“R&D”) includes IPR&D intangible asset impairment charges of $643.7 million for the year to December 31, 2015 (2014: $190.3 million, 2013: $19.9 million). Selling, general and administrative (“SG&A”) costs include amortization of intangible assets relating to intellectual property rights acquired of $498.7 million for the year to December 31, 2015 (2014: $243.8 million, 2013: $152.0 million). | |||
[2] | Excludes shares purchased by the EBT and under the shares buy-back program and presented by Shire as treasury stock |
Consolidated Statements of Inc5
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets (Excluding Goodwill) [Line Items] | |||
Amortization of intangible assets | $ 498.7 | $ 243.8 | |
Impairment of unamortized intangible assets | 643.7 | 190.3 | $ 19.9 |
Acquired Intellectual Property Rights | |||
Intangible Assets (Excluding Goodwill) [Line Items] | |||
Amortization of intangible assets | $ 498.7 | $ 243.8 | $ 152 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Income and Comprehensive Income [Abstract] | |||||
Net income | $ 280.6 | $ 2,172.3 | $ 1,303.4 | $ 3,405.5 | $ 665.1 |
Other comprehensive income: | |||||
Foreign currency translation adjustments | (156.4) | (136.1) | 25.3 | ||
Unrealized holding gain/(loss) on available-for-sale securities (net of taxes of $nil, $1.3 million and $0.1 million) | 4.1 | (5.6) | (2) | ||
Comprehensive income | 1,151.1 | 3,263.8 | $ 688.4 | ||
Components of accumulated other comprehensive income | |||||
Foreign currency translation adjustments | (182.1) | (25.7) | (182.1) | (25.7) | |
Unrealized holding loss on available-for-sale securities, net of taxes | (1.7) | (5.8) | (1.7) | (5.8) | |
Accumulated other comprehensive loss | $ (183.8) | $ (31.5) | $ (183.8) | $ (31.5) |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Income and Comprehensive Income [Abstract] | |||
Unrealized holding gain/(loss) on available-for-sale securities, tax | $ 0 | $ 1.3 | $ 0.1 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Millions, $ in Millions | Total | EBT | Share Buy-back Program | Common stock | Additional paid-in capital | Treasury stock | Treasury stockEBT | Treasury stockShare Buy-back Program | Accumulated other comprehensive (loss)/income | Retained earnings | Retained earningsEBT | |
As at Dec. 31, 2012 | $ 3,809.2 | $ 55.7 | $ 2,981.5 | $ (310.4) | $ 86.9 | $ 995.5 | ||||||
Shares as at Dec. 31, 2012 | 562.5 | |||||||||||
Net income | 665.1 | 665.1 | ||||||||||
Other comprehensive (loss)/income, net of tax | 23.3 | 23.3 | ||||||||||
Options exercised | 16.2 | $ 0.1 | 16.1 | |||||||||
Option exercised (in shares) | 1.2 | |||||||||||
Convertible Bonds, conversion to Ordinary shares | 1,101.5 | $ 2.8 | 1,098.7 | |||||||||
Convertible Bonds, conversion to Ordinary shares (in shares) | 33.8 | |||||||||||
Share-based compensation | 78.1 | 78.1 | ||||||||||
Tax benefit associated with exercise of stock options (in US dollar) | 11.9 | 11.9 | ||||||||||
Shares purchased | $ (50) | $ (193.8) | $ (50) | $ (193.8) | ||||||||
Shares released by employee benefit trust to satisfy exercise of stock options | 0.9 | 103.6 | $ (102.7) | |||||||||
Dividends | [1] | (96.4) | (96.4) | |||||||||
As at Dec. 31, 2013 | 5,366 | $ 58.6 | 4,186.3 | (450.6) | 110.2 | 1,461.5 | ||||||
Shares as at Dec. 31, 2013 | 597.5 | |||||||||||
Net income | 3,405.5 | 3,405.5 | ||||||||||
Other comprehensive (loss)/income, net of tax | (141.7) | (141.7) | ||||||||||
Options exercised | 15.2 | $ 0.1 | 15.1 | |||||||||
Option exercised (in shares) | 1.6 | |||||||||||
Share-based compensation | 97 | 97 | ||||||||||
Tax benefit associated with exercise of stock options (in US dollar) | 39.6 | 39.6 | ||||||||||
Shares released by employee benefit trust to satisfy exercise of stock options | 2.5 | 104.7 | (102.2) | |||||||||
Dividends | [2] | (121.2) | (121.2) | |||||||||
As at Dec. 31, 2014 | $ 8,662.9 | $ 58.7 | 4,338 | (345.9) | (31.5) | 4,643.6 | ||||||
Shares as at Dec. 31, 2014 | 599.1 | 599.1 | ||||||||||
Net income | $ 1,303.4 | 1,303.4 | ||||||||||
Other comprehensive (loss)/income, net of tax | (152.3) | (152.3) | ||||||||||
Options exercised | 16.6 | $ 0.2 | 16.4 | |||||||||
Option exercised (in shares) | 2 | |||||||||||
Share-based compensation | 100.3 | 100.3 | ||||||||||
Tax benefit associated with exercise of stock options (in US dollar) | 31.6 | 31.6 | ||||||||||
Shares released by employee benefit trust to satisfy exercise of stock options | $ 1 | $ 25.3 | $ (24.3) | |||||||||
Dividends | [3] | (134.4) | (134.4) | |||||||||
As at Dec. 31, 2015 | $ 9,829.1 | $ 58.9 | $ 4,486.3 | $ (320.6) | $ (183.8) | $ 5,788.3 | ||||||
Shares as at Dec. 31, 2015 | 601.1 | 601.1 | ||||||||||
[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) totaling $96.4 million | |||||||||||
[2] | Dividends per share During the year to December 31, 2014 Shire plc declared and paid dividends of 20.76 US cents per ordinary share (equivalent to 62.28 US cents per ADS) totaling $121.2 million. | |||||||||||
[3] | Dividends per share During the year to December 31, 2015 Shire plc declared and paid dividends of 23.30 US cents per ordinary share (equivalent to 69.90 US cents per ADS) totaling $134.4 million. |
Consolidated Statements of Cha9
Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Dividends paid (in USD) | $ 134.4 | [1] | $ 121.2 | [2] | $ 96.4 | [3] |
Ordinary Shares | ||||||
Dividends per share declared | $ 0.233 | $ 0.2076 | $ 0.176 | |||
Dividends per share paid | 0.233 | 0.2076 | 0.176 | |||
ADS | ||||||
Dividends per share declared | 0.699 | 0.6228 | 0.528 | |||
Dividends per share paid | $ 0.699 | $ 0.6228 | $ 0.528 | |||
[1] | Dividends per share During the year to December 31, 2015 Shire plc declared and paid dividends of 23.30 US cents per ordinary share (equivalent to 69.90 US cents per ADS) totaling $134.4 million. | |||||
[2] | Dividends per share During the year to December 31, 2014 Shire plc declared and paid dividends of 20.76 US cents per ordinary share (equivalent to 62.28 US cents per ADS) totaling $121.2 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) totaling $96.4 million |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 1,303.4 | $ 3,405.5 | $ 665.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 637.2 | 407.3 | 324.4 |
Share-based compensation | 100.3 | 97 | 77.4 |
Change in fair value of contingent consideration | (149.9) | 14.7 | (159.1) |
Impairment of intangible assets | 643.7 | 190.3 | 19.9 |
Goodwill impairment charge | 0 | 0 | 198.9 |
Impairment of assets held for sale | 0 | 0 | 636.9 |
Write down of assets | 0 | 0 | 58.2 |
Gain on sale of product rights | (14.7) | (54.6) | (15.9) |
Unwind of inventory fair value step-ups | 31.1 | 91.9 | 0 |
Other, net | 12.5 | 29.4 | 11.4 |
Movement in deferred taxes | (198.2) | (14.3) | (349.9) |
Equity in losses/(earnings) of equity method investees | 2.2 | (2.7) | (3.9) |
Changes in operating assets and liabilities: | |||
Increase in accounts receivable | (211.4) | (66.1) | (148.3) |
Iincrease in sales deduction accruals | 97.6 | 107.6 | 177.5 |
Increase in inventory | (63.2) | (25.3) | (36.6) |
Decrease/(increase) in prepayments and other assets | 37.2 | 42.4 | (60.9) |
Increase in accounts and notes payable and other liabilities | 109.2 | 5.3 | 67.9 |
Net cash provided by operating activities | 2,337 | 4,228.4 | 1,463 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Movements in restricted cash | (32) | (32.6) | (5.3) |
Purchases of subsidiary undertakings and businesses, net of cash acquired | (5,553.4) | (4,104.4) | (227.8) |
Purchases of non-current investments | (9.5) | (23.1) | (10.6) |
Purchases of PP&E | (114.7) | (77) | (157) |
Proceeds from short-term investments | 67 | 57.8 | 0 |
Proceeds received on sale of product rights | 17.5 | 127 | 19.2 |
Proceeds from disposal of non-current investments | 18.7 | 21.5 | 12.1 |
Other, net | (13.5) | 0.2 | 8.5 |
Net cash used in investing activities | (5,619.9) | (4,030.6) | (360.9) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving line of credit, long-term and short-term borrowings | 3,760.8 | 2,310.8 | 0 |
Repayment of revolving line of credit, long term and short term borrowings | (3,110.9) | (1,461.8) | 0 |
Repayment of debt acquired through business combinations | 0 | (551.5) | 0 |
Proceeds from ViroPharma call options | 0 | 346.7 | 0 |
Payment of dividend | (134.4) | (121.2) | (96.4) |
Payments to acquire shares (in USD) | (243.8) | ||
Excess tax benefit associated with exercise of stock options | 32.4 | 39.7 | 13.4 |
Proceeds from exercise of options | 16.6 | 17.4 | 17.2 |
Facility arrangement fee | (24.1) | (10.2) | (13.9) |
Contingent consideration payments | (101.2) | (15.2) | (14.1) |
Other, net | (0.2) | (0.2) | (7) |
Net cash provided by/(used in) financing activities | 439 | 554.5 | (344.6) |
Effect of foreign exchange rate changes on cash and cash equivalents | (3) | (9.3) | (0.3) |
Net (decrease)/increase in cash and cash equivalents | (2,846.9) | 743 | 757.2 |
Cash and cash equivalents at beginning of period | 2,982.4 | 2,239.4 | 1,482.2 |
Cash and cash equivalents at end of period | 135.5 | 2,982.4 | 2,239.4 |
Supplemental information associated with continuing operations: | |||
Interest paid | (20) | (14.5) | (29.9) |
Income taxes repaid | 76.9 | 395 | 0 |
Income taxes paid | (145.9) | (200.6) | (290.2) |
Receipt of break fee | 1,635.4 | ||
Continung operations | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Goodwill impairment charge | 7.1 | ||
Gain on sale of product rights | (88.2) | ||
Discontinued operations | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Goodwill impairment charge | 191.8 | ||
Gain on sale of product rights | 33.6 | ||
EBT | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Payments to acquire shares (in USD) | 0 | 0 | (50) |
Share Buy-back Program | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Payments to acquire shares (in USD) | $ 0 | $ 0 | $ (193.8) |
Shire Income Access Share Trust
Shire Income Access Share Trust Balance Sheet - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Total assets | $ 16,609.8 | $ 13,632.1 |
Liabilities: | ||
Total liabilities | 6,780.7 | 4,969.2 |
Equity: | ||
Total equity | 9,829.1 | 8,662.9 |
Total liabilities and equity | 16,609.8 | 13,632.1 |
Shire Income Access Share Trust | ||
ASSETS | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Equity: | ||
Total equity | 0 | 0 |
Total liabilities and equity | $ 0 | $ 0 |
Shire Income Access Share Tru12
Shire Income Access Share Trust Statement of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net income | $ 1,303.4 | $ 3,405.5 | $ 665.1 |
Shire Income Access Share Trust [Member] | |||
Dividend income | 127.7 | 112.8 | 91.1 |
Net income | $ 127.7 | $ 112.8 | $ 91.1 |
Shire Income Access Share Tru13
Shire Income Access Share Trust Statements of Changes in Equity - USD ($) $ in Millions | Total | Shire Income Access Share Trust | Shire Income Access Share TrustCapital account | Shire Income Access Share TrustRevenue account | |
As at Dec. 31, 2012 | $ 3,809.2 | ||||
Net income | 665.1 | $ 91.1 | $ 0 | $ 91.1 | |
Distributions made | (96.4) | [1] | (91.1) | 0 | (91.1) |
As at Dec. 31, 2013 | 5,366 | 0 | 0 | 0 | |
Net income | 3,405.5 | 112.8 | 0 | 112.8 | |
Distributions made | (121.2) | [2] | (112.8) | 0 | (112.8) |
As at Dec. 31, 2014 | 8,662.9 | 0 | 0 | 0 | |
Net income | 1,303.4 | 127.7 | 0 | 127.7 | |
Distributions made | (134.4) | [3] | (127.7) | 0 | (127.7) |
As at Dec. 31, 2015 | $ 9,829.1 | $ 0 | $ 0 | $ 0 | |
[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) totaling $96.4 million | ||||
[2] | Dividends per share During the year to December 31, 2014 Shire plc declared and paid dividends of 20.76 US cents per ordinary share (equivalent to 62.28 US cents per ADS) totaling $121.2 million. | ||||
[3] | Dividends per share During the year to December 31, 2015 Shire plc declared and paid dividends of 23.30 US cents per ordinary share (equivalent to 69.90 US cents per ADS) totaling $134.4 million. |
Shire Income Access Share Tru14
Shire Income Access Share Trust Statements of Cashflows - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ 280.6 | $ 410.4 | $ 2,172.3 | $ 230.4 | $ 1,303.4 | $ 3,405.5 | $ 665.1 |
Net cash provided by operating activities | 2,337 | 4,228.4 | 1,463 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Net cash provided by investing activities | (5,619.9) | (4,030.6) | (360.9) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net cash provided by/(used in) financing activities | 439 | 554.5 | (344.6) | ||||
Net (decrease)/increase in cash and cash equivalents | (2,846.9) | 743 | 757.2 | ||||
Cash and cash equivalents at beginning of period | 2,982.4 | 2,239.4 | 2,982.4 | 2,239.4 | 1,482.2 | ||
Cash and cash equivalents at end of period | 135.5 | 2,982.4 | 135.5 | 2,982.4 | 2,239.4 | ||
Shire Income Access Share Trust | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | 127.7 | 112.8 | 91.1 | ||||
Net cash provided by operating activities | 127.7 | 112.8 | 91.1 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Net cash provided by investing activities | 0 | 0 | 0 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Distributions made | (127.7) | (112.8) | (91.1) | ||||
Net cash provided by/(used in) financing activities | (127.7) | (112.8) | (91.1) | ||||
Net (decrease)/increase in cash and cash equivalents | 0 | 0 | 0 | ||||
Cash and cash equivalents at beginning of period | $ 0 | $ 0 | 0 | 0 | 0 | ||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Description of Operations
Description of Operations | 12 Months Ended |
Dec. 31, 2015 | |
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 biotech Company, focusing on developing and marketing innovative medicines for patients with rare diseases and other select conditions . The Company has grown both organically and through acquisition, completing a series of major transactions that have brought therapeutic, geographic and pipeline growth and diversification. The Company will continue to conduct its own R&D, focused on rare diseases, as well as evaluate companies , products and pipeline opportunities that offer a strategic fit and have the potential to deliver value to all of the Company's stakeholders: patients, physicians, policy makers, payers, investors and employees . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2 . Summary of s ignificant a ccounting p olicies (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 rea lization 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 and loss of a product's exclusivity . The se 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 up - front payment to Shire by the licensee on inception of the license and subsequent milestone payments to Shire by the licensee , 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 were deferred and are 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-re fundable, 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 collaborati ng 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 to third party intellectual property owners on sale of the Company's products 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 liabilit y , 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 $ 56.1 million, $ 56.4 million and $60.9 million for the years to December 31, 2015 , 2014 and 2013 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. Up - front 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 a n 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 statement s 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 statement s of income . (l) Foreign currency Monetary assets and liabilities in foreign currencies are translated into the functional currency of the relevant subsidiar y 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 statement s 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 loss . Foreign currency exchange transaction losses included in consolidated statement s of income in the years to December 31, 2015 , 2014 and 2013 amounted to $ 26.5 million , $ 15 . 6 million and $8.7 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 and penalties relating to unrecognized tax benefits within income taxes. The Company recognizes interest and penalties relating to income tax es within income taxes . Interest income on cash required to be deposited with the tax authorities is recognized within interest income. 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 the Company divided by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is based upon net income attributable to the Company adjusted for the impact of interest expense on convertible debt on an “if-converted” basis (whe n the effect is dilutive and prior to the actual conversion or redemption of such 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, SG&A and Reorganization costs in the consolidated statement s 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 statement s 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 28 . (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 principally associated with inter - company 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 cha n ges in the fair value recognized in the consolidated statement s 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 highly 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 highly 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 (losses)/ earnings of equity method investees, net of taxes 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 in the consolidated statements of income. The cost of securities sold is based on the specific identification method. Interest on securities classified as available-for-sale is included as interest income in the consolidated statements of 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 1 5 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 statement s 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. The Company reviews goodwill for impairment by firstly assessing qualitative factors, including comparing the market capitalization of the Company to the carrying value of its assets, to determine whether events or circumstances exist which indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company assesses the totality of events or circumstances and determines if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If, after assessing these qualitative factors, it is deemed more likely than not that the fair value of a reporting unit is less than its carrying value, a “two step” quantitative assessment is performed 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 4 to 24 years (weighted average 20 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 ass et 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 Balance Sheet Classification of Deferred Taxes In November 2015 the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the balance sheet presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position compared to the current practi c e of classifying deferred income tax liabilities and assets into both current and noncurrent amounts. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If an entity applies the guidance prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. Shire adopted this guidance prospectively in the current period presented and the prior year balance sheet classification of deferred taxes has not been adjusted. The adoption of this guidance primarily resulted in a reclassification of net current deferred tax assets to net non-current deferred tax liabilities in the Consolidated Balance Sheet as at December 31, 2015. See Note 26 for details. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014 the FASB issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows . To be adopted in future periods Revenue from Contracts with Customers In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standard s Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP. Five-step model: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligation |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | 3 . Business c ombinations Proposed combination with Baxalta Incorporated (“ Baxalta ”) On January 11, 2016 Shire announced that the boards of directors of Shire and Baxalta had agreed on the terms of a recommended combination of Shire with Baxalta . Under the terms of the agreement, Baxalta shareholders will receive $18.00 in cash and 0.1482 Shire ADSs per Baxalta share. Based on Shire's closing ADS price on January 8, 2016, this implies a total value of $45.57 per Baxalta share, representing an aggregate consideration of approximately $32 billion. Baxalta is a global biopharmaceutical company that focuses on developing, manufacturing and commercializing therapies for orphan diseases and unde r served conditions in hematology, oncology and immunology. Closing of the transaction is subject to approval by Shire and Baxalta shareholders, certain regulatory approvals, redelivery of tax opinions initially delivered at signing and other customary closing conditions and representations . The transaction is a class 1 transaction for Shire for the purposes of the UK Listing Rules and requires the approval of Shire shareholders. A shareholder circular, together with notice of the relevant shareholder meeting, will be distributed to Shire shareholders in due course. The parties expect the transaction to close in mid-2016. Acquisition of Dyax Corp . (“ Dyax ”) On January 22, 2016 Shire acquired all of the outstanding share capital of Dyax for $37.30 per share in cash . Under the terms of the merger agreement Dyax shareholders may receive additional value through a non-tradable contingent value right worth $4.00 per share, payable subject to FDA approval of DX-2930. Dyax was a publicly traded, Massachusetts-based rare disease biopharmaceutical company primarily focused on the development of plasma kallikrein ( pKal ) inhibitors for the treatment of HAE. Dyax's most advanced clinical program is SHP643 (formerly DX-2930), a Phase 3 program with the potential for improved efficacy and convenience for HAE patients. SHP643 has received Fast Track, Breakthrough Therapy, and Orphan Drug designations by the FDA and has also received Orphan Drug status in the EU. Dyax also brings the marked ed product, KALBITOR, a plasma kallikrein inhibitor for the treatment of acute attacks of HAE in patients 12 years of age and older . The acquisition of Dyax will be accounted for as a business combination using the acquisition method. The preliminary acquisition-date fair value consideration is $ 6, 330.0 million, comprising cash paid on closing of $ 5, 934.0 million and the preliminary fair value of the contingent value right of $ 396.0 million (maximum payable $ 646.0 million). The assets acquired and the liabilities assumed from Dyax 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 Dyax will be included in Shire's consolidated statement of income from, January 22, 2016. 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, 201 6 . In the year to December 31, 2015 the Company expensed costs of $ 13.2 million (2014: $nil) relating to the acquisition of Dyax , which have been recorded within integration and acquisition costs in the Company's consolidated income statement . Acquisition of NPS Pharma On February 21, 201 5 Shire completed its acqui sition of 100% of the outstanding share capital of NPS Pharma. The acquisition-date fair value of cash consideration paid on closing was $ 5 , 220 million. The acquisition of NPS Pharma added GATTEX/REVESTIVE, approved in the US and EU for the treatment of adults with Short Bowel Syndrome ( “ SBS ” ) who are dependent on parenteral support , a rare and potentially fatal gastrointestinal disorder and NATPARA/NATPAR approved in the US and indicated as an adjunct to calcium and vitamin D to control hypocalcemia in patients with HPT , a rare endocrine disease, to Shire's portfolio of currently marketed products . The acquisition of NPS Pharma has been accounted for as a business combination using the acquisition method . The assets acquired and the liabilities assumed from NPS Pharma have be en recorded at their preliminary fair value s at the date of acquisition , being February 21, 2015 . The Company 's consolidated financial statements include the results of NPS Pharma from February 21, 2015 . The amount of NPS Pharma 's post-acquisition revenues and pre-tax losses included in the Company's consolidated statement of income for the year to December 31 , 2015 were $ 285.9 million and $ 96.7 million respectively. The pre-tax loss includes charges relating to the unwind of inventory fair value adjustments of $ 29.8 million, intangible asset amortization of $ 260.3 million and integration costs of $ 90.1 million. The purchase price allocation was finalized in the fourth quarter of 2015. The Company's allocation of the purchase price to the fair value of assets acquire d and liabilities assumed , including measurement period adjustments record ed during 2015 , is outlined below : Fair value $’M ASSETS Current assets: Cash and cash equivalents 41.6 Short-term investments 67.0 Accounts receivable 33.4 Inventories 89.4 Other current assets 11.1 _______________ Total current assets 242.5 Non-current assets: PP&E 4.8 Goodwill 1,551.0 Other intangible assets - currently marketed products 4,640.0 - royalty rights (categorized as "Other amortized intangible assets" ) 353.0 _______________ Total assets 6,791.3 _______________ LIABILITIES Current liabilities: Accounts payable and other current liabilities 75.7 Short-term debt 27.4 Non-current liabilities: Long-term debt, less current portion 78.9 Deferred tax liabilities 1,385.2 Other non-current liabilities 4.5 _______________ Total liabilities 1,571.7 _______________ Fair value of identifiable assets acquired and liabilities assumed 5,219.6 Consideration _______________ Cash consideration paid 5,219.6 _______________ (a) Other intangible assets – currently marketed products Other intangible assets totaling $ 4,640 .0 million relate to intellectual property rights acquired for NPS Pharma's currently marketed products, primarily attributed to NATPARA/NATPAR and GATTEX/REVESTIVE. The fair value of the currently marketed products is and has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset. The estimated useful lives of the NATPARA/NATPAR and GATTEX/REVESTIVE intangible assets are 24 years, with amortization being recorded on a straight-line basis. (b) Other intangible assets – Royalty rights Other intangibles totaling $ 353.0 million relate to the royalty rights arising from the collaboration agreements with Amgen, Janssen and Kyowa Hakko Kirin. Amgen markets cinacalcet HCl as SENSIPAR in the US and as MIMPARA in the EU; Janssen Pharmaceuticals markets tapentadol as Nucynta in the US; and Kyowa Hakko Kirin markets cinacalcet HCI as REGPARA in Japan, Hong Kong, Malaysia, Macau, Singapore, and Taiwan. NPS Pharma is entitled to royalties from the relevant net sales of these products. The fair value of these royalty rights has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each royalty right. The estimated useful lives of these royalty rights range from 4 to 5 years (weighted average 4 years), with amortization being recorded on a straight-line basis. (c) Goodwill Goodwill arising of $ 1, 551.0 million, which is not deductible for tax purposes, includes the expected synergies that will result from combin ing the operations of NPS Pharma with the operations of Shire , particularly those synergies expected to be realized due to Shire's structure ; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce. In the year to Dece mber 31 , 2015 the Company expensed costs of $ 144.5 million (2014: $nil) relating to the acquisition and post-acquisition integration of NPS Pharma , which have been recorded within I ntegration and acquisition costs in the Company's consolidated statement of income . Supplemental disclosure of pro forma information The following unaudited pro forma financial information presents the combined results of the operations of Shire and NPS Pharma as if the acquisition of NPS Pharma had occurred as at January 1, 2014. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations actually would have been had the acquisition been completed at the date indicated. In addition, the unaudited pro forma financial information does not purport to project the future results of operations of the combined Company. December 31, December 31, 2015 2014 $’M $’M _______________ _______________ Revenues 6,446.6 6,246.1 Net income from continuing operations 1,293.6 2,950.7 _______________ _______________ Per share amounts: Net income from continuing operations per share - basic 219.1c 502.9c Net income from continuing operations per share - diluted 218.1c 499.0c _______________ _______________ The unaudited pro forma financial information above reflects the following pro forma adjustments: an adjustment to decrease net income by $ 105.3 million for the year to December 31 , 2014 to reflect acquisition costs incurred by Shire and NPS Pharma, and increase net income by $105 .3 million for the year to December 31 , 2015 to eliminate acquisition costs incurred ; an adjustment to decrease net income by $ 18.8 million for the year to December 31 , 2014 to reflect charges on the unwind of inventory fair value adjustments as acquisition date inventory is sold, and a corresponding increase in net income for the year to December 31 , 2015; an adjustment of $ 22.2 million in the year to December 31 , 2014 to reflect additional interest expense associated with the drawdown of debt to partially finance the acquisition of NPS Pharma and the amortization of related deferred debt issuance costs ; and an adjustment to increase amortizatio n expense by approximately $22 .2 million in the year to Dece mber 3 1 , 2015 and $ 177.0 million in the year to Dece mber 30 , 2014 related to amortization of the fair value of identifiable intangible assets acquired and the elimination of NPS Pharma's historical intangible asset amortization expense . T he adjustments above are stated net of their tax effects , where applicable. Acquisition of Foresight Biotherapeutics , Inc. (“Foresight”) On July 30, 2015 Shire completed the acquisition of 100% of the outstanding share capital of Foresight, a privately owned company incorporated in New York. The acquisition-date fair value of cash consideration, which was paid on closing, was $298.8 million. With this acquisition, Shire acquire d the global rights to SHP640 (formerly FST-100 ) , a Phase-3 ready therapy for the treatment of infectious conjunctivitis, an ocular surface condition commonly referred to as pink eye. The acquisition of Foresight has been accounted for as a business combination using the acquisition method. The assets and liabilities acquired from Foresight have been recorded at their preliminary fair values at the date of acquisition, being July 30, 2015. The Company's consolidated financial statements include the results of Foresight from July 30, 2015. The purchase price allocation is preliminary pending the determination of the fair values of certain assets and liabilities. The purchase price has been allocated on a preliminary basis to the SHP640 IPR&D intangible asset ($300.0 million), net current assets assumed ($3.0 million), net non-current liabilities assumed (including d eferred tax liabilities) ($116.6 million) and goodwill ($112.4 million). Goodwill is not deductible for tax purposes. Unaudited pro forma financial information to present the combined results of operations of Shire and Foresight is not provided as the impact of this acquisition is not material to the Company's results of operations for any period presented . Acquisition of Solpharm d.o.o (“ Solpharm ”) On September 28, 2015 Shire completed the acquisition of 100% of the outstanding share capital of Solpharm , a privately-owned company incorporated in Croatia. The acquisition-date fair value of consideration was $5.2 million, comprising cash paid on closing of $4.5 million and the fair value of contingent consideration payable of $0.7 million (maximum payable $3.1 million dependent upon achievement of post-closing milestones). Shire has preliminarily allocated the purchase price to goodwill ($4.4 million) and other net assets ($0.8 million). Unaudited pro forma financial information to present the combined results of operations of Shire and Solpharm is not provided as the impact of this acquisition is not material to the Company's results of operations for any period presented . Acquisition of Meritage Pharma Inc. (“ Meritage ”) Prior to the acquisition of ViroPharma Incorporated (“ ViroPharma ”) by Shire (see below) , ViroPharma had entered into an exclusive development and option agreement with Meritage , a privately owned US company focusing on developing oral budesonide suspension (“OBS”) as a treatment for eosinophilic esophagitis. Under the terms of this agreement Meritage controlled and conducted all related research up to achievement of pre-defined development success criteria at which point ViroPharma had the option to acquire Meritage . On February 18, 2015 , following the exercise of the purchase option, Shire acquired all the outstan ding equity of Meritage . The acquisition date fair value of the consideration totalled $166.9 million, comprising cash consideration paid on closing of $74.8 million and the fair value of contingent consideration payable of $92.1 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $175.0 million dependent upon achievement of certain clinical development and regulatory milestones. With the Meritage acquisition, Shire has acquired the global rights to Meritage's Phase 3-ready compound , OBS (now SHP621) , for the treatment of adolescents and adults with eosinophilic esophagitis . The acquisition of Meritage has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Meritage have been recorded at their fair values at the date of acquisition, being February 18, 2015. The Company's consolidated financial statements and results of operations include the results of Meritage from February 18, 2015. The purchase price allocation is final. The purchase price has been allocated to acquired SHP621 IPR&D intangible asset ($175 .0 million), net current assets assumed ($5.5 million), net non-current liabilities assumed (including deferred tax liabilities) ($ 45.9 million) and goodwil l ($32.3 mil lion). Goodwill is not deductible for tax purposes. Unaudited pro forma financial information to present the combined results of operations of Shire and Meritage is not provided as the impact of this acquisition is not material to the Company's results of operations for any period presented . Acquisition of ViroPharma On January 24, 2014 Shire completed its acquisition of 100% of the outstanding share capital of ViroPharma . The acquisition-date fair value of cash consideration paid on closing was $3,997 million. The acquisition of ViroPharma added CINRYZE to Shire's portfolio of currently marketed products. CINRYZE is a leading brand for the prophylactic treatment of Hereditary Angioedema (“HAE”) in adolescents and adults. The acquisition of ViroPharma has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from ViroPharma have been recorded at their fair values at the date of acquisition, being January 24, 2014. The Company's consolidated financial statements include the results of ViroPharma from January 24, 2014 . The purchase price allocation was finalized in the fourth quarter of 2014. The Company's allocation of the purchase price to the fair value of assets acquired and liabilities assumed is outlined below: Acquisition date fair value $’M Identifiable assets acquired and liabilities assumed ASSETS Current assets: Cash and cash equivalents 232.6 Short-term investments 57.8 Accounts receivable 52.2 Inventories 203.6 Deferred tax assets 100.7 Purchased call option 346.7 Other current assets 50.9 _______________ Total current assets 1,044.5 Non-current assets: PP&E 24.7 Goodwill 1,655.5 Other intangible assets - Currently marketed products 2,320.0 - In-Process Research and Development (“IPR&D”) 315.0 Other non-current assets 10.4 _______________ Total assets 5,370.1 _______________ LIABILITIES Current liabilities: Accounts payable and other current liabilities 122.7 Convertible bond 551.4 Non-current liabilities: Deferred tax liabilities 603.5 Other non-current liabilities 95.5 _______________ Total liabilities 1,373.1 _______________ Fair value of identifiable assets acquired and liabilities assumed 3,997.0 _______________ Consideration Cash consideration paid 3,997.0 _______________ (a) Other intangible assets – currently marketed products Other intangible assets totaled $2,320.0 million at the date of acquisition, relat ing to intellectual property rights acquired for ViroPharma's then currently marketed products, primarily attributed to CINRYZE, for the routine prophylaxis against HAE attacks in adolescent and adult patients. Shire also obtained intellectual property rights to three other commercialized products, PLENADREN, an orphan drug for the treatment of adrenal insufficiency in adults, BUCCOLAM, an oromucosal solution for the treatment of prolonged, acute, and convulsive seizures in infants, toddlers, children and adolescents and VANCOCIN, an oral capsule formulation for the treatment of C. difficile-associated diarrhea (“CDAD”) , which was divested by Shire in the t hird quarter of 2014 . The fair value of currently marketed products has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset. The estimated useful lives of the CINRYZE, PLENADREN and BUCCOLAM intangible assets range from 10 to 23 years (weighted average 22 years), with amortization bein g recorded on a straight- line basis. (b) Other intangible assets – IPR&D The IPR&D asset of $315.0 million relates to m aribavir (now SHP620) , an investigational antiviral product for cytomegalovirus. The fair value of this IPR&D asset was estimated based on an income approach, using the present value of incremental after tax cash flows expected to be generated by this development project after the deduction of contributory asset charges for other assets employed in this project . The estimated cash flows have been probability adj usted to take into account the stage of completion and the remaining risks and uncertainties surrounding the future development and commercialization. The major risks and uncertainties associated with the timely completio n of the acquired IPR&D project include the ability to confirm the efficacy of the technology based on the data from clinical trials, and obtaining the relevant regulatory approvals as well as other risks as described in the Company's A nnual R eport on Form 10-K. The valuation of IPR&D has been based on information available at the time of the acquisition (and information obtained during the measurement period) and on expectations and assumptions that ( i ) have been deemed reasonable by the Company's management and (ii) are based on information, expectations and assumptions that would be available to a market participant. However, no assurance can be given that the assumptions and events associated with such assets will occur as projected. For these reasons, the actual cash flows may vary from forecast future cash flows. The estimated probability adjusted after tax cash flows used in fair valuing other intangible assets have been discounted at rates ranging from 9.5% to 10.0%. (c) Goodwill Goodwill arising of $1, 655.5 million, which is not deductible for tax purposes, includes the expected operational synergies that will result from combining the commercial operations of ViroPharma with th ose of Shire; other synergies expected to be realized due to Shire's structure; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce. Acquisition of Lumena Pharmaceuticals, Inc. (“ Lumena ”) On June 11, 2014 Shire completed the acquisition of 100% of the outstanding share capital of Lumena , a privately owned US incorporated biopharmaceutical company. The acquisition date fair value of the consideration totaled $464.3 million, comprising cash consideration paid on closing of $300.3 million and the fair value of contingent consideration payable of $164 million. In the year to December 31, 2015 Shire settled all future contingent milestones payable for a one-time cash payment of $90 million. This acquisition brought two novel, orally active therapeutic compounds SHP625 (formerly LUM001) and SHP626 (formerly LUM002). Both compounds are inhibitors of the apical sodium-dependent bile acid transport (“ASBT”), which is primarily responsible for recycling bile acids from the intestine to the liver. At acquisition date SHP625 was being investigated for the potential relief of the extreme itching associated with cholestatic liver disease and three other indications. In the year to December 31, 2015 Shire fully impaired the SHP625 IPR&D intangible asset (see Note 12 for further details). SHP626 is in development for the treatment of nonalcoholic steatohepatitis . The acquisition of Lumena has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Lumena have been recorded at their fair values at the date of acquisition, being June 11, 2014. The Company's consolidated financial statements and results of operations include the results of Lumena from June 11, 2014. The purchase price has been allocated to acquired IPR&D ($467 million), net current assets assumed ($52.6 million, including cash of $46.3 million), net non-current liabilities assumed (including deferred tax liabilities) ($169.9 million) and goodwill ($114.6 million). Goodwill arising of $114.6 million is not deductible for tax purposes . Acquisition of Fibrotech Therapeutics Pty Ltd. (“ Fibrotech ”) On July 4, 2014 Shire completed its acquisition of Fibrotech , an Australian biopharmaceutical company developing a new class of orally available drugs with a novel mechanism of action which has the potential to address both the inflammatory and fibrotic components of disease processes. The acquisition of Fibrotech is expected to strengthen the Company's growing and innovative portfolio targeting renal and fibrotic diseases, and leverage existing renal capabilities. The acquisition date fair value of the consideration totaled $122.6 million, comprising cash consideration paid on closing of $75.6 million and the fair value of contingent consideration payable of $47 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $482.5 million dependent upon achievement of certain clinical development, regulatory and commercial milestones. The acquisition of Fibrotech has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Fibrotech have been recorded at their fair values at the date of acquisition being July 4, 2014. The Company's consolidated financial statements and results of operations include the results of Fibrotech from July 4, 2014. The purchase price has been allocated to acquired IPR&D ($11 million), net current assets ($1.4 million) and goodwill ($110.2 million). Goodwill arising of $110.2 million is not deductible for tax purposes. Goodwill generated from the acquisition was primarily attributed to acquired scientific knowledge in fibrotic diseases and the potential to optimize the novel mechanism of action to other fibrotic conditions. Other Acquisitions On July 9, 2014 Shire acquired BIKAM Pharmaceuticals, Inc. (“BIKAM”), a US-based biopharmaceutical company with pre-clinical compounds that could provide an innovative approach to treating autosomal dominant retinitis pigmentosa ( adRP ). In the third quarter of 2014 Shire also acquired certain assets and employees related to the production of BUCCOLAM from its previous contract manufacturer SCM Pharma Limited (“SCM”). The aggregate acquisition date fair value of the consideration for these two acquisitions was $17.9 million, comprising cash paid on closing of $12.1 million and the fair value of contingent consideration payable in respect of BIKAM of $5.8 million. In respect of BIKAM following achievement and payment of the first development milestone in the year to December 31, 2015, the maximum contingent consideration which may now be payable by Shire in future periods is $89.5 million contingent upon the achievement of certain development, regulatory and commercial milestones . In connection with these two acquisitions, Shire has recorded $1 million in current assets, $4.8 million in non-current assets and $12.1 million in goodwill . 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 brought the global rights of lifitegrast (now SHP606) into Shire's portfolio which, at acquisition date, was in Phase 3 development for the treatment of DED. Top-line results from OPUS-2, a Phase 3 efficacy and safety study of 5.0% SHP606 ophthalmic solution, were announced on December 6, 2013. On April 30, 2014 Shire announced top-line results from the prospective randomized, double-masked, placebo-controlled SONATA trial which indicated no ocular or drug-related serious adverse events. Following a meeting with the FDA, on May 16, 2014 Shire announced that it intended to submit an NDA for SHP606 in the first quarter of 2015 as a treatment for signs and symptoms for DED in adults. On April 9, 2015 Shire announced that the FDA had accepted the NDA and had granted the NDA Priority Review designation. The FDA set an action date of October 25, 2015, based on the Prescription Drug User Fee Act V (”PDUFA”). On October 16, 2015 the FDA requested an additional clinical study as part of a complete response letter to the NDA. The FDA also requested more information related to product quality. On October 27, 2015, Shire announced positive topline results from the OPUS-3 trial. These data showed OPUS-3 met the primary endpoint of significantly improving patient-reported symptoms of DED from baseline to day 84 (p=0.0007). Additionally, OPUS-3 met the secondary endpoints of symptom improvement from baseline to days 14 and 42 (p<0.0001 for both endpoints). Shire used these data as part of the resubmission of the NDA on January 22, 2016. On February 4, 2016, Shire announced that the FDA had acknowledged receipt of the resubmission of the NDA. The FDA determined that the submission was a complete response and has assigned a 6-month review period for the NDA and a PDUFA date of July 22, 2016. The acquisition of SARcode has been accounted for 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. The purchase price has been allocated to acquired IPR&D in respect of SHP606 ($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). T his 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 . Acquisition of Premacure AB (“ Premacure ”) On March 8, 2013 Shire completed the acquisition of 100% of the outstanding share capital of Premacure , a privately-owned Swedish biotechnology company. 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 was developing a protein replacement therapy SHP607 (formerly referred to as “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 ophthalmic therapeutic area. In December 2014 Shire received notification that SHP607 was granted fast Track designation by the FDA. In addition, SHP607 has been granted orphan drug designation in both the US and EU. A Phase 2 clinical trial completed enrolment in December 2015. 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 SHP607 ($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 . 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, a privately-owned US biotechnology company. 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 was 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 added to Shire's pipeline a late-stage pre-clinical product for the treatment of DEB with global rights. In the year to December 31, 2015 Shire fully impaired the SHP608 IPR&D intangible asset (see Note 12 for further details). 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 a |
Reorganization Costs
Reorganization Costs | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Reorganization Costs Disclosure | 4 . Reorganization costs One Shire business re organization On May 2, 2013, the Company initiated the reorganization of its business to integrate the three divisions into a simplified One Shire organization in order to drive future growth and innovation. In 2014 c ertain aspects of the One Shire program were temporarily put on hold due to AbbVie's offer for Shire, which was terminated in October 2014. Subsequent to the termination of AbbVie's offer, Shire announced on November 10, 2014 its plans to relocate over 500 positions to Lexington , Massachusetts from its Chesterbrook, Pennsylvania, site and establish Lexington as the Company's US operational headquarters in continuation of the One Shire efficiency program. This relocation will streamline business globally through two principal locations, Massachusetts and Switzerland, with support from regional and country-based offices around the world. In the year to December 3 1 , 201 5 the Company incurred reorganization costs totaling $ 97 . 9 million respectively , relating to employee involuntary termination benefits and other reorganization costs. Reorganization costs of $ 3 43 . 4 million have been incurred since the reorganization began in May 2013. The One Shire reorganization is now substantially complete. The Company estimates that further costs in respect of the One Shire reorganization of approximately $ 50 million will be expensed as incurred during the first half of 2016 . The liability for reorganization costs arising from the One Shire business reorganization at December 3 1 , 201 5 is as follows : Opening liability Amount Closing liability at at January 1, charged to re- December 31, 2015 organization Paid/Utilized 2015 $'M $'M $'M $'M ___________ ____________ ___________ ___________ Involuntary termination benefits 38.0 65.4 (88.4) 15.0 Other reorganization costs - 32.5 (22.4) 10.1 ___________ ___________ ___________ ___________ 38.0 97.9 (110.8) 25.1 ___________ ___________ ___________ ___________ At December 31, 2015 the closing reorganization cost liability was recorded within accounts payable and accrued expenses . |
Integration and acquisition cos
Integration and acquisition costs | 12 Months Ended |
Dec. 31, 2015 | |
IntegrationAndAcquisitionCosts[Abstract] | |
Integration and acquisition costs | 5 . Integration and a cquisition costs For the year to December 31, 2015 Shire recorded net integration and acquisition costs of $39.8 million. The net integration and acquisition costs principally comprises costs related to the acquisition and integration of NPS Pharma, Viropharma, Dyax and the proposed combination with Baxalta ($ 189.7 million), offset by a net credit relating to the change in the fair value of contingent consideration liabilities ($ 149.9 million). This net credit principally relates to the acquisition of Lumena, reflecting the agreement in the third quarter of 2015 to settle all future contingent milestones payable to former Lumena shareholders for a one-time cash payment of $90 million and the acquisition of Lotus Tissue Repair, Inc. reflecting a lower probability of success for the SHP608 asset (for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”)) as a result of certain preclinical toxicity findings (see note 12 for further details) . In the year to December 3 1 , 201 4 Shire recorded integration and acquisition costs of $15 8 .8 million , comprised of $1 44 . 1 million relating to the acquisition and integration of ViroPharma and a net charge of $ 14 . 7 million relating to the change in fair value of contingent consideration liabilities (principally in relation to the acquisition of SARcode Bioscience Inc. (“SARcode”), reflecting Shire's increased confidence in the SHP606 asset, offset by credits in relation to the acquisition of FerroKin BioSciences, Inc., reflecting the decision to place the Phase 2 clinical trial for SHP602 on clinical hold) . In the year to December 31, 2013 Shire recorded a net credit to integration and acquisition costs of $134.1 million, comprising costs associated with the acquisitions of ViroPharma, SARcode and Lotus of $25.0 million which were more than offset by a net credit related to the change in the fair value of contingent consideration liabilities of $159.1 million (principally in relation to the acquisition of SARcode following receipt of OPUS-2 trial results) . |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Accounts Receivable Disclosure | 6 . Accounts receivable, net Accounts receivable at December 31 , 2015 of $1,201.2 million ( December 31 , 2014 : $ 1,035.1 million) , are stated at the invoiced amount and net of provision for disco unts and doubtful accounts of $55.8 million (December 31 , 2014 : $48.5 million , 2013: $47.9 million ) . Provision for discounts and doubtful accounts: 2015 2014 2013 $’M $’M $’M _____________ _____________ _____________ As at January 1, 48.5 47.9 41.7 Provision charged to operations 424.2 338.2 306.8 Provision utilization (416.9) (337.6) (300.6) _____________ _____________ _____________ As at December 31, 55.8 48.5 47.9 _____________ _____________ _____________ At December 31 , 2015 accounts receivable included $ 7 9 . 0 million (December 31, 2014: $ 59 . 0 million) related to royalty income . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure | 7. Inventories I nventories are stated at the lower of cost or market. Inventories comprise : December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Finished goods 184.9 136.0 Work-in-progress 302.0 305.3 Raw materials 148.5 103.5 ____________ ____________ 635.4 544.8 ____________ ____________ |
Results of discontinued operati
Results of discontinued operations | 12 Months Ended |
Dec. 31, 2015 | |
DiscontinuedOperationsAndDisposalGroupsAbstract | |
Results of discontinued operations Disclosure | 8 . Results of discontinued operations Following the divestment of the Company's DERMAGRAFT business in January 2014, the operating results associated with the DERMAGRAFT business have been classified as discontinued operations in the consolidated statements of income for all periods presented. In the year to December 3 1 , 2015 the Company recorded a loss from discontinued operations of $ 3 4 . 1 million (net of tax of $18.9 million) , primarily relating to a change in estimate in relation to reserves for onerous leases retained by the Company. In the year to December 3 1 , 2014 the Company recorded a gain from discontinued operations of $122.7 million (net of tax of $211.3 million) . The gain from discontinued operations in the year to December 31, 2014 includes a tax credit of $211.3 million primarily driven by a tax benefit arising following a reorganization of the former Regenerative Medicine business undertaken in the fourth quarter of 2014, associated with the divestment of the DERMAGRAFT business in the first quarter of 2014. This gain was partially offset by costs associated with the divestment of the DERMAGRAFT business, including a loss on re-measurement of contingent consideration receivable from Organogenesis to its fair value . The loss from discontinued operations in 2013 of $754.5 million (net of tax of $326.4 million) included a goodwill impairment charge of $191.8 million and a charge of $636.9 million upon re-measurement of the divested assets to their fair values less costs to sell . |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2015 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expense and Other Assets, Current | 9 . Prepaid expenses and other current assets December 31, December 31, 2015 2014 $’M $’M ______________ ____________ Prepaid expenses 35.6 36.9 Income tax receivable 73.6 121.5 Value added taxes receivable 18.2 13.8 Other current assets 70.0 49.3 ______________ ______________ 197.4 221.5 ______________ ______________ |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | 10 . Property, plant and equipment, net December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Land and buildings 703.1 717.1 Office furniture, fittings and equipment 529.8 494.2 Warehouse, laboratory and manufacturing equipment 297.6 290.0 Assets under construction 93.7 43.9 ____________ ____________ 1,624.2 1,545.2 Less: Accumulated depreciation (796.1) (707.7) ____________ ____________ 828.1 837.5 ____________ ____________ Depreciation expense for the years to December 31, 2015 , 2014 and 2013 was $ 138.5 million, $ 163.5 million and $ 127.6 million , respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure | 11 . Goodwill December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Goodwill arising on businesses acquired 4,147.8 2,474.9 ____________ ____________ In the year to December 3 1 , 201 5 the Company completed the acquisition s of NPS Pharma , Meritage , Foresight and Solpharm which resulted in aggregate goodwill of $ 1, 700 . 1 million (see Note 3 for details ) . 2015 2014 $’M $’M ____________ ____________ As at January 1, 2,474.9 624.6 Acquisitions 1,700.1 1,890.5 Foreign currency translation (27.2) (40.2) ____________ ____________ As at December 31, 4,147.8 2,474.9 ____________ ____________ |
Other Intangible Assets, Net
Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Other Intangible Assets Disclosure | 12 . Other intangible assets, net December 31, December 31, 2015 2014 $’M $’M ________________ ________________ Amortized intangible assets Intellectual property rights acquired for currently marketed products 9,371.9 4,816.9 Other intangible assets 1 375.0 30.0 ________________ ________________ 9,746.9 4,846.9 Unamortized intangible assets Intellectual property rights acquired for IPR&D 1,362.0 1,550.0 ________________ ________________ 11,108.9 6,396.9 Less: Accumulated amortization 2 (1,935.6) (1,462.5) ________________ ________________ 9,173.3 4,934.4 ________________ ________________ Other intangible assets primarily comprises of royalty right assets acquired with NPS Pharma. Comprising $ 1, 852 . 1 million of accumulated amortization for intellectual property rights acquired for currently marketed products and $ 83 . 5 million for other intangible asset s . The change in the net book value of other intangible assets for the year to December 31 , 2015 and 201 4 is shown in the table below: Other intangible assets 2015 2014 $’M $’M ________________ ________________ As at January 1, 4,934.4 2,312.6 Acquisitions 5,474.9 3,118.6 Divestment of non-core products - (17.3) Amortization charged (498.7) (243.8) Impairment charges (643.7) (190.3) Foreign currency translation (93.6) (45.4) ________________ ________________ As at December 31, 9,173.3 4,934.4 ________________ ________________ In the year to December 3 1 , 2015 the Company acquired intangible assets totaling $ 5, 47 5 million, primarily relating to the fair value of intangible assets for currently marketed products and royalty right assets acquired with NPS Pharma of $ 4 , 99 3 million and IPR&D assets of $ 4 75 million acquired with Meritage and Foresight (see Note 3 for further details). The Company reviews its intangible assets for impairment whenever events or circumstances suggest that their carrying value may not be recoverable. In the year to December 3 1 , 2015 the Company identified indicators of impairment in respect of its SHP625 ( for the treatment of cholestatic liver disease ), and SHP608 ( for the treatment of DEB ) IPR&D assets . The indicators of impairment related to SHP625 in 2015 included the results of three Phase 2 studies, comprising a 13-week study of 20 paediatric patients with Alagille syndrome (“ALGS”), a 13 week, double blind, placebo-controlled trial in combination with ursodeoxycholic acid (“UDCA”) for patients with Primary Biliary Cirrhosis (“PBC”), and preliminary results from a 72 week open label Phase 2 study in Progressive Familial Intrahepatic Cholestasis (“PFIC”). Although both the ALGS and PBC trials indicated a reduction in bile serum acids in the SHP625 treated group, neither of these trials met their primary or secondary endpoints. The interim analysis in the PFIC trial was based on the first 12 subjects who completed 13 weeks of treatment per protocol. There was no statistically significant reduction in mean serum bile acid levels from baseline. Following receipt of these results, the Company also updated its revenue and profitability forecasts for ALGS and PFIC. As a result of these impairment indicators, the Company reviewed the recoverability of its SHP625 IPR&D asset and recorded impairment charges totaling $467 million (within R&D expenses in the consolidated statement of income) in 2015, to record the SHP625 IPR&D asset to its revised fair value of $nil. This fair value was based on the revised discounted cash flow forecasts associated with SHP625, which included a reduced probability of achieving regulatory approval . For SHP608, preclinical toxicity findings in the second quarter of 2015 have led to a significant reduction in the probability of achieving regulatory approval of this asset. As a result, the Company recorded an impairment charge of $ 176.7 million within R&D expenses in the consolidated statement of income to fully write off the SHP608 IPR&D asset. The fair values of the related contingent consideration liabilities arising from the Lumena and Lotus Tissue Repair acquisitions (through which Shire acquired SHP625 and SHP608 respectively) have also been reduced, resulting in a credit of $2 0 3 . 2 million being recorded in Integration and acquisition costs for the year ended December 3 1 , 2015. In the year to December 3 1 , 2014 the Company identified indicators of impairment in respect of its SHP602 ( iron chelating agent for the treatment of iron overload secondary to chronic transfusion ) and SHP613 ( for the treatment of improvement in patency of arteriovenous access in hemodialysis patients) IPR&D assets. The Company therefore reviewed the recoverability of its SHP602 and SHP613 IPR&D assets and recorded an impairment charge of $166.0 million and $22.0 million, respectively , within R&D expenses in the consolidated statement of income to record the IPR&D assets to their revised fair value . Management estimates that the annual amortization charge in respect of intangible assets held at December 31, 2015 will be approximately $ 4 65 million for each of the five years to December 31 , 20 20 . 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 Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accounts Payable and Accrued Expenses Disclosure | 13 . Accounts payable and accrued expenses December 31, December 31, 2015 2014 $’M $’M ________________ ________________ Trade accounts payable and accrued purchases 336.3 247.7 Accrued rebates – Medicaid 632.2 563.9 Accrued rebates – Managed care 350.2 318.2 Sales return reserve 128.3 131.7 Accrued bonuses 152.0 150.7 Accrued employee compensation and benefits payable 102.5 109.1 R&D accruals 65.3 88.3 Other accrued expenses 283.8 299.8 ________________ ________________ 2,050.6 1,909.4 ________________ ________________ |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | 14 . Other current liabilities December 31, December 31, 2015 2014 $’M $’M _____________ _____________ Income taxes payable 73.5 16.2 Value added taxes 21.8 16.6 Contingent consideration payable 19.5 194.5 Other current liabilities 29.2 35.2 _____________ _____________ 144.0 262.5 _____________ _____________ |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings Disclosure | 15 . Borrowings December 31, December 31, 2015 2014 $’M $’M _____________ _____________ Short term borrowings: Borrowings under the Revolving Credit Facilities Agreement (the “RCF”) 750.0 - Borrowings under the January 2015 Facility Agreement 750.0 - Borrowings under the 2013 Facilities Agreement - 850.0 Secured non-recourse debts 11.5 - _____________ _____________ 1,511.5 850.0 Long term borrowings: Secured non-recourse debts 69.9 - _____________ _____________ 1,581.4 850.0 _____________ _____________ The January 2016 Facilities Agreement includes customary representations and warranties, covenants and events of default, including requirements that Shire's (i) ratio of Net Debt to EBITDA in respect of the most recently ended 12-month relevant period, (each as defined in the January 2016 Facilities Agreement), must not, at any time, exceed 3.5:1, except that following the combination with Baxalta, or any other acquisition fulfilling certain criteria, Shire may elect on a once only basis to increase this ratio to (a) 5.5:1 for the relevant period in which the acquisition was completed, (b) 5.0:1 in respect of the first relevant period following the relevant period in which the acquisition was completed and (c) 4.5:1 in respect of the second relevant period following the relevant period in which the acquisition was completed, and (ii) ratio of EBITDA to Net Interest, for the most recently ended 12-month relevant period (each as defined in the January 2016 Facilities Agreement) must not be less than 4.0:1. |
Other Non-current Liabilities
Other Non-current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities, Noncurrent [Abstract] | |
Other non-current Liabilities Disclosure | 16 . Other non-current liabilities December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Income taxes payable 195.8 199.2 Contingent consideration payable 456.4 435.4 Other non-current liabilities 146.6 102.1 ____________ ____________ 798.8 736.7 ____________ ____________ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | 17 . Commitments and contingencies (a) Leases Future minimum lease payments under operating leases at December 31, 2015 are presented below: Operating leases $’M _____________ 2016 1 51.5 2017 1 40.8 2018 1 34.6 2019 1 30.2 2020 29.4 Thereafter 1 185.8 111 _____________ 372.3 _____________ The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 20 32 . Lease and rental expense amounted to $ 40.7 million , $ 32.9 million and $ 44.0 million for the year to December 31, 2015 , 2014 and 2013 respectively , which is predominately included in SG&A expenses in the Company's c onso lidated i ncome statement . (b) Letters of credit and guarantees At December 31 , 2015 the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companies totaling $ 48 .0 m illion (being the contractual amounts) , providing security for the C ompany's performance of various obligations. These obligations are primarily in respect of the recoverability of insurance claims, lease obligations and supply comm itments. (c) Collaborative and other licensing arrangements Details of significant updates in collaborative and other licensing arrangements are included below: On September 1, 2015 Shire and Sangamo BioSciences , Inc. (“ Sangamo ”) agreed to revise the collaboration and license agreement originally entered into in January 2012 to expedite the development of ZFP Therapeutics for hemophilia A and B and Huntington's disease. Under the revised terms, Shire has returned to Sangamo the exclusive world-wide rights to gene targets for the development, clinical testing and commercialization of ZFP Therapeutic s for hemophilia A and B, and has retain ed rights and will continue to develop ZFP Therapeutic clinical leads for Huntington's disease and a ZFP Therapeutic for one additional gene target. E ach company will be responsible for expenses associated with its own programs and will reimburse the other for any ongoing services provided. Sangamo has granted Shire a right of first negotiation to license the hemophilia A and B programs. No milestone payments will be made on any program and each company will pay certain royalties to the other on commercial sales up to a specified maximum cap . As of December 31, 2015 Shire had entered into various other collaborative and out-licensing 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 collaborative and out-licensing arrangements, the Company may receive development milestone payments up to an aggregate amount of $ 3 2 million and sales milestones up to an aggregate amount of $ 43 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, 2015 Shire received cash in respect of up-front and milestone payments totaling $ 1 9 . 6 million (2014 : $ 2.2 million , 2013: $3.0 million ). In the year to December 31, 2015 Shire recognized milestone income of $ 8 . 9 million (2014 : $ 16 . 7 million , 2013: $5.0 million ) in o ther revenues and $ 51 . 0 million (2014 : $ 46 . 5 million , 2013: $58.3 million ) in p roduct sales for shipment of product to the relevant licensee. (d) Commitments ( i ) Clinical testing At December 31, 2015 the Company had committed to pay approximately $ 490 million (December 31, 2014 : $ 382 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, 2015 the Company had committed to pay approximately $ 325 million (December 31, 2014 : $ 384 million) in respect of contract manufacturing. The Company expects to pay $ 101 million of these commitments in 201 6 . (iii) Other purchasing commitments At December 31, 2015 the Company had committed to pay approximately $ 485 million (December 31, 2014 : $ 265 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $ 459 million of these commitments in 201 6 . (iv) Investment commitments At December 31, 2015 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $ 22 million (December 31, 2014 : $ 67 million) which may all be payable in 201 6 , depending on the timing of capital calls. The investment commitments include additional funding to certain VIE s of which Shire is not the primary beneficiary. (v) Capital commitments At December 31, 2015 the Company had committed to spend $ 60 million (December 31, 2014 : $ 3 million) on capital projects. (e) L egal 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, 2015 , provisions for litigation losses, insurance claims and other disputes totaled $ 9.9 million (December 31, 2014 : $ 16.9 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 . (“Watson”) ; Roxane Laboratories, Inc. ("Roxane"); Mylan Pharmaceuticals, Inc. (“ Mylan ”) ; and Actavis Elizabeth LLC and Actavis Inc. (collectively, " Actavis "). Since filing suit against these ANDA filers, along with API suppliers Johnson Matthey Inc. and Johnson Matthey Pharmaceuticals Materials (collectively “Johnson Matthey”), Shire has been engaged in a consolidated patent infringement litigation in the US District Court for the District of New Jersey against the aforementioned parties (except Watson, who withdrew their ANDA). On June 23, 2014, the US District Court for the District of New Jersey granted Shire's summary judgment motion holding that 18 claims of the patents-in-suit were both infringed and valid. On September 24, 2015, the US Court of Appeals of the Federal Circuit (“CAFC”) affirmed that ruling against all of the ANDA filers and the infringement ruling against Johnson Matthey . 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 . A Markman hearing took place on January 29, 2015 and a Markman ruling was issued on July 28, 2015 . A trial is scheduled to take place starting on March 28, 2016 . 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 . A Markman hearing took place on August 22, 2013 and a Markman ruling was issued on September 25, 2014. The Court issued an Order on February 27, 2015 in which all dates in the scheduling order have been stayed. 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. Watson Pharma, Inc. and Watson Laboratories, Inc. were subsequently added as defendants. 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 appealed the trial court's ruling to the CAFC and a hearing took place on December 2, 2013. The ruling of the CAFC was issued on March 28, 2014 overruling the trial court on the interpretation of two claim terms and remanding the case for further proceedings. Shire petitioned the Supreme Court for a writ of certiori , which was granted on January 26, 2015. The Supreme Court also vacated the CAFC decision and remanded the case to the CAFC for further consideration in light of the Supreme Court's decision in Teva v Sandoz. On June 3, 2015, the CAFC reaffirmed its previous decision to reverse the district court's claims construction. The case has been remanded to the district court and a trial took place beginning on January 25, 2016. Closing arguments are scheduled to take place on March 11, 2016. The court has not issued its ruling on the trial . In April 2012, Shire was notified that 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 . A Markman hearing took place on December 22, 2014. A Markman ruling was issued on March 23, 2015. The previously scheduled trial date has been vacated and the case has been stayed until May 31, 2016. In March 2015, Shire was notified that Amneal 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 New Jersey against Amneal , Amneal Pharmaceuticals of New York, LLC , Amneal Life Sciences Pvt. Ltd. and Amneal Pharmaceuticals Co. India Pvt. Ltd. No trial date has been set. In September 2015, Shire was notified that Lupin Ltd. 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 Maryland against Lupin Ltd., Lupin Pharmaceuticals Inc., Lupin Inc. and Lupin Atlantis Holdings SA. A Markman hearing is scheduled to take place on August 22, 2016. No trial date has been set. On October 7, 2015 the Patent Trial and Appeals Board (“PTAB”) of the United States Patent Office instituted an inter parties review (“IPR”) of US Patent 6,773,720 which is the patent-in-suit in the litigations referred to above. The IPR process is designed to re-assess the patentability of the claims of the patent. A decision from the PTAB is expected in October 2016. Investigation related to DERMAGRAFT 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. Following the disposal of the DERMAGRAFT business in January 2014, Shire has retained certain legacy liabilities including any liability that may arise from this investigation. 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 relating to VANCOCIN On April 6, 2012, ViroPharma received a notification that the United States Federal Trade Commission (“FTC”) is conducting an investigation into whether ViroPharma had engaged in unfair methods of competition with respect to VANCOCIN. On August 3, 2012, and September 8, 2014, ViroPharma and Shire respectively received Civil Investigative Demands from the FTC requesting additional information related to this matter. Shire has fully cooperate d with the FTC 's investigation. At this time, Shire is unable to predict the outcome or duration of this investigation . Lawsuit related to supply of ELAPRASE to certain patients in Brazil On September 24, 2014 Shire's Brazilian affiliate, Shire Farmaceutica Brasil Ltda , was served with a lawsuit brought by the State of Sao Paulo and in which the Brazilian Public Attorney's office has intervened alleging that Shire is obligated to provide certain medical care including ELAPRASE for an indefinite period at no cost to patients who participated in ELAPRASE clinical trials in Brazil, and seeking recoupment to the Brazilian government for amounts paid for these patients to date, and moral damages associated with these claims. Shire intends to defend itself against these allegations but is not able to predict the outcome or duration of this case . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 18 . Accumulated O ther Comprehensive loss The changes in accumulated other comprehensive loss , net of their related tax effects, in the year to December 31, 2015 and 2014 are included below: Foreign currency translation adjustment Unrealized holding gain/(loss) on available-for-sale securities Accumulated other comprehensive loss $M $M $M As at January 1, 2015 (25.7) (5.8) (31.5) Current period change: Net current period other comprehensive (loss)/income (156.4) 4.1 (152.3) As at December 31, 2015 (182.1) (1.7) (183.8) Foreign currency translation adjustment Unrealized holding gain/(loss) on available-for-sale securities Accumulated other comprehensive income/(loss) $M $M $M As at January 1, 2014 110.4 (0.2) 110.2 Current period change: Other comprehensive (loss)/income before reclassification (136.1) 3.7 (132.4) Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities - (9.3) (9.3) Net current period other comprehensive loss (136.1) (5.6) (141.7) As at December 31, 2014 (25.7) (5.8) (31.5) 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 (loss)/income before reclassification 25.3 1.5 26.8 Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities - (3.5) (3.5) Net current period other comprehensive loss 25.3 (2.0) 23.3 As at December 31, 2013 110.4 (0.2) 110.2 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instrument Detail [Abstract] | |
Financial Instruments Disclosure | 19 . 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 of Directors. As a matter of policy, the Company does not undertake speculative transactions that would increase its credit, currency or interest rate exposure. Interest rate risk The Company is principally exposed to interest rate risk on any borrowings under the Company's various debt facilities (see Note 15 for details of each of the Company's facilities). Interest on each of these facilities is set at floating rates, to the extent utilized. Shire's exposure under these facilities is to US dollar interest rates. At December 31, 2015 the Company had fully utilized the January 2015 Facility Agreement and utilized $750 million of the RCF. Other facilities were not utilized at December 31, 2015. The Company regularly evaluates the interest rate risk on its facilities. At December 31, 2015 the Company considered the risks associated with floating interest rates on borrowings under its facilities as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the January 2015 Facility Agreement and the RCF at December 31, 2015 would increase interest expense by approximately $ 15 million per annum or would decrease the interest expense by approximately $ 7 million per annum. The Company is also exposed to interest rate risk on its restricted cash, cash and cash equivalents and on foreign exchange contracts on which interest is set at floating rates. This exposure is primarily limited to US dollar, Pounds sterling and Euro interest rates. 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 December 31, 2015 the average interest rate received on cash and liquid investments was less than 1% per annum. These cash and liquid investments were primarily invested in US dollar term deposits with banks and money market and liquidity funds . No derivative instruments were entered into during the year to December 31, 2015 to manage interest rate exposure. The Company co ntinues to review its interest rate risk and the policies in place to manage the risk and may enter into derivative instruments to manage interest rate risk in the future . 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 bank term deposit arrangements and 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, 2015 there were three customers in the US that accounted for 47 % 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 global and national economic conditions have negatively affected the growth, creditworthiness and general economic condition of certain markets in which the Company operates. As a result, in some countries outside of the US , specifically, Argentina , Greece, Italy, Portugal and Spain (collectively the “Relevant Countries”) the Company is experiencing delays in the remittance of receivables due from government-owned or government-supported healthcare providers. The Company continue d to receive remittances in relation to government-owned or government-supported healthcare providers in the Relevant Countries in the year to December 31, 2015 , including receipts of $ 116.0 million and $ 1 00 .0 million in respect of Spanish and Italian receivables, respectively . The Company's exposure to Greece, both in terms of gross accounts receivable and annual revenues, is not material. To date the Company has not incurred material 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 , Canadian dollar 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 inter - company 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, 2015 the Company h ad 39 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 the se 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. T he Company has elected to present derivative assets and derivative liabilities on a gross basis in the consolidated balance sheet. As a t December 31, 2015 the po tential effect of rights of set- off associated with the foreign exchange contracts would be an offset to both assets and liabilities of $ 1.4 million, resulting in net derivative assets and derivative liabilities of $ 0.5 million and $ 10.1 million, respectively . Further details are included below : Fair value Fair value December 31, December 31, 2015 2014 $’M $’M _____________ _____________ Assets Prepaid expenses and other current assets 1.9 12.6 Liabilities Other current liabilities 11.5 7.8 _____________ _____________ Net gains /(losses) (both realized and unrealized) arising on foreign exchange contracts have been classified in the consolidated statements of income as follows: Location of net gains/(losses) recognized in income Amount of net gains/(losses) recognized in income __________________________________ ____________ ____________ Year to December 31, 2015 2014 2013 $’M $’M $’M _____________ _____________ _____________ Foreign exchange contracts Other income, net 9.5 8.0 (1.8) _____________ _____________ _____________ These net foreign exchange gains /(losses) are offset within Other income, net by net foreign exchange ( losses )/gains arising on the ba lance sheet items that these contracts were put in place to manag e . |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 20. Fair value measurement Assets and l iabilities that are m easured at f air v alue on a r ecurring b asis As at December 31, 2015 and December 31, 201 4 t he 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 value and Fair value Total Level 1 Level 2 Level 3 At December 31, 2015 $'M $'M $'M $'M ____________ ___________ ___________ ___________ Financial assets: Available-for-sale securities (1) 17.2 17.2 - - Contingent consideration receivable (2) 13.8 - - 13.8 Foreign exchange contracts 1.9 - 1.9 - Financial liabilities: Foreign exchange contracts 11.5 - 11.5 - Contingent consideration payable (3) 475.9 - - 475.9 ____________ ___________ ___________ ___________ Total Level 1 Level 2 Level 3 At December 31, 2014 $'M $'M $'M $'M ____________ ___________ ___________ ___________ Financial assets: Available-for-sale securities (1) 13.1 13.1 - - Contingent consideration receivable (2) 15.9 - - 15.9 Foreign exchange contracts 12.6 - 12.6 - Financial liabilities: Foreign exchange contracts 7.8 - 7.8 - Contingent consideration payable (3) 1 629.9 - - 629.9 ____________ ___________ ___________ ___________ 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 O ther 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 2015 2014 $'M $'M ____________ ____________ Balance at January 1, 15.9 36.1 Initial recognition of contingent consideration receivable - 33.6 Loss recognized in the income statement (within discontinued operations) due to change in fair value during the period - (33.6) Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period 13.6 (2.9) Reclassification of amounts to Other receivables within Other current assets (17.8) (20.2) Amounts recorded to other comprehensive income (within foreign currency translation adjustments) 2.1 2.9 Balance at December 31, 13.8 15.9 Contingent consideration payable 2015 2014 $'M $'M ____________ ____________ Balance at January 1, 629.9 405.9 Initial recognition of contingent consideration payable 92.8 226.7 Change in fair value during the period with the corresponding adjustment recognized (within Integration and acquisition costs) in the income statement (149.9) 14.7 Reclassification of amounts to Other current liabilities (100.8) (15.1) Change in fair value during the period with corresponding adjustment to the associated intangible asset 1.4 2.7 Amounts recorded to other comprehensive income (within foreign currency translation adjustments) 2.5 (5.0) Balance at December 31, 475.9 629.9 Of the $ 475 . 9 million of contingent consideration payable as at December 3 1 , 2015 , $ 1 9 . 5 million is recorded within other current liabilities and $ 4 56 . 4 million is recorded within other non-current liabilities in the Company's balance sheet . 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, 2015 Fair value Valuation Technique Significant unobservable Inputs Range $'M ____________ ___________ ___________ ___________ Contingent consideration receivable ("CCR") 13.8 Income approach (probability weighted discounted cash flow) • Probability weightings applied to different sales scenarios • Future forecast consideration receivable based on contractual terms with purchaser • Assumed market participant discount rate • 10 to 70% • $0 to $25 million • 8.4% ____________ ____________ ____________ ____________ Financial liabilities: Fair Value at the Measurement Date At December 31, 2015 Fair value Valuation Technique Significant unobservable Inputs Range $'M ____________ ___________ ___________ ___________ Contingent consideration payable 475.9 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 • 4 to 90% • 1.2 to 12.4% • 2016 to 2030 • $2.1 to $6.6 million ____________ ____________ ____________ ____________ The Company re-measures the CCR (relating to contingent consideration due to the Company following divestment of certain of the Company's products) at fair value at each balance sheet date , with the fair value measurement based on forecast cash flow s, over a number of scenarios which vary depending on the expected performance outcome of the product s 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 royalt ies payable as a result of certain business combinations and license s . 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 is 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 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 using Significant Unobservable Inputs (Level 3) In the year to December 3 1 , 201 5 the Company reviewed its SHP625 and SHP608 IPR&D intangible assets for impairment and recognized an impairment charge of $ 64 3. 7 million, recorded within R&D in the consolidated income statement, to write-down these IPR&D assets to their fair value. The fair value of these IPR&D assets was determined using the income approach, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, the probabilities of these IPR&D assets receiving regulatory approval, the timeframe for such approval, risk-adjusted forecast future cash flows to be generated by these IPR&D 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 IPR&D assets, determined at the time of the impairment review, was $ nil . Fair Value at the Measurement Date At December 31, 2015 Fair value Valuation Technique Significant unobservable Inputs Range $'M ____________ ___________ ___________ ___________ IPR&D intangible assets (SHP625 and SHP608) $nil Income approach (discounted cash flow) • Probability of regulatory approval being obtained • Expected commercial launch date • Assumed market participant discount rate • 5 to 33% • 2020 to 2021 • 9.1 to 10.7% ____________ ____________ ____________ ____________ The carrying amounts of other financial assets and liabilities materially approximate to their fair value either because of the short-term maturity of these amounts or because there have been no significant changes since the asset or liability was last re-measured to fair value on a non-recurring basis . |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure | 21 . Shareholders' equity Authorized common stock The authorized stock of Shire plc as at December 31, 2015 , was 1,000,000,000 ordinary shares and 2 subscriber ordinary shares. Dividends Under Jersey law, Shire plc is entitled to fund payments of dividends from any source (other than a capital redemption reserve or nominal capital account) subject to the Directors authorizing the distribution making a solvency statement in the prescribed statutory form. At December 31, 2015 , Shire plc's distributable reserves were approximately $12.1 billion. Treasury stock The Company records the purchase of its own shares by the E B T and under the share buy-back program as a reduction of shareholders' equity based on the price paid for the shares. At December 31, 2015 , the E B T held 0. 6 million ordinary shares ( 2014: 0.7 million; 20 1 3 : 2 . 4 million) and 0. 2 million ADSs ( 2014: 0.3 million; 20 1 3 : 0 . 4 million) and shares held under the share buy-back program were 8 . 5 million ordinary shares ( 2014: 9.0 million; 2013: 9.8 million) . During the year to December 31, 2015 and 2014 the Company did not purchase any shares either through the EBT or under any share buy-back program . In the year to December 31, 2013 a total of 4 . 2 million ordinary shares and 0 . 8 million ADSs had been purchased for total consideration of $243.8 million , including stamp duty and broker commission. Income Access Share Arrangements 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 plc, 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 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 he/she will receive his/her dividends (which would otherwise be payable by S hire plc) under these arrangements from O ld S hire . This can be done by submitting an IAS arrangement election form containing information on the participating shareholders as required by law. 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, he/she must withdraw his/her ordinary shares from the ADS program prior to the dividend record date set by the ADS Depositary and request delivery of the Shire plc ordinary shares. This will enable him/her to receive dividends from Shire plc. 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 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 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 to December 31, 2015 Old Shire paid dividends totalling $ 127.7 million (2014: $ 112.8 million; 2013: $ 91.1 million) on the income access share to the Trustee in an amount equal to the dividend ordinary shareholders would have received from Shire plc . |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Disclosure | 22 . 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: Year to December 31, 2015 2014 2013 $’M $’M $’M _________________ _________________ _________________ Income from continuing operations, net of taxes 1,337.5 3,282.8 1,419.6 (Loss)/ gain from discontinued operations 1 (34.1) 122.7 (754.5) _________________ _________________ _________________ Numerator for basic earnings per share 1,303.4 3,405.5 665.1 _________________ _________________ _________________ Interest on convertible bonds, net of tax - - 28.3 _________________ _________________ _________________ Numerator for diluted earnings per share 1303.4 3,405.5 693.4 _________________ _________________ _________________ Weighted average number of shares: Millions Millions Millions _________________ _________________ _________________ Basic 1 590.4 586.7 552.0 Effect of dilutive shares: Share-based awards to employees 2 2.7 4.6 4.8 Convertible bonds 2.75% due 2014 3 - - 33.5 _________________ _________________ _________________ Diluted 593.1 591.3 590.3 _________________ _________________ _________________ 1 . Excludes shares purchased by the EBT and under the shares buy-back program and presented by Shire as treasury stock . 2 . Calculated using the treasury stock method . 3 . A t December 31, 2013 , Bond h olders had voluntarily converted $1,099,050,000 aggregate principal amount of the Bonds into 33,806,464 fully paid ordinary s hares . 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 earnings per share from January 1, 2013 to the actual date of conversion of the Bonds using the 'if-converted' method . Year to December 31, 2015 2014 2013 _______________ _______________ _______________ Earnings per ordinary share - basic Earnings from continuing operations 226.5c 559.6c 257.2c (Loss)/gain from discontinued operations (5.8c) 20.9c (136.7c) _______________ _______________ _______________ Earnings per ordinary share - basic 220.7c 580.5c 120.5c _______________ _______________ _______________ Earnings per ordinary share - diluted Earnings from continuing operations 225.5c 555.2c 245.3c (Loss)/gain from discontinued operations (5.8c) 20.8c (127.8c) _______________ _______________ _______________ Earnings per ordinary share – diluted 219.7c 576.0c 117.5c _______________ _______________ _______________ The share equivalents not included in the calculation of the diluted weighted average number of shares are shown below: 2015 2014 2013 No. of shares No. of shares No. of shares Millions Millions Millions _________________ _________________ _________________ Share-based awards to employees 1 3.4 0.3 0.5 _________________ _________________ _________________ 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, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure | 23 . Segmental reporting Shire comprises a single operating and reportable segment 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 Corporate Development, which prioritizes 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 responsible for the Company's global supply chain; and an In-line marketed products group which focuses on commercialized products. The In-Line marketed products group has commercial units that focus exclusively on the commercial execution of its marketed products including in the areas of HAE/LSD , Neuroscience, and Gastrointestinal (“ GI ”) and Internal Medicine, and to support the development of our pipeline candidates, in Ophthalmics . This ensures that the Company provides innovative treatments, and services the needs of its customers and patients, as efficiently as possible. 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 . Th is 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): Year to December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Ireland 14.1 18.5 22.5 United States 4,659.2 4,174.1 3,249.3 Rest of World 1,743.4 1,829.5 1,662.5 ____________ ____________ ____________ Total revenues 6,416.7 6,022.1 4,934.3 ____________ ____________ ____________ 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 ir relevant geographic location: Year to December 31, 2015 2014 $’M $’M ___________ ___________ Ireland 1.7 3.1 United States 751.3 749.8 Rest of World 82.2 91.3 ____________ ____________ Total 835.2 844.2 ____________ ____________ Material customers In the periods s et out below, certain customers accounted for greater than 10% of the Company's product revenues : 2015 2015 2014 2014 2013 2013 Year to December 31, $’M % product revenue $’M % product revenue $’M % product revenue ___________ ___________ ___________ ___________ ___________ ___________ AmerisourceBergen Corp 1,048.3 17 759.2 13 721.0 15 McKesson Corp. 1,044.1 17 1,021.0 18 902.9 19 Cardinal Health Inc. 796.9 13 979.9 17 853.7 18 ____________ ___________ ____________ ___________ ____________ ___________ Amounts outstanding as at December 31, in respect of these material customers were as follows: 2015 2014 December 31, $’M $’M ___________ ___________ AmerisourceBergen Corp 171.5 134.9 McKesson Corp. 193.1 179.4 Cardinal Health Inc. 181.7 164.5 ____________ ___________ In the periods set out below, revenues by major product were as follows : December 31, December 31, December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ VYVANSE 1,722.2 1,449.0 1,227.8 LIALDA/MEZAVANT 684.4 633.8 528.9 CINRYZE 617.7 503.0 - ELAPRASE 552.6 592.8 545.6 FIRAZYR 445.0 364.2 234.8 REPLAGAL 441.2 500.4 467.9 ADDERALL XR 362.8 383.2 375.4 VPRIV 342.4 366.7 342.7 PENTASA 305.8 289.7 280.6 FOSRENOL 177.6 183.0 183.4 GATTEX/REVESTIVE 141.7 - - XAGRID 100.8 108.5 99.4 INTUNIV 65.1 327.2 334.9 NATPARA 24.4 - - Other product sales 116.2 128.9 136.1 ____________ ____________ ____________ Total product sales 6,099.9 5,830.4 4,757.5 ____________ ____________ ____________ |
Receipt of Break Fee
Receipt of Break Fee | 12 Months Ended |
Dec. 31, 2015 | |
Extraordinary and Unusual Items [Abstract] | |
Receipt of Break Fee Disclosure | 24 . Receipt of break f ee On July 18, 2014 , the Boards of AbbVie and Shire announced that they had agreed the terms of a recommended combination of Shire with AbbVie , subject to a number of conditions including approval by shareholders and regulators. On the same date Shire and AbbVie entered into a co-operation agreement in connection with the recommended combination. On October 16, 2014 , the Board of AbbVie confirmed that it had withdrawn its recommendation of its offer for Shire as a result of the anticipated impact of a US Treasury Notice on the benefits that AbbVie expected from its offer. As AbbVie's offer was conditional on the approval of its stockholders, and given their Board's decision to change its recommendation and to advise AbbVie's stockholders to vote against the offer, there was no realistic prospect of satisfying this condition. Accordingly, Shire's Board agreed with AbbVie to terminate the cooperation agreement on October 20 , 2014 . The Company entered into a termination agreement with AbbVie , pursuant to which AbbVie paid the break fee due under the cooperatio n agreement of approximately $1, 635 .4 million . The Company has obtained advice that the break fee should not be taxable in Ireland. The Company has therefore concluded that no tax liability should arise and has not recognized a tax charge in the income statement in 2014 . The relevant tax return was submitted on September 23, 201 5 . |
Retirement Benefits
Retirement Benefits | 12 Months Ended |
Dec. 31, 2015 | |
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 each employee's pay. Company contributions to personal defined contribution pension plans totaled $ 52.3 million , $ 4 9 . 8 million and $ 45.7 million for the years to December 31, 20 1 5 , 20 1 4 and 201 3 , respectively, and were charged to operations as they became payable . |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | 26. Taxation The components of pre - tax income from continuing operations are as follows: Year to December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Ireland (11.4) 1,472.0 (47.8) United States 975.8 1,025.9 1,153.3 Rest of the world 421.4 838.3 588.1 ___________ ___________ ___________ 1,385.8 3,336.2 1,693.6 ___________ ___________ ___________ The provision for income taxes on continuing operations by location of the taxing jurisdiction for the years to December 31 , 201 5 , 20 1 4 and 201 3 consisted of the following: Year to December 31, 2015 2014 2013 $’M $’M $’M __________ __________ __________ Current income taxes: Ireland 0.8 - - US federal tax 191.7 291.8 274.3 US state and local taxes 17.3 25.3 17.9 Rest of the world 17.8 (290.9) 63.4 __________ __________ __________ Total current taxes 227.6 26.2 355.6 __________ __________ __________ Deferred taxes: US federal tax (151.2) 39.7 23.8 US state and local taxes (1.7) (2.9) (8.3) Rest of the world (28.6) (6.9) (93.2) __________ __________ __________ Total deferred taxes (181.5) 29.9 (77.7) __________ __________ __________ Total income taxes 46.1 56.1 277.9 __________ __________ __________ The Group has determined the amount of income tax expense or benefit allocable to continuing operations using the incremental approa ch in accordance with ASC 740-20-45-8. The amount of i ncome tax attributed to discontinued operations is disclosed in Note 8 . The operating results associated with the DERMAGRAFT business have been classified as discontinued operations for all periods presented. The reconciliation of income from continuing operations before income taxes 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, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Income from continuing operations before income taxes and equity in (losses)/ earnings of equity method investees 1,385.8 3,336.2 1,693.6 ___________ ___________ ___________ Statutory tax rate (1) 25.0% 25.0% 25.0% US R&D credit (7.7%) (2.5%) (4.5%) Intra-group items (2) (19.5%) (6.3%) (9.2%) Other permanent items 2.0% 0.7% (0.7%) Change in valuation allowance 1.0% 0.8% 0.9% Difference in taxation rates 7.3% 3.4% 7.8% Change in provisions for uncertain tax positions (0.4%) 0.2% 3.8% Prior year adjustment (1.6%) 0.1% (3.4%) Change in fair value of contingent consideration (3.8%) 0.3% (3.6%) Change in tax rates 0.9% 0.5% (0.2%) Receipt of break fee 0.0% (12.3%) 0.0% Settlement with Canadian revenue authorities 0.0% (7.0%) 0.0% Other 0.1% (1.2%) 0.5% ___________ ___________ ___________ Provision for income taxes on continuing operations 3.3% 1.7% 16.4% ___________ ___________ ___________ (1) In addition to being subject to the Irish c orporation tax rate of 25 %, in 20 1 5 the Company is also subject to income tax in other territories in which the Company operates, including: Canada ( 1 5 %); France ( 33.3 %); Germany ( 15 %); Italy ( 27.5 %); Luxembourg ( 21.0 %); the Netherlands ( 25 %); Belgium ( 33.99 %); Spain ( 28 %); Sweden ( 2 2 %); Switzerland ( 8.5 %); United Kingdom ( 2 0 %) 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 prin cipally relate to the effect of inter-company dividends 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 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 2008 . Tax authorities in various jurisdictions are in the process of auditing the Company's tax returns for fiscal periods from 2008, but primarily periods after 2010 ; these tax audits cover primarily transfer pricing. In respect of the receipt of the break fee from AbbVie in 2014, the Company ha s obtained advice that the break fee should not be taxable in Ireland. T he Company has therefore concluded that no tax liability should arise and did not recognize a tax charge in the income statement in 2014. T he relevant tax return was submitted on September 23 , 2015 . 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 an increase cannot be made. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows : 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Balance at January 1 207.8 355.2 278.7 Increases based on tax positions related to the current year 27.0 20.3 56.8 Decreases based on tax positions taken in the current year - - (0.5) Increases for tax positions taken in prior years 21.8 64.2 34.5 Decreases for tax positions taken in prior years (30.6) (211.0) (0.8) Decreases resulting from settlements with the taxing authorities (1.2) (9.4) - Decreases as a result of expiration of the statute of limitations (4.4) (0.6) (0.6) Foreign currency translation adjustments (1) (4.1) (10.9) (12.9) ___________ ___________ ___________ Balance at December 31 (2) 216.3 207.8 355.2 ___________ ___________ ___________ ( 1 ) Recognized within Other Comprehensive Income ( 2 ) Approximately $ 207 m (2014: $ 181 m, 2013: $ 355 m) of which would affect the effective rate if recognized. The Company considers it reasonably possible that certain audits currently being conducted could be concluded in the next 12 months, and as a result the total amount of unrecognized tax benefits recorded at December 31, 2015 could decrease by up to approximately $ 60 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 positions within income taxes. During the years ended December 31, 2015, 2014 and 2013, the Company recognized a charge / (credit) to income taxes of $0.8m, $(103.1) million and $0.4 million in interest and penalties and the Company had a liability of $26.5 million, $25.8 million and $112.2 million for the payment of interest and penalties accrued at December 31, 2015, 2014 and 2013 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, 2015 2014 $’M $’M ____________ ____________ Deferred tax assets: Deferred revenue 2.4 3.2 Inventory & warranty provisions 25.8 28.8 Losses carried forward (including tax credits) 1 980.3 686.3 Provisions for sales deductions and doubtful accounts 178.0 166.7 Intangible assets 5.9 5.8 Share-based compensation 40.6 29.5 Excess of tax value over book value of assets 0.6 13.4 Accruals and provisions 130.4 55.7 Other 19.3 14.0 ____________ ____________ Gross deferred tax assets 1,383.3 1,003.4 Less: valuation allowance (416.1) (324.7) ____________ ____________ 967.2 678.7 Deferred tax liabilities: Intangible assets (2,850.6) (1,196.5) Excess of book value over tax value of assets and investments (153.9) (231.8) Other (47.6) (4.2) ____________ ____________ Net deferred tax liabilities (2,084.9) (753.8) ____________ ____________ Balance sheet classifications: Deferred tax assets - current - 344.7 Deferred tax assets - non-current 121.0 112.1 Deferred tax liabilities - non-current (2,205.9) (1,210.6) ____________ ____________ (2,084.9) (753.8) ____________ ____________ Excluding $ 30.4 million of deferred tax assets at December 31, 2015 (2014: $ 24.6 million), related to 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, 2015, the Company had a valuation allowance of $416.1 million (2014: $324.7 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 Switzerland (2015: $ 131.5 m illion ; 2014: $ 62.3 m illion ); US (2015: $ 125.9 m illion ; 2014: $ 77.5 m illion ); Ireland (2015: $ 22.2 million; 2014: $ 75.2 million); and other foreign tax jurisdictions (2015 $ 136.5 million; 2014: $ 109.7 million). Management is required to exercise judgment 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, projections 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 $ 91.4 million includes ( i ) increases of $180.4 m illion relating to operating losses and capital losses primarily acquired with NPS Pharma ($98.9 m illion ) and losses in various jurisdictions ($81.5 m illion ) for which management considers that there is insufficient positive evidence in respect of the factors described above to overcome negative evidence, such as cumulative losses and expiration periods and therefore it is more likely than not that the relevant deferred tax assets will not be realized in full, and ii) decrease s of $89 m illion primarily in respect of Irish tax losses, which based on the assessment of factors described above now provides sufficient positive evidence to support the losses are more likely than not to be realized. At December 31, 2015, 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 future periods. During the period, the Company adopted ASU No.2015-17 which requires that all deferred tax liabilities and deferred tax assets be presented as non-current in the classified balance sheet (ASU 740-10-45-4) for the purpose of simplifying the balance sheet presentation. In accordance with the permitted transition guidance, this new guidance has been applied prospectively in 2015 and the prior year balance sheet classification of deferred taxes has not been adjusted . The approximate tax effect of NOLs, capital losses and tax credit carry-forwards as at December 31, are as follows : 2015 2014 $’M $’M ____________ ____________ US federal tax 149.3 38.7 US state tax 77.2 82.8 Republic of Ireland 61.2 75.2 Foreign tax jurisdictions 434.9 351.8 R&D and other tax credits 257.7 137.8 ____________ ____________ 980.3 686.3 ____________ ____________ The approximate gross value of net operating losses (“ NOLs ”) and capital losses at 31 December 2015 is $ 5, 562 .3 million (2014: $ 3,313.0 million) . The tax effected NOLs, capital losses and tax credit carry-forwards shown above have the following expiration dates: December 31, 2015 $’M ___________ Within 1 year 0.2 Within 3 to 4 years 41.3 Within 4 to 5 years 12.2 Within 5 to 6 years 12.7 After 6 years 521.8 Indefinitely 392.1 The Company do es not provide for deferred taxes on the excess of the financial reporting over the tax basis in our investments in foreign subsidiaries that are essentially permanent in duration. At 31 December 2015, that excess totalled $ 11.3 billion (2014: $8.1 billion). The determination of the additional deferred taxes that have not been provided is not practicable |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Disclosure | 27 . Related parties Shire considers that ArmaGen , Inc. (“ ArmaGen ”) is a related party by virtue of a combination of Shire's equity stake in ArmaGen and the worldwide licensing and collaboration agreement between the two parties to develop and commercialize AGT-182. In the year to December 3 1 , 2015 Shire paid $ 2 . 5 million in cash to ArmaGen in exchange for an additional equity stake in ArmaGen , following which Shire holds approximately 21 % of ArmaGen's issued equity. In addition, Shire recorded R&D costs arising from the licensing and collaboration arrangement of $ 7. 8 million in the year to December 3 1 , 2015, of which $ 0.5 million was accrued and unpaid as at December 3 1 , 2015 (2014: $1.0 million) . |
Share-based Compensation Plans
Share-based Compensation Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Plans Disclosure | 28 . 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 : Year to December 31, 2015 2014 2013 $’M $’M $’M ____________ ____________ ____________ Cost of product sales 7.6 8.5 4.4 Research and development 28.6 22.2 22.8 Selling, general and administrative 37.4 35.9 46.9 Reorganization costs 26.7 30.4 3.3 ____________ ____________ ____________ Total 100.3 97.0 77.4 Less tax (28.4) (23.8) (18.1) ____________ ____________ ____________ 71.9 73.2 59.3 ____________ ____________ ____________ There were no capitalized share-based compensation costs at December 31, 20 1 5 and 20 1 4 . At December 31, 20 1 5 , $ 115.3 million ( 2014: $ 83.1 million , 20 1 3 : $ 97.0 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, 20 1 5 , $ 82.0 million ( 2014: $ 71.2 million , 20 1 3 : $ 9 0 . 3 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 1.9 years ( 2014: 1.9 years, 20 1 3 : 1. 7 years) . On May 2, 2013, the Company initiated the reorganization of its business to integrate the three divisions into a simplified One Shire organization (see Note 4 for details) . As a result of this reorganization the Company modified the terms of certain of its equity awards to employees and directors impacted by the One Shire reorganization . Included in the stock compensation expense for the year to December 31, 201 5 , is $ 26 . 7 million ( 2014: $ 30.4 million, 2013: $ 3.3 million) of incremental stock compensation costs related to the modification of awards granted to those individuals impacted by the One Shire reorganization. Share-based compensation plans Prior to February 28 , 2015 t he Company grant ed stock-settled share appreciation rights (“SARs”) and performance share awards (“PSAs”) over ordinary shares and ADSs to Executive D irectors and employees under the Shire Portfolio Share Plan (“PSP”) (Parts A and B). The SARs and PSAs granted under the PSP (Part s A & B) to Executive Directors are exercisable subject to performance and service criteria. Substantially all SARs and PSAs granted to employees are exercisable subject only to service criteria. The principal terms and conditions of SARs and PSAs under the Shire Portfolio Share Plan (Parts A and B) 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 over three years , and (iii) awards granted to the level of Executive Director and Executive Vice President, cliff vest after three years and contain performance conditions based on growth in Non-GAAP adjusted return on invested capital (“Adjusted ROIC”) and Non-GAAP earnings before interest, taxation, depreciation and amortization (“Non-GAAP EBITDA”). In 2014 the Company granted PSAs under the PSP to employees at Executive Vice President level and to a select group of senior employees, which are exercisable subject to performance and service criteria. These PSAs cliff vest after three years and contain performance conditions as explained above. Since February 28 , 2015 the Company has granted awards under the Shire Long Term Incentive Plan 2015 (“LTIP”). Under the LTIP the Company grants stock-settled share appreciation rights (“SARs”), restricted stock units (“RSUs”) and performance share units (“PSUs”) over ordinary shares and ADSs to Executive Directors and employees. The PSUs granted under the LTIP and SARs granted to Executive Directors are exercisable subject to performance and service criteria. RSUs granted under the LTIP and SARs granted to all other employees are exercisable subject only to service criteria . The principal terms and conditions of SARs , RSUs and PSUs granted under the LTIP are as follows: ( i ) the contractual life of SARs is seven years, (ii) the vesting period of SARs and RSUs granted to employees below the level of Executive Vice President allows for graded vesting, and (iii) all SARs granted to Executive Directors and employees at Executive Vice President level and all PSUs granted cliff vest after three years and, with the exception of SARs granted to employees at Executive Vice President level, contain performance conditions based on product sales and Non-GAAP EBITDA targets ; a Non-GAAP Adjusted ROIC underpin is also used at the end of the three year performance period to assess the underlying performance of the Company before determining the final vesting levels for awards with performance conditions . In addition, a further two year holding period will apply to all awards granted to Executive Directors post vesting . The Company also operates a Global Employee S tock Purchase Plan , and UK/Irish Sharesave Plans . The following awards were outstanding as at December 31, 20 1 5 : Compensation type Number of awards * Expiration period from date of issue Vesting period ____________ ____________ ____________ ____________ SARs SARs 7,326,798 7 years 3 years graded vesting and/or 3 years cliff vesting subject to performance criteria for Executive Directors only UK/Irish Sharesave Plans Stock options 113,619 6 months after vesting 3 or 5 years Global Employee Stock Purchase Plan Stock options 356,079 On vesting date 1 to 5 years __________________ Stock-settled SARs and stock options 7,796,496 __________________ RSUs, PSUs and PSAs RSUs, PSUs and PSAs 1,791,930 3 years 3 years graded vesting, 3 years cliff vesting subject to performance criteria for Executive Directors and certain senior employees only __________________ Restricted/Performance stock units and Performance share awards 1,791,930 __________________ * Number of awards are stated in terms of ordinary share equivalents . Stock- settled SARs and stock options (a) LTIP and PSP – Part A Stock-settled share appreciation rights are exercisable subject to service and, for grants to Executive Directors only, performance criteria . In respect of any award made to Executive Directors under the LTIP , performance criteria are based on product sales and Non-GAAP EBITDA targets, with a Non-GAAP Adjusted ROIC underpin. In respect of any award made to Executive Directors under the PSP (Part A), performance criteria are based on growth in Non-GAAP Adjusted ROIC and Non-GAAP EBITDA. These performance measures are an important measure of the Company's ability to meet the strategic objective to grow value for all of its stakeholders . Awards granted to employees below E xecutive D irector 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) UK/Irish Sharesave Plans ( “ Sharesave Plans ” ) Options granted under the Sharesave Plans 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 Global 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. A summary of the status of the Company's SARs and stock options as at December 31, 20 1 5 and of the related t ransactions during the period then ended is presented below: Weighted average exercise price Year to December 31, 2015 £ Number of Intrinsic value shares * £’ M _______________ _______________ _______________ Outstanding as at beginning of period 33.27 7,756,516 Granted 52.12 4,444,345 Exercised 50.99 (3,104,782) Forfeited 40.69 (1,299,583) _______________ _______________ ________________ Outstanding as at end of period 52.02 7,796,496 98.5 _______________ _______________ ________________ Exercisable as at end of period 35.61 2,408,241 54.8 _______________ _______________ ________________ * 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, 20 1 5 was £ 10 . 36 (201 4 : £ 6 . 19 ; 2013: £ 3.37 ) . SARs and stock options outstanding as at December 31, 20 1 5 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 £ £ £ ________________ ______________ __________ _______________ _____________ _____________ 3,307,723 14.01-28.00 3.7 20.61 1,953,627 20.43 1,019,985 28.01-40.00 5.2 36.06 264,646 36.01 3,468,788 40.01-53.87 5.3 46.05 189,968 53.27 ________________ _____________ 7,796,496 2,408,241 ________________ _____________ * Number of awards are stated in terms of ordinary share equivalents RSUs, PSUs and P SAs LTIP and PSP – Part B PSU s granted to E xecutive D irectors and certain senior employees under the 2015 LTIP are exercisable subject to certain performance and service criteria. In respect of any award granted to Executive Directors and certain senior employees under the LTIP , the performance criteria are based on product sales and Non-GAAP EBITDA targets, with a Non-GAAP Adjusted ROIC underpin . In respect of any award granted to Executive Directors and certain senior employees under the PSP (Part B), performance criteria are based on growth in Non-GAAP Adjusted ROIC and Non-GAAP EBITDA. RSUs and PSAs granted to employees below Executive Director and Executive Vice President level are not subject to performance conditions and are only subject to service conditions (with the exception of a select group of senior employees) . A summary of the status of the Company's performance share awards as at December 31, 20 1 5 and of the related transactions during the period then ended is presented below: RSUs, PSUs and PSAs Number of shares * Aggregate intrinsic value £’M Weighted average remaining life _______________ _______________ _______________ Outstanding as at beginning of period 2,166,181 Granted 1,075,254 Exercised (975,895) Forfeited (473,610) _______________ Outstanding as at end of period 1,791,930 84.2 5.4 _______________ _______________ ________________ 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 RSUs and performance share awards granted in the year to December 31, 201 5 is £ 53 .11 (201 4 :£ 35 . 1 1 ; 2013:£ 19.71 ) . Exercises of employee share-based awards The total intrinsic values of share-based awards exercised for the years to December 31, 20 1 5 , 20 1 4 and 201 3 were $ 198.8 million , $ 2 00 . 8 million and $ 298.3 million, respectively. The total cash received from employees as a result of employee share option exercises for the period to December 31, 2015, 2014 and 2013 was approximately $ 1 6 . 6 million , $ 1 7 . 4 million and $ 1 7 . 2 million, respectively. In connection with these exercises, the tax benefit credited to additional paid-in capital for the years to December 31, 2015, 2014 and 2013 was $ 3 1 . 6 million , $ 39 . 6 million and $ 11 . 9 million respectively . The Company will settle future employee share award exercises with either newly listed ordinary shares or with shares held in the EBT . The number of shares to be purchased by the EBT in 2016 will be dependent on the number of employee share awards granted and exercised during the year and Shire plc's s hare price. At December 31, 20 1 5 the EBT held 0. 6 million ordinary shares and 0. 2 million ADSs. Valuation methodologies T he 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 guida nce 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, 2015 2014 2013 ______________ ______________ ______________ Risk-free interest rate 1 0.6-1.8% 0.3-1.8% 0.1-0.9% Expected dividend yield 0.2-0.4% 0.2-0.4% 0.4-0.6% Expected life 1-4 years 1-4 years 1-4 years Volatility 23-26% 23-27% 23-26% Forfeiture rate 5-7% 5-7% 5-9% (1) Risk- free interest rate is for UK and US grants The following assumptions were used to value share-based awards : r isk-free interest rate – f or 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 exp ected life of the award is used; e xpected 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; e xpected life – estimated based on the contractual term of the awards and the effects of employees' expected exercise and post-vesting employment termination behavio u r ; 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 t he forfeiture rate is estimated using historical trends of the number of awards forfeited prior to vesting . |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | Quarterly results of operations ( Unaudited) The following table presents summarized unaudited quarterly results fo r the years to December 31, 2015 and 2014 : 2015 Q1 Q2 Q3 Q4 $’M $’M $’M $’M ____________ ____________ ____________ ____________ Total revenues 1,488.4 1,557.6 1,655.0 1,715.7 Cost of product sales 227.8 228.0 262.7 250.5 Income from continuing operations, net of taxes 412.9 164.1 477.1 283.4 Loss from discontinued operations, net of taxes (2.5) (4.5) (24.3) (2.8) Net income 410.4 159.6 452.8 280.6 Earnings per ordinary share - basic Earnings from continuing operations 70.1c 27.8c 80.7c 47.9c Loss from discontinued operations (0.4c) (0.8c) (4.1c) (0.5c) Earnings per share - basic 69.7c 27.0c 76.6c 47.4c Earnings per ordinary share - diluted Earnings from continuing operations 69.7c 27.7c 80.4c 47.8c Loss from discontinued operations (0.4c) (0.8c) (4.1c) (0.5c) Earnings per share - diluted 69.3c 26.9c 76.3c 47.3c 2014 Q1 Q2 Q3 Q4 $’M $’M $’M $’M ____________ ____________ ____________ ____________ Total revenues 1,346.8 1,502.1 1,597.1 1,576.1 Cost of product sales 229.5 277.0 254.3 218.5 Income from continuing operations, net of taxes 253.1 528.3 515.8 1,985.6 (Loss)/gain from discontinued operations, net of taxes (22.7) (5.2) (36.1) 186.7 Net income 230.4 523.1 479.7 2,172.3 Earnings per ordinary share - basic Earnings from continuing operations 43.3c 90.1c 87.8c 338.3c (Loss)/gain from discontinued operations (3.9c) (0.9c) (6.1c) 31.8c Earnings per share - basic 39.4c 89.2c 81.7c 370.1c Earnings per ordinary share - diluted Earnings from continuing operations 43.0c 89.5c 87.0c 335.7c (Loss)/gain from discontinued operations (3.9c) (0.9c) (6.1c) 31.6c Earnings per share - diluted 39.1c 88.6c 80.9c 367.3c |
Notes to the Shire Income Acces
Notes to the Shire Income Access Share Trust Financial Statements | 12 Months Ended |
Dec. 31, 2015 | |
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 , 2 6 New Street , St Helier , Jersey , JE4 3RA . The Trust was established as part of the Income Access Share mechanism, as outlined in Note 21 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 judg ment 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- 6 6 . (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 statement s 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, 2015 . 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 check s . To the extent that check s 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 Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Provision for sales rebates, returns and coupons | Schedule II – Valuation and Qualifying Accounts Beginning balance Provision charged to income (1) Costs incurred/ utilization (1) Ending balance Provision for sales rebates, returns and coupons $’M $’M $’M $’M __________ __________ __________ __________ 2015 : Accrued rebates – Medicaid and HMOs 882.1 2,128.0 (2,027.7) 982.4 Sales returns reserve 131.7 19.4 (22.8) 128.3 Accrued coupons 20.1 140.5 (134.0) 26.6 __________ __________ __________ __________ 1,033.9 2,287.9 (2,184.5) 1,137.3 __________ __________ __________ __________ 2014 : Accrued rebates – Medicaid and HMOs 806.5 1,877.7 (1,802.1) 882.1 Sales returns reserve 97.9 60.1 (26.3) 131.7 Accrued coupons 20.7 98.9 (99.5) 20.1 __________ __________ __________ __________ 925.1 2,036.7 (1,927.9) 1,033.9 __________ __________ __________ __________ 2013 : Accrued rebates – Medicaid and HMOs 640.5 1,626.6 (1,460.6) 806.5 Sales returns reserve 90.5 34.5 (27.1) 97.9 Accrued coupons 8 107.4 (94.7) 20.7 __________ __________ __________ __________ 739 1,768.5 (1,582.4) 925.1 __________ __________ __________ __________ (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 Accoun46
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 rea lization 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 and loss of a product's exclusivity . The se 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 up - front payment to Shire by the licensee on inception of the license and subsequent milestone payments to Shire by the licensee , 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 were deferred and are 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-re fundable, 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 collaborati ng 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 to third party intellectual property owners on sale of the Company's products 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 liabilit y , 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 $ 56.1 million, $ 56.4 million and $60.9 million for the years to December 31, 2015 , 2014 and 2013 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. Up - front 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 a n 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 statement s 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 statement s of income . |
Foreign currency | Monetary assets and liabilities in foreign currencies are translated into the functional currency of the relevant subsidiar y 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 statement s 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 loss . Foreign currency exchange transaction losses included in consolidated statement s of income in the years to December 31, 2015 , 2014 and 2013 amounted to $ 26.5 million , $ 15 . 6 million and $8.7 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 and penalties relating to unrecognized tax benefits within income taxes. The Company recognizes interest and penalties relating to income tax es within income taxes . Interest income on cash required to be deposited with the tax authorities is recognized within interest income. 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 the Company divided by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is based upon net income attributable to the Company adjusted for the impact of interest expense on convertible debt on an “if-converted” basis (whe n the effect is dilutive and prior to the actual conversion or redemption of such 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, SG&A and Reorganization costs in the consolidated statement s 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 statement s 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 28 . |
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 principally associated with inter - company 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 cha n ges in the fair value recognized in the consolidated statement s 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 highly 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 highly 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 (losses)/ earnings of equity method investees, net of taxes 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 in the consolidated statements of income. The cost of securities sold is based on the specific identification method. Interest on securities classified as available-for-sale is included as interest income in the consolidated statements of 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 1 5 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 statement s 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. The Company reviews goodwill for impairment by firstly assessing qualitative factors, including comparing the market capitalization of the Company to the carrying value of its assets, to determine whether events or circumstances exist which indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company assesses the totality of events or circumstances and determines if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. If, after assessing these qualitative factors, it is deemed more likely than not that the fair value of a reporting unit is less than its carrying value, a “two step” quantitative assessment is performed 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 4 to 24 years (weighted average 20 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 ass et 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 Balance Sheet Classification of Deferred Taxes In November 2015 the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the balance sheet presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position compared to the current practi c e of classifying deferred income tax liabilities and assets into both current and noncurrent amounts. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If an entity applies the guidance prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. Shire adopted this guidance prospectively in the current period presented and the prior year balance sheet classification of deferred taxes has not been adjusted. The adoption of this guidance primarily resulted in a reclassification of net current deferred tax assets to net non-current deferred tax liabilities in the Consolidated Balance Sheet as at December 31, 2015. See Note 26 for details. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity In April 2014 the FASB issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows . To be adopted in future periods Revenue from Contracts with Customers In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standard s Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP. Five-step model: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Accounting Standards Boards also issued new qualitative and quantitative disclosure requirements as part of the new accounting standard which aims to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015 the FASB decided to defer the effective date of the guidance by one year. Based on this deferral , public entities would need to apply the new guidance for annual reporting periods beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the impact of adopting this guidance . Amendments to the Consolidation Analysis In February 201 5 the FASB issued guidance to respond to stakeholders' concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity's economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance. Under the amendments, all reporting entities are within the scope of Subtopic 810-10, Consolidation , including limited partnerships and similar legal entities, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate a VIE in certain instances. The amendments place more emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE, written put options on the assets of the VIE, or similar obligations, including some liquidity commitments or agreements (explicit or implicit). Additionally, the amendments reduce the extent to which related party arrangements cause an entity to be considered a primary beneficiary. The amendments are effective for public business entities for fiscal years, and for interim periods therein, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows. Simplify ing the Presentation of Debt Issuance Costs In April 201 5 the FASB issued guidance to simplify the presentation of debt issuance costs . The guidance require s that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this u pdate. In August 2015 the FASB issued further guidance to incorporate the SEC staff's observation that , given the absence of authoritative guidance , the SEC staff would not object to an entity deferring and presenting debt issuance costs arising from line-of-credit arrangements as an asset and subsequently amortizing these costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. T he amendments in these updates are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods therein. Early adoption is permitted for financial statements that have not been previously issued. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows . Customer's Accounting for Fees Paid in a Cloud Computing Arrangement In April 2015 the FASB issued guidance to simplify the customer's accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for all entities. An entity can elect to adopt the guidance either a) prospectively to all arrangements entered into or materially modified after the effective date or b) retrospectively. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows . Simplifying the Measurement of Inventory In July 2015 the FASB issued guidance to simplify the measurement of i nventory which currently requires an entity to measure its inventory at the lower of cost or market, whereby market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendment provide s guidance that an entity should measure inventory within the scope of this u pdate at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last in first out or the retail inventory method. Th is amendment will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted for all entities. The Company is currently evaluating the impact of adopting this guidance . Simplifying the Accounting for Measurement-Period Adjustments In September 2015 the FASB issued guidance to simplify the accounting for measurement -period adjustment. The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance further requires that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance will be effective for fiscal year beginning after December 15, 2015, including interim periods within those fiscal years. The guidance should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update with earlier application permitted for financial statements that have not been issued. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows Recognition and Measurement of Financial Assets and Financial Liabilities In January 201 6 the FASB issued guidance to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this update revises the entity's accounting related to the classification and measurement of investment in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance will be effective for fiscal year beginning after December 15, 201 7 , including interim periods within those fiscal years. Upon adoption, entities will be required to make a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective. The guidance on equity securities without readily determinable fair value will be applied prospectively to all equity instruments that exist as of the date of the adoption of this standard. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows . |
Statutory accounts | The consolidated financial statements as at December 31, 2015 and 2014 , and for each of the three years in the period to December 31, 2015 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, 2014 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 to December 31, 2014 prepared in accordance with US GAAP, in fulfillment of the Company's United Kingdom List ing 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, 2015 prepared under UK GAAP and in compliance with Jersey law will be delivered to the Registrar of Companies in Jersey in 201 6 . The Company further expects to file the consolidated accounts of the Company for the year to December 31, 201 5 , prepared in accordance with US GAAP, in fulfillment of the Company's UKLA annual reporting requirements with the UKLA in 201 6 . |
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 statement s 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 judg ment 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- 6 6 . |
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) | 12 Months Ended |
Dec. 31, 2015 | |
NPS Pharma | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Fair value $’M ASSETS Current assets: Cash and cash equivalents 41.6 Short-term investments 67.0 Accounts receivable 33.4 Inventories 89.4 Other current assets 11.1 _______________ Total current assets 242.5 Non-current assets: PP&E 4.8 Goodwill 1,551.0 Other intangible assets - currently marketed products 4,640.0 - royalty rights (categorized as "Other amortized intangible assets" ) 353.0 _______________ Total assets 6,791.3 _______________ LIABILITIES Current liabilities: Accounts payable and other current liabilities 75.7 Short-term debt 27.4 Non-current liabilities: Long-term debt, less current portion 78.9 Deferred tax liabilities 1,385.2 Other non-current liabilities 4.5 _______________ Total liabilities 1,571.7 _______________ Fair value of identifiable assets acquired and liabilities assumed 5,219.6 Consideration _______________ Cash consideration paid 5,219.6 _______________ |
Business Acquisition, Pro Forma Information | December 31, December 31, 2015 2014 $’M $’M _______________ _______________ Revenues 6,446.6 6,246.1 Net income from continuing operations 1,293.6 2,950.7 _______________ _______________ Per share amounts: Net income from continuing operations per share - basic 219.1c 502.9c Net income from continuing operations per share - diluted 218.1c 499.0c _______________ _______________ |
Viropharma | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Acquisition date fair value $’M Identifiable assets acquired and liabilities assumed ASSETS Current assets: Cash and cash equivalents 232.6 Short-term investments 57.8 Accounts receivable 52.2 Inventories 203.6 Deferred tax assets 100.7 Purchased call option 346.7 Other current assets 50.9 _______________ Total current assets 1,044.5 Non-current assets: PP&E 24.7 Goodwill 1,655.5 Other intangible assets - Currently marketed products 2,320.0 - In-Process Research and Development (“IPR&D”) 315.0 Other non-current assets 10.4 _______________ Total assets 5,370.1 _______________ LIABILITIES Current liabilities: Accounts payable and other current liabilities 122.7 Convertible bond 551.4 Non-current liabilities: Deferred tax liabilities 603.5 Other non-current liabilities 95.5 _______________ Total liabilities 1,373.1 _______________ Fair value of identifiable assets acquired and liabilities assumed 3,997.0 _______________ Consideration Cash consideration paid 3,997.0 _______________ |
Reorganization costs (Table)
Reorganization costs (Table) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Reorganization costs | Opening liability Amount Closing liability at at January 1, charged to re- December 31, 2015 organization Paid/Utilized 2015 $'M $'M $'M $'M ___________ ____________ ___________ ___________ Involuntary termination benefits 38.0 65.4 (88.4) 15.0 Other reorganization costs - 32.5 (22.4) 10.1 ___________ ___________ ___________ ___________ 38.0 97.9 (110.8) 25.1 ___________ ___________ ___________ ___________ |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Provision for discounts and doubtful accounts | 2015 2014 2013 $’M $’M $’M _____________ _____________ _____________ As at January 1, 48.5 47.9 41.7 Provision charged to operations 424.2 338.2 306.8 Provision utilization (416.9) (337.6) (300.6) _____________ _____________ _____________ As at December 31, 55.8 48.5 47.9 _____________ _____________ _____________ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Finished goods 184.9 136.0 Work-in-progress 302.0 305.3 Raw materials 148.5 103.5 ____________ ____________ 635.4 544.8 ____________ ____________ |
Prepaid Expenses and Other Cu51
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expense and Other Assets, Current | December 31, December 31, 2015 2014 $’M $’M ______________ ____________ Prepaid expenses 35.6 36.9 Income tax receivable 73.6 121.5 Value added taxes receivable 18.2 13.8 Other current assets 70.0 49.3 ______________ ______________ 197.4 221.5 ______________ ______________ |
Property, Plant and Equipment52
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Land and buildings 703.1 717.1 Office furniture, fittings and equipment 529.8 494.2 Warehouse, laboratory and manufacturing equipment 297.6 290.0 Assets under construction 93.7 43.9 ____________ ____________ 1,624.2 1,545.2 Less: Accumulated depreciation (796.1) (707.7) ____________ ____________ 828.1 837.5 ____________ ____________ |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Goodwill | December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Goodwill arising on businesses acquired 4,147.8 2,474.9 ____________ ____________ |
Schedule of Goodwill | 2015 2014 $’M $’M ____________ ____________ As at January 1, 2,474.9 624.6 Acquisitions 1,700.1 1,890.5 Foreign currency translation (27.2) (40.2) ____________ ____________ As at December 31, 4,147.8 2,474.9 ____________ ____________ |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Other Intangible Assets | December 31, December 31, 2015 2014 $’M $’M ________________ ________________ Amortized intangible assets Intellectual property rights acquired for currently marketed products 9,371.9 4,816.9 Other intangible assets 1 375.0 30.0 ________________ ________________ 9,746.9 4,846.9 Unamortized intangible assets Intellectual property rights acquired for IPR&D 1,362.0 1,550.0 ________________ ________________ 11,108.9 6,396.9 Less: Accumulated amortization 2 (1,935.6) (1,462.5) ________________ ________________ 9,173.3 4,934.4 ________________ ________________ |
Intangible Assets (Excluding Goodwill) Roll Forward | Other intangible assets 2015 2014 $’M $’M ________________ ________________ As at January 1, 4,934.4 2,312.6 Acquisitions 5,474.9 3,118.6 Divestment of non-core products - (17.3) Amortization charged (498.7) (243.8) Impairment charges (643.7) (190.3) Foreign currency translation (93.6) (45.4) ________________ ________________ As at December 31, 9,173.3 4,934.4 ________________ ________________ |
Accounts Payable and Accrued 55
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | December 31, December 31, 2015 2014 $’M $’M ________________ ________________ Trade accounts payable and accrued purchases 336.3 247.7 Accrued rebates – Medicaid 632.2 563.9 Accrued rebates – Managed care 350.2 318.2 Sales return reserve 128.3 131.7 Accrued bonuses 152.0 150.7 Accrued employee compensation and benefits payable 102.5 109.1 R&D accruals 65.3 88.3 Other accrued expenses 283.8 299.8 ________________ ________________ 2,050.6 1,909.4 ________________ ________________ |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities, Current [Abstract] | |
Schedule of Other Current Liabilities | December 31, December 31, 2015 2014 $’M $’M _____________ _____________ Income taxes payable 73.5 16.2 Value added taxes 21.8 16.6 Contingent consideration payable 19.5 194.5 Other current liabilities 29.2 35.2 _____________ _____________ 144.0 262.5 _____________ _____________ |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | December 31, December 31, 2015 2014 $’M $’M _____________ _____________ Short term borrowings: Borrowings under the Revolving Credit Facilities Agreement (the “RCF”) 750.0 - Borrowings under the January 2015 Facility Agreement 750.0 - Borrowings under the 2013 Facilities Agreement - 850.0 Secured non-recourse debts 11.5 - _____________ _____________ 1,511.5 850.0 Long term borrowings: Secured non-recourse debts 69.9 - _____________ _____________ 1,581.4 850.0 _____________ _____________ |
Other Non-current Liabilities (
Other Non-current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Noncurrent Liabilities | December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Income taxes payable 195.8 199.2 Contingent consideration payable 456.4 435.4 Other non-current liabilities 146.6 102.1 ____________ ____________ 798.8 736.7 ____________ ____________ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments under Operating Leases | Operating leases $’M _____________ 2016 1 51.5 2017 1 40.8 2018 1 34.6 2019 1 30.2 2020 29.4 Thereafter 1 185.8 111 _____________ 372.3 _____________ |
Accumulated Other Comprehensi60
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 loss $M $M $M As at January 1, 2015 (25.7) (5.8) (31.5) Current period change: Net current period other comprehensive (loss)/income (156.4) 4.1 (152.3) As at December 31, 2015 (182.1) (1.7) (183.8) Foreign currency translation adjustment Unrealized holding gain/(loss) on available-for-sale securities Accumulated other comprehensive income/(loss) $M $M $M As at January 1, 2014 110.4 (0.2) 110.2 Current period change: Other comprehensive (loss)/income before reclassification (136.1) 3.7 (132.4) Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities - (9.3) (9.3) Net current period other comprehensive loss (136.1) (5.6) (141.7) As at December 31, 2014 (25.7) (5.8) (31.5) 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 (loss)/income before reclassification 25.3 1.5 26.8 Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities - (3.5) (3.5) Net current period other comprehensive loss 25.3 (2.0) 23.3 As at December 31, 2013 110.4 (0.2) 110.2 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instrument Detail [Abstract] | |
Schedule of Foreign Exchange Contracts, Statement of Financial Position | Fair value Fair value December 31, December 31, 2015 2014 $’M $’M _____________ _____________ Assets Prepaid expenses and other current assets 1.9 12.6 Liabilities Other current liabilities 11.5 7.8 _____________ _____________ |
Schedule of Foreign Exchange Contracts, Gain (Loss) in Other Income (Expense) | Location of net gains/(losses) recognized in income Amount of net gains/(losses) recognized in income __________________________________ ____________ ____________ Year to December 31, 2015 2014 2013 $’M $’M $’M _____________ _____________ _____________ Foreign exchange contracts Other income, net 9.5 8.0 (1.8) _____________ _____________ _____________ |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Carrying value and Fair value Total Level 1 Level 2 Level 3 At December 31, 2015 $'M $'M $'M $'M ____________ ___________ ___________ ___________ Financial assets: Available-for-sale securities (1) 17.2 17.2 - - Contingent consideration receivable (2) 13.8 - - 13.8 Foreign exchange contracts 1.9 - 1.9 - Financial liabilities: Foreign exchange contracts 11.5 - 11.5 - Contingent consideration payable (3) 475.9 - - 475.9 ____________ ___________ ___________ ___________ Total Level 1 Level 2 Level 3 At December 31, 2014 $'M $'M $'M $'M ____________ ___________ ___________ ___________ Financial assets: Available-for-sale securities (1) 13.1 13.1 - - Contingent consideration receivable (2) 15.9 - - 15.9 Foreign exchange contracts 12.6 - 12.6 - Financial liabilities: Foreign exchange contracts 7.8 - 7.8 - Contingent consideration payable (3) 1 629.9 - - 629.9 ____________ ___________ ___________ ___________ 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 O ther 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 2015 2014 $'M $'M ____________ ____________ Balance at January 1, 15.9 36.1 Initial recognition of contingent consideration receivable - 33.6 Loss recognized in the income statement (within discontinued operations) due to change in fair value during the period - (33.6) Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period 13.6 (2.9) Reclassification of amounts to Other receivables within Other current assets (17.8) (20.2) Amounts recorded to other comprehensive income (within foreign currency translation adjustments) 2.1 2.9 Balance at December 31, 13.8 15.9 |
Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3) | Contingent consideration payable 2015 2014 $'M $'M ____________ ____________ Balance at January 1, 629.9 405.9 Initial recognition of contingent consideration payable 92.8 226.7 Change in fair value during the period with the corresponding adjustment recognized (within Integration and acquisition costs) in the income statement (149.9) 14.7 Reclassification of amounts to Other current liabilities (100.8) (15.1) Change in fair value during the period with corresponding adjustment to the associated intangible asset 1.4 2.7 Amounts recorded to other comprehensive income (within foreign currency translation adjustments) 2.5 (5.0) Balance at December 31, 475.9 629.9 |
Fair Value Inputs, Assets Quantitative Information Table | Financial assets: Fair Value at the Measurement Date At December 31, 2015 Fair value Valuation Technique Significant unobservable Inputs Range $'M ____________ ___________ ___________ ___________ Contingent consideration receivable ("CCR") 13.8 Income approach (probability weighted discounted cash flow) • Probability weightings applied to different sales scenarios • Future forecast consideration receivable based on contractual terms with purchaser • Assumed market participant discount rate • 10 to 70% • $0 to $25 million • 8.4% ____________ ____________ ____________ ____________ Fair Value at the Measurement Date At December 31, 2015 Fair value Valuation Technique Significant unobservable Inputs Range $'M ____________ ___________ ___________ ___________ IPR&D intangible assets (SHP625 and SHP608) $nil Income approach (discounted cash flow) • Probability of regulatory approval being obtained • Expected commercial launch date • Assumed market participant discount rate • 5 to 33% • 2020 to 2021 • 9.1 to 10.7% ____________ ____________ ____________ ____________ |
Fair Value Inputs, Liabilities Quantitative Information Table | Financial liabilities: Fair Value at the Measurement Date At December 31, 2015 Fair value Valuation Technique Significant unobservable Inputs Range $'M ____________ ___________ ___________ ___________ Contingent consideration payable 475.9 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 • 4 to 90% • 1.2 to 12.4% • 2016 to 2030 • $2.1 to $6.6 million ____________ ____________ ____________ ____________ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | Year to December 31, 2015 2014 2013 $’M $’M $’M _________________ _________________ _________________ Income from continuing operations, net of taxes 1,337.5 3,282.8 1,419.6 (Loss)/ gain from discontinued operations 1 (34.1) 122.7 (754.5) _________________ _________________ _________________ Numerator for basic earnings per share 1,303.4 3,405.5 665.1 _________________ _________________ _________________ Interest on convertible bonds, net of tax - - 28.3 _________________ _________________ _________________ Numerator for diluted earnings per share 1303.4 3,405.5 693.4 _________________ _________________ _________________ |
Schedule of Weighted Average Number of Shares | Weighted average number of shares: Millions Millions Millions _________________ _________________ _________________ Basic 1 590.4 586.7 552.0 Effect of dilutive shares: Share-based awards to employees 2 2.7 4.6 4.8 Convertible bonds 2.75% due 2014 3 - - 33.5 _________________ _________________ _________________ Diluted 593.1 591.3 590.3 _________________ _________________ _________________ |
Schedule of Earnings Per Share, Basic and Diluted | Year to December 31, 2015 2014 2013 _______________ _______________ _______________ Earnings per ordinary share - basic Earnings from continuing operations 226.5c 559.6c 257.2c (Loss)/gain from discontinued operations (5.8c) 20.9c (136.7c) _______________ _______________ _______________ Earnings per ordinary share - basic 220.7c 580.5c 120.5c _______________ _______________ _______________ Earnings per ordinary share - diluted Earnings from continuing operations 225.5c 555.2c 245.3c (Loss)/gain from discontinued operations (5.8c) 20.8c (127.8c) _______________ _______________ _______________ Earnings per ordinary share – diluted 219.7c 576.0c 117.5c _______________ _______________ _______________ |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | 2015 2014 2013 No. of shares No. of shares No. of shares Millions Millions Millions _________________ _________________ _________________ Share-based awards to employees 1 3.4 0.3 0.5 _________________ _________________ _________________ |
Segmental Reporting (Tables)
Segmental Reporting (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Year to December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Ireland 14.1 18.5 22.5 United States 4,659.2 4,174.1 3,249.3 Rest of World 1,743.4 1,829.5 1,662.5 ____________ ____________ ____________ Total revenues 6,416.7 6,022.1 4,934.3 ____________ ____________ ____________ Year to December 31, 2015 2014 $’M $’M ___________ ___________ Ireland 1.7 3.1 United States 751.3 749.8 Rest of World 82.2 91.3 ____________ ____________ Total 835.2 844.2 ____________ ____________ |
Schedule of Revenue by Major Customers by Reporting Segments | 2015 2015 2014 2014 2013 2013 Year to December 31, $’M % product revenue $’M % product revenue $’M % product revenue ___________ ___________ ___________ ___________ ___________ ___________ AmerisourceBergen Corp 1,048.3 17 759.2 13 721.0 15 McKesson Corp. 1,044.1 17 1,021.0 18 902.9 19 Cardinal Health Inc. 796.9 13 979.9 17 853.7 18 ____________ ___________ ____________ ___________ ____________ ___________ |
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: 2015 2014 December 31, $’M $’M ___________ ___________ AmerisourceBergen Corp 171.5 134.9 McKesson Corp. 193.1 179.4 Cardinal Health Inc. 181.7 164.5 ____________ ___________ |
Schedule of Segment Revenue from Major Products | December 31, December 31, December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ VYVANSE 1,722.2 1,449.0 1,227.8 LIALDA/MEZAVANT 684.4 633.8 528.9 CINRYZE 617.7 503.0 - ELAPRASE 552.6 592.8 545.6 FIRAZYR 445.0 364.2 234.8 REPLAGAL 441.2 500.4 467.9 ADDERALL XR 362.8 383.2 375.4 VPRIV 342.4 366.7 342.7 PENTASA 305.8 289.7 280.6 FOSRENOL 177.6 183.0 183.4 GATTEX/REVESTIVE 141.7 - - XAGRID 100.8 108.5 99.4 INTUNIV 65.1 327.2 334.9 NATPARA 24.4 - - Other product sales 116.2 128.9 136.1 ____________ ____________ ____________ Total product sales 6,099.9 5,830.4 4,757.5 ____________ ____________ ____________ |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Year to December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Ireland (11.4) 1,472.0 (47.8) United States 975.8 1,025.9 1,153.3 Rest of the world 421.4 838.3 588.1 ___________ ___________ ___________ 1,385.8 3,336.2 1,693.6 ___________ ___________ ___________ |
Schedule of Components of Income Tax Expense (Benefit) | Year to December 31, 2015 2014 2013 $’M $’M $’M __________ __________ __________ Current income taxes: Ireland 0.8 - - US federal tax 191.7 291.8 274.3 US state and local taxes 17.3 25.3 17.9 Rest of the world 17.8 (290.9) 63.4 __________ __________ __________ Total current taxes 227.6 26.2 355.6 __________ __________ __________ Deferred taxes: US federal tax (151.2) 39.7 23.8 US state and local taxes (1.7) (2.9) (8.3) Rest of the world (28.6) (6.9) (93.2) __________ __________ __________ Total deferred taxes (181.5) 29.9 (77.7) __________ __________ __________ Total income taxes 46.1 56.1 277.9 __________ __________ __________ |
Schedule of Effective Income Tax Rate Reconciliation | Year to December 31, 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Income from continuing operations before income taxes and equity in (losses)/ earnings of equity method investees 1,385.8 3,336.2 1,693.6 ___________ ___________ ___________ Statutory tax rate (1) 25.0% 25.0% 25.0% US R&D credit (7.7%) (2.5%) (4.5%) Intra-group items (2) (19.5%) (6.3%) (9.2%) Other permanent items 2.0% 0.7% (0.7%) Change in valuation allowance 1.0% 0.8% 0.9% Difference in taxation rates 7.3% 3.4% 7.8% Change in provisions for uncertain tax positions (0.4%) 0.2% 3.8% Prior year adjustment (1.6%) 0.1% (3.4%) Change in fair value of contingent consideration (3.8%) 0.3% (3.6%) Change in tax rates 0.9% 0.5% (0.2%) Receipt of break fee 0.0% (12.3%) 0.0% Settlement with Canadian revenue authorities 0.0% (7.0%) 0.0% Other 0.1% (1.2%) 0.5% ___________ ___________ ___________ Provision for income taxes on continuing operations 3.3% 1.7% 16.4% ___________ ___________ ___________ |
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits | 2015 2014 2013 $’M $’M $’M ___________ ___________ ___________ Balance at January 1 207.8 355.2 278.7 Increases based on tax positions related to the current year 27.0 20.3 56.8 Decreases based on tax positions taken in the current year - - (0.5) Increases for tax positions taken in prior years 21.8 64.2 34.5 Decreases for tax positions taken in prior years (30.6) (211.0) (0.8) Decreases resulting from settlements with the taxing authorities (1.2) (9.4) - Decreases as a result of expiration of the statute of limitations (4.4) (0.6) (0.6) Foreign currency translation adjustments (1) (4.1) (10.9) (12.9) ___________ ___________ ___________ Balance at December 31 (2) 216.3 207.8 355.2 ___________ ___________ ___________ |
Schedule of Deferred Tax Assets and Liabilities | December 31, December 31, 2015 2014 $’M $’M ____________ ____________ Deferred tax assets: Deferred revenue 2.4 3.2 Inventory & warranty provisions 25.8 28.8 Losses carried forward (including tax credits) 1 980.3 686.3 Provisions for sales deductions and doubtful accounts 178.0 166.7 Intangible assets 5.9 5.8 Share-based compensation 40.6 29.5 Excess of tax value over book value of assets 0.6 13.4 Accruals and provisions 130.4 55.7 Other 19.3 14.0 ____________ ____________ Gross deferred tax assets 1,383.3 1,003.4 Less: valuation allowance (416.1) (324.7) ____________ ____________ 967.2 678.7 Deferred tax liabilities: Intangible assets (2,850.6) (1,196.5) Excess of book value over tax value of assets and investments (153.9) (231.8) Other (47.6) (4.2) ____________ ____________ Net deferred tax liabilities (2,084.9) (753.8) ____________ ____________ Balance sheet classifications: Deferred tax assets - current - 344.7 Deferred tax assets - non-current 121.0 112.1 Deferred tax liabilities - non-current (2,205.9) (1,210.6) ____________ ____________ (2,084.9) (753.8) ____________ ____________ |
Summary of Operating Loss and Tax Credit Carryforwards | 2015 2014 $’M $’M ____________ ____________ US federal tax 149.3 38.7 US state tax 77.2 82.8 Republic of Ireland 61.2 75.2 Foreign tax jurisdictions 434.9 351.8 R&D and other tax credits 257.7 137.8 ____________ ____________ 980.3 686.3 ____________ ____________ |
Schedule of Carryforwards Available to Reduce Future Taxes, Expiration Periods | December 31, 2015 $’M ___________ Within 1 year 0.2 Within 3 to 4 years 41.3 Within 4 to 5 years 12.2 Within 5 to 6 years 12.7 After 6 years 521.8 Indefinitely 392.1 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Expense | Year to December 31, 2015 2014 2013 $’M $’M $’M ____________ ____________ ____________ Cost of product sales 7.6 8.5 4.4 Research and development 28.6 22.2 22.8 Selling, general and administrative 37.4 35.9 46.9 Reorganization costs 26.7 30.4 3.3 ____________ ____________ ____________ Total 100.3 97.0 77.4 Less tax (28.4) (23.8) (18.1) ____________ ____________ ____________ 71.9 73.2 59.3 ____________ ____________ ____________ |
Share-based Awards Outstanding | Compensation type Number of awards * Expiration period from date of issue Vesting period ____________ ____________ ____________ ____________ SARs SARs 7,326,798 7 years 3 years graded vesting and/or 3 years cliff vesting subject to performance criteria for Executive Directors only UK/Irish Sharesave Plans Stock options 113,619 6 months after vesting 3 or 5 years Global Employee Stock Purchase Plan Stock options 356,079 On vesting date 1 to 5 years __________________ Stock-settled SARs and stock options 7,796,496 __________________ RSUs, PSUs and PSAs RSUs, PSUs and PSAs 1,791,930 3 years 3 years graded vesting, 3 years cliff vesting subject to performance criteria for Executive Directors and certain senior employees only __________________ Restricted/Performance stock units and Performance share awards 1,791,930 __________________ |
Summary of Status of Stock Appreciation Rights and Stock Options | Weighted average exercise price Year to December 31, 2015 £ Number of Intrinsic value shares * £’ M _______________ _______________ _______________ Outstanding as at beginning of period 33.27 7,756,516 Granted 52.12 4,444,345 Exercised 50.99 (3,104,782) Forfeited 40.69 (1,299,583) _______________ _______________ ________________ Outstanding as at end of period 52.02 7,796,496 98.5 _______________ _______________ ________________ Exercisable as at end of period 35.61 2,408,241 54.8 _______________ _______________ ________________ |
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 £ £ £ ________________ ______________ __________ _______________ _____________ _____________ 3,307,723 14.01-28.00 3.7 20.61 1,953,627 20.43 1,019,985 28.01-40.00 5.2 36.06 264,646 36.01 3,468,788 40.01-53.87 5.3 46.05 189,968 53.27 ________________ _____________ 7,796,496 2,408,241 ________________ _____________ |
Schedule of Performance Share Awards | RSUs, PSUs and PSAs Number of shares * Aggregate intrinsic value £’M Weighted average remaining life _______________ _______________ _______________ Outstanding as at beginning of period 2,166,181 Granted 1,075,254 Exercised (975,895) Forfeited (473,610) _______________ Outstanding as at end of period 1,791,930 84.2 5.4 _______________ _______________ ________________ Exercisable as at end of period - N/A N/A _______________ _______________ _______________ |
Schedule of Share-based Payment Award, Valuation Assumptions | Period ended December 31, 2015 2014 2013 ______________ ______________ ______________ Risk-free interest rate 1 0.6-1.8% 0.3-1.8% 0.1-0.9% Expected dividend yield 0.2-0.4% 0.2-0.4% 0.4-0.6% Expected life 1-4 years 1-4 years 1-4 years Volatility 23-26% 23-27% 23-26% Forfeiture rate 5-7% 5-7% 5-9% |
Quarterly Results of Operatio67
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations | 2015 Q1 Q2 Q3 Q4 $’M $’M $’M $’M ____________ ____________ ____________ ____________ Total revenues 1,488.4 1,557.6 1,655.0 1,715.7 Cost of product sales 227.8 228.0 262.7 250.5 Income from continuing operations, net of taxes 412.9 164.1 477.1 283.4 Loss from discontinued operations, net of taxes (2.5) (4.5) (24.3) (2.8) Net income 410.4 159.6 452.8 280.6 Earnings per ordinary share - basic Earnings from continuing operations 70.1c 27.8c 80.7c 47.9c Loss from discontinued operations (0.4c) (0.8c) (4.1c) (0.5c) Earnings per share - basic 69.7c 27.0c 76.6c 47.4c Earnings per ordinary share - diluted Earnings from continuing operations 69.7c 27.7c 80.4c 47.8c Loss from discontinued operations (0.4c) (0.8c) (4.1c) (0.5c) Earnings per share - diluted 69.3c 26.9c 76.3c 47.3c 2014 Q1 Q2 Q3 Q4 $’M $’M $’M $’M ____________ ____________ ____________ ____________ Total revenues 1,346.8 1,502.1 1,597.1 1,576.1 Cost of product sales 229.5 277.0 254.3 218.5 Income from continuing operations, net of taxes 253.1 528.3 515.8 1,985.6 (Loss)/gain from discontinued operations, net of taxes (22.7) (5.2) (36.1) 186.7 Net income 230.4 523.1 479.7 2,172.3 Earnings per ordinary share - basic Earnings from continuing operations 43.3c 90.1c 87.8c 338.3c (Loss)/gain from discontinued operations (3.9c) (0.9c) (6.1c) 31.8c Earnings per share - basic 39.4c 89.2c 81.7c 370.1c Earnings per ordinary share - diluted Earnings from continuing operations 43.0c 89.5c 87.0c 335.7c (Loss)/gain from discontinued operations (3.9c) (0.9c) (6.1c) 31.6c Earnings per share - diluted 39.1c 88.6c 80.9c 367.3c |
Summary of Significant Accoun68
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 56.1 | $ 56.4 | $ 60.9 |
Foreign currency exchange transaction gain (loss) | 26.5 | 15.6 | 8.7 |
Goodwill and Intangible Assets | |||
Goodwill impairment charge | $ 0 | $ 0 | $ 198.9 |
Minimum | |||
Goodwill and Intangible Assets | |||
Estimated useful life of intangible assets | 4 years | ||
Maximum | |||
Goodwill and Intangible Assets | |||
Estimated useful life of intangible assets | 24 years | ||
Weighted Average | |||
Goodwill and Intangible Assets | |||
Estimated useful life of intangible assets | 20 years | ||
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 (Details)
Business Combinations (Details) $ / shares in Units, $ in Millions | Jan. 22, 2016USD ($)$ / shares | Sep. 28, 2015USD ($) | Jul. 30, 2015USD ($) | Feb. 21, 2015USD ($) | Feb. 18, 2015USD ($) | Dec. 31, 2014USD ($) | Jul. 04, 2014USD ($) | Jun. 11, 2014USD ($) | Jan. 24, 2014USD ($) | Apr. 17, 2013USD ($) | Mar. 08, 2013USD ($) | Feb. 12, 2013USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jan. 11, 2016USD ($)$ / shares |
Business Acquisition [Line Items] | |||||||||||||||||
Contingent consideration payments | $ (101.2) | $ (15.2) | $ (14.1) | ||||||||||||||
Integration and acquisition costs | 39.8 | 158.8 | (134.1) | ||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | $ 2,474.9 | 4,147.8 | 2,474.9 | 624.6 | |||||||||||||
Pro Forma Information | |||||||||||||||||
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income | $ 31.1 | 91.9 | $ 0 | ||||||||||||||
Minimum | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 4 years | ||||||||||||||||
Maximum | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 24 years | ||||||||||||||||
Baxalta | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Shire ADSs per Baxalta share | 0.1482 | ||||||||||||||||
Purchase price paid per share of acquiree, in cash (in USD per share) | $ / shares | $ 18 | ||||||||||||||||
Purchase price paid per share of acquiree (in USD per share) | $ / shares | $ 45.57 | ||||||||||||||||
Cash consideration payable in business acquisition | $ 32,000 | ||||||||||||||||
Dyax | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent consideration payable, per share | $ / shares | $ 4 | ||||||||||||||||
Purchase price paid per share of acquiree (in USD per share) | $ / shares | $ 37.3 | ||||||||||||||||
Cash consideration paid | $ 5,934 | ||||||||||||||||
Acquisition-date fair value of consideration | 6,330 | ||||||||||||||||
Maximum amount of contingent cash consideration | 646 | ||||||||||||||||
Fair value of contingent consideration payable | 396 | ||||||||||||||||
Integration and acquisition costs | $ 13.2 | 0 | |||||||||||||||
Non-current liabilities: | |||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | $ 6,330 | ||||||||||||||||
NPS Pharma | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 5,219.6 | ||||||||||||||||
Acquisition-date fair value of consideration | 5,219.6 | ||||||||||||||||
Integration and acquisition costs | 144.5 | 0 | |||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 41.6 | ||||||||||||||||
Short term investments | 67 | ||||||||||||||||
Accounts receivable | 33.4 | ||||||||||||||||
Inventories | 89.4 | ||||||||||||||||
Other current assets | 11.1 | ||||||||||||||||
Total current assets | 242.5 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Property, plant and equipment | 4.8 | ||||||||||||||||
Goodwill | 1,551 | ||||||||||||||||
Total assets | 6,791.3 | ||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable and other current liabilities | 75.7 | ||||||||||||||||
Short-term debt | 27.4 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Long term debt, less current portion | 78.9 | ||||||||||||||||
Deferred tax liabilities | 1,385.2 | ||||||||||||||||
Other non-current liabilities | 4.5 | ||||||||||||||||
Total liabilities | 1,571.7 | ||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 5,219.6 | ||||||||||||||||
Pro Forma Information | |||||||||||||||||
Post acquisition revenues included in consolidated statement of income | 285.9 | ||||||||||||||||
Post acquisition pre-tax losses included in consolidated statement of income | 96.7 | ||||||||||||||||
Post acquisition amortization of intangible assets included in consolidated statement of income | 260.3 | ||||||||||||||||
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income | 29.8 | ||||||||||||||||
Post acquisition integration costs included in consolidated statement of income | 90.1 | ||||||||||||||||
NPS Pharma | Currently Marketed Products | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 4,640 | ||||||||||||||||
NPS Pharma | Currently Marketed Products | GATTEX/REVESTIVE | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 24 years | ||||||||||||||||
NPS Pharma | Currently Marketed Products | NATPARA/NATPAR | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 24 years | ||||||||||||||||
NPS Pharma | Other intangible assets | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Weighted average amortization period of acquired amortizable intangible assets | 4 years | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 353 | ||||||||||||||||
NPS Pharma | Other intangible assets | Minimum | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 4 years | ||||||||||||||||
NPS Pharma | Other intangible assets | Maximum | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 5 years | ||||||||||||||||
Foresight | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 298.8 | ||||||||||||||||
Current assets: | |||||||||||||||||
Total current assets | 3 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 112.4 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Total liabilities | 116.6 | ||||||||||||||||
Foresight | IPR&D | SHP640 | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 300 | ||||||||||||||||
Solpharm | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 4.5 | ||||||||||||||||
Acquisition-date fair value of consideration | 5.2 | ||||||||||||||||
Maximum amount of contingent cash consideration | 3.1 | ||||||||||||||||
Fair value of contingent consideration payable | 0.7 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 4.4 | ||||||||||||||||
Total assets | 0.8 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | $ 5.2 | ||||||||||||||||
Meritage | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Cash consideration paid | $ 74.8 | ||||||||||||||||
Acquisition-date fair value of consideration | 166.9 | ||||||||||||||||
Maximum amount of contingent cash consideration | 175 | ||||||||||||||||
Fair value of contingent consideration payable | 92.1 | ||||||||||||||||
Current assets: | |||||||||||||||||
Total current assets | 5.5 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 32.3 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Total liabilities | 45.9 | ||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 166.9 | ||||||||||||||||
Meritage | IPR&D | SHP621 | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 175 | ||||||||||||||||
Viropharma | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 3,997 | ||||||||||||||||
Acquisition-date fair value of consideration | 3,997 | 3,997 | |||||||||||||||
Integration and acquisition costs | 144.1 | ||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 232.6 | 232.6 | |||||||||||||||
Short term investments | 57.8 | 57.8 | |||||||||||||||
Accounts receivable | 52.2 | 52.2 | |||||||||||||||
Inventories | 203.6 | 203.6 | |||||||||||||||
Deferred tax assets | 100.7 | 100.7 | |||||||||||||||
Purchased call option | 346.7 | 346.7 | |||||||||||||||
Other current assets | 50.9 | 50.9 | |||||||||||||||
Total current assets | 1,044.5 | 1,044.5 | |||||||||||||||
Non-current assets: | |||||||||||||||||
Property, plant and equipment | 24.7 | 24.7 | |||||||||||||||
Goodwill | 1,655.5 | 1,655.5 | |||||||||||||||
Other non-current assets | 10.4 | 10.4 | |||||||||||||||
Total assets | 5,370.1 | 5,370.1 | |||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable and other current liabilities | 122.7 | 122.7 | |||||||||||||||
Short-term debt | 551.4 | 551.4 | |||||||||||||||
Non-current liabilities: | |||||||||||||||||
Deferred tax liabilities | 603.5 | 603.5 | |||||||||||||||
Other non-current liabilities | 95.5 | 95.5 | |||||||||||||||
Total liabilities | 1,373.1 | 1,373.1 | |||||||||||||||
Fair value of identified assets acquired and liabilities assumed | $ 3,997 | $ 3,997 | |||||||||||||||
Pro Forma Information | |||||||||||||||||
Discount rate used in determining fair value of acquired in process research and development, low rate | 9.50% | 9.50% | |||||||||||||||
Discount rate used in determining fair value of acquired in process research and development, high rate | 10.00% | 10.00% | |||||||||||||||
Viropharma | Currently Marketed Products | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Weighted average amortization period of acquired amortizable intangible assets | 22 years | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 2,320 | $ 2,320 | |||||||||||||||
Viropharma | Currently Marketed Products | Minimum | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 10 years | ||||||||||||||||
Viropharma | Currently Marketed Products | Maximum | |||||||||||||||||
Pro Forma Information | |||||||||||||||||
Estimated useful life of intangible assets | 23 years | ||||||||||||||||
Viropharma | IPR&D | MARIBAVIR | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 315 | 315 | |||||||||||||||
Lumena | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 300.3 | ||||||||||||||||
Acquisition-date fair value of consideration | 464.3 | ||||||||||||||||
Maximum amount of contingent cash consideration | 265 | ||||||||||||||||
Fair value of contingent consideration payable | 164 | ||||||||||||||||
Contingent consideration payments | $ (90) | (90) | |||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 46.3 | ||||||||||||||||
Total current assets | 52.6 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 114.6 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Total liabilities | 169.9 | ||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 464.3 | ||||||||||||||||
Lumena | IPR&D | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 467 | ||||||||||||||||
Fibrotech | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Cash consideration paid | $ 75.6 | ||||||||||||||||
Acquisition-date fair value of consideration | 122.6 | ||||||||||||||||
Maximum amount of contingent cash consideration | 482.5 | ||||||||||||||||
Fair value of contingent consideration payable | 47 | ||||||||||||||||
Current assets: | |||||||||||||||||
Total current assets | 1.4 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 110.2 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 122.6 | ||||||||||||||||
Fibrotech | IPR&D | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 11 | ||||||||||||||||
Other Acquisitions | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Cash consideration paid | 12.1 | ||||||||||||||||
Acquisition-date fair value of consideration | 17.9 | 17.9 | |||||||||||||||
Current assets: | |||||||||||||||||
Total current assets | 1 | 1 | |||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 12.1 | 12.1 | |||||||||||||||
Other non-current assets | 4.8 | 4.8 | |||||||||||||||
Non-current liabilities: | |||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 17.9 | 17.9 | |||||||||||||||
Bikam | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Maximum amount of contingent cash consideration | $ 89.5 | ||||||||||||||||
Fair value of contingent consideration payable | $ 5.8 | $ 5.8 | |||||||||||||||
SARcode | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 151 | ||||||||||||||||
Acquisition-date fair value of consideration | 368 | ||||||||||||||||
Maximum amount of contingent cash consideration | 225 | ||||||||||||||||
Fair value of contingent consideration payable | 217 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 86.6 | ||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable and other current liabilities | 8.2 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Other non-current liabilities | 122.4 | ||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 368 | ||||||||||||||||
SARcode | IPR&D | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 412 | ||||||||||||||||
Premacure | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 30.6 | ||||||||||||||||
Acquisition-date fair value of consideration | 140.2 | ||||||||||||||||
Maximum amount of contingent cash consideration | 169 | ||||||||||||||||
Fair value of contingent consideration payable | 109.6 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 29.6 | ||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable and other current liabilities | 11.7 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Other non-current liabilities | 29.5 | ||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 140.2 | ||||||||||||||||
Premacure | IPR&D | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 151.8 | ||||||||||||||||
Lotus | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||||||
Cash consideration paid | $ 49.4 | ||||||||||||||||
Acquisition-date fair value of consideration | 174.2 | ||||||||||||||||
Maximum amount of contingent cash consideration | 275 | ||||||||||||||||
Fair value of contingent consideration payable | 124.8 | ||||||||||||||||
Current assets: | |||||||||||||||||
Total current assets | 6.8 | ||||||||||||||||
Non-current assets: | |||||||||||||||||
Goodwill | 54.1 | ||||||||||||||||
Non-current liabilities: | |||||||||||||||||
Other non-current liabilities | 63.4 | ||||||||||||||||
Fair value of identified assets acquired and liabilities assumed | 174.2 | ||||||||||||||||
Lotus | IPR&D | |||||||||||||||||
Non-current assets: | |||||||||||||||||
Other intangible assets, net | $ 176.7 |
Business Combinations (Pro Form
Business Combinations (Pro Forma Information) (Details) - NPS Pharma - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Pro Forma Information | ||
Revenues | $ 6,446.6 | $ 6,246.1 |
Net income from continuing operations | $ 1,293.6 | $ 2,950.7 |
Net income from continuing operations per share - basic | $ 2.191 | $ 5.029 |
Net income from continuing operations per share - diluted | $ 2.181 | $ 4.990 |
Pro Forma Data Adjustments | ||
An adjustment to increase amortization of intangible assets | $ (22.2) | $ (177) |
Increase/(decrease) to net income to reflect acquisition related costs | 105.3 | (105.3) |
Decrease to net income to reflect the additional interest expense | (22.2) | |
Increase/(decrease) to net income to reflect the fair value adjustment to acquisition date inventory. | $ 18.8 | $ (18.8) |
Reorganization Costs (Details)
Reorganization Costs (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)divisions | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Restructuring and Related Cost [Line Items] | |||
Reorganization costs | $ 97.9 | $ 180.9 | $ 88.2 |
Reorganization cost incurred to date | 343.4 | ||
Reorganizations costs, expected costs | 50 | ||
Restructuring Reserve [Roll Forward] | |||
Reorganization Reserve Opening liability | 38 | ||
Amounts charged to re-organization | 97.9 | 180.9 | $ 88.2 |
Reorganization liability, Paid and Utilized | (110.8) | ||
Reorganization Reserve Closing liability | $ 25.1 | 38 | |
Number of divisions | divisions | 3 | ||
Involuntary termination benefits | |||
Restructuring and Related Cost [Line Items] | |||
Reorganization costs | $ 65.4 | ||
Restructuring Reserve [Roll Forward] | |||
Reorganization Reserve Opening liability | 38 | ||
Amounts charged to re-organization | 65.4 | ||
Reorganization liability, Paid and Utilized | (88.4) | ||
Reorganization Reserve Closing liability | 15 | 38 | |
Other reorganization costs | |||
Restructuring and Related Cost [Line Items] | |||
Reorganization costs | 32.5 | ||
Restructuring Reserve [Roll Forward] | |||
Reorganization Reserve Opening liability | 0 | ||
Amounts charged to re-organization | 32.5 | ||
Reorganization liability, Paid and Utilized | (22.4) | ||
Reorganization Reserve Closing liability | $ 10.1 | $ 0 |
Integration and acquisition c72
Integration and acquisition costs (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | $ 39.8 | $ 158.8 | $ (134.1) | |
Contingent consideration payments | (101.2) | (15.2) | (14.1) | |
Viropharma | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 144.1 | |||
NPS Pharma, Viropharma, Dyax and the proposed combination with Baxalta | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | 189.7 | |||
SARcode | ||||
Business Acquisition [Line Items] | ||||
Change in fair value of contingent consideration | (159.1) | |||
Lumena and Lotus Tissue Repair | ||||
Business Acquisition [Line Items] | ||||
Change in fair value of contingent consideration | (149.9) | |||
SARcode and Ferrokin Bioscience, Inc | ||||
Business Acquisition [Line Items] | ||||
Change in fair value of contingent consideration | $ 14.7 | |||
Lumena | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration payments | $ (90) | $ (90) | ||
Viropharma, SARcode and Lotus | ||||
Business Acquisition [Line Items] | ||||
Integration and acquisition costs | $ 25 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Provision for discounts and doubtful accounts | |||
As at January 1, | $ 48.5 | $ 47.9 | $ 41.7 |
Provision charged to operations | 424.2 | 338.2 | 306.8 |
Provision utilization | (416.9) | (337.6) | (300.6) |
As at December 31, | 55.8 | 48.5 | $ 47.9 |
Accounts receivable, net | 1,201.2 | 1,035.1 | |
Accounts receivable related to royalty income | $ 79 | $ 59 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Inventory | ||
Finished goods | $ 184.9 | $ 136 |
Work-in-progress | 302 | 305.3 |
Raw materials | 148.5 | 103.5 |
Total inventories | $ 635.4 | $ 544.8 |
Results of discontinued opera75
Results of discontinued operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
(Loss)/gain from discontinued operations, net of taxes (in USD) | $ (2.8) | $ (24.3) | $ (4.5) | $ (2.5) | $ 186.7 | $ (36.1) | $ (5.2) | $ (22.7) | $ (34.1) | $ 122.7 | $ (754.5) |
Impairment of assets held for sale | 0 | 0 | 636.9 | ||||||||
Goodwill impairment charge | 0 | 0 | 198.9 | ||||||||
DERMAGRAFT | Discontinued operations | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Income taxes | 18.9 | 211.3 | 326.4 | ||||||||
(Loss)/gain from discontinued operations, net of taxes (in USD) | $ (34.1) | $ 122.7 | (754.5) | ||||||||
Impairment of assets held for sale | 636.9 | ||||||||||
Goodwill impairment charge | 191.8 | ||||||||||
Continung operations | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Goodwill impairment charge | $ 7.1 |
Prepaid Expenses and Other Cu76
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $ 35.6 | $ 36.9 |
Income tax receivable | 73.6 | 121.5 |
Value added taxes receivable | 18.2 | 13.8 |
Other current assets | 70 | 49.3 |
Prepaid expenses and other current assets, total | $ 197.4 | $ 221.5 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment, Net | |||
Land and buildings | $ 703.1 | $ 717.1 | |
Office furniture, fittings and equipment | 529.8 | 494.2 | |
Warehouse, laboratory and manufacturing equipment | 297.6 | 290 | |
Assets under construction | 93.7 | 43.9 | |
Property, plant and equipment, gross | 1,624.2 | 1,545.2 | |
Less: Accumulated depreciation | (796.1) | (707.7) | |
Property, plant and equipment, net | 828.1 | 837.5 | |
Depreciation | $ 138.5 | $ 163.5 | $ 127.6 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Goodwill arising on business acquired | $ 4,147.8 | $ 2,474.9 |
Goodwill [Roll Forward] | ||
As at January 1, | 2,474.9 | 624.6 |
Acquisition | 1,700.1 | 1,890.5 |
Foreign currency translation | (27.2) | (40.2) |
As at December 31, | $ 4,147.8 | $ 2,474.9 |
Other Intangible Assets, Net (D
Other Intangible Assets, Net (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Intangible Assets (Excluding Goodwill) [Line Items] | |||||
Amortized intangible assets | $ 9,746.9 | $ 4,846.9 | |||
Other intangible assets, gross | 11,108.9 | 6,396.9 | |||
Less: Accumulated amortization | (1,935.6) | [1] | (1,462.5) | ||
Other intangible assets, net | 9,173.3 | 4,934.4 | $ 2,312.6 | ||
Other Disclosures | |||||
Acquisitions | 5,474.9 | 3,118.6 | |||
Impairment charges | 643.7 | 190.3 | 19.9 | ||
Change in fair value of contingent consideration | 149.9 | (14.7) | $ 159.1 | ||
Estimates of Annual Amortization | |||||
2,016 | 465 | ||||
2,017 | 465 | ||||
2,018 | 465 | ||||
2,019 | 465 | ||||
2,020 | 465 | ||||
Currently Marketed Products | |||||
Intangible Assets (Excluding Goodwill) [Line Items] | |||||
Amortized intangible assets | 9,371.9 | 4,816.9 | |||
Less: Accumulated amortization | (1,852.1) | ||||
Other intangible assets | |||||
Intangible Assets (Excluding Goodwill) [Line Items] | |||||
Amortized intangible assets | 375 | [2] | 30 | ||
Less: Accumulated amortization | (83.5) | ||||
IPR&D | |||||
Intangible Assets (Excluding Goodwill) [Line Items] | |||||
Unamortized intangible assets | 1,362 | 1,550 | |||
IPR&D | Meritage and Foresight | |||||
Other Disclosures | |||||
Acquisitions | 475 | ||||
SHP602 IPR&D | |||||
Other Disclosures | |||||
Impairment charges | 166 | ||||
SHP613 | |||||
Other Disclosures | |||||
Impairment charges | $ 22 | ||||
Currently marketed products and royalty rights | NPS Pharma | |||||
Other Disclosures | |||||
Acquisitions | 4,993 | ||||
SHP625 | |||||
Other Disclosures | |||||
Unamortized intangible assets, fair value | 0 | ||||
Impairment charges | 467 | ||||
SHP608 | |||||
Other Disclosures | |||||
Impairment charges | $ 176.7 | ||||
SHP625 and SHP608 combined | Lumena and Lotus Tissue Repair | |||||
Other Disclosures | |||||
Change in fair value of contingent consideration | $ (203.2) | ||||
[1] | Comprising $1,852.1 million of accumulated amortization for intellectual property rights acquired for currently marketed products and $83.5 million for other intangible asset | ||||
[2] | Other intangible assets primarily comprises of royalty right assets acquired with NPS Pharma. |
Other Intangible Assets, Net (R
Other Intangible Assets, Net (Roll Forward) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Intangible Assets Roll Forward | |||
As at January 1, | $ 4,934.4 | $ 2,312.6 | |
Acquisitions | 5,474.9 | 3,118.6 | |
Divestment on non-core product rights | 0 | (17.3) | |
Amortization charged | (498.7) | (243.8) | |
Impairment charges | (643.7) | (190.3) | $ (19.9) |
Foreign currency translation | (93.6) | (45.4) | |
As at December 31, | $ 9,173.3 | $ 4,934.4 | $ 2,312.6 |
Accounts Payable and Accrued 81
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Payable and Accrued Liabilities, Current [Line Items] | ||
Trade accounts payable and accrued purchases | $ 336.3 | $ 247.7 |
Accrued rebates - Medicaid | 632.2 | 563.9 |
Accrued rebates - Managed care | 350.2 | 318.2 |
Sales return reserve | 128.3 | 131.7 |
Accrued bonuses | 152 | 150.7 |
Accrued employee compensation and benefits payable | 102.5 | 109.1 |
R&D accruals | 65.3 | 88.3 |
Other accrued expenses | 283.8 | 299.8 |
Accounts payable and accrued expenses, total | $ 2,050.6 | $ 1,909.4 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities, Current [Abstract] | ||
Income taxes payable | $ 73.5 | $ 16.2 |
Value added taxes | 21.8 | 16.6 |
Contingent consideration payable | 19.5 | 194.5 |
Other current liabilities | 29.2 | 35.2 |
Other current liabilities, total | $ 144 | $ 262.5 |
Borrowings (Details)
Borrowings (Details) $ in Millions | Apr. 11, 2017 | Jul. 11, 2016 | Feb. 22, 2016USD ($) | Jan. 11, 2016USD ($)contract | Nov. 02, 2015USD ($)contract | Sep. 28, 2015USD ($) | Jan. 11, 2015USD ($) | Dec. 12, 2014USD ($) | Nov. 11, 2013USD ($)contract | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Long-term borrowings | $ 69.9 | $ 0 | ||||||||||
Short-term borrowings | 1,511.5 | 850 | ||||||||||
Borrowing, Long-term and Short-term ,Combined Amount | 1,581.4 | 850 | ||||||||||
Repayment of lines of credit | (3,110.9) | (1,461.8) | $ 0 | |||||||||
2013 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement initiation date | Nov. 11, 2013 | |||||||||||
Facilitiy agreement total amount | $ 2,600 | |||||||||||
Number of term loan facilities | contract | 2 | |||||||||||
Short-term borrowings | 0 | 850 | ||||||||||
Repayment of lines of credit | $ (350) | |||||||||||
January 2015 Facility Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement initiation date | Jan. 11, 2015 | |||||||||||
Facilitiy agreement total amount | $ 850 | 750 | ||||||||||
Facility agreement expiration date | Jul. 11, 2016 | Jan. 10, 2016 | ||||||||||
Line of Credit Facility, Margin Interest Rate Per Annum Increase | 0.25% | |||||||||||
Maturity extension option | 6 months | |||||||||||
Short-term borrowings | 750 | 0 | ||||||||||
Repayment of lines of credit | $ (100) | $ (100) | ||||||||||
Line of Credit Facility, Margin Interest Rate | 0.50% | |||||||||||
January 2016 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement initiation date | Jan. 11, 2016 | |||||||||||
Facilitiy agreement total amount | $ 18,000 | |||||||||||
Rate of commitment fee, of the applicable interest rate margin | 35.00% | |||||||||||
Covenant terms | The January 2016 Facilities Agreement includes customary representations and warranties, covenants and events of default, including requirements that Shire’s (i) ratio of Net Debt to EBITDA in respect of the most recently ended 12-month relevant period, (each as defined in the January 2016 Facilities Agreement), must not, at any time, exceed 3.5:1, except that following the combination with Baxalta, or any other acquisition fulfilling certain criteria, Shire may elect on a once only basis to increase this ratio to (a) 5.5:1 for the relevant period in which the acquisition was completed, (b) 5.0:1 in respect of the first relevant period following the relevant period in which the acquisition was completed and (c) 4.5:1 in respect of the second relevant period following the relevant period in which the acquisition was completed, and (ii) ratio of EBITDA to Net Interest, for the most recently ended 12-month relevant period (each as defined in the January 2016 Facilities Agreement) must not be less than 4.0:1. | |||||||||||
Number of term loan facilities | contract | 2 | |||||||||||
Interest rate description | Interest on any loans made under the January 2016 Facilities Agreement will be payable on the last day of each interest period, which may be one week or one, two, three or six months, or as otherwise agreed with the lenders. The interest rate applicable to the January 2016 Facilities Agreement is LIBOR plus 1.25 percent per annum, increasing by: (i) 0.25 percent per annum on July 11, 2016 and on each subsequent date falling at three month intervals thereafter until (and excluding) April 11, 2017 and (ii) 0.50 percent per annum on April 11, 2017 and on each subsequent date falling at three month intervals thereafter. | |||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 3.5 | |||||||||||
Line of Credit Facility, Margin Interest Rate | 0.50% | 0.25% | 1.25% | |||||||||
January 2016 Facilities Agreement | Increase of Net Debt to EBITDA ratio for the Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 5.5 | |||||||||||
January 2016 Facilities Agreement | Increase of Net Debt to EBITDA ratio for the first Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 5 | |||||||||||
January 2016 Facilities Agreement | Increase of Net Debt to EBITDA ratio for the second Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 4.5 | |||||||||||
November 2015 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement initiation date | Nov. 2, 2015 | |||||||||||
Facilitiy agreement total amount | $ 5,600 | |||||||||||
Covenant terms | The November 2015 Facilities Agreement includes customary representations and warranties, covenants and events of default, including requirements that Shire’s (i) ratio of Net Debt to EBITDA in respect of the most recently ended 12-month relevant period, (each as defined in the November 2015 Facilities Agreement), must not, at any time, exceed 3.5:1, except that following an acquisition fulfilling certain criteria, Shire may elect on a once only basis to increase this ratio to (a) 5.5:1 for the relevant period in which the acquisition was completed, (b) 5.0:1 in respect of the first relevant period following the relevant period in which the acquisition was completed and (c) 4.5:1 in respect of the second relevant period following the relevant period in which the acquisition was completed, and (ii) ratio of EBITDA to Net Interest in respect of the most recently ended 12 month relevant period, (each as defined in the November 2015 Facilities Agreement), must not be less than 4.0:1. | |||||||||||
Number of term loan facilities | contract | 3 | |||||||||||
Interest rate description | Interest on any loans made under the November 2015 Facilities Agreement is payable on the last day of each interest period, which may be one week or one, two, three or six months, or as otherwise agreed with the lenders.  The interest rate applicable is LIBOR plus, in the case of November 2015 Facility A, 0.55% per annum, in the case of November 2015 Facility B, 0.65% per annum and, in the case of November 2015 Facility C, 0.75% per annum, in each case until delivery of the first compliance certificate required to be delivered after the date of the November 2015 Facilities Agreement and is subject to change thereafter depending on (i) the prevailing ratio of Net Debt to EBITDA (each as defined in the November 2015 Facilities Agreement) in respect of the most recently completed financial year or financial half year and (ii)  the occurrence and continuation of an event of default in respect of the financial covenants or failure to provide a compliance certificate. | |||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 3.5 | |||||||||||
November 2015 Facilities Agreement | Increase of Net Debt to EBITDA ratio for the Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 5.5 | |||||||||||
November 2015 Facilities Agreement | Increase of Net Debt to EBITDA ratio for the first Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 5 | |||||||||||
November 2015 Facilities Agreement | Increase of Net Debt to EBITDA ratio for the second Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 4.5 | |||||||||||
Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Rate of commitment fee, of the applicable interest rate margin | 10.00% | |||||||||||
Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Rate of commitment fee, of the applicable interest rate margin | 35.00% | |||||||||||
Maximum | January 2016 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 4 | |||||||||||
Maximum | November 2015 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 4 | |||||||||||
Term loan facility one | 2013 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Term loan facility | $ 1,750 | |||||||||||
Term loan facilitly two | 2013 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Term loan facility | $ 850 | |||||||||||
November 2015 Facility A | November 2015 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement expiration date | Nov. 2, 2016 | |||||||||||
Term loan facility | $ 1,000 | |||||||||||
Line of Credit Facility, Margin Interest Rate | 0.55% | |||||||||||
November 2015 Facility B | November 2015 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement expiration date | Nov. 2, 2017 | |||||||||||
Term loan facility | $ 2,200 | |||||||||||
Line of Credit Facility, Margin Interest Rate | 0.65% | |||||||||||
November 2015 Facility C | November 2015 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement expiration date | Nov. 2, 2018 | |||||||||||
Term loan facility | $ 2,400 | |||||||||||
Line of Credit Facility, Margin Interest Rate | 0.75% | |||||||||||
January 2016 Facility B | January 2016 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement expiration date | Jan. 11, 2017 | |||||||||||
Term loan facility | $ 5,000 | |||||||||||
January 2016 Facility A | January 2016 Facilities Agreement | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement expiration date | Jan. 11, 2017 | |||||||||||
Term loan facility | $ 13,000 | |||||||||||
Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Facility agreement initiation date | Dec. 12, 2014 | |||||||||||
Facility agreement expiration date | Dec. 12, 2020 | |||||||||||
Rate of commitment fee, of the applicable interest rate margin | 35.00% | |||||||||||
Covenant terms | The RCF includes customary representations and warranties, covenants and events of default, including requirements that Shire’s (i) ratio of Net Debt to EBITDA in respect of the most recently-ended 12-month relevant period (each as defined in the RCF) must not, at any time, exceed 3.5:1 except that, following an acquisition fulfilling certain criteria, Shire may on a once only basis elect to increase this ratio to (a) 5.5:1 for the relevant period in which the acquisition was completed (b) 5.0:1 in respect of the first relevant period following the relevant period in which the acquisition was completed and (c) 4.5:1 in respect of the second relevant period following the relevant period in which the acquisition was completed, and (ii) ratio of EBITDA to Net Interest for the most recently-ended 12-month relevant period (each as defined in the RCF) must not be less than 4.0:1. | |||||||||||
Commitment fee description | Shire shall also pay (i) a commitment fee equal to 35% of the applicable margin on available commitments under the RCF for the availability period applicable thereto and (ii) a utilization fee equal to (a) 0.10% per year of the aggregate of all outstanding loans up to an aggregate base currency amount equal to $700 million, (b) 0.15% per year of the amount by which the aggregate base currency amount of all outstanding loans exceeds $700 million but is equal to or less than $1,400 million and (c) 0.30% per year of the amount by which the aggregate base currency amount of all outstanding loans exceeds $1,400 million. | |||||||||||
Swingline Facility | $ 250 | |||||||||||
Interest rate description | Interest on any loans made under the RCF is 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 for the RCF is: LIBOR (or, in relation to any revolving loan in euro, EURIBOR); plus 0.30% per annum subject to change depending upon (i) the prevailing ratio of Net Debt to EBITDA (each as defined in the RCF) in respect of the most recently completed financial year or financial half year and (ii) the occurrence and continuation of an event of default in respect of the financial covenants or the failure to provide a compliance certificate. | |||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 3.5 | |||||||||||
Principal amount | $ 2,100 | |||||||||||
Short-term borrowings | 750 | 0 | ||||||||||
Line of Credit Facility, Margin Interest Rate | 0.30% | |||||||||||
Revolving Credit Facility | Increase of Net Debt to EBITDA ratio for the Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 5.5 | |||||||||||
Revolving Credit Facility | Increase of Net Debt to EBITDA ratio for the first Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 5 | |||||||||||
Revolving Credit Facility | Increase of Net Debt to EBITDA ratio for the second Relevant Period in which an acquisiton was completed | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 4.5 | |||||||||||
Revolving Credit Facility | Base Currency Amount Equal to $700million | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Rate of utilization fee | 0.10% | |||||||||||
Revolving Credit Facility | Base Currency amount exceeds $700m but equal or less than $1400m | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Rate of utilization fee | 0.15% | |||||||||||
Revolving Credit Facility | Base currency amount exceeds $1400m | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Rate of utilization fee | 0.30% | |||||||||||
Revolving Credit Facility | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Borrowings, Option Covenant,Net Debt to EBITDA | 4 | |||||||||||
Secured Non-recourse Debts | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term borrowings | 69.9 | 0 | ||||||||||
Short-term borrowings | 11.5 | $ 0 | ||||||||||
Sensipar and Mimpara Debt, Amgen | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal amount | 145 | |||||||||||
Regpara Debt, DRI | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, maximum obligation | 96 | |||||||||||
PTH-184 Debt, DRI | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, maximum obligation | $ 125 |
Other Non-current Liabilities84
Other Non-current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities, Noncurrent [Abstract] | ||
Income taxes payable | $ 195.8 | $ 199.2 |
Contingent consideration payable | 456.4 | 435.4 |
Other non-current liabilities | 146.6 | 102.1 |
Other noncurrent liabilities, total | $ 798.8 | $ 736.7 |
Commitments and Contingencies85
Commitments and Contingencies (Leases, and LC and Guarantees ) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Future Minimum Lease Payments under Operating Leases | |||
2,016 | $ 51.5 | ||
2,017 | 40.8 | ||
2,018 | 34.6 | ||
2,019 | 30.2 | ||
2,020 | 29.4 | ||
Thereafter | 185.8 | ||
Future minimum lease payments, total | 372.3 | ||
Operating Leases, Rent Expense | |||
Lease and rental expense | 40.7 | $ 32.9 | $ 44 |
Letters of credit and guarantees | |||
Irrevocable standby letters of credit and guarantees | $ 48 |
Commitments and Contingencies86
Commitments and Contingencies (Collaborative Arrangements) (Details) - Out-licensing Arrangement - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Out-licensing arrangements | |||
Milestone payments received | $ 19.6 | $ 2.2 | $ 3 |
Other Revenues | |||
Out-licensing arrangements | |||
Milestone revenues recognized | 8.9 | 16.7 | 5 |
Product Sales | |||
Out-licensing arrangements | |||
Milestone revenues recognized | 51 | $ 46.5 | $ 58.3 |
Development Milestone | |||
Out-licensing arrangements | |||
Maximum milestone payment receivable | 32 | ||
Sales Milestone | |||
Out-licensing arrangements | |||
Maximum milestone payment receivable | $ 43 |
Commitments and Contingencies87
Commitments and Contingencies (Commitments and Loss Contingency) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Legal Matters [Line Items] | ||
Provisions for litigation loss, insurance claims and other disputes | $ 9.9 | $ 16.9 |
Clinical Testing | ||
Commitment [Line Items] | ||
Commitment amount | 490 | 382 |
Contract Manufacturing | ||
Commitment [Line Items] | ||
Commitment amount | 325 | 384 |
Commitments expected to be paid in next year | 101 | |
Other Purchasing Commitment | ||
Commitment [Line Items] | ||
Commitment amount | 485 | 265 |
Commitments expected to be paid in next year | 459 | |
Investment Commitment | ||
Commitment [Line Items] | ||
Commitment amount | 22 | 67 |
Capital Commitment | ||
Commitment [Line Items] | ||
Commitment amount | $ 60 | $ 3 |
Accumulated Other Comprehensi88
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
As at January 1, | $ (31.5) | ||
Net current period other comprehensive (loss)/income | (152.3) | $ (141.7) | $ 23.3 |
As at December 31, | (183.8) | (31.5) | |
Foreign currency translation adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
As at January 1, | (25.7) | 110.4 | 85.1 |
Other comprehensive (loss)/ income before reclassification | (136.1) | 25.3 | |
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities | 0 | 0 | |
Net current period other comprehensive (loss)/income | (156.4) | (136.1) | 25.3 |
As at December 31, | (182.1) | (25.7) | 110.4 |
Unrealized holding gain/(loss) on available-for-sale securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
As at January 1, | (5.8) | (0.2) | 1.8 |
Other comprehensive (loss)/ income before reclassification | 3.7 | 1.5 | |
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities | (9.3) | (3.5) | |
Net current period other comprehensive (loss)/income | 4.1 | (5.6) | (2) |
As at December 31, | (1.7) | (5.8) | (0.2) |
Accumulated other comprehensive (loss)/income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
As at January 1, | (31.5) | 110.2 | 86.9 |
Other comprehensive (loss)/ income before reclassification | (132.4) | 26.8 | |
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities | (9.3) | (3.5) | |
Net current period other comprehensive (loss)/income | (152.3) | (141.7) | 23.3 |
As at December 31, | $ (183.8) | $ (31.5) | $ 110.2 |
Financial Instruments (Interest
Financial Instruments (Interest Rate and Credit Risks) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($) | |
Interest rate risk | ||
Average interest rate received on cash and liquid investments | less than 1% per annum. | |
Line of Credit Facility [Line Items] | ||
Interest rate risk exposure | The Company regularly evaluates the interest rate risk on its facilities. At December 31, 2015 the Company considered the risks associated with floating interest rates on borrowings under its facilities as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the January 2015 Facility Agreement and the RCF at December 31, 2015 would increase interest expense by approximately $15 million per annum or would decrease the interest expense by approximately $7 million per annum. | |
Short-term borrowings | $ 1,511.5 | $ 850 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of major external customers | customer | 3 | |
Customer concentration risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk percentage | 47.00% | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Short-term borrowings | $ 750 | $ 0 |
Government-owned or Supported Healthcare Providers | Italy | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable received | 100 | |
Government-owned or Supported Healthcare Providers | Spain | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable received | $ 116 |
Financial Instruments (Foreign
Financial Instruments (Foreign Exchange Risk and Its Classification on Balance Sheet) (Details) - Foreign Exchange Contract $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)contract | Dec. 31, 2014USD ($) | |
Derivatives, Fair Value | ||
Net derivative fair value assets | $ 0.5 | |
Net derivative fair value liabilities | 10.1 | |
Potential effect of rights of set off associated with the foreign exchange contracts | $ 1.4 | |
Number of swap and forward foreign exchange contracts outstanding | contract | 39 | |
Swaps and forward contracts maturity | 90 days | |
Prepaid expenses and other current assets | ||
Derivatives, Fair Value | ||
Assets | $ 1.9 | $ 12.6 |
Other current liabilities | ||
Derivatives, Fair Value | ||
Liabilities | $ 11.5 | $ 7.8 |
Financial Instruments (Foreig91
Financial Instruments (Foreign Exchange Risk and Its Effect on Income Statement) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Foreign Exchange Contract | Other income, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of net gains/(losses) recognized in income | $ 9.5 | $ 8 | $ (1.8) |
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 ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Carrying value | |||
Financial assets: | |||
Available-for-sale securities | $ 17.2 | $ 13.1 | |
Contingent consideration receivable | 13.8 | 15.9 | |
Foreign exchange contracts, asset | 1.9 | 12.6 | |
Financial liabilities: | |||
Foreign exchange contracts, liability | 11.5 | 7.8 | |
Contingent consideration payable | 475.9 | 629.9 | |
Recurring Basis | Estimated fair value | |||
Financial assets: | |||
Available-for-sale securities | [1] | 17.2 | 13.1 |
Contingent consideration receivable | [2] | 13.8 | 15.9 |
Foreign exchange contracts, asset | 1.9 | 12.6 | |
Financial liabilities: | |||
Foreign exchange contracts, liability | 11.5 | 7.8 | |
Contingent consideration payable | [3] | 475.9 | 629.9 |
Recurring Basis | Level 1 | |||
Financial assets: | |||
Available-for-sale securities | [1] | 17.2 | 13.1 |
Contingent consideration receivable | [2] | 0 | 0 |
Foreign exchange contracts, asset | 0 | 0 | |
Financial liabilities: | |||
Foreign exchange contracts, liability | 0 | 0 | |
Contingent consideration payable | [3] | 0 | 0 |
Recurring Basis | Level 2 | |||
Financial assets: | |||
Available-for-sale securities | [1] | 0 | 0 |
Contingent consideration receivable | [2] | 0 | 0 |
Foreign exchange contracts, asset | 1.9 | 12.6 | |
Financial liabilities: | |||
Foreign exchange contracts, liability | 11.5 | 7.8 | |
Contingent consideration payable | [3] | 0 | 0 |
Recurring Basis | Level 3 | |||
Financial assets: | |||
Available-for-sale securities | [1] | 0 | 0 |
Contingent consideration receivable | [2] | 13.8 | 15.9 |
Foreign exchange contracts, asset | 0 | 0 | |
Financial liabilities: | |||
Foreign exchange contracts, liability | 0 | 0 | |
Contingent consideration payable | [3] | $ 475.9 | $ 629.9 |
[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 (Asset93
Fair Value Measurement (Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Change in the Fair Value of Contigent Consideration Receivable | |||
Balance at beginning of period | $ 15.9 | $ 36.1 | |
Initial recognition of contingent consideration receivable | 0 | 33.6 | |
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | 13.6 | (2.9) | |
Reclassification of amounts to Other receivables within Other current assets | (17.8) | (20.2) | |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2.1 | 2.9 | |
Balance at end of period | 13.8 | 15.9 | $ 36.1 |
Change in the Fair Value of Contigent Consideration Payable | |||
Balance at beginning of period | 629.9 | 405.9 | |
Initial recognition of contingent consideration payable | 92.8 | 226.7 | |
Change in fair value during the period with the corresponding adjustment recognized (within Integration and acquisition costs) in the income statement | (149.9) | 14.7 | (159.1) |
Reclassification of amounts to Other current liabilities | (100.8) | (15.1) | |
Change in fair value during the period with corresponding adjustment to the associated intangible asset | 1.4 | 2.7 | |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2.5 | (5) | |
Balance at end of period | 475.9 | 629.9 | $ 405.9 |
Contingent consideration payable, current (within other current liabilities) | 19.5 | 194.5 | |
Contingent consideration payable, non-current (within other non-current liabilities) | 456.4 | 435.4 | |
Discontinued operations | |||
Change in the Fair Value of Contigent Consideration Receivable | |||
Gain/(loss) on change in the fair value of divestiture contingent consideration receivable | $ 0 | $ (33.6) |
Fair Value Measurement (Quantit
Fair Value Measurement (Quantitative Information About Recurring and Non-recurring Level 3 Fair Value Measurements) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Inputs | |||
Impairment of intangible assets | $ 643.7 | $ 190.3 | $ 19.9 |
Recurring Basis | Contingent Consideration Payable | Minimum | |||
Fair Value Inputs | |||
Assumed market participant discount rate | 1.20% | ||
Cumulative probability of milestones being achieved (in percent) | 4.00% | ||
Periods in which milestones are expected to be achieved | 2,016 | ||
Forecast quarterly royalties payable on net sales of relevant products | $ 2.1 | ||
Recurring Basis | Contingent Consideration Payable | Maximum | |||
Fair Value Inputs | |||
Assumed market participant discount rate | 12.40% | ||
Cumulative probability of milestones being achieved (in percent) | 90.00% | ||
Periods in which milestones are expected to be achieved | 2,030 | ||
Forecast quarterly royalties payable on net sales of relevant products | $ 6.6 | ||
Recurring Basis | Contingent Consideration Payable | Income approach (probability weighted discounted cash flow) | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Liabilities | 475.9 | ||
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Assets | $ 13.8 | ||
Fair Value Inputs | |||
Assumed market participant discount rate | 8.40% | ||
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | Minimum | |||
Fair Value Inputs | |||
Probability weightings applied to different sales scenarios (in percent) | 10.00% | ||
Future forecast consideration receivable based on contractual terms with purchaser | $ 0 | ||
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | Maximum | |||
Fair Value Inputs | |||
Probability weightings applied to different sales scenarios (in percent) | 70.00% | ||
Future forecast consideration receivable based on contractual terms with purchaser | $ 25 | ||
Nonrecurring Basis | SHP625 and SHP608 combined | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
IPR&D intangible assets, fair value | 0 | ||
Fair Value Inputs | |||
Impairment of intangible assets | $ 643.7 | ||
Nonrecurring Basis | Income approach (discounted cash flow) | Minimum | SHP625 and SHP608 combined | |||
Fair Value Inputs | |||
Assumed market participant discount rate | 9.10% | ||
Probability of regulatory approval being obtained (in percent) | 5.00% | ||
Expected commercial launch date | 2,020 | ||
Nonrecurring Basis | Income approach (discounted cash flow) | Maximum | SHP625 and SHP608 combined | |||
Fair Value Inputs | |||
Assumed market participant discount rate | 10.70% | ||
Probability of regulatory approval being obtained (in percent) | 33.00% | ||
Expected commercial launch date | 2,021 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
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 | $ 12,100 | ||
Treasury Stock | |||
Consideration paid for treasury stock purchased (in USD) | $ 243.8 | ||
Income Access Share Arrangements | |||
Cash dividends paid to Income Access Share Trustee (in USD) | $ 127.7 | $ 112.8 | 91.1 |
Irish Witholding Tax, Rate | 20.00% | ||
Share Buy-back Program | |||
Treasury Stock | |||
Consideration paid for treasury stock purchased (in USD) | $ 0 | $ 0 | 193.8 |
Share Buy-back Program | |||
Cost of share repurchases (in USD) | $ 193.8 | ||
Ordinary Shares | |||
Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock acquired (in shares) | 4,200,000 | ||
Ordinary Shares | Shares held by EBT | |||
Treasury Stock | |||
Treasury stock held (in shares) | 600,000 | 700,000 | 2,400,000 |
Ordinary Shares | Shares held under share buy-back program | |||
Treasury Stock | |||
Treasury stock held (in shares) | 8,500,000 | 9,000,000 | 9,800,000 |
ADS | |||
Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock acquired (in shares) | 800,000 | ||
ADS | Shares held by EBT | |||
Treasury Stock | |||
Treasury stock held (in shares) | 200,000 | 300,000 | 400,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | |||||||||||||
Income from continuing operations, net of taxes (in USD) | $ 283,400,000 | $ 477,100,000 | $ 164,100,000 | $ 412,900,000 | $ 1,985,600,000 | $ 515,800,000 | $ 528,300,000 | $ 253,100,000 | $ 1,337,500,000 | $ 3,282,800,000 | $ 1,419,600,000 | ||
(Loss)/gain from discontinued operations, net of taxes (in USD) | (2,800,000) | (24,300,000) | (4,500,000) | (2,500,000) | 186,700,000 | (36,100,000) | (5,200,000) | (22,700,000) | (34,100,000) | 122,700,000 | (754,500,000) | ||
Net income | $ 280,600,000 | $ 452,800,000 | $ 159,600,000 | $ 410,400,000 | $ 2,172,300,000 | $ 479,700,000 | $ 523,100,000 | $ 230,400,000 | $ 1,303,400,000 | 3,405,500,000 | 665,100,000 | ||
Interest on convertible bonds, net of tax (in USD) | 0 | 28,300,000 | |||||||||||
Numerator for diluted earnings per share (in USD) | $ 3,405,500,000 | $ 693,400,000 | |||||||||||
Schedule of Weighted Average Number of Shares | |||||||||||||
Basic (in shares) | [1] | 590,400,000 | 586,700,000 | 552,000,000 | |||||||||
Effect of dilutive shares: | |||||||||||||
Share based awards to employees (in shares) | [2] | 2,700,000 | 4,600,000 | 4,800,000 | |||||||||
Convertible bonds 2.75% due 2014 (in shares) | 0 | 0 | 33,500,000 | [3] | |||||||||
Diluted (in shares) | 593,100,000 | 591,300,000 | 590,300,000 | ||||||||||
Earning per ordinary share - basic | |||||||||||||
Earnings from continuing operations (in USD per share) | $ 479,000 | $ 0.807 | $ 0.278 | $ 0.701 | $ 3.383 | $ 0.878 | $ 0.901 | $ 0.433 | $ 2.265 | $ 5.596 | $ 2.572 | ||
(Loss)/gain from discontinued operations (in USD per share) | (5,000) | (0.041) | (0.008) | (0.004) | 0.318 | (0.061) | (0.009) | (0.039) | (0.058) | 0.209 | (1.367) | ||
Earnings per ordinary share - basic (in USD per share) | 474,000 | 0.766 | 0.270 | 0.697 | 3.701 | 0.817 | 0.892 | 0.394 | 2.207 | 5.805 | 1.205 | ||
Earnings per ordinary share - diluted | |||||||||||||
Earnings from continuing operations (in USD per share) | 478,000 | 0.804 | 0.277 | 0.697 | 3.357 | 0.870 | 0.895 | 0.430 | 2.255 | 5.552 | 2.453 | ||
(Loss)/gain from discontinued operations (in USD per share) | (5,000) | (0.041) | (0.008) | (0.004) | 0.316 | (0.061) | (0.009) | (0.039) | (0.058) | 0.208 | (1.278) | ||
Earnings per ordinary share - diluted (in USD per share) | $ 473,000 | $ 0.763 | $ 0.269 | $ 0.693 | $ 3.673 | $ 0.809 | $ 0.886 | $ 0.391 | $ 2.197 | $ 5.760 | $ 1.175 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Convertible bond, convertible into number of ordinary shares | 33,806,464 | ||||||||||||
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 | ||||||||||||
Share Awards | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Antidilutive securities excluded from computation of earnings per share | [4] | 3,400,000 | 300,000 | 500,000 | |||||||||
[1] | Excludes shares purchased by the EBT and under the shares 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 $950,000 were redeemed pursuant to the option redemption notice issued on November 26, 2013. The Company has calculated the impact of the Bonds on diluted earnings per share from January 1, 2013 to the actual date of conversion of the Bonds using the ‘if-converted’ method. | ||||||||||||
[4] | Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plc’s average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. |
Segmental Reporting (Revenues a
Segmental Reporting (Revenues and Long-lived Assets by Geographic Location) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 1,715.7 | $ 1,655 | $ 1,557.6 | $ 1,488.4 | $ 1,576.1 | $ 1,597.1 | $ 1,502.1 | $ 1,346.8 | $ 6,416.7 | $ 6,022.1 | $ 4,934.3 |
Long-lived assets | 835.2 | 844.2 | 835.2 | 844.2 | |||||||
Ireland | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 14.1 | 18.5 | 22.5 | ||||||||
Long-lived assets | 1.7 | 3.1 | 1.7 | 3.1 | |||||||
Rest of World | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 1,743.4 | 1,829.5 | 1,662.5 | ||||||||
Long-lived assets | 82.2 | 91.3 | 82.2 | 91.3 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 4,659.2 | 4,174.1 | $ 3,249.3 | ||||||||
Long-lived assets | $ 751.3 | $ 749.8 | $ 751.3 | $ 749.8 |
Segmental Reporting (Revenues98
Segmental Reporting (Revenues and Accounts Receivable by Major Customers) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue, Major Customer [Line Items] | |||
Product sales | $ 6,099.9 | $ 5,830.4 | $ 4,757.5 |
Customer concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Revenue by major customer, percent | 47.00% | ||
Cardinal Health Inc. | |||
Revenue, Major Customer [Line Items] | |||
Product sales | $ 796.9 | 979.9 | $ 853.7 |
Accounts receivable by major customer | $ 181.7 | $ 164.5 | |
Revenue by major customer, percent | 13.00% | 17.00% | 18.00% |
McKesson Corp. | |||
Revenue, Major Customer [Line Items] | |||
Product sales | $ 1,044.1 | $ 1,021 | $ 902.9 |
Accounts receivable by major customer | $ 193.1 | $ 179.4 | |
Revenue by major customer, percent | 17.00% | 18.00% | 19.00% |
AmerisourceBergen Corp | |||
Revenue, Major Customer [Line Items] | |||
Product sales | $ 1,048.3 | $ 759.2 | $ 721 |
Accounts receivable by major customer | $ 171.5 | $ 134.9 | |
Revenue by major customer, percent | 17.00% | 13.00% | 15.00% |
Segmental Reporting (Revenue by
Segmental Reporting (Revenue by Product) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue from External Customer [Line Items] | |||
Product sales | $ 6,099.9 | $ 5,830.4 | $ 4,757.5 |
VYVANSE | |||
Revenue from External Customer [Line Items] | |||
Product sales | 1,722.2 | 1,449 | 1,227.8 |
CINRYZE | |||
Revenue from External Customer [Line Items] | |||
Product sales | 617.7 | 503 | 0 |
LIALDA/MEZAVANT | |||
Revenue from External Customer [Line Items] | |||
Product sales | 684.4 | 633.8 | 528.9 |
ADDERALL XR | |||
Revenue from External Customer [Line Items] | |||
Product sales | 362.8 | 383.2 | 375.4 |
INTUNIV | |||
Revenue from External Customer [Line Items] | |||
Product sales | 65.1 | 327.2 | 334.9 |
PENTASA | |||
Revenue from External Customer [Line Items] | |||
Product sales | 305.8 | 289.7 | 280.6 |
FOSRENOL | |||
Revenue from External Customer [Line Items] | |||
Product sales | 177.6 | 183 | 183.4 |
XAGRID | |||
Revenue from External Customer [Line Items] | |||
Product sales | 100.8 | 108.5 | 99.4 |
Other Products | |||
Revenue from External Customer [Line Items] | |||
Product sales | 116.2 | 128.9 | 136.1 |
REPLAGAL | |||
Revenue from External Customer [Line Items] | |||
Product sales | 441.2 | 500.4 | 467.9 |
ELAPRASE | |||
Revenue from External Customer [Line Items] | |||
Product sales | 552.6 | 592.8 | 545.6 |
VPRIV | |||
Revenue from External Customer [Line Items] | |||
Product sales | 342.4 | 366.7 | 342.7 |
FIRAZYR | |||
Revenue from External Customer [Line Items] | |||
Product sales | 445 | 364.2 | 234.8 |
GATTEX/REVESTIVE | |||
Revenue from External Customer [Line Items] | |||
Product sales | 141.7 | 0 | 0 |
NATPARA | |||
Revenue from External Customer [Line Items] | |||
Product sales | $ 24.4 | $ 0 | $ 0 |
Receipt of Break Fee (Details)
Receipt of Break Fee (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Unusual or Infrequent Item [Line Items] | |
Receipt of break fee | $ 1,635.4 |
Retirement Benefits (Details)
Retirement Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Contributions to personal defined contribution pension plans | $ 52.3 | $ 49.8 | $ 45.7 |
Taxation (Pretax Income from Co
Taxation (Pretax Income from Continuing Operations and Provision for Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components of pre tax income from continuing operations | |||
Income from continuing operations before income taxes and equity in (losses)/earnings of equity method investees | $ 1,385.8 | $ 3,336.2 | $ 1,693.6 |
Current income taxes: | |||
Total current taxes | 227.6 | 26.2 | 355.6 |
Deferred taxes: | |||
Total deferred taxes | (181.5) | 29.9 | (77.7) |
Total income taxes | 46.1 | 56.1 | 277.9 |
Ireland | |||
Components of pre tax income from continuing operations | |||
Republic of Ireland | (11.4) | 1,472 | (47.8) |
United States | |||
Components of pre tax income from continuing operations | |||
Pre-tax income from continuing operations, foreign | 975.8 | 1,025.9 | 1,153.3 |
Other jurisdictions | |||
Components of pre tax income from continuing operations | |||
Pre-tax income from continuing operations, foreign | 421.4 | 838.3 | 588.1 |
Republic of Ireland | |||
Current income taxes: | |||
Current domestic tax expense (benefit) | 0.8 | 0 | 0 |
US federal tax | |||
Current income taxes: | |||
Current foreign tax expense (benefit) | 191.7 | 291.8 | 274.3 |
Deferred taxes: | |||
Deferred foreign tax expense (benefit) | (151.2) | 39.7 | 23.8 |
Other | |||
Current income taxes: | |||
Other, current | 17.8 | (290.9) | 63.4 |
Deferred taxes: | |||
Other, deferred | (28.6) | (6.9) | (93.2) |
US state and local taxes | |||
Current income taxes: | |||
Current foreign tax expense (benefit) | 17.3 | 25.3 | 17.9 |
Deferred taxes: | |||
Deferred foreign tax expense (benefit) | $ (1.7) | $ (2.9) | $ (8.3) |
Taxation (Effective Income Tax
Taxation (Effective Income Tax Rate Reconciliation, and Statutory Tax Rates) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Effective Income Tax Rate Reconciliation | ||||
Income from continuing operations before income taxes and equity in earnings of equity method investees (in USD) | $ 1,385.8 | $ 3,336.2 | $ 1,693.6 | |
Statutory tax rate | [1] | 25.00% | 25.00% | 25.00% |
Other permanent differences: | ||||
US R&D credit | (7.70%) | (2.50%) | (4.50%) | |
Intra-group items | [2] | (19.50%) | (6.30%) | (9.20%) |
Other permanent items | 2.00% | 0.70% | (0.70%) | |
Change in valuation allowance | 1.00% | 0.80% | 0.90% | |
Differences in taxation rates | 7.30% | 3.40% | 7.80% | |
Change in provisions for uncertain tax positions | (0.40%) | 0.20% | 3.80% | |
Prior year adjustment | (1.60%) | 0.10% | (3.40%) | |
Change in fair value of contingent consideration | (3.80%) | 0.30% | (3.60%) | |
Change in tax rates | 0.90% | 0.50% | (0.20%) | |
Settlement with Canadian revenue authorities | 0.00% | (7.00%) | 0.00% | |
Receipt of break fee | 0.00% | (12.30%) | 0.00% | |
Other | 0.10% | (1.20%) | 0.50% | |
Provision for income taxes on continuing operations | 3.30% | 1.70% | 16.40% | |
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 25.00% | |||
Canada | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 15.00% | |||
France | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 33.30% | |||
Germany | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 15.00% | |||
Italy | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 27.50% | |||
Luxembourg | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 21.00% | |||
The Netherlands | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 25.00% | |||
Belgium | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 33.99% | |||
Spain | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 28.00% | |||
Sweden | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 22.00% | |||
Switzerland | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 8.50% | |||
United Kingdom | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 20.00% | |||
United States | ||||
Statutory Tax Rates [Line Items] | ||||
Statutory tax rate | 35.00% | |||
[1] | In addition to being subject to the Irish corporation tax rate of 25%, in 2015 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 (28%); Sweden (22%); Switzerland (8.5%); United Kingdom (20%) 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 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. |
Taxation (Unrecognized Tax Bene
Taxation (Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Reconciliation of Unrecognized Tax Benefits | ||||||
Balance at January 1, | $ 207.8 | [1] | $ 355.2 | [1] | $ 278.7 | |
Increases based on tax positions related to the current year | 27 | 20.3 | 56.8 | |||
Decreases based on tax positions taken in the current year | 0 | 0 | (0.5) | |||
Increases for tax positions taken in prior years | 21.8 | 64.2 | 34.5 | |||
Decreases for tax positions taken in prior years | (30.6) | (211) | (0.8) | |||
Decreases resulting from settlements with the taxing authorities | (1.2) | (9.4) | 0 | |||
Decreases as a result of expiration of the statute of limitations | (4.4) | (0.6) | (0.6) | |||
Foreign currency translation adjustments | [2] | (4.1) | (10.9) | (12.9) | ||
Balance at December 31, | [1] | 216.3 | 207.8 | 355.2 | ||
Income Tax Contingency [Line Items] | ||||||
Income tax penalties and interest expense | 0.8 | (103.1) | 0.4 | |||
Income tax penalties and interest expense accrued | 26.5 | 25.8 | 112.2 | |||
Unrecognized tax benefits that would impact effective tax rate if recognized | 207 | $ 181 | $ 355 | |||
Future decrease in the unrecognized tax benefit | $ 60 | |||||
[1] | Approximately $207m (2014: $181m, 2013: $355m) of which would affect the effective rate if recognized. | |||||
[2] | Recognized within Other Comprehensive Income |
Taxation (Deferred Tax Assets a
Taxation (Deferred Tax Assets and Liabilities, and Valuation Allowances) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred tax assets: | ||
Deferred revenue | $ 2.4 | $ 3.2 |
Inventory & warranty provisions | 25.8 | 28.8 |
Losses carried forward (including tax credits) | 980.3 | 686.3 |
Provision for sales deductions and doubtful accounts | 178 | 166.7 |
Intangible assets | 5.9 | 5.8 |
Share-based compensation | 40.6 | 29.5 |
Excess of tax value over book value of fixed assets | 0.6 | 13.4 |
Accruals and provisions | 130.4 | 55.7 |
Other | 19.3 | 14 |
Gross deferred tax assets | 1,383.3 | 1,003.4 |
Less: valuation allowance | (416.1) | (324.7) |
Deferred tax assets, net | 967.2 | 678.7 |
Deferred tax liabilities: | ||
Intangible assets | (2,850.6) | (1,196.5) |
Excess of book value over tax value of assets and investments | (153.9) | (231.8) |
Other | (47.6) | (4.2) |
Net deferred tax liabilities | (2,084.9) | (753.8) |
Net operating losses that result from excess stock based compensation | 30.4 | 24.6 |
Balance Sheet Classifications | ||
Deferred tax assets - current | 0 | 344.7 |
Deferred tax assets - non-current | 121 | 112.1 |
Deferred tax liabilities - non-current | (2,205.9) | (1,210.6) |
Valuation Allowance [Line Items] | ||
Valuation Allowances | 416.1 | 324.7 |
Net increase in valuation allowances | $ 91.4 | |
Valuation Allowance, deferred tax asset - explanation of change | The net increase in valuation allowances of $91.4 million includes (i) increases of $180.4 million relating to operating losses and capital losses primarily acquired with NPS Pharma ($98.9 million) and losses in various jurisdictions ($81.5 million) for which management considers that there is insufficient positive evidence in respect of the factors described above to overcome negative evidence, such as cumulative losses and expiration periods and therefore it is more likely than not that the relevant deferred tax assets will not be realized in full, and ii) decreases of $89 million primarily in respect of Irish tax losses, which based on the assessment of factors described above now provides sufficient positive evidence to support the losses are more likely than not to be realized. | |
Ireland | ||
Deferred tax assets: | ||
Less: valuation allowance | $ (22.2) | (75.2) |
Valuation Allowance [Line Items] | ||
Valuation Allowances | 22.2 | 75.2 |
United States | ||
Deferred tax assets: | ||
Less: valuation allowance | (125.9) | (77.5) |
Valuation Allowance [Line Items] | ||
Valuation Allowances | 125.9 | 77.5 |
Other foreign tax jurisdictions | ||
Deferred tax assets: | ||
Less: valuation allowance | (136.5) | (109.7) |
Valuation Allowance [Line Items] | ||
Valuation Allowances | 136.5 | 109.7 |
Switzerland | ||
Deferred tax assets: | ||
Less: valuation allowance | (131.5) | (62.3) |
Valuation Allowance [Line Items] | ||
Valuation Allowances | $ 131.5 | $ 62.3 |
Taxation (Operating Loss and Ta
Taxation (Operating Loss and Tax Credit Carryforwards, and Their Expiration Dates) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss and Tax Credit Carryforwards [Line Items] | ||
Tax credit carryforwards | $ 980.3 | $ 686.3 |
Gross value of NOLs and capital losses | 5,562.3 | 3,313 |
Expirations of Tax Benefit Carryforwards | ||
Within 1 year | 0.2 | |
Winthin 3 to 4 years | 41.3 | |
Winthin 4 to 5 years | 12.2 | |
Winthin 5 to 6 years | 12.7 | |
After 6 years | 521.8 | |
Indefinitely | 392.1 | |
Unremitted earnings of the Company's foreign subsidiaries | 11,300 | 8,100 |
US federal tax | ||
Operating Loss and Tax Credit Carryforwards [Line Items] | ||
Tax credit carryforwards | 149.3 | 38.7 |
US state | ||
Operating Loss and Tax Credit Carryforwards [Line Items] | ||
Tax credit carryforwards | 77.2 | 82.8 |
Republic of Ireland | ||
Operating Loss and Tax Credit Carryforwards [Line Items] | ||
Tax credit carryforwards | 61.2 | 75.2 |
Foreign Tax Jurisdictions | ||
Operating Loss and Tax Credit Carryforwards [Line Items] | ||
Tax credit carryforwards | 434.9 | 351.8 |
R&D and Other Tax Credits | ||
Operating Loss and Tax Credit Carryforwards [Line Items] | ||
Tax credit carryforwards | $ 257.7 | $ 137.8 |
Related parties (Details)
Related parties (Details) - ArmaGen - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Amount paid for an equity stake and the license to develop and commercialize AGT-182 | $ 2.5 | |
Share of R&D credit recorded within R&D expense | 7.8 | |
Related parties, acrrued liabilities | $ 0.5 | $ 1 |
Percentage of equity stake | 21.00% |
Share-based Compensation Pla108
Share-based Compensation Plans (Share-based Compensation Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 100.3 | $ 97 | $ 77.4 |
Less tax | (28.4) | (23.8) | (18.1) |
Share-based compensation expense, net | 71.9 | 73.2 | 59.3 |
Unrecognized compensation cost relating to non-vested awards | $ 115.3 | 83.1 | 97 |
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 | $ 82 | $ 71.2 | $ 90.3 |
Unrecognized compensation cost relating to non-vested in the money awards, expected period for recognition | 1 year 10 months 24 days | 1 year 10 months 24 days | 1 year 8 months 12 days |
Incremental compensation costs related to the modification of awards in connection with One Shire reorganization | $ 26.7 | $ 30.4 | $ 3.3 |
Cost of Product Sales | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 7.6 | 8.5 | 4.4 |
Research and Development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 28.6 | 22.2 | 22.8 |
Selling, General and Administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 37.4 | 35.9 | 46.9 |
Reorganization costs | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 26.7 | $ 30.4 | $ 3.3 |
Share-based Compensation Pla109
Share-based Compensation Plans (by Share-based Payment Award) (Details) - shares | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | |||
SARs and Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award outstanding (in shares) | [2] | 7,796,496 | [1] | 7,756,516 |
SARs | SARs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award outstanding (in shares) | [1] | 7,326,798 | ||
Award expiration period from the date of the issue | 7 years | |||
Vesting period | 3 years | |||
UK/Irish Sharesave Scheme | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award outstanding (in shares) | [1] | 113,619 | ||
Award expiration period from the date of the issue | 6 months | |||
UK/Irish Sharesave Scheme | Stock Options | United Kingdom | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price of common stock, percent | 80.00% | |||
UK/Irish Sharesave Scheme | Stock Options | Ireland | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price of common stock, percent | 75.00% | |||
UK/Irish Sharesave Scheme | Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
UK/Irish Sharesave Scheme | Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Global Employee Stock Purchase Plan | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award outstanding (in shares) | [1] | 356,079 | ||
Exercise price of common stock, percent | 85.00% | |||
Global Employee Stock Purchase Plan | Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Global Employee Stock Purchase Plan | Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
RSUs, PSUs and PSAs | RSUs.PSUs and PSAs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award outstanding (in shares) | [1] | 1,791,930 | ||
Award expiration period from the date of the issue | 3 years | |||
Vesting period | 3 years | |||
[1] | Number of awards are stated in terms of ordinary share equivalents | |||
[2] | Number of awards are stated in terms of ordinary share equivalents |
Share-based Compensation Pla110
Share-based Compensation Plans (Stock Options and SARs) (Details) - SARs and Stock Options - GBP (£) £ / shares in Units, £ in Millions | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Outstanding as at beginning of period (in shares) | [1] | 7,756,516 | |||
Granted (in shares) | [1] | 4,444,345 | |||
Exercised (in shares) | [1] | (3,104,782) | |||
Forfeited (in shares) | [1] | (1,299,583) | |||
Outstanding as at end of period (in shares) | [1] | 7,796,496 | [2] | 7,756,516 | |
Exercisable as at end of period (in shares) | [1] | 2,408,241 | |||
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) | £ 33.27 | ||||
Granted (per share) | 52.12 | ||||
Exercised (per share) | 50.99 | ||||
Forfeited (per share) | 40.69 | ||||
Outstanding as at end of period (per share) | 52.02 | £ 33.27 | |||
Exercisable as at end of period (per share) | £ 35.61 | ||||
Outstanding as at end of period Intrinsic Value (in GBP) | £ 98.5 | ||||
Exercisable as at end of period Intrinsic Value (in GBP) | £ 54.8 | ||||
Weighted average grant date fair value of awards granted (per share) | £ 10.36 | £ 6.19 | £ 3.37 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | |||||
Number of awards outstanding (in shares) | [3] | 7,796,496 | |||
Number of awards exercisable | 2,408,241 | ||||
14.01-28.00 GBP | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | |||||
Number of awards outstanding (in shares) | [3] | 3,307,723 | |||
Weighted average remaining contractual term | 3 years 8 months 12 days | ||||
Weighted average exercise price of awards outstanding (per share) | £ 20.61 | ||||
Number of awards exercisable | 1,953,627 | ||||
Weighted average exercise price of awards exercisable (per share) | £ 20.43 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 14.01 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | £ 28 | ||||
28.01-40.00 GBP | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | |||||
Number of awards outstanding (in shares) | [3] | 1,019,985 | |||
Weighted average remaining contractual term | 5 years 2 months 12 days | ||||
Weighted average exercise price of awards outstanding (per share) | £ 36.06 | ||||
Number of awards exercisable | 264,646 | ||||
Weighted average exercise price of awards exercisable (per share) | £ 36.01 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 28.01 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | £ 40 | ||||
40.01-53.87 GBP | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Abstract] | |||||
Number of awards outstanding (in shares) | [3] | 3,468,788 | |||
Weighted average remaining contractual term | 5 years 3 months 18 days | ||||
Weighted average exercise price of awards outstanding (per share) | £ 46.05 | ||||
Number of awards exercisable | 189,968 | ||||
Weighted average exercise price of awards exercisable (per share) | £ 53.27 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 40.01 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | £ 53.87 | ||||
[1] | Number of awards are stated in terms of ordinary share equivalents | ||||
[2] | Number of awards are stated in terms of ordinary share equivalents | ||||
[3] | Number of awards are stated in terms of ordinary share equivalents |
Share-based Compensation Pla111
Share-based Compensation Plans (Performance Share Awards) (Details) £ / shares in Units, £ in Millions, $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2015USD ($)shares | Dec. 31, 2015USD ($)£ / sharesshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2014USD ($)£ / shares | Dec. 31, 2013USD ($) | Dec. 31, 2013USD ($)£ / shares | Dec. 31, 2015GBP (£)shares | ||
Performance Share Awards Outstanding [Roll Forward] | ||||||||
Weighted average remaining life | 5 years 4 months 24 days | |||||||
Tax benefit associated with exercise of stock options (in US dollar) | $ | $ 31.6 | $ 39.6 | $ 11.9 | |||||
Intrinsic values of share-based awards exercised (in US dollar) | $ | 198.8 | $ 198.8 | 200.8 | $ 200.8 | 298.3 | $ 298.3 | ||
Cash received from employees as a result of employee share option exercises (in US dollar) | $ | $ 16.6 | $ 17.4 | $ 17.2 | |||||
EBT | Ordinary Shares | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Treasury stock held (in shares) | 600,000 | 600,000 | 600,000 | |||||
EBT | ADS | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Treasury stock held (in shares) | 200,000 | 200,000 | 200,000 | |||||
RSUs.PSUs and PSAs | ||||||||
Performance Share Awards Outstanding [Roll Forward] | ||||||||
Outstanding as at beginning of period | [1] | 2,166,181 | ||||||
Granted | [1] | 1,075,254 | ||||||
Exercised | [1] | (975,895) | ||||||
Forfeited | [1] | (473,610) | ||||||
Outstanding as at end of period | [1] | 1,791,930 | 2,166,181 | |||||
Aggregate intrinsic value (in GBP) | £ | £ 84.2 | |||||||
Weighted average grant date fair value (in GBP per share) | £ / shares | $ 53.11 | $ 35.11 | $ 19.71 | |||||
[1] | Number of awards are stated in terms of ordinary share equivalents |
Share-based Compensation Pla112
Share-based Compensation Plans (Fair Value Assumptions) (Details) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Minimum | ||||
Fair Value Assumptions and Methodology | ||||
Risk-free interest rate, minimum | [1] | 0.60% | 0.30% | 0.10% |
Expected dividend yield | 0.20% | 0.20% | 0.40% | |
Expected life | 1 year | 1 year | 1 year | |
Volatility, minimum | 23.00% | 23.00% | 23.00% | |
Forfeiture rate | 5.00% | 5.00% | 5.00% | |
Maximum | ||||
Fair Value Assumptions and Methodology | ||||
Risk-free interest rate, maximum | [1] | 1.80% | 1.80% | 0.90% |
Expected dividend yield | 0.40% | 0.40% | 0.60% | |
Expected life | 4 years | 4 years | 4 years | |
Volatility, maximum | 26.00% | 27.00% | 26.00% | |
Forfeiture rate | 7.00% | 7.00% | 9.00% | |
[1] | Risk-free interest rate is for UK and US grants |
Quarterly Results of Operati113
Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information [Line Items] | |||||||||||
Total revenues | $ 1,715.7 | $ 1,655 | $ 1,557.6 | $ 1,488.4 | $ 1,576.1 | $ 1,597.1 | $ 1,502.1 | $ 1,346.8 | $ 6,416.7 | $ 6,022.1 | $ 4,934.3 |
Cost of product sales | 250.5 | 262.7 | 228 | 227.8 | 218.5 | 254.3 | 277 | 229.5 | 969 | 979.3 | 670.8 |
Income from continuing operations, net of taxes (in USD) | 283.4 | 477.1 | 164.1 | 412.9 | 1,985.6 | 515.8 | 528.3 | 253.1 | 1,337.5 | 3,282.8 | 1,419.6 |
(Loss)/gain from discontinued operations, net of taxes (in USD) | (2.8) | (24.3) | (4.5) | (2.5) | 186.7 | (36.1) | (5.2) | (22.7) | (34.1) | 122.7 | (754.5) |
Net income | $ 280.6 | $ 452.8 | $ 159.6 | $ 410.4 | $ 2,172.3 | $ 479.7 | $ 523.1 | $ 230.4 | $ 1,303.4 | $ 3,405.5 | $ 665.1 |
Earning per ordinary share - basic | |||||||||||
Earnings from continuing operations (in USD per share) | $ 479,000 | $ 0.807 | $ 0.278 | $ 0.701 | $ 3.383 | $ 0.878 | $ 0.901 | $ 0.433 | $ 2.265 | $ 5.596 | $ 2.572 |
(Loss)/gain from discontinued operations (in USD per share) | (5,000) | (0.041) | (0.008) | (0.004) | 0.318 | (0.061) | (0.009) | (0.039) | (0.058) | 0.209 | (1.367) |
Earnings per ordinary share - basic (in USD per share) | 474,000 | 0.766 | 0.270 | 0.697 | 3.701 | 0.817 | 0.892 | 0.394 | 2.207 | 5.805 | 1.205 |
Earnings per ordinary share - diluted | |||||||||||
Earnings from continuing operations (in USD per share) | 478,000 | 0.804 | 0.277 | 0.697 | 3.357 | 0.870 | 0.895 | 0.430 | 2.255 | 5.552 | 2.453 |
(Loss)/gain from discontinued operations (in USD per share) | (5,000) | (0.041) | (0.008) | (0.004) | 0.316 | (0.061) | (0.009) | (0.039) | (0.058) | 0.208 | (1.278) |
Earnings per ordinary share - diluted (in USD per share) | $ 473,000 | $ 0.763 | $ 0.269 | $ 0.693 | $ 3.673 | $ 0.809 | $ 0.886 | $ 0.391 | $ 2.197 | $ 5.760 | $ 1.175 |
Schedule II - Valuation and 114
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning balance | $ 1,033.9 | $ 925.1 | $ 739 | |
Provision charged to income | [1] | 2,287.9 | 2,036.7 | 1,768.5 |
Costs incurred/utilization | [1] | (2,184.5) | (1,927.9) | (1,582.4) |
Ending balance | 1,137.3 | 1,033.9 | 925.1 | |
Accrued rebates - Medicaid and HMOs | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning balance | 882.1 | 806.5 | 640.5 | |
Provision charged to income | [1] | 2,128 | 1,877.7 | 1,626.6 |
Costs incurred/utilization | [1] | (2,027.7) | (1,802.1) | (1,460.6) |
Ending balance | 982.4 | 882.1 | 806.5 | |
Sales returns reserve | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning balance | 131.7 | 97.9 | 90.5 | |
Provision charged to income | [1] | 19.4 | 60.1 | 34.5 |
Costs incurred/utilization | [1] | (22.8) | (26.3) | (27.1) |
Ending balance | 128.3 | 131.7 | 97.9 | |
Accrued coupons | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning balance | 20.1 | 20.7 | 8 | |
Provision charged to income | [1] | 140.5 | 98.9 | 107.4 |
Costs incurred/utilization | [1] | (134) | (99.5) | (94.7) |
Ending balance | $ 26.6 | $ 20.1 | $ 20.7 | |
[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. |