MYLAN INC. (Form: 10-Q, Received: 10/31/2013 16:50:44)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q



þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________to___________

Commission File Number 1-9114

MYLAN INC.

(Exact name of registrant as specified in its charter)



Pennsylvania		25-1211621
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1500 Corporate Drive, Canonsburg, Pennsylvania 15317

(Address of principal executive offices)

(724) 514-1800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



	Class of		Outstanding at
	Common Stock		October 25, 2013
	$0.50 par value		382,856,845

Table of Contents

MYLAN INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

For the Quarterly Period Ended

September 30, 2013



		Page
	PART I — FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations — Three and Nine Months Ended September 30, 2013 and 2012	3
	Condensed Consolidated Statements of Comprehensive Earnings — Three and Nine Months Ended September 30, 2013 and 201 2	4
	Condensed Consolidated Balance Sheets — September 30, 2013 and December 31, 2012	5
	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2013 and 2012	6

	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	47

ITEM 4.	Controls and Procedures	47

	PART II — OTHER INFORMATION
ITEM 1.	Legal Proceedings	48

ITEM 1A.	Risk Factors	48

ITEM 6.	Exhibits	48

SIGNATURES		51

Table of Contents

PART I — FINANCIAL INFORMATION

MYLAN INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Revenues:
Net revenues	$	1,756,046		$	1,789,836		$	5,062,791		$	5,040,896
Other revenues	11,380			11,950			37,826			32,360
Total revenues	1,767,426			1,801,786			5,100,617			5,073,256
Cost of sales	958,908			1,008,664			2,856,225			2,907,268
Gross profit	808,518			793,122			2,244,392			2,165,988
Operating expenses:
Research and development	113,995			108,250			351,914			283,570
Selling, general and administrative	364,868			342,232			1,031,624			1,037,802
Litigation settlements, net	(10,161		)	7,950			(1,428		)	(2,083		)
Total operating expenses	468,702			458,432			1,382,110			1,319,289
Earnings from operations	339,816			334,690			862,282			846,699
Interest expense	73,953			76,051			233,744			234,126
Other (expense) income, net	(70,597		)	6,209			(74,391		)	604
Earnings before income taxes and noncontrolling interest	195,266			264,848			554,147			613,177
Income tax provision	35,843			52,762			108,564			132,449
Net earnings	159,423			212,086			445,583			480,728
Net earnings attributable to the noncontrolling interest	(515		)	(829		)	(2,104		)	(1,842		)
Net earnings attributable to Mylan Inc. common shareholders	$	158,908		$	211,257		$	443,479		$	478,886
Earnings per common share attributable to Mylan Inc. common shareholders:
Basic	$	0.42		$	0.52		$	1.15		$	1.15
Diluted	$	0.40		$	0.51		$	1.13		$	1.13
Weighted average common shares outstanding:
Basic	382,134			406,469			385,497			418,000
Diluted	395,548			411,562			393,872			422,775

See Notes to Condensed Consolidated Financial Statements

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MYLAN INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings

(Unaudited; in thousands)



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012

Net earnings	$	159,423		$	212,086		$	445,583		$	480,728
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustment	113,646			141,742			(248,356		)	24,958
Change in unrecognized loss and prior service cost related to defined benefit plans	159			(10		)	4,616			(29		)
Net unrecognized (loss) gain on derivatives	(20,177		)	51,749			128,314			39,589
Net unrealized gain (loss) on marketable securities	35			147			(941		)	67
Other comprehensive earnings (loss), before tax	93,663			193,628			(116,367		)	64,585
Income tax related to items of other comprehensive (loss) earnings	(10,106		)	16,567			48,082			12,559
Other comprehensive earnings (loss), net of tax	103,769			177,061			(164,449		)	52,026
Comprehensive earnings	263,192			389,147			281,134			532,754
Comprehensive earnings attributable to the noncontrolling interest	(515		)	(829		)	(2,104		)	(1,842		)
Comprehensive earnings attributable to Mylan Inc. common shareholders	$	262,677		$	388,318		$	279,030		$	530,912

See Notes to Condensed Consolidated Financial Statements

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MYLAN INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited; in thousands, except share and per share amounts)



	September 30, 2013			December 31, 2012
ASSETS
Assets
Current assets:
Cash and cash equivalents	$	364,920		$	349,969
Accounts receivable, net	1,717,281			1,554,342
Inventories	1,645,806			1,525,242
Deferred income tax benefit	246,410			229,348
Prepaid expenses and other current assets	368,750			243,816
Total current assets	4,343,167			3,902,717
Property, plant and equipment, net	1,459,046			1,397,216
Intangible assets, net	1,922,608			2,224,457
Goodwill	3,427,962			3,515,655
Deferred income tax benefit	95,088			87,655
Other assets	1,653,703			804,197
Total assets	$	12,901,574		$	11,931,897

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Trade accounts payable	$	875,394		$	777,908
Short-term borrowings	522,636			298,987
Income taxes payable	74,739			33,731
Current portion of long-term debt and other long-term obligations	3,760			98,048
Deferred income tax liability	580			1,283
Other current liabilities	1,084,314			983,546
Total current liabilities	2,561,423			2,193,503
Long-term debt	5,779,438			5,337,196
Other long-term obligations	1,025,064			771,111
Deferred income tax liability	302,975			274,259
Total liabilities	9,668,900			8,576,069
Equity
Mylan Inc. shareholders’ equity
Common stock — par value $0.50 per share
Shares authorized: 1,500,000,000
Shares issued: 542,881,016 and 539,664,386 as of September 30, 2013 and December 31, 2012	271,441			269,832
Additional paid-in capital	4,068,791			3,986,746
Retained earnings	2,504,849			2,061,370
Accumulated other comprehensive loss	(250,947		)	(86,498		)
	6,594,134			6,231,450
Noncontrolling interest	17,355			15,110
Less: treasury stock — at cost
Shares: 160,153,274 and 144,459,210 as of September 30, 2013 and December 31, 2012	3,378,815			2,890,732
Total equity	3,232,674			3,355,828
Total liabilities and equity	$	12,901,574		$	11,931,897

See Notes to Condensed Consolidated Financial Statements

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MYLAN INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited; in thousands)



	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net earnings	$	445,583		$	480,728
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	373,871			417,822
Stock-based compensation expense	36,029			32,099
Change in estimated sales allowances	164,798			204,700
Deferred income tax benefit	(31,914		)	(73,949		)
Other non-cash items	103,874			156,292
Litigation settlements, net	(1,428		)	(2,083		)
Changes in operating assets and liabilities:
Accounts receivable	(302,677		)	(243,082		)
Inventories	(177,281		)	(121,450		)
Trade accounts payable	129,292			(24,634		)
Income taxes	(8,363		)	5,376
Deferred revenue	(140		)	(18,890		)
Other operating assets and liabilities, net	(42,941		)	(154,968		)
Net cash provided by operating activities	688,703			657,961
Cash flows from investing activities:
Capital expenditures	(238,527		)	(159,917		)
Change in restricted cash	(49,019		)	7,748
Cash paid for acquisitions, net	(50,887		)	—
Proceeds from sale of property, plant and equipment	—			16,338
Purchase of marketable securities	(13,824		)	(10,019		)
Proceeds from sale of marketable securities	8,100			5,954
Other items, net	(19,038		)	(77,932		)
Net cash used in investing activities	(363,195		)	(217,828		)
Cash flows from financing activities:
Payment of financing fees	(20,302		)	(1,737		)
Purchase of common stock	(500,000		)	(499,953		)
Change in short-term borrowings, net	236,127			288,175
Proceeds from issuance of long-term debt	2,358,267			860,000
Payment of long-term debt	(2,457,284		)	(1,191,377		)
Proceeds from exercise of stock options	56,713			52,482
Other items, net	10,493			7,152
Net cash used in financing activities	(315,986		)	(485,258		)
Effect on cash of changes in exchange rates	5,429			2,385
Net increase (decrease) in cash and cash equivalents	14,951			(42,740		)
Cash and cash equivalents — beginning of period	349,969			375,056
Cash and cash equivalents — end of period	$	364,920		$	332,316

See Notes to Condensed Consolidated Financial Statements

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)


1.	General

The accompanying unaudited Condensed Consolidated Financial Statements (“interim financial statements”) of Mylan Inc. and subsidiaries (“Mylan” or the “Company”) were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q; therefore, as permitted under these rules, certain footnotes and other financial information included in audited financial statements were condensed or omitted. The interim financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the interim results of operations, comprehensive earnings, financial position and cash flows for the periods presented.

These interim financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 , as updated by the Company’s Current Report on Form 8-K filed on May 28, 2013. The December 31, 2012 Condensed Consolidated Balance Sheet was derived from audited financial statements.

The interim results of operations, comprehensive earnings and cash flows for the nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period. The Company computed its provision for income taxes using an estimated effective tax rate for the full year with consideration of certain discrete tax items which occurred within the interim period. The estimated annual effective tax rate for 2013 includes an estimate of the full-year effect of foreign tax credits that the Company anticipates it will claim against its 2013 United States (“U.S.”) tax liabilities.

Certain insignificant prior period amounts of other revenue, cost of sales and operating expenses have been reclassified to other (expense) income, net to conform to the presentation for the current period. The reclassifications had no impact on the previously reported net earnings attributable to Mylan Inc. common shareholders. In addition, certain insignificant prior period amounts have been reclassified from net cash provided by operating activities to net cash used in investing activities .


2.	Revenue Recognition and Accounts Receivable

Mylan recognizes net revenue for product sales when title and risk of loss pass to its customers and when provisions for estimates, including discounts, sales allowances, price adjustments, returns, chargebacks and other promotional programs are reasonably determinable. Accounts receivable are presented net of allowances relating to these provisions. No revisions were made to the methodology used in determining these provisions during the nine months ended September 30, 2013 . Such allowances were $1.08 billion and $977.0 million at September 30, 2013 and December 31, 2012 , respectively. Other current liabilities include $266.2 million and $202.9 million at September 30, 2013 and December 31, 2012 , respectively, for certain sales allowances and other adjustments that are paid to indirect customers.

Through its wholly owned subsidiary Mylan Pharmaceuticals Inc. (“MPI”), the Company has access to a $400 million accounts receivable securitization facility (the “Receivables Facility”). The receivables underlying any borrowings are included in accounts receivable, net, in the Condensed Consolidated Balance Sheets . There were $629.8 million of securitized accounts receivable at September 30, 2013 .


3.	Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued revised accounting guidance on the presentation of an unrecognized tax benefit when a net operating loss carryforward exists. The amended guidance clarifies when the unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss and when the unrecognized tax benefit should be presented in the financial statements as a liability and not combined with the deferred tax asset. The guidance is effective for fiscal years, and interim periods, beginning after December 15, 2013. The Company does not expect that the adoption of the guidance will have a material effect on its results of operations, financial position or cash flows.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

In February 2013, the FASB issued revised accounting guidance on the presentation of comprehensive income in the financial statements. The amended guidance requires an entity to report, in one place, the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. Reclassifications must be disclosed if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. The guidance is effective prospectively for reporting periods beginning after December 15, 2012. The Company adopted the guidance during 2013 by presenting additional disclosure in the notes to financial statements (see Note 11 ). The adoption of the guidance did not have a material effect on the Company’s results of operations, financial position or cash flows.

In December 2011 and January 2013, the FASB issued revised accounting guidance for an entity with particular financial instruments and derivative instruments that offset in accordance with the FASB’s guidance regarding other presentation matters for derivatives and hedging. Under the amendments in this update, an entity with financial instruments that are offset in the financial statements or subject to enforceable master netting arrangements, or similar agreements, must disclose the gross amount recognized for the asset/liability, the offsetting amounts, the net amounts presented on the balance sheet and any amounts subject to enforceable master netting arrangements. The amended guidance is effective for fiscal years, including interim periods, beginning on or after January 1, 2013. Retroactive application is required. The Company adopted the guidance during 2013, and the adoption of the guidance did not have a material effect on the Company’s results of operations, financial position or cash flows.


4.	Acquisitions and Collaborative Agreements

Pfizer Japan

On August 22, 2012, the Company and Pfizer Japan Inc. (“Pfizer Japan”) announced a definitive agreement to establish an exclusive long-term strategic collaboration to develop, manufacture, distribute and market generic drugs in Japan. Under the agreement, the Company and Pfizer Japan continue to operate separate legal entities in Japan, but collaborate on current and future generic products, sharing the costs and profits resulting from the collaboration. The Company’s responsibilities primarily consist of managing operations, including research and development and manufacturing. Pfizer Japan’s responsibilities under the agreement primarily consist of the commercialization of the combined generics portfolio and managing a combined marketing and sales effort. The collaboration became operational on January 1, 2013.

Biocon Insulin Products

On February 12, 2013, the Company entered into a definitive agreement with Biocon Limited (“Biocon”) for an exclusive strategic collaboration on the development and commercialization of generic versions of three insulin analog products. Under the terms of this collaboration, the Company has the rights to develop and market a version of Glargine (the generic version of Sanofi’s Lantus®), Lispro (the generic version of Eli Lilly and Company’s Humalog®) and Aspart (the generic version of Novo Nordisk’s NovoLog®). The Company and Biocon share development, capital and certain other costs to bring the products to market. Mylan has exclusive commercialization rights in the U.S., Canada, Australia, New Zealand, the European Union and the European Free Trade Association countries through a profit-share arrangement with Biocon. The Company also has co-exclusive commercialization rights with Biocon in certain other markets around the world. As part of the agreement, the Company made a licensing payment of $20 million to Biocon, which is included as a component of research and development expense for the nine months ended September 30, 2013 .

Other Acquisitions

During 2013, the Company completed the acquisition of three separate manufacturing operations located in India. The aggregate purchase price was approximately $50 million in cash. As part of the purchase price allocations, goodwill in the aggregate of approximately $14 million was recognized within the Generics segment. The acquisitions did not have a material impact on the Company’s results of operations since the acquisition dates.

Agila Specialties

On February 27, 2013, the Company announced that it had signed definitive agreements (“the Agreements”) to acquire the Agila Specialties business (“Agila Specialties”), a developer, manufacturer and marketer of high-quality generic injectable products, from Strides Arcolab Limited for approximately $1.6 billion in cash plus contingent payments of up to $250 million subject to certain conditions. The Company has obtained $1 billion in committed financing, which together with internal

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

sources, including available cash and existing lines of credit, is expected to be sufficient to finance the transaction. Upon completion of the acquisition, the Company will significantly expand and strengthen its injectable product portfolio and gain entry into new geographic markets, such as Brazil. The transaction is expected to close in the fourth quarter of 2013 and is subject to certain closing conditions and regulatory approvals.


5.	Stock-Based Incentive Plan

Mylan’s shareholders have approved the 2003 Long-Term Incentive Plan (as amended, the “2003 Plan”). Under the 2003 Plan, 55,300,000 shares of common stock are reserved for issuance to key employees, consultants, independent contractors and non-employee directors of Mylan through a variety of incentive awards, including: stock options, stock appreciation rights, restricted shares and units, performance awards, other stock-based awards and short-term cash awards. Stock option awards are granted at the fair value of the shares underlying the options at the date of the grant, generally become exercisable over periods ranging from three to four years , and generally expire in ten years .

Upon approval of the 2003 Plan, no further grants of stock options have been made under any other plan. However, there are stock options outstanding from frozen or expired plans and other plans assumed through acquisitions.

The following table summarizes stock option activity:



	Number of Shares Under Option		Weighted Average Exercise Price per Share
Outstanding at December 31, 2012	16,616,617		$	19.54
Options granted	1,891,035		31.61
Options exercised	(3,263,711	)	17.76
Options forfeited	(591,100	)	22.48
Outstanding at September 30, 2013	14,652,841		$	21.39
Vested and expected to vest at September 30, 2013	13,838,827		$	21.18
Options exercisable at September 30, 2013	8,937,942		$	18.63

As of September 30, 2013 , options outstanding, options vested and expected to vest and options exercisable had average remaining contractual terms of 6.64 years , 6.53 years and 5.42 years , respectively. Also at September 30, 2013 , options outstanding, options vested and expected to vest and options exercisable had aggregate intrinsic values of $245.8 million , $235.2 million and $174.7 million , respectively.

A summary of the status of the Company’s nonvested restricted stock and restricted stock unit awards, including performance based restricted stock, as of September 30, 2013 and the changes during the nine months ended September 30, 2013 are presented below:



	Number of Restricted Stock Awards		Weighted Average Grant-Date Fair Value per Share
Nonvested at December 31, 2012	2,498,316		$	22.47
Granted	1,849,479		30.89
Released	(820,017	)	21.81
Forfeited	(148,295	)	25.99
Nonvested at September 30, 2013	3,379,483		$	27.10

As of September 30, 2013 , the Company had $74.6 million of total unrecognized compensation expense, net of estimated forfeitures, related to all of its stock-based awards, which will be recognized over the remaining weighted average vesting period of 1.70 years . The total intrinsic value of stock-based awards exercised and restricted stock units converted during the nine months ended September 30, 2013 and 2012 was $70.4 million and $45.8 million , respectively.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


6.	Balance Sheet Components

Selected balance sheet components consist of the following:



(In thousands)	September 30, 2013		December 31, 2012
Inventories:
Raw materials	$	516,689	$	455,958
Work in process	296,142		268,191
Finished goods	832,975		801,093
	$	1,645,806	$	1,525,242



Property, plant and equipment:
Land and improvements	$	67,976	$	73,857
Buildings and improvements	640,493		665,058
Machinery and equipment	1,530,193		1,436,904
Construction in progress	331,611		308,192
	2,570,273		2,484,011
Less accumulated depreciation	1,111,227		1,086,795
	$	1,459,046	$	1,397,216



Other current liabilities:
Legal and professional accruals, including litigation accruals	$	140,294	$	122,083
Payroll and employee benefit plan accruals	248,947		266,650
Accrued sales allowances	266,175		202,891
Accrued interest	50,796		72,590
Fair value of financial instruments	97,947		29,051
Other	280,155		290,281
	$	1,084,314	$	983,546

The value of contingent consideration included in other long-term obligations in the Condensed Consolidated Balance Sheets is $406.2 million and $379.2 million at September 30, 2013 and December 31, 2012 , respectively. Included in prepaid expenses and other current assets is $50.5 million and $1.5 million of restricted cash at September 30, 2013 and December 31, 2012 , respectively.

The Company’s equity method investments in clean energy partnerships, whose activities qualify for income tax credits under section 45 of the U.S. Internal Revenue Code, totaled $292.2 million and $71.7 million at September 30, 2013 and December 31, 2012 , respectively, and are included in other assets in the Condensed Consolidated Balance Sheets . Liabilities related to these investments totaled $304.2 million and $78.7 million at September 30, 2013 and December 31, 2012 , respectively, and are included in other long-term obligations in the Condensed Consolidated Balance Sheets .


7.	Earnings per Common Share Attributable to Mylan Inc.

Basic earnings per common share is computed by dividing net earnings attributable to Mylan Inc. common shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per common share is computed by dividing net earnings attributable to Mylan Inc. common shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding related to potentially dilutive securities or instruments, if the impact is dilutive.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

On September 15, 2008, concurrent with the sale of $575 million aggregate principal amount of Cash Convertible Notes due 2015 (the “Cash Convertible Notes”), Mylan entered into a convertible note hedge and warrant transaction with certain counterparties. Pursuant to the warrant transactions, the Company sold to the counterparties warrants to purchase in the aggregate up to approximately 43.2 million shares of Mylan common stock, subject to certain anti-dilution provisions. In 2011, the Company entered into amendments with the counterparties to exchange the original warrants with an exercise price of $20.00 (the “Old Warrants”) for new warrants with an exercise price of $30.00 (the “New Warrants”). Approximately 41.0 million of the Old Warrants were exchanged in the transaction. Both the Old and New Warrants meet the definition of derivatives under the FASB’s guidance regarding accounting for derivative instruments and hedging activities; however, because these instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification under the FASB’s guidance regarding contracts in an entity’s own equity , the warrants have been recorded in shareholders’ equity in the Condensed Consolidated Balance Sheets . The dilutive impact of the Old and New Warrants are included in the calculation of diluted earnings per share based upon the average market value of the Company’s common stock during the period as compared to the exercise price. For the three and nine months ended September 30, 2013 , 7.0 million warrants and 2.8 million warrants, respectively, were included in the calculation of diluted earnings per share. For the three and nine months ended September 30, 2012 , 0.3 million warrants and 0.2 million warrants, respectively, were included in the calculation of diluted earnings per share.

Basic and diluted earnings per common share attributable to Mylan Inc. are calculated as follows:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2013		2012		2013		2012
Basic earnings attributable to Mylan Inc. common shareholders (numerator):
Net earnings attributable to Mylan Inc. common shareholders	$	158,908	$	211,257	$	443,479	$	478,886
Shares (denominator):
Weighted average common shares outstanding	382,134		406,469		385,497		418,000
Basic earnings per common share attributable to Mylan Inc. common shareholders	$	0.42	$	0.52	$	1.15	$	1.15



Diluted earnings attributable to Mylan Inc. common shareholders (numerator):
Net earnings attributable to Mylan Inc. common shareholders	$	158,908	$	211,257	$	443,479	$	478,886
Shares (denominator):
Weighted average common shares outstanding	382,134		406,469		385,497		418,000
Stock-based awards and warrants	13,414		5,093		8,375		4,775
Total dilutive shares outstanding	395,548		411,562		393,872		422,775
Diluted earnings per common share attributable to Mylan Inc. common shareholders	$	0.40	$	0.51	$	1.13	$	1.13

Additional stock options and restricted stock awards were outstanding during the periods ended September 30, 2013 and 2012 but were not included in the computation of diluted earnings per share for each respective period, because the effect would be anti-dilutive. Such anti-dilutive stock options or restricted stock awards represented 1.1 million and 1.2 million shares for the three and nine months ended September 30, 2013 , respectively, and 5.7 million and 7.1 million shares for the three and nine months ended September 30, 2012 , respectively.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


8.	Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the nine months ended September 30, 2013 are as follows:



(In thousands)	Generics Segment			Specialty Segment			Total
Balance at December 31, 2012:
Goodwill	$	3,194,148		$	706,507		$	3,900,655
Accumulated impairment losses	—			(385,000		)	(385,000		)
	3,194,148			321,507			3,515,655
Goodwill acquired ⁽¹⁾	13,871			—			13,871
Transfers ⁽²⁾	(27,602		)	27,602			—
Foreign currency translation	(101,564		)	—			(101,564		)
	$	3,078,853		$	349,109		$	3,427,962
Balance at September 30, 2013:
Goodwill	$	3,078,853		$	734,109		$	3,812,962
Accumulated impairment losses	—			(385,000		)	(385,000		)
	$	3,078,853		$	349,109		$	3,427,962

____________


⁽¹⁾	See Note 4 .


⁽²⁾	As a result of the January 1, 2013 reorganization of certain components between the Generics and Specialty segments, the Company was required to reassign a portion of the carrying amount of goodwill to the Specialty segment.

Intangible assets consist of the following components at September 30, 2013 and December 31, 2012 :



(In thousands)	Weighted Average Life (Years)	Original Cost		Accumulated Amortization		Net Book Value
September 30, 2013
Amortized intangible assets:
Patents and technologies	20	$	116,631	$	92,393	$	24,238
Product rights and licenses	10	3,396,389		1,949,185		1,447,204
Other ⁽¹⁾	8	95,729		59,828		35,901
		3,608,749		2,101,406		1,507,343
In-process research and development		415,265		—		415,265
		$	4,024,014	$	2,101,406	$	1,922,608
December 31, 2012
Amortized intangible assets:
Patents and technologies	20	$	116,631	$	88,288	$	28,343
Product rights and licenses	10	3,459,980		1,749,424		1,710,556
Other ⁽¹⁾	8	111,033		51,384		59,649
		3,687,644		1,889,096		1,798,548
In-process research and development		425,909		—		425,909
		$	4,113,553	$	1,889,096	$	2,224,457

____________


⁽¹⁾	Other intangible assets consist principally of customer lists and contracts.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Amortization expense, which is classified primarily within cost of sales in the Condensed Consolidated Statements of Operations , for the nine months ended September 30, 2013 and 2012 , was $260.6 million and $304.7 million , respectively. Amortization expense is expected to be approximately $84 million for the remainder of 2013 and $330 million , $308 million , $234 million and $190 million for the years ended December 31, 2014 through 2017 , respectively, excluding the planned Agila Specialties acquisition.

Indefinite-lived intangible assets, such as the Company’s in-process research and development (“IPR&D”) assets, are tested at least annually for impairment, but they may also be tested whenever certain impairment indicators are present. Impairment is determined to exist when the fair value is less than the carrying value of the assets being tested. During the nine months ended September 30, 2013 , the Company recognized IPR&D asset impairment charges of $5.1 million , which were recorded as a component of amortization expense. During the nine months ended September 30, 2012 , the Company recorded impairment charges related to IPR&D assets of $41.6 million .

During 2013 and 2012 , approximately $6.5 million and $33.0 million , respectively, were reclassified from acquired IPR&D to product rights and licenses.


9.	Financial Instruments and Risk Management

Mylan is exposed to certain financial risks relating to its ongoing business operations. The primary financial risks that are managed by using derivative instruments are foreign currency risk and interest rate risk.

Foreign Currency Risk Management

In order to manage foreign currency risk, Mylan enters into foreign exchange forward contracts to mitigate risk associated with changes in spot exchange rates of mainly non-functional currency denominated assets or liabilities. The foreign exchange forward contracts are measured at fair value and reported as current assets or current liabilities on the Condensed Consolidated Balance Sheets . Any gains or losses on the foreign exchange forward contracts are recognized in earnings in the period incurred in the Condensed Consolidated Statements of Operations .

The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international subsidiaries. These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities on the Condensed Consolidated Balance Sheets . Any changes in fair value are included in earnings or deferred through accumulated other comprehensive earnings (“AOCE”), depending on the nature and effectiveness of the offset.

Interest Rate Risk Management

The Company enters into interest rate swaps in order to manage interest rate risk associated with the Company’s fixed- and floating-rate debt. These derivative instruments are measured at fair value and reported as current assets or current liabilities in the Condensed Consolidated Balance Sheets .

The Company’s interest rate swaps designated as cash flow hedges fix the interest rate on a portion of the Company’s variable-rate debt or hedge part of the Company’s interest rate exposure associated with variability in future cash flows attributable to changes in interest rates. Any changes in fair value are included in earnings or deferred through AOCE, depending on the nature and effectiveness of the offset. Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the Condensed Consolidated Statements of Operations . In conjunction with the senior notes offering during the second quarter of 2013 and the related repayment of the Company’s variable-rate U.S. Term Loans (see Note 10 ), the Company terminated all existing interest rate swaps that had previously fixed the interest rate on a portion of the Company’s variable-rate U.S. Term Loans. As a result, during the nine months ended September 30, 2013 , approximately $0.8 million that had previously been classified in AOCE was recognized into other (expense) income, net , as the forecasted transaction was no longer probable of occurring. In addition, $750 million of floating-rate debt interest rate swaps that were extended through forward-starting swaps were terminated during the nine months ended September 30, 2013 in the transaction described above. The total notional amount of the Company’s interest rate swaps on floating-rate debt was $850 million as of December 31, 2012 . There were no interest rate swaps on floating-rate debt as of September 30, 2013 .

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

In anticipation of issuing fixed-rate debt, the Company may use treasury rate locks or forward starting interest rate swaps that are designated as cash flow hedges. During the first and third quarters of 2013, the Company entered into a series of forward starting swaps to hedge against changes in interest rates that could impact the Company’s expected future financing of the acquisition of Agila Specialties. These interest rate swaps are designated as cash flow hedges of expected future issuances of long-term bonds. In February 2013, the Company executed interest rate swaps with a notional value of $1.07 billion and an effective date in September 2013 . In September, the swaps were extended to an effective date in November 2013 . In September 2013, the Company executed an additional $930 million of notional value of interest rate swaps with an effective date in November 2013 . The swaps have maturities ranging from three years to 30 years .

In April 2013, the Company entered into a series of forward starting swaps to hedge against changes in interest rates that could impact future debt issuances. These swaps are designated as cash flow hedges of expected future issuances of long-term bonds. The Company executed $1.80 billion of notional value swaps with effective dates ranging from December 2014 to August 2015 . These swaps have maturities of ten years .

The Company’s interest rate swaps designated as fair value hedges convert the fixed rate on a portion of the Company’s fixed-rate senior notes to a variable rate. These interest rate swaps designated as fair value hedges are measured at fair value and reported as assets or current liabilities in the Condensed Consolidated Balance Sheets . Any changes in the fair value of these derivative instruments, as well as the offsetting change in fair value of the portion of the fixed-rate debt being hedged, is included in interest expense. In June 2013, the Company entered into interest rate swaps with a notional value of $500 million that were designated as hedges of the Company’s 1.80% Senior Notes due 2016. The total notional amount of the Company’s interest rate swaps on fixed-rate debt was $1 billion and $500 million as of September 30, 2013 and December 31, 2012 , respectively.

Certain derivative instrument contracts entered into by the Company are governed by Master Agreements, which contain credit-risk-related contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an event of default on other specified borrowings.

The Company maintains significant credit exposure arising from the convertible note hedge on its Cash Convertible Notes. Holders may convert their Cash Convertible Notes subject to certain conversion provisions determined by a) the market price of the Company’s common stock, b) specified distributions to common shareholders, c) a fundamental change, as defined in the purchase agreement, or d) certain time periods specified in the purchase agreement. The conversion feature can only be settled in cash and, therefore, it is bifurcated from the Cash Convertible Notes and treated as a separate derivative instrument. In order to offset the cash flow risk associated with the cash conversion feature, the Company entered into a convertible note hedge with certain counterparties. Both the cash conversion feature and the purchased convertible note hedge are measured at fair value with gains and losses recorded in the Company’s Condensed Consolidated Statements of Operations . Also, in conjunction with the issuance of the Cash Convertible Notes, the Company entered into several warrant transactions with certain counterparties. The warrants meet the definition of derivatives; however, because these instruments have been determined to be indexed to the Company’s own stock, and have been recorded in shareholders’ equity in the Company’s Condensed Consolidated Balance Sheets , the instruments are exempt from the scope of the FASB’s guidance regarding accounting for derivative instruments and hedging activities and are not subject to the fair value provisions set forth therein.

At September 30, 2013 , the convertible note hedge had a total fair value of $1.08 billion , which reflects the maximum loss that would be incurred should the parties fail to perform according to the terms of the contract. The counterparties are highly rated diversified financial institutions with both commercial and investment banking operations. The counterparties are required to post collateral against this obligation should they be downgraded below thresholds specified in the contract. Eligible collateral is comprised of a wide range of financial securities with a valuation discount percentage reflecting the associated risk.

The Company regularly reviews the creditworthiness of its financial counterparties and does not expect to incur a significant loss from failure of any counterparties to perform under any agreements.

The Company records all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets . Accordingly, there are no offsetting amounts that net assets against liabilities. The asset and liability balances presented in the tables below reflect the gross amounts of derivatives recorded in the Company’s Condensed Consolidated Financial Statements .

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Fair Values of Derivative Instruments

Derivatives Designated as Hedging Instruments



	Asset Derivatives
	September 30, 2013			December 31, 2012
(In thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Prepaid expenses and other current assets	$	90,682	Prepaid expenses and other current assets	$	36,647
Interest rate swaps	Other assets	123,143		Other assets	—
Total		$	213,825		$	36,647



	Liability Derivatives
	September 30, 2013			December 31, 2012
(In thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Other current liabilities	$	13,957	Other current liabilities	$	9,823
Foreign currency forward contracts	Other current liabilities	81,427		Other current liabilities	15,863
Total		$	95,384		$	25,686

Fair Values of Derivative Instruments

Derivatives Not Designated as Hedging Instruments



	Asset Derivatives
	September 30, 2013			December 31, 2012
(In thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign currency forward contracts	Prepaid expenses and other current assets	$	5,264	Prepaid expenses and other current assets	$	5,818
Purchased cash convertible note hedge	Other assets	1,078,900		Other assets	636,300
Total		$	1,084,164		$	642,118



	Liability Derivatives
	September 30, 2013			December 31, 2012
(In thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign currency forward contracts	Other current liabilities	$	2,563	Other current liabilities	$	3,365
Cash conversion feature of Cash Convertible Notes	Long-term debt	1,078,900		Long-term debt	636,300
Total		$	1,081,463		$	639,665

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations

Derivatives in Fair Value Hedging Relationships



	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
(In thousands)		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013			2012
Interest rate swaps	Interest expense	$	5,354	$	13,050	$	(4,492	)	$	26,509
Total		$	5,354	$	13,050	$	(4,492	)	$	26,509



	Location of (Loss) or Gain Recognized in Earnings on Hedged Items	Amount of (Loss) or Gain Recognized in Earnings on Hedged Items
(In thousands)		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2013			2012			2013		2012
2016 Senior Notes	Interest expense	$	(1,747	)	$	—		$	833	$	—
2018 Senior Notes (6.00% coupon)	Interest expense	211			(9,823		)	14,331		(16,897		)
Total		$	(1,536	)	$	(9,823	)	$	15,164	$	(16,897	)

The Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations

Derivatives in Cash Flow Hedging Relationships



	Amount of (Loss) or Gain Recognized in AOCE (Net of Tax) on Derivative (Effective Portion)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2013			2012			2013			2012
Foreign currency forward contracts	$	(37,371	)	$	23,981		$	(84,826	)	$	(11	)
Interest rate swaps	4,851			(5,485		)	119,837			(7,836		)
Total	$	(32,520	)	$	18,496		$	35,011		$	(7,847	)



	Location of Loss Reclassified from AOCE into Earnings (Effective Portion)	Amount of Loss Reclassified from AOCE into Earnings (Effective Portion)
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
(In thousands)		2013			2012			2013			2012
Foreign currency forward contracts	Net revenues	$	(22,521	)	$	(15,062	)	$	(44,365	)	$	(33,357	)
Interest rate swaps	Interest expense	—			(651		)	(1,408		)	(1,670		)
Interest rate swaps	Other (expense) income, net	—			—			(818		)	—
Total		$	(22,521	)	$	(15,713	)	$	(46,591	)	$	(35,027	)



	Location of Gain Excluded from the Assessment of Hedge Effectiveness	Amount of Gain Excluded from the Assessment of Hedge Effectiveness
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In thousands)		2013		2012		2013		2012
Foreign currency forward contracts	Other (expense) income, net	$	16,239	$	22,210	$	43,455	$	43,281
Total		$	16,239	$	22,210	$	43,455	$	43,281

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

At September 30, 2013 , the Company expects that approximately $63.3 million of pre-tax net losses on cash flow hedges will be reclassified from AOCE into earnings during the next 12 months .

The Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations

Derivatives Not Designated as Hedging Instruments



	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
(In thousands)		2013			2012			2013			2012
Foreign currency forward contracts	Other (expense) income, net	$	13,360		$	(7,860	)	$	9,574		$	(16,517	)
Cash conversion feature of Cash Convertible Notes	Other (expense) income, net	(299,200		)	(98,700		)	(442,600		)	(64,800		)
Purchased cash convertible note hedge	Other (expense) income, net	299,200			98,700			442,600			64,800
Total		$	13,360		$	(7,860	)	$	9,574		$	(16,517	)

Fair Value Measurement

Fair value is based on the price that would be received from the sale of an identical asset or paid to transfer an identical liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy has been established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:


•	Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.


•	Level 2: Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.


•	Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Financial assets and liabilities carried at fair value are classified in the tables below in one of the three categories described above:



	September 30, 2013
(In thousands)	Level 1		Level 2		Level 3		Total
Recurring fair value measurements
Financial Assets
Cash equivalents:
Money market funds	$	17,822	$	—	$	—	$	17,822
Total cash equivalents	17,822		—		—		17,822
Trading securities:
Equity securities — exchange traded funds	15,393		—		—		15,393
Total trading securities	15,393		—		—		15,393
Available-for-sale fixed income investments:
U.S. Treasuries	—		11,201		—		11,201
Corporate bonds	—		9,978		—		9,978
Agency mortgage-backed securities	—		747		—		747
Other	—		2,697		—		2,697
Total available-for-sale fixed income investments	—		24,623		—		24,623
Available-for-sale equity securities:
Biosciences industry	173		—		—		173
Total available-for-sale equity securities	173		—		—		173
Foreign exchange derivative assets	—		5,264		—		5,264
Interest rate swap derivative assets	—		213,825		—		213,825
Purchased cash convertible note hedge	—		1,078,900		—		1,078,900
Total assets at recurring fair value measurement	$	33,388	$	1,322,612	$	—	$	1,356,000
Financial Liabilities
Foreign exchange derivative liabilities	$	—	$	83,990	$	—	$	83,990
Interest rate swap derivative liabilities	—		13,957		—		13,957
Cash conversion feature of Cash Convertible Notes	—		1,078,900		—		1,078,900
Contingent consideration	—		—		406,216		406,216
Total liabilities at recurring fair value measurement	$	—	$	1,176,847	$	406,216	$	1,583,063

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued



	December 31, 2012
(In thousands)	Level 1		Level 2		Level 3		Total
Recurring fair value measurements
Financial Assets
Cash equivalents:
Money market funds	$	135,209	$	—	$	—	$	135,209
Total cash equivalents	135,209		—		—		135,209
Trading securities:
Equity securities — exchange traded funds	10,913		—		—		10,913
Total trading securities	10,913		—		—		10,913
Available-for-sale fixed income investments:
U.S. Treasuries	—		11,085		—		11,085
Corporate bonds	—		8,189		—		8,189
Agency mortgage-backed securities	—		1,050		—		1,050
Other	—		2,502		—		2,502
Total available-for-sale fixed income investments	—		22,826		—		22,826
Available-for-sale equity securities:
Biosciences industry	102		—		—		102
Total available-for-sale equity securities	102		—		—		102
Foreign exchange derivative assets	—		5,818		—		5,818
Interest rate swap derivative assets	—		36,647		—		36,647
Purchased cash convertible note hedge	—		636,300		—		636,300
Total assets at recurring fair value measurement	$	146,224	$	701,591	$	—	$	847,815
Financial Liabilities
Foreign exchange derivative liabilities	$	—	$	19,228	$	—	$	19,228
Interest rate swap derivative liabilities	—		9,823		—		9,823
Cash conversion feature of Cash Convertible Notes	—		636,300		—		636,300
Contingent consideration	—		—		379,197		379,197
Total liabilities at recurring fair value measurement	$	—	$	665,351	$	379,197	$	1,044,548

For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including the LIBOR yield curve, foreign exchange forward prices, and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities:


•	Cash equivalents — valued at observable net asset value prices.


•	Trading securities — valued at the active quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date.


•	Available-for-sale fixed income investments — valued at the quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date.


•	Available-for-sale equity securities — valued using quoted stock prices from the London Exchange at the reporting date and translated to U.S. Dollars at prevailing spot exchange rates.


•	Interest rate swap derivative assets and liabilities — valued using the LIBOR/EURIBOR yield curves at the reporting date. Counterparties to these contracts are highly rated financial institutions, none of which experienced any significant downgrades during the nine months ended September 30, 2013 that would reduce the receivable amount owed, if any, to the Company.

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


•	Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices at the reporting date. Counterparties to these contracts are highly rated financial institutions, none of which experienced any significant downgrades during the nine months ended September 30, 2013 that would reduce the receivable amount owed, if any, to the Company.

•

Cash conversion feature of Cash Convertible Notes and purchased convertible note hedge — valued using quoted prices for the Company’s Cash Convertible Notes, its implied volatility and the quoted yield on the Company’s other long-term debt at the reporting date. Counterparties to the purchased convertible note hedge are highly rated financial institutions, none of which experienced any significant downgrades during the nine months ended September 30, 2013 that would reduce the receivable amount owed, if any, to the Company.

The fair value measurement of contingent consideration is determined using Level 3 inputs. The Company’s contingent consideration represents a component of the total purchase consideration for the respiratory delivery platform and certain other acquisitions. The measurement is calculated using unobservable inputs based on the Company’s own assumptions. Significant unobservable inputs in the valuation include the probability and timing of future development and commercial milestones and future profit sharing payments. A discounted cash flow method was used to value contingent consideration at September 30, 2013 and December 31, 2012 , which was calculated as the present value of the estimated future net cash flows using a market rate of return. Discount rates ranging from 1.9% to 11.0% were utilized in the valuation. Significant changes in unobservable inputs could result in material changes to the contingent consideration liability. During the three and nine months ended September 30, 2013 , accretion of $8.2 million and $23.9 million , respectively, was recorded in interest expense. A fair value adjustment to increase the liability by approximately $15.0 million and $3.1 million , during the three and nine months ended September 30, 2013 , respectively, was recorded as a component of selling, general and administrative expense.

Although the Company has not elected the fair value option for financial assets and liabilities, any future transacted financial asset or liability will be evaluated for the fair value election.


10.	Debt

Senior Bridge Term Loan Commitment

In connection with the Company’s execution of an agreement to acquire Agila Specialties (the “Transaction”), in February 2013, the Company obtained a commitment letter from Morgan Stanley Senior Funding, Inc. for a new $1 billion senior unsecured bridge term loan in connection with the Transaction, which together with internal sources, including available cash and existing lines of credit, is expected to be sufficient to finance the Transaction. The bridge term loan is subject to the negotiation of mutually acceptable definitive documentation, which will include customary representations and warranties, affirmative and negative covenants and events of default. Additionally, the lenders’ obligation to provide the bridge term loan is subject to the satisfaction of specified conditions, including consummation of the Transaction in accordance with the terms of the Agreements, the accuracy of specified representations, the absence of specified defaults, the delivery of a certificate on behalf of the Company with respect to the solvency (on a consolidated basis) of the Company and its subsidiaries, taken as a whole, immediately after the consummation of the transactions contemplated by the Agreements, and other customary conditions.

Receivables Facility

The Company has a $400 million accounts receivable securitization facility (“Receivables Facility”), which will expire in February 2015. Interest rates are based on prevailing market rates for short-term commercial paper or LIBOR plus a program fee of 75 basis points. A commitment fee of 35 basis points, on an annual basis, is paid to maintain the availability under the Receivables Facility.

The Receivables Facility contains requirements relating to the performance of the accounts receivable and covenants relating to the Company. If the Company does not comply with these covenants, the Company’s ability to use the Receivables Facility may be suspended and repayment of any outstanding balances under the Receivables Facility may be required. At September 30, 2013 and December 31, 2012 , the Company was in compliance with all covenants. As of September 30, 2013 and December 31, 2012 , respectively, the Condensed Consolidated Balance Sheets include $629.8 million and $556.5 million of accounts receivable balances sold to Mylan Securitization LLC, a wholly owned bankruptcy remote subsidiary. Also included in the Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012 , respectively, are $337

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

million and $180 million of short-term borrowings, which are recorded as a secured loan. The interest rate on borrowings under the Receivables Facility was approximately 0.95% at September 30, 2013 .

Long-Term Debt

A summary of long-term debt is as follows:



(In thousands)	September 30, 2013		December 31, 2012
U.S. Term Loans	$	—	$	1,156,250
Revolving Facility	460,000		—
2016 Senior Notes	498,825		—
2017 Senior Notes	—		550,000
2018 Senior Notes (2.60% coupon)	648,710		—
2018 Senior Notes (6.00% coupon)	813,691		826,974
2020 Senior Notes	1,012,352		1,013,372
2023 Senior Notes	748,552		748,452
Cash Convertible Notes	1,597,179		1,136,768
Other	132		132
	5,779,441		5,431,948
Less current portion	3		94,752
Total long-term debt	$	5,779,438	$	5,337,196

Senior Credit Facilities

In June 2013, the Company entered into a credit agreement (the “Senior Credit Agreement”) with a syndicate of banks which contains a $1.50 billion revolving facility (the “Revolving Facility”) under which the Company may obtain extensions of credit, subject to the satisfaction of specified conditions, in U.S. Dollars or alternative currencies, including Euro, Sterling, Yen, and such other currencies that are acceptable to each lender under the Revolving Facility and the Administrative Agent. The Revolving Facility includes a $150 million subfacility for the issuance of letters of credit and a $125 million subfacility for swingline borrowings. At September 30, 2013 , the Company had $460 million outstanding under the Revolving Facility. The interest rate on the Revolving Facility at September 30, 2013 was 1.48% . Amounts drawn on the Revolving Facility become due and payable on June 27, 2018.

The Senior Credit Agreement contains customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of business existence and insurance, and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness and limitations on liens, mergers and certain other fundamental changes, investments and loans, transactions with affiliates, payments of dividends and other restricted payments, and changes in our lines of business. The Senior Credit Agreement contains a maximum consolidated leverage ratio financial covenant.

In June 2013, in connection with its entry into the Senior Credit Agreement, the Company terminated the credit agreement entered into in November 2011 (the “Prior Credit Agreement”). An amortization payment due in the first quarter of 2013 on the U.S. Term Loans was paid in March 2013 , in the amount of $23.4 million . The remaining balance on the U.S. Term Loans of $1.13 billion was paid in June 2013, utilizing the proceeds from the June 2013 senior note offerings as described below. In addition, during the second quarter of 2013, the Company incurred a pre-tax charge of approximately $8.7 million related to the Senior Credit Agreement refinancing transaction related to the write-off of deferred financing fees, which was included in other (expense) income, net , in the Condensed Consolidated Statements of Operations .

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Senior Notes

In June 2013, the Company issued $500 million aggregate principal amount of 1.80% Senior Notes due 2016 (“2016 Senior Notes”). These notes are Mylan’s senior unsecured obligations and were issued to qualified institutional buyers in accordance with Rule 144A and to persons outside of the U.S. pursuant to Regulation S under the Securities Act in a private offering exempt from the registration requirements of the Securities Act. Interest on the 2016 Senior Notes accrues from June 25, 2013 and is payable semiannually in arrears on December 24 and June 24 of each year, beginning on December 24, 2013. The 2016 Senior Notes will mature on June 24, 2016, subject to earlier repurchase or redemption in accordance with the terms of the indenture. The Company has entered into interest rate swaps that convert $500 million of 2016 Senior Notes principal debt to a variable rate, which was 1.45% at September 30, 2013 . At September 30, 2013 , the $498.8 million of 2016 Senior Notes debt is net of a $0.3 million discount and includes a fair value adjustment of $0.8 million associated with the interest rate swaps.

In June 2013, the Company issued $650 million aggregate principal amount of 2.60% Senior Notes due 2018 (“2018 - 2.6% Senior Notes”). These notes are Mylan’s senior unsecured obligations and were issued to qualified institutional buyers in accordance with Rule 144A and to persons outside of the U.S. pursuant to Regulation S under the Securities Act in a private offering exempt from the registration requirements of the Securities Act. Interest on the 2018 - 2.6% Senior Notes accrues from June 25, 2013 and is payable semiannually in arrears on December 24 and June 24 of each year, beginning on December 24, 2013. The 2018 - 2.6% Senior Notes will mature on June 24, 2018, subject to earlier repurchase or redemption in accordance with the terms of the indenture. At September 30, 2013 , the $648.7 million of debt associated with the 2018 - 2.6% Senior Notes includes a $1.3 million discount.

In June 2013 and in connection with the offering of the 2016 Senior Notes and the 2018 - 2.6% Senior Notes (collectively the “Notes”), the Company entered into a registration rights agreement with the initial purchasers of the Notes. Pursuant to the registration rights agreement, the Company will use commercially reasonable efforts (1) to file a registration statement with respect to an offer to exchange the 2016 Senior Notes and the 2018 - 2.6% Senior Notes (each, an “exchange offer”) for new notes with the same aggregate principal amount and terms substantially identical in all material respects and (2) to cause the exchange offer registration statement to be declared effective by the SEC under the Securities Act.

The Company may redeem some or all of the 2016 Senior Notes and 2018 - 2.6% Senior Notes at any time prior to maturity at a price equal to the greater of 100% of the principal amount of notes being redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed discounted to the redemption date on a semi-annual basis at the treasury rate plus 20 basis points in the case of the 2016 Senior Notes or 30 basis points in the case of the 2018 - 2.6% Senior Notes, plus in each case accrued and unpaid interest on the notes being redeemed accrued to the redemption date.

On July 18, 2013, the Company redeemed all of its outstanding 7.625% Senior Notes due 2017 (“2017 Senior Notes”) pursuant to their terms for a total of $608.8 million , including a $58.8 million redemption premium. The Company recorded a pre-tax charge of approximately $63.9 million during the current quarter related to the redemption of the 2017 Senior Notes, comprised of the redemption premium and the write-off of deferred financing fees, which was included in other (expense) income, net , in the Condensed Consolidated Statements of Operations . The redemption of the 2017 Senior Notes was funded through borrowings under the Revolving Facility.

The Company has entered into interest rate swaps that convert $500 million of 6.0% Senior Notes due 2018 (“2018 - 6.0% Senior Notes”) principal debt to a variable rate. The variable rate was 3.22% at September 30, 2013 . At September 30, 2013 , the $813.7 million of 2018 - 6.0% Senior Notes debt is net of a $8.6 million discount and includes a fair value adjustment of $22.3 million associated with the interest rate swaps. At December 31, 2012 , the $827.0 million of 2018 - 6.0% Senior Notes debt is net of a $9.7 million discount and includes a fair value adjustment of $36.6 million .

At September 30, 2013 and December 31, 2012 , the $1.01 billion of 2020 Senior Notes debt includes a premium of $12.4 million and $13.4 million , respectively.

At September 30, 2013 , the $748.6 million of 2023 Senior Notes includes a discount of $1.4 million . At December 31, 2012 , the $748.5 million of 2023 Senior Notes included a discount of $1.5 million .

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Cash Convertible Notes

At September 30, 2013 , the $1.60 billion outstanding consists of $518.3 million of Cash Convertible Notes debt ( $574 million face amount, net of a $55.7 million discount) and the bifurcated conversion feature with a fair value of $1.08 billion recorded as a liability within long-term debt in the Condensed Consolidated Balance Sheets at September 30, 2013 . The Cash Convertible Notes will mature on September 15, 2015 , subject to earlier repurchase or conversion. Holders may convert their notes subject to certain conversion provisions determined by the market price of the Company’s common stock, specified distributions to common shareholders, a fundamental change, and certain time periods specified in the purchase agreement. Additionally, the Company has purchased call options, which are recorded as assets at their fair value of $1.08 billion within other assets in the Condensed Consolidated Balance Sheets at September 30, 2013 . At December 31, 2012 , the $1.14 billion outstanding consists of $500.5 million of debt ( $575 million face amount, net of a $74.5 million discount) and the bifurcated conversion feature with a fair value of $636.3 million recorded as a liability within other long-term obligations in the Condensed Consolidated Balance Sheets . The purchased call options are assets recorded at their fair value of $636.3 million within other assets in the Condensed Consolidated Balance Sheets at December 31, 2012 .

As of September 30, 2013 , because the closing price of Mylan’s common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day in the September 30, 2013 period was more than 130% of the applicable conversion reference price of $13.32 , the $574 million of Cash Convertible Notes was currently convertible. Although de minimis conversions have been requested, the Company’s experience is that convertible debentures are not normally converted by investors until close to their maturity date. Upon an investor’s election to convert, the Company is required to pay the full conversion value in cash. Should holders elect to convert, the Company intends to draw on its revolving credit facility to fund any principal payments. The amount payable per $1,000 notional bond would be calculated as the product of (1) the conversion reference rate (currently 75.0751 ) and (2) the average Daily Volume Weighted Average Price per share of common stock for a specified period following the conversion date. Any payment above the principal amount is matched by a convertible note hedge.

Fair Value

At September 30, 2013 and December 31, 2012 , the fair value of the Senior Notes was approximately $3.84 billion and $3.43 billion , respectively. At September 30, 2013 and December 31, 2012 , the fair value of the Cash Convertible Notes was approximately $1.66 billion and $1.22 billion , respectively. The fair values of the Senior Notes and Cash Convertible Notes were valued at quoted market prices from broker or dealer quotations and were classified as Level 2 in the fair value hierarchy. Based on quoted market rates of interest and maturity schedules for similar debt issues, the fair values of the U.S. Term Loans and Revolving Facility, determined based on Level 2 inputs, approximate their carrying values at September 30, 2013 and December 31, 2012 .

Mandatory minimum repayments remaining on the outstanding borrowings under the Revolving Facility and notes at notional amounts at September 30, 2013 are as follows for each of the periods ending December 31:



(In thousands)	Cash Convertible Notes		2016 Senior Notes		2018 - 6.0% Senior Notes		2018 - 2.6% Senior Notes		2020 Senior Notes		2023 Senior Notes		Revolving Facility		Total
2013	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	3
2014	—		—		—		—		—		—		—		—
2015	573,963		—		—		—		—		—		—		573,963
2016	—		500,000		—		—		—		—		—		500,000
2017	—		—		—		—		—		—		—		—
Thereafter	—		—		800,000		650,000		1,000,000		750,000		460,000		3,660,000
Total	$	573,966	$	500,000	$	800,000	$	650,000	$	1,000,000	$	750,000	$	460,000	$	4,733,966

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued


11.	Comprehensive Earnings

Accumulated other comprehensive loss , as reflected on the Condensed Consolidated Balance Sheets , is comprised of the following:



(In thousands)	September 30, 2013			December 31, 2012
Accumulated other comprehensive loss:
Net unrealized gains on marketable securities, net of tax	$	421		$	1,033
Net unrecognized losses and prior service cost related to defined benefit plans, net of tax	(10,972		)	(13,890		)
Net unrecognized gains (losses) on derivatives, net of tax	50,781			(30,820		)
Foreign currency translation adjustment	(291,177		)	(42,821		)
	$	(250,947	)	$	(86,498	)

Components of accumulated other comprehensive loss consist of the following, for the three and nine months ended September 30, 2013 :



(In thousands)	Three Months Ended September 30, 2013
(In thousands)	Gains and Losses on Derivatives in Cash Flow Hedging Relationships			Gains and Losses on Marketable Securities			Defined Benefit Plan Items			Foreign Currency Translation Adjustment			Totals
Balance at June 30, 2013, net of tax	$	60,780		$	398		$	(11,071	)	$	(404,823	)	$	(354,716	)
Other comprehensive (loss) earnings before reclassifications, before tax	(42,698		)	19			(223		)	113,646			70,744
Amounts reclassified from accumulated other comprehensive loss, before tax:
Gain (loss) on foreign exchange forward contracts classified as cash flow hedges, included in net revenues	(22,521		)										(22,521		)
Realized gain (loss) on sale of marketable securities, included in other (expense) income, net				(16		)							(16		)
Amortization of prior service costs included in selling, general and administrative expenses							(86		)				(86		)
Amortization of actuarial gain (loss) included in selling, general and administrative expenses							(296		)				(296		)
Amounts reclassified from accumulated other comprehensive loss, before tax	(22,521		)	(16		)	(382		)	—			(22,919		)
Net other comprehensive earnings, before tax	(20,177		)	35			159			113,646			93,663
Income tax related to items of other comprehensive earnings	10,178			(12		)	(60		)	—			10,106
Balance at September 30, 2013, net of tax	$	50,781		$	421		$	(10,972	)	$	(291,177	)	$	(250,947	)

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	Nine Months Ended September 30, 2013
	Gains and Losses on Derivatives in Cash Flow Hedging Relationships							Gains and Losses on Marketable Securities			Defined Benefit Plan Items			Foreign Currency Translation Adjustment			Totals
(In thousands)	Foreign currency forward contracts		Interest rate swaps		Total
Balance at December 31, 2012, net of tax					$	(30,820	)	$	1,033		$	(13,890	)	$	(42,821	)	$	(86,498	)
Other comprehensive earnings (loss) before reclassifications, before tax					81,723			(923		)	3,476			(248,356		)	(164,080		)
Amounts reclassified from accumulated other comprehensive loss, before tax:
Gain (loss) on foreign exchange forward contracts classified as cash flow hedges, included in net revenues	(44,365	)			(44,365		)										(44,365		)
Gain (loss) on interest rate swaps classified as cash flow hedges, included in interest expense			(1,408	)	(1,408		)										(1,408		)
Gain (loss) on interest rate swaps classified as cash flow hedges, included in other (expense) income, net			(818	)	(818		)										(818		)
Realized gain (loss) on sale of marketable securities, included in other (expense) income, net								18									18
Amortization of prior service costs included in selling, general and administrative expenses											(254		)				(254		)
Amortization of actuarial gain (loss) included in selling, general and administrative expenses											(886		)				(886		)
Amounts reclassified from accumulated other comprehensive loss, before tax					(46,591		)	18			(1,140		)	—			(47,713		)
Net other comprehensive earnings (loss), before tax					128,314			(941		)	4,616			(248,356		)	(116,367		)
Income tax related to items of other comprehensive earnings (loss)					(46,713		)	329			(1,698		)	—			(48,082		)
Balance at September 30, 2013, net of tax					$	50,781		$	421		$	(10,972	)	$	(291,177	)	$	(250,947	)

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Components of other comprehensive loss , before tax, consist of the following, for the three and nine months ended September 30, 2012 :



	Three Months Ended			Nine Months Ended
(In thousands)	September 30, 2012			September 30, 2012
Defined benefit plans:
Unrecognized gain (loss) and prior service cost arising during the period	$	—		$	—
Less: Amortization of actuarial gain included in net earnings	10			29
Net change in unrecognized losses and prior service cost related to defined benefit plans	$	(10	)	$	(29	)

Derivatives in cash flow hedging relationships:
Amount of loss recognized in AOCE on derivatives (effective portion)	$	36,036		$	4,562
Less: Reclassification of loss from AOCE into earnings (effective portion)	(15,713		)	(35,027		)
Net unrecognized loss on derivatives	$	51,749		$	39,589

Net unrealized gain on marketable securities:
Unrealized gain on marketable securities	$	170		$	119
Less: Reclassification for gain included in net earnings	23			52
Net unrealized gain on marketable securities	$	147		$	67


12.	Shareholders’ Equity

A summary of the changes in shareholders’ equity for the nine months ended September 30, 2013 and 2012 is as follows:



(In thousands)	Total Mylan Inc. Shareholders' Equity			Noncontrolling Interest		Total
December 31, 2012	$	3,340,718		$	15,110	$	3,355,828
Net earnings	443,479			2,104		445,583
Other comprehensive loss, net of tax	(164,449		)	—		(164,449		)
Common stock share repurchase	(500,000		)	—		(500,000		)
Stock option activity	56,713			—		56,713
Stock compensation expense	36,029			—		36,029
Issuance of restricted stock, net of shares withheld	(7,665		)	—		(7,665		)
Tax benefit of stock option plans	10,494			—		10,494
Other	—			141		141
September 30, 2013	$	3,215,319		$	17,355	$	3,232,674

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued



(In thousands)	Total Mylan Inc. Shareholders' Equity			Noncontrolling Interest			Total
December 31, 2011	$	3,491,775		$	13,007		$	3,504,782
Net earnings	478,886			1,842			480,728
Other comprehensive earnings, net of tax	52,026			—			52,026
Common stock share repurchase	(499,953		)	—			(499,953		)
Stock option activity	52,482			—			52,482
Stock compensation expense	32,099			—			32,099
Issuance of restricted stock, net of shares withheld	(5,041		)	—			(5,041		)
Purchase of subsidiary shares from noncontrolling interest	(9		)	(25		)	(34		)
Tax benefit of stock option plans	7,226			—			7,226
Other	—			47			47
September 30, 2012	$	3,609,491		$	14,871		$	3,624,362


13.	Segment Information

Mylan has two segments, “Generics” and “Specialty.” The Generics segment primarily develops, manufactures, sells and distributes generic or branded generic pharmaceutical products in tablet, capsule, injectable or transdermal patch form, as well as active pharmaceutical ingredients (“API”). The Specialty segment engages mainly in the development, manufacture and sale of branded specialty nebulized and injectable products. Beginning with the first quarter of 2013, the Company reorganized the components of its Generics and Specialty segments as a result of a change in the way the Chief Executive Officer, who is the chief operating decision maker, evaluates the performance of operations, develops strategy and allocates capital resources. As required by the applicable accounting standards, financial statements issued subsequent to this segment reporting change are required to reflect modifications to the reportable segment information resulting from the revision, including reclassifications of all comparative segment information. Accordingly, the results presented below reflect the change in segment reporting for all periods presented. There is no change to the Company’s previously reported consolidated net operating results, financial position or cash flows.

The Company’s chief operating decision maker evaluates the performance of its segments based on total revenues and segment profitability. Segment profitability represents segment gross profit less direct research and development expenses and direct selling, general and administrative expenses. Certain general and administrative and research and development expenses not allocated to the segments, net charges for litigation settlements, impairment charges and other expenses not directly attributable to the segments, are reported in Corporate/Other. Additionally, amortization of intangible assets and other purchase accounting related items, as well as any other significant special items, are included in Corporate/Other. Items below the earnings from operations line on the Company’s Condensed Consolidated Statements of Operations are not presented by segment, since they are excluded from the measure of segment profitability. The Company does not report depreciation expense, total assets and capital expenditures by segment, as such information is not used by the chief operating decision maker.

The accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 . Intersegment revenues are accounted for at current market values and are eliminated at the consolidated level.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Presented in the table below is segment information for the periods identified and a reconciliation of segment information to total consolidated information.



(In thousands)	Generics Segment		Specialty Segment		Corporate / Other ⁽¹⁾			Consolidated
Three Months Ended September 30, 2013
Total revenues
Third party	$	1,404,426	$	363,000	$	—		$	1,767,426
Intersegment	1,736		4,148		(5,884		)	—
Total	$	1,406,162	$	367,148	$	(5,884	)	$	1,767,426

Segment profitability	$	369,239	$	189,822	$	(219,245	)	$	339,816

Nine Months Ended September 30, 2013
Total revenues
Third party	$	4,275,457	$	825,160	$	—		$	5,100,617
Intersegment	4,189		17,980		(22,169		)	—
Total	$	4,279,646	$	843,140	$	(22,169	)	$	5,100,617

Segment profitability	$	1,173,529	$	387,390	$	(698,637	)	$	862,282



Three Months Ended September 30, 2012
Total revenues
Third party	$	1,495,484	$	306,302	$	—		$	1,801,786
Intersegment	410		6,419		(6,829		)	—
Total	$	1,495,894	$	312,721	$	(6,829	)	$	1,801,786

Segment profitability	$	459,408	$	135,058	$	(259,776	)	$	334,690

Nine Months Ended September 30, 2012
Total revenues
Third party	$	4,389,079	$	684,177	$	—		$	5,073,256
Intersegment	1,154		30,090		(31,244		)	—
Total	$	4,390,233	$	714,267	$	(31,244	)	$	5,073,256

Segment profitability	$	1,278,937	$	264,199	$	(696,437	)	$	846,699

____________


⁽¹⁾	Includes certain corporate general and administrative and research and development expenses; net charges for litigation settlements; certain intercompany transactions, including eliminations; amortization of intangible assets and certain purchase accounting items; impairment charges; and other expenses not directly attributable to segments.

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14.	Contingencies

Legal Proceedings

The Company is involved in various disputes, governmental and/or regulatory inquiries and proceedings and litigation matters that arise from time to time, some of which are described below. The Company is also party to certain litigation matters for which Merck KGaA has agreed to indemnify the Company, pursuant to the agreement by which Mylan acquired the former Merck Generics business.

While the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, the process of resolving matters through litigation or other means is inherently uncertain, and it is not possible to predict the ultimate resolution of any such proceeding. It is possible that an unfavorable resolution of any of the matters described below, or the inability or denial of Merck KGaA, another indemnitor or insurer to pay an indemnified claim, could have a material effect on the Company’s financial position, results of operations and cash flows. Unless otherwise disclosed below, the Company is unable to predict the outcome of the respective litigation or to provide an estimate of the range of reasonably possible losses. Legal costs are recorded as incurred and are classified in selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations .

Lorazepam and Clorazepate

On June 1, 2005, a jury verdict was rendered against Mylan, MPI, and co-defendants Cambrex Corporation and Gyma Laboratories in the U.S. District Court for the District of Columbia in the amount of approximately $12.0 million , which has been accrued for by the Company. The jury found that Mylan and its co-defendants willfully violated Massachusetts, Minnesota and Illinois state antitrust laws in connection with API supply agreements entered into between the Company and its API supplier (Cambrex) and broker (Gyma) for two drugs, Lorazepam and Clorazepate, in 1997, and subsequent price increases on these drugs in 1998. The case was brought by four health insurers who opted out of earlier class action settlements agreed to by the Company in 2001 and represents the last remaining antitrust claims relating to Mylan’s 1998 price increases for Lorazepam and Clorazepate. On December 20, 2006, the Company’s motion for judgment as a matter of law and motion for a new trial were denied and the remaining motions were denied on January 24, 2008. In post-trial filings, the plaintiffs requested that the verdict be trebled and that request was granted on January 24, 2008. On February 6, 2008, a judgment was issued against Mylan and its co-defendants in the total amount of approximately $69.0 million , which, in the case of three of the plaintiffs, reflects trebling of the compensatory damages in the original verdict (approximately $11.0 million in total) and, in the case of the fourth plaintiff, reflects their amount of the compensatory damages in the original jury verdict plus doubling this compensatory damage award as punitive damages assessed against each of the defendants (approximately $58.0 million in total), some or all of which may be subject to indemnification obligations by Mylan. Plaintiffs are also seeking an award of attorneys’ fees and litigation costs in unspecified amounts and prejudgment interest of approximately $8.0 million . The Company and its co-defendants appealed to the U.S. Court of Appeals for the D.C. Circuit and have challenged the verdict as legally erroneous on multiple grounds. The appeals were held in abeyance pending a ruling on the motion for prejudgment interest, which has been granted. Mylan has contested this ruling along with the liability finding and other damages awarded as part of its appeal, which was filed in the Court of Appeals for the D.C. Circuit. On January 18, 2011, the Court of Appeals issued a judgment remanding the case to the District Court for further proceedings based on lack of diversity with respect to certain plaintiffs. On June 13, 2011, Mylan filed a certiorari petition with the U.S. Supreme Court requesting review of the judgment of the D.C. Circuit. On October 3, 2011, the certiorari petition was denied. The case is now proceeding before the District Court. On January 14, 2013, following limited court-ordered jurisdictional discovery, the plaintiffs filed a fourth amended complaint containing additional factual averments with respect to the diversity of citizenship of the parties, along with a motion to voluntarily dismiss 755 (of 1,387 ) self-funded customers whose presence would destroy the District Court’s diversity jurisdiction. Plaintiffs also moved for a remittitur (reduction) of approximately $8.1 million from the full damages award. Mylan’s brief in response to the new factual averments in the complaint was filed on February 13, 2013. In addition to disputing the sufficiency of many of the plaintiffs’ jurisdictional averments, Mylan argued that the case should be dismissed in its entirety, or that alternatively all of the self-funded customer claims should be dismissed. Mylan also argued for additional discovery and a new trial on damages. Briefing on these issues is complete, and a decision is pending.

In connection with the Company’s appeal of the judgment, the Company submitted a surety bond underwritten by a third-party insurance company in the amount of $74.5 million in February 2008. On May 30, 2012, the District Court ordered the amount of the surety bond reduced to $66.6 million .

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Pricing and Medicaid Litigation

Beginning in September 2003, Mylan, MPI and/or Mylan Institutional Inc. (formerly known as UDL Laboratories, Inc. and hereafter “MII”), a wholly owned subsidiary of the Company, together with many other pharmaceutical companies, have been named in civil lawsuits filed by state attorneys general (“AGs”) and municipal bodies within the state of New York alleging generally that the defendants defrauded the state Medicaid systems by allegedly reporting “Average Wholesale Prices” and/or “Wholesale Acquisition Costs” that exceeded the actual selling price of the defendants’ prescription drugs, causing state programs to overpay pharmacies and other providers. To date, Mylan, MPI and/or MII have been named as defendants in substantially similar civil lawsuits filed by the AGs of Alabama, Alaska, California, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Mississippi, Missouri, Oklahoma, South Carolina, Texas, Utah and Wisconsin, and also by the city of New York and approximately 40 counties across New York State. Several of these cases have been transferred to the AWP multi-district litigation proceedings pending in the U.S. District Court for the District of Massachusetts for pretrial proceedings. Other cases will likely be litigated in the state courts in which they were filed. Each of the cases seeks money damages, civil penalties and/or double, treble or punitive damages, counsel fees and costs, equitable relief and/or injunctive relief. Mylan and its subsidiaries have denied liability and are defending the remaining actions vigorously.

In May 2008, an amended complaint was filed in the U.S. District Court for the District of Massachusetts by a private plaintiff on behalf of the United States of America against Mylan, MPI, MII and several other generic manufacturers. The original complaint was filed under seal in April 2000, and Mylan, MPI and MII were added as parties in February 2001. The claims against Mylan, MPI, MII and the other generic manufacturers were severed from the April 2000 complaint (which remains under seal) as a result of the federal government’s decision not to intervene in the action as to those defendants. The complaint alleged violations of the False Claims Act and set forth allegations substantially similar to those alleged in the state AG cases mentioned in the preceding paragraph and purported to seek nationwide recovery of any and all alleged overpayment of the “federal share” under the Medicaid program, as well as treble damages and civil penalties. In December 2010, the Company completed a settlement of this case (except for the claims related to the California federal share) and the Texas state action mentioned above. This settlement resolved a significant portion of the damages claims asserted against Mylan, MPI and MII in the various pending pricing litigations. In addition, Mylan has reached settlements of the Alabama, Alaska, California (including the “federal share”), Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Mississippi, New York state and county, Oklahoma, South Carolina, and Utah state actions. The Company has also reached an agreement in principle to settle the Missouri action, which is contingent upon the execution of definitive settlement documents. With regard to the remaining state actions, the Company continues to believe that it has meritorious defenses and is vigorously defending itself in those actions. The Company had accrued approximately $50.0 million at December 31, 2012 and $56.0 million at September 30, 2013 . There were no settlement payments during the nine months ended September 30, 2013 . The Company reviews the status of these actions on an ongoing basis, and from time to time, the Company may settle or otherwise resolve these matters on terms and conditions that management believes are in the best interests of the Company. There are no assurances that settlements reached and/or adverse judgments received, if any, will not exceed amounts that may be provided for. However, the range of reasonably possible loss above the amount provided for cannot be estimated.

Dey L.P. (now known as Mylan Specialty L.P. and hereafter “Mylan Specialty”), a wholly owned subsidiary of the Company, was named as a defendant in several class actions brought by consumers and third-party payors. Mylan Specialty has reached a settlement of these class actions, which has been approved by the court and all claims have been dismissed. Additionally, a complaint was filed under seal by a plaintiff on behalf of the United States of America against Mylan Specialty in August 1997. In August 2006, the Government filed its complaint-in-intervention and the case was unsealed in September 2006. The Government asserted that Mylan Specialty was jointly liable with a codefendant and sought recovery of alleged overpayments, together with treble damages, civil penalties and equitable relief. Mylan Specialty completed a settlement of this action in December 2010. These cases all have generally alleged that Mylan Specialty falsely reported certain price information concerning certain drugs marketed by Mylan Specialty, that Mylan Specialty caused false claims to be made to Medicaid and to Medicare, and that Mylan Specialty caused Medicaid and Medicare to make overpayments on those claims.

Under the terms of the purchase agreement with Merck KGaA, Mylan is fully indemnified for the claims in the preceding paragraph and Merck KGaA is entitled to any income tax benefit the Company realizes for any deductions of amounts paid for such pricing litigation. Under the indemnity, Merck KGaA is responsible for all settlement and legal costs, and, as such, these settlements had no impact on the Company’s Consolidated Statements of Operations. At September 30, 2013 , the Company has accrued approximately $64.1 million in other current liabilities, which represents its estimate of the remaining amount of anticipated income tax benefits due to Merck KGaA. Substantially all of Mylan Specialty’s known claims with respect to this pricing litigation have been settled.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Modafinil Antitrust Litigation and FTC Inquiry

Beginning in April 2006, Mylan and four other drug manufacturers have been named as defendants in civil lawsuits filed in or transferred to the U.S. District Court for the Eastern District of Pennsylvania by a variety of plaintiffs purportedly representing direct and indirect purchasers of the drug Modafinil and in a lawsuit filed by Apotex, Inc., a manufacturer of generic drugs, seeking approval to market a generic Modafinil product. These actions allege violations of federal antitrust and state laws in connection with the defendants’ settlement of patent litigation relating to Modafinil. On March 29, 2010, the Court in the Eastern District of Pennsylvania denied the defendants’ motions to dismiss. Fact discovery closed on February 11, 2011. No date has been set for briefing on dispositive motions. Mylan is defending each of these actions vigorously. The case had been suspended in light of petitions for writ of certiorari that were filed before the U.S. Supreme Court in In RE: K-Dur Antitrust Litigation and FTC v. Watson Pharms Inc., et al. (Androgel Litigation). On June 17, 2013, the Supreme Court issued its decision in the Androgel Litigation. The case is now proceeding in the district court.

In addition, by letter dated July 11, 2006, Mylan was notified by the U.S. Federal Trade Commission (“FTC”) of an investigation relating to the settlement of the Modafinil patent litigation. In its letter, the FTC requested certain information from Mylan, MPI and Mylan Technologies, Inc. pertaining to the patent litigation and the settlement thereof. On March 29, 2007, the FTC issued a subpoena, and on April 26, 2007, the FTC issued a civil investigative demand to Mylan, requesting additional information from the Company relating to the investigation. Mylan has cooperated fully with the government’s investigation and completed all requests for information. On February 13, 2008, the FTC filed a lawsuit against Cephalon in the U.S. District Court for the District of Columbia and the case has subsequently been transferred to the U.S. District Court for the Eastern District of Pennsylvania. On July 1, 2010, the FTC issued a third party subpoena to Mylan, requesting documents in connection with its lawsuit against Cephalon. Mylan has responded to the subpoena. Mylan is not named as a defendant in the FTC’s lawsuit, although the complaint includes certain allegations pertaining to the Mylan/Cephalon settlement.

Minocycline

On May 1, 2012, the FTC issued a civil investigative demand to Mylan pertaining to an investigation being conducted to determine whether Medicis Pharmaceutical Corporation, Mylan, and/or other generic companies engaged in unfair methods of competition with regard to Medicis’ branded Solodyn products and generic Solodyn products, as well as the 2010 settlement of Medicis’ patent infringement claims against Mylan and Matrix Laboratories Ltd. (now known as Mylan Laboratories Ltd. ). Mylan is cooperating with the FTC and has responded to requests for information.

Beginning in July 2013, Mylan and Mylan Laboratories Ltd. , along with eight other parties, have been named as defendants in civil lawsuits filed by a variety of plaintiffs in the U.S. District Court for the Eastern District of Pennsylvania, the District of Arizona, and the District of Massachusetts. The plaintiffs purport to represent direct and indirect purchasers of the drug Solodyn, and assert violations of federal and state laws, including allegations in connection with separate settlements by Medicis with each of the other defendants of patent litigation relating to generic Solodyn.

EPIPEN® Auto-Injector Advertising Inquiries

During 2012, the Massachusetts Attorney General’s office and the Oregon Department of Justice issued civil investigation demands to Mylan Specialty, regarding the marketing and sale of EPIPEN® and EPIPEN Jr Auto-Injector s in both states, seeking information about an EPIPEN® Auto-Injector television commercial. Mylan is cooperating with both requests and has responded to the requests for information.

EU Commission Proceedings

On or around July 8, 2009, the European Commission (the “EU Commission” or the “Commission”) stated that it had initiated antitrust proceedings pursuant to Article 11(6) of Regulation No. 1/2003 and Article 2(1) of Regulation No. 773/2004 to explore possible infringement of Articles 81 and 82 EC and Articles 53 and 54 of the EEA Agreement by Les Laboratoires Servier (“Servier”) as well as possible infringement of Article 81 EC by the Company’s Indian subsidiary, Mylan Laboratories Ltd. (formerly known as Matrix Laboratories Ltd. ), and four other companies, each of which entered into agreements with Servier relating to the product Perindopril. On July 30, 2012, the European Commission issued a Statement of Objections to Servier SAS, Servier Laboratories Limited, Servier, Adir, Biogaran, Krka, d.d. Novo mesto, Lupin Limited, Mylan Laboratories Ltd. , Mylan Inc., Niche Generics Limited, Teva UK Limited, Teva Pharmaceutical Industries Ltd., Teva Pharmaceuticals Europe B.V., and Unichem Laboratories Limited. Mylan Inc. and Mylan Laboratories Ltd. have filed responses to the Statement of Objections and are vigorously defending themselves against allegations contained therein.

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Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

On October 6, 2009, the Company received notice that the EU Commission was initiating an investigation pursuant to Article 20(4) of Regulation No. 1/2003 to explore possible infringement of Articles 81 and 82 EC by the Company and its affiliates. Mylan S.A.S., acting on behalf of its Mylan affiliates, has produced documents and other information in connection with the inquiry and continues to respond to other requests for additional information. The Company is cooperating with the Commission in connection with the investigation, and no statement of objections has been filed against the Company in connection with the investigation.

On March 19, 2010, Mylan and Generics [U.K.] Limited , a wholly owned subsidiary of the Company, received notice that the EU Commission had opened proceedings against Lundbeck with respect to alleged unilateral practices and/or agreements related to Citalopram in the European Economic Area. A Statement of Objections was issued to Lundbeck, Merck KGaA, Generics [U.K.] Limited , Arrow, Resolution Chemicals, Xelia Pharmaceuticals, Alpharma, A.L. Industrier and Ranbaxy on July 25, 2012. Generics [U.K.] Limited filed a response to the Statement of Objections, defending itself against the allegations contained therein. On June 19, 2013, the European Commission issued a decision finding that Generics [U.K.] Limited , as well as the companies noted above, had violated EU competition rules and requiring Generics [U.K.] Limited to pay approximately EUR 7.8 million , jointly and severally with Merck KGaA. Generics [U.K.] Limited has appealed the European Commission’s decision. Generics [U.K.] Limited has also sought indemnification from Merck KGaA with respect to the EUR 7.8 million issued against Merck KGaA and Generics [U.K.] Limited jointly and severally. Merck KGaA has counterclaimed against Generics [U.K.] Limited seeking the same. During the nine months ended September 30, 2013 , the Company accrued approximately $10.3 million related to this matter. There are no assurances that settlements reached and/or adverse judgments received, if any, will not exceed amounts that may be provided for. However, the range of reasonably possible loss above the amount provided for cannot be estimated.

U.K. Office of Fair Trading

On August 12, 2011, Generics [U.K.] Limited received notice that the Office of Fair Trading was opening an investigation to explore the possible infringement of the Competition Act 1998 and Article 101 and 102 on the Functioning of the European Union, with respect to alleged agreements related to Paroxetine. Generics [U.K.] Limited has produced documents and information in connection with this inquiry and is continuing to cooperate with the investigation. On April 19, 2013, a Statement of Objections was issued to GlaxoSmithKline, Generics [U.K.] Limited , Alpharma and Ivax LLC. Generics [U.K.] Limited filed a response to the Statement of Objections, defending itself against the allegations contained therein.

South African Competition Commission

Mylan's South African affiliate received a summons and a request for appearance and information, dated February 22, 2013, regarding a supply agreement between Aspen Pharmacare Holdings (Pty) Ltd. and Mylan Laboratories Ltd. pertaining to a fixed dose combination antiretroviral product. The summons was issued in respect of two complaints in connection with this Agreement. An amended complaint and Initiation Statement were received on June 21, 2013. Mylan has produced documents and information in connection with this matter. Mylan is continuing to cooperate in this investigation. The complaint has not been referred to the Competition Tribunal.

Product Liability

The Company is involved in a number of product liability lawsuits and claims related to alleged personal injuries arising out of certain products manufactured and/or distributed by the Company, including but not limited to its Fentanyl Transdermal System, Phenytoin, Propoxyphene, Alendronate and Amnesteem ^® . The Company believes that it has meritorious defenses to these lawsuits and claims and is vigorously defending itself with respect to those matters. From time to time, the Company has agreed to settle or otherwise resolve certain lawsuits and claims on terms and conditions that are in the best interests of the Company. The Company had accrued approximately $21.6 million at December 31, 2012 and $19.6 million at September 30, 2013 . The reduction in the accrual during the current year was principally due to payments. There are no assurances that settlements reached and/or adverse judgments received, if any, will not exceed amounts that may be provided for. However, the range of reasonably possible loss above the amount provided for cannot be estimated.

Intellectual Property

On April 16, 2012, the Federal Circuit reversed and vacated a judgment of invalidity by the United States District Court for the District of Delaware in a patent infringement lawsuit by Eurand, Inc. (now known as Aptalis Pharmatech, Inc.),

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MYLAN INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

Cephalon, Inc., and Anesta AG against Mylan Inc. and MPI in relation to MPI’s abbreviated new drug application for extended-release cyclobenzaprine hydrochloride. On May 12, 2011, the District Court found, after trial, the patents-in-suit invalid as obvious. On May 13, 2011, MPI launched its cyclobenzaprine hydrochloride extended-release capsules. Plaintiffs appealed the District Court’s finding of obviousness to the Federal Circuit, and on May 24, 2011, the District Court issued an injunction order enjoining Mylan from selling any additional cyclobenzaprine products pending the Federal Circuit’s decision. Plaintiffs were required to post a $10 million bond. Mylan appealed the District Court’s injunction and filed a motion to stay the injunction pending resolution of the appeal. On May 25, 2011, the Federal Circuit temporarily stayed the injunction pending full briefing on Mylan’s motion to stay. On July 7, 2011, the Federal Circuit reinstated the injunction preventing further sales pending a decision on the appeal. On April 16, 2012, the Federal Circuit reversed and vacated the District Court’s invalidity judgment and dismissed without prejudice Mylan’s appeal of the injunction. The Company filed a petition for rehearing en banc and on July 25, 2012, the petition was denied. The Company filed a petition for certiorari to the United States Supreme Court on October 23, 2012 and on January 14, 2013, the petition was denied. The case was remanded to the District Court for consideration of the issue of damages. On April 4, 2013, the District Court ordered that the effective date of approval of Mylan’s Abbreviated New Drug Application shall not be earlier than the later to expire of the patents-in-suit, unless otherwise ordered by the Court, and enjoined Mylan from manufacturing, using, offering to sell, selling, or importing its products until after the later of the expiration dates of the patents-in-suit, unless otherwise ordered by the Court. The trial on the issue of damages is scheduled to commence on September 2, 2014.

In these and other situations, the Company has used its business judgment to decide to market and sell products, notwithstanding the fact that allegations of patent infringement(s) or other potential third party rights have not been finally resolved by the courts (i.e., an “at-risk launch” situation). The risk involved in doing so can be substantial because the remedies available to the owner of a patent for infringement may include, among other things, damages measured by the profits lost by the patent owner and not necessarily by the profits earned by the infringer. In the case of willful infringement, the definition of which is subjective, such damages may be increased up to three times. Moreover, because of the discount pricing typically involved with bioequivalent products, patented branded products generally realize a substantially higher profit margin than bioequivalent products. An adverse decision in cases involving an “at-risk launch” could be material to our financial position, including our results of operations and cash flows.

Other Litigation

The Company is involved in various other legal proceedings that are considered normal to its business, including but not limited to certain proceedings assumed as a result of the acquisition of the former Merck Generics business. While it is not possible to predict the ultimate outcome of such other proceedings, the ultimate outcome of any such proceeding is not currently expected to be material to the Company’s financial position, results of operations or cash flows.


15.	Subsequent Event

On October 29, 2013 , the Board of Directors of the Company approved the repurchase of up to $500 million of the Company’s common stock either in the open market or through privately negotiated transactions. This share repurchase plan will be financed with available cash on hand, borrowings from the Company’s revolving credit facility or future debt issuances. The timing and the amount of any purchases will be determined by the Company based on an evaluation of market conditions, capital allocation alternatives, and other factors. The repurchase program does not require the Company to acquire any specific number of shares and may be modified, suspended, extended or terminated by the Company at any time without prior notice.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis addresses material changes in the financial condition and results of operations of Mylan Inc. and subsidiaries (the “Company”, “Mylan”, “our” or “we”) for the periods presented. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements , the related Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 , as updated by the Company’s Current Report on Form 8-K filed on May 28, 2013, the unaudited interim Condensed Consolidated Financial Statements and related Notes included in Part I — ITEM 1 of this Quarterly Report on Form 10-Q (“Form 10-Q”) and our other Securities and Exchange Commission (“SEC”) filings and public disclosures. The interim results of operations for the three and nine months ended September 30, 2013 and the interim cash flows for the nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.

This Form 10-Q may contain “forward-looking statements.” These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about our market opportunities, strategies, competition and expected activities and expenditures, and at times may be identified by the use of words such as “may,” “could,” “should,” “would,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue” and variations of these words or comparable words. Forward-looking statements inherently involve risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 , as well as below under “Risk Factors” in Part II, ITEM 1A. Th e Company undertakes no obligation to update any forward-looking statements for revisions or changes after the filing date of this Form 10-Q.

Executive Overview

Mylan ranks among the leading generic and specialty pharmaceutical companies in the world, offering one of the industry’s broadest and highest quality product portfolios, a robust pipeline and a global commercial footprint that spans approximately 140 countries and territories. With a workforce of more than 20,000 employees and external contractors, Mylan has attained leading positions in key international markets through its wide array of dosage forms and delivery systems, significant manufacturing capacity, global scale and commitment to customer service. Through its Indian subsidiary, Mylan Laboratories Ltd. (formerly known as Matrix Laboratories Ltd. ), Mylan operates one of the world’s largest active pharmaceutical ingredient (“API”) manufacturers with respect to the number of drug master files filed with regulatory agencies. This capability makes Mylan one of only two global generics companies with a comprehensive, vertically integrated supply chain.

Mylan has two segments, “Generics” and “Specialty.” Generics primarily develops, manufactures, sells and distributes generic or branded generic pharmaceutical products in tablet, capsule, injectable or transdermal patch form, as well as API. Specialty engages mainly in the manufacture and sale of branded specialty nebulized and injectable products. Our specialty pharmaceutical business is conducted through our wholly owned subsidiary, Mylan Specialty L.P. We also report in Corporate/Other certain research and development expenses, general and administrative expenses, litigation settlements, amortization of intangible assets and certain purchase accounting items, impairment charges, if any, and other items not directly attributable to the segments.

Recent Developments

Senior Credit Agreement Refinancing and Senior Notes Issuance

In June 2013, the Company entered into a new credit agreement (the “Senior Credit Agreement”) with a syndication of banks which contains a $1.50 billion revolving credit facility (the “Revolving Facility”). Also in June 2013, the Company issued Senior Notes due 2016 and due 2018 with an aggregate principal amount of $1.15 billion . The proceeds from the senior notes issuance and borrowings under the Revolving Facility were used to repay the outstanding U.S. Term Loan under the 2011 Amended and Restated Credit Agreement, to redeem the outstanding 2017 Senior Notes and to pay the related fees and expenses of the foregoing transactions. During the second quarter of 2013, the Company incurred a pre-tax charge of approximately $8.7 million related to the Senior Credit Agreement refinancing transaction related to the write-off of deferred financing fees, which was included in other (expense) income, net , in the Condensed Consolidated Statements of Operations .

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In the third quarter of 2013, the Company redeemed the 2017 Senior Notes for a total of $608.8 million , including a $58.8 million redemption premium. The Company recorded a pre-tax charge of approximately $63.9 million related to the redemption of the 2017 Senior Notes, comprised of the redemption premium and the write-off of deferred financing fees, which was included in other (expense) income, net , in the Condensed Consolidated Statements of Operations .

Agila Specialties

On February 27, 2013, the Company announced that it had signed a definitive agreement to acquire the Agila Specialties business, a developer, manufacturer and marketer of high-quality generic injectable products, from Strides Arcolab Limited for approximately $1.6 billion in cash plus contingent payments of up to $250 million subject to certain conditions. The transaction will be funded through $1 billion in committed financing and the use of cash on hand and borrowings from the Company’s revolving credit facility. Upon completion of the acquisition, the Company will significantly expand and strengthen its injectable product portfolio and gain entry into new geographic markets, including Brazil. The transaction is expected to close in the fourth quarter of 2013 and is subject to certain closing conditions and regulatory approvals.

Other Acquisitions

During 2013, the Company completed the acquisition of three separate manufacturing operations located in India, for which the aggregate purchase price was approximately $50 million in cash. As part of the purchase price allocations, goodwill in the aggregate of approximately $14 million was recognized within the Generics segment. The acquisitions did not have a material impact on the Company’s results of operations since the acquisition dates.

Share Repurchase Programs

On February 27, 2013 , the Board of Directors of the Company approved the repurchase of up to $500 million of the Company’s common stock in the open market and through privately-negotiated transactions. The repurchase program was completed during the first quarter of 2013 with approximately 16.3 million shares of common stock repurchased. On October 29, 2013 , the Board of Directors of the Company approved the repurchase of up to $500 million of the Company’s common stock either in the open market or through privately negotiated transactions. This share repurchase plan will be financed with available cash on hand, borrowings from the Company’s revolving credit facility or future debt issuances. The timing and the amount of any purchases will be determined by the Company based on an evaluation of market conditions, capital allocation alternatives, and other factors. The repurchase program does not require the Company to acquire any specific number of shares and may be modified, suspended, extended or terminated by the Company at any time without prior notice.

Financial Summary

For the three months ended September 30, 2013 , Mylan reported total revenues of $1.77 billion , compared to $1.80 billion for the three months ended September 30, 2012 . This represents a decrease in revenues of $34.4 million , or 1.9% . Consolidated gross profit for the current quarter was $808.5 million , compared to $793.1 million in the comparable prior year period, an increase of $15.4 million , or 1.9% . For the current quarter, earnings from operations were $339.8 million , compared to $334.7 million for the three months ended September 30, 2012 , an increase of $5.1 million , or 1.5% .

Net earnings attributable to Mylan Inc. common shareholders decreased $52.3 million , or 24.8% , to $158.9 million for the three months ended September 30, 2013 , compared to $211.3 million for the prior year comparable period. Diluted earnings per common share attributable to Mylan Inc. common shareholders decreased from $0.51 to $0.40 for the three months ended September 30, 2013 compared to the prior year comparable period.

For the nine months ended September 30, 2013 , the Company reported total revenues of $5.10 billion , compared to $5.07 billion for the nine months ended September 30, 2012 . This represents an increase in revenues of $27.3 million , or 0.5% . Consolidated gross profit for the nine months ended September 30, 2013 was $2.24 billion , compared to $2.17 billion in the comparable prior year period, an increase of $78.4 million , or 3.6% . For the nine months ended September 30, 2013 , earnings from operations were $862.3 million , compared to $846.7 million for the nine months ended September 30, 2012 , an increase of $15.6 million , or 1.8% .

Net earnings attributable to Mylan Inc. common shareholders decreased $35.4 million , or 7.4% , to $443.5 million for the nine months ended September 30, 2013 , compared to $478.9 million for the prior year comparable period. Diluted earnings per common share attributable to Mylan Inc. common shareholders was $1.13 for both the nine months ended September 30,

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2013 and 2012 . A more detailed discussion of the Company’s financial results can be found below in the section titled “Results of Operations.”

Results of Operations

Three Months Ended September 30, 2013 , Compared to Three Months Ended September 30, 2012

Total Revenues and Gross Profit

For the current quarter, Mylan reported total revenues of $1.77 billion , compared to $1.80 billion for the comparable prior year period. Total revenues include both net revenues and other revenues from third parties. Third party net revenues for the current quarter were $1.76 billion , compared to $1.79 billion for the comparable prior year period, representing a decrease of $33.8 million , or 1.9% . Other third party revenues for the current quarter were $11.4 million , compared to $12.0 million for the comparable prior year period, a decrease of $0.6 million .

Mylan’s current quarter revenues were impacted by the effect of foreign currency translation, primarily reflecting changes in the U.S. Dollar as compared to the currencies of Mylan’s subsidiaries in India, Australia and Japan. When translating total revenues for the current quarter at prior year comparative period exchange rates (“constant currency”), the unfavorable impact of foreign currency translation on current quarter total revenues was approximately $38 million , or 2% . Total revenues were essentially flat when translating total revenues for the current quarter at prior year comparative period exchange rates. The contribution from new product launches in the current period of approximately $108 million was not as significant as the contribution in the comparable prior year period of approximately $299 million , a decline of approximately 65% . The North American generics business accounted for the majority of the decline in new product revenues. Offsetting this decline in new product revenues, was revenue growth in the Generics segment outside of North America and double digit revenue growth in the Specialty segment. On a constant currency basis, revenues from existing products decreased approximately $104 million , primarily as a result of a decline in pricing within the Generics segment.

Cost of sales for the three months ended September 30, 2013 was $958.9 million , compared to $1.01 billion for the comparable prior year period. Cost of sales for the current quarter is impacted by the amortization of acquired intangible assets and restructuring and other special items as described further in the section titled “Adjusted Earnings.” These items totaled $94.7 million in the current quarter. The prior year comparable period cost of sales included similar purchase accounting and restructuring and other special items in the amount of $147.4 million . The decrease in current year purchase accounting and restructuring and other special items is principally the result of a $41.6 million in-process research and development asset impairment charge in the prior year. Excluding the amounts related to purchase accounting amortization and restructuring and other special items, cost of sales in the current quarter increased slightly to $864.2 million from $861.3 million .

Gross profit for the three months ended September 30, 2013 was $808.5 million , and gross margins were 45.7% . For the three months ended September 30, 2012 , gross profit was $793.1 million , and gross margins were 44.0% . Excluding the purchase accounting and restructuring and other special items discussed in the preceding paragraph, gross margins would have been approximately 51% for the three months ended September 30, 2013 as compared to approximately 52% for the three months ended September 30, 2012 . Gross margins were positively impacted in the current quarter as a result of the increase in sales of the EPIPEN® Auto-Injector by approximately 180 basis points and were positively impacted by higher margins on products launched in 2013 by approximately 200 basis points. These increases were more than offset by the impact of unfavorable pricing on existing products, including products launched in the prior year, in all regions within our Generics segment.

From time to time, a limited number of our products may represent a significant portion of our net revenues, gross profit and net earnings. Generally, this is due to the timing of new product launches and the amount, if any, of additional competition in the market. Our top ten products in terms of sales, in the aggregate, represented approximately 38% of the Company’s total revenues for the three months ended September 30, 2013 .

Generics Segment

For the current quarter, Generics third party net revenues were $1.40 billion , compared to $1.49 billion for the comparable prior year period, a decrease of $89.2 million , or 6.0% . Foreign currency had an unfavorable impact on third party net revenues for the current quarter. When translated at prior year foreign currency exchange rates, Generics third party net revenues for the current quarter would have decreased by approximately 3% when compared to the prior year period. Generics

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sales are derived primarily in or from North America, Europe, the Middle East and Africa (collectively, “EMEA”) and India, Australia, Japan and New Zealand (collectively, “Asia Pacific”).

Third party net revenues from North America were $706.5 million for the current quarter, compared to $823.2 million for the comparable prior year period, representing a decrease of $116.7 million , or 14.2% . The decrease in current quarter third party net revenues was due to a greater amount of revenue from new product launches in the prior year, which included the launches of Valsartan and Hydrochlorothiazide Tablets, USP, Pioglitazone and Escitalopram. Revenues from new product launches in the current quarter totaled $81 million versus $258 million in the comparable prior year period, a decline of almost 70% . The effect of foreign currency translation was insignificant within North America.

Products generally contribute most significantly to revenues and gross margins at the time of their launch, even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on the Company’s financial results. The entrance into the market of additional competition generally has a negative impact on the volume and pricing of the affected products. Additionally, pricing is often affected by factors outside of the Company’s control.

Third party net revenues from EMEA were $361.7 million for the three months ended September 30, 2013 , compared to $325.6 million for the comparable prior year period, an increase of $36.1 million , or 11.1% . Translating current quarter third party net revenues from EMEA at comparable prior year period exchange rates would have resulted in a year-over-year increase in third party net revenues of approximately $21 million , or 6% . This increase was primarily the result of a double-digit increase in revenues in Italy as a result of favorable volumes combined with new product introductions in France. Partially offsetting these increases was unfavorable pricing in a number of European markets in which Mylan operates, as a result of government-imposed pricing reductions and competitive market conditions.

Local currency revenues from Mylan’s business in France increased as compared to the prior year as a result of favorable volumes on new and existing products, partially offset by lower pricing due to government-imposed pricing reductions and an increasingly competitive market. Our market share in France remained relatively stable in the third quarter of 2013 , and we remain the market leader.

In addition to France and Italy, certain other markets in which we do business, including Spain, have undergone government-imposed price reductions, and further government-imposed price reductions are expected in the future. Such measures, along with the tender systems discussed below, are likely to have a negative impact on sales and gross profit in these markets. However, government initiatives in certain markets that appear to favor generic products could help to offset some of the unfavorable effect by potentially increasing rates of generic substitution and penetration.

A number of markets in which we operate have implemented or may implement tender systems for generic pharmaceuticals in an effort to lower prices. Generally speaking, tender systems can have an unfavorable impact on revenue and profitability. Under such tender systems, manufacturers submit bids that establish prices for generic pharmaceutical products. Upon winning the tender, the winning company will receive a preferential reimbursement for a period of time. The tender system often results in companies underbidding one another by proposing low pricing in order to win the tender. Additionally, the loss of a tender by a third party to whom we supply API can also have a negative impact on our sales and profitability. Sales, primarily in Germany, continue to be negatively affected by the impact of tender systems.

In Asia Pacific, third party net revenues were $330.6 million for the three months ended September 30, 2013 , compared to $339.2 million for the comparable prior year period, a decrease of $8.6 million , or 2.5% . Excluding the unfavorable effect of foreign currency translation, calculated as described above, third party net revenues would have increased by approximately $44 million , or 13% . This increase is primarily driven by higher third party sales from our operations in India, in particular, strong growth in the anti-retroviral (“ARV”) franchise.

The increase in third party net revenues from our operations in India is due to significant growth, excluding the effect of foreign currency, in sales of ARV products used in the treatment of HIV/AIDS, both finished dosage form (“FDF”) generic products and API. In addition to third party sales, the Asia Pacific region also supplies both FDF generic products and API to Mylan subsidiaries in conjunction with the Company’s vertical integration strategy. Intercompany revenues recognized by the Asia Pacific region were approximately $70.7 million and $68.1 million in the three months ended September 30, 2013 and 2012 , respectively. These intercompany sales eliminate within, and therefore are not included in, Generics or consolidated net revenues.

In Japan, excluding the effect of foreign currency, third party net revenues experienced double digit growth due to increased volumes and new product introductions. In Australia, local currency third party net revenues were slightly lower than

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the comparable prior year period as a result of significant government-imposed pricing reform, partially offset by new product introductions. As in EMEA, Australia has undergone government-imposed price reductions that have had, and could continue to have, a negative impact on sales and gross profit in that market.

Specialty Segment

For the current quarter, Specialty reported third party net revenues of $357.2 million , an increase of $55.4 million , or 18.4% , from $301.8 million for the comparable prior year period. The increase was the result of higher sales of the EPIPEN® Auto-Injector , which is used in the treatment of severe allergic reactions (anaphylaxis), as a result of favorable pricing and increased volume. The EPIPEN® Auto-Injector is the number one prescribed epinephrine auto-injector. In addition, Perforomist® Inhalation Solution sales increased by double digits from the comparable prior year period as a result of favorable pricing and volume.

Operating Expenses

Research & Development Expense

Research and development expense (“R&D”) for the three months ended September 30, 2013 was $114.0 million , compared to $108.3 million for the comparable prior year period, an increase of $5.7 million . R&D increased due primarily to the expenses related to the development of our respiratory and biologics programs, as well as the timing of internal and external product development projects.

Selling, General & Administrative Expense

Selling, general and administrative expense (“SG&A”) for the current quarter was $364.9 million , compared to $342.2 million for the comparable prior year period, an increase of $22.6 million . Factors contributing to the increase in SG&A include a fair value adjustment to increase the contingent consideration liability by approximately $15.0 million , as well as increased marketing costs incurred within the Specialty segment of approximately $8.4 million .

Litigation Settlements, net

During the three months ended September 30, 2013 , the Company recorded a $10.2 million gain , net, for litigation settlements, principally related to recoveries of lost profits in patent infringement matters totaling approximately $20 million , including recoveries related to product launches. Offsetting these settlements were $6.2 million of charges related to a patent infringement matter in Europe. In the prior year, the Company recorded an $8.0 million charge, net, for litigation settlements, principally as a result of patent infringement matters in the United States (“U.S.”) and the United Kingdom.

Interest Expense

Interest expense for the three months ended September 30, 2013 totaled $74.0 million , compared to $76.1 million for the three months ended September 30, 2012 . The decrease is primarily due to a lower effective interest rate in the current quarter due to refinancing transactions undertaken in previous periods. Included in interest expense is the amortization of the discounts on our convertible debt instruments and senior notes, net of amortization of the premium on our 2020 Senior Notes, totaling $7.6 million for the current quarter and $5.8 million for the comparable prior year period. Also included in interest expense is accretion of our contingent consideration liabilities related to certain acquisitions. The amount of accretion included in the current quarter is $8.2 million compared to $8.3 million for the comparable prior year period.

Other (Expense) Income, Net

Other (expense) income, net , was expense of $70.6 million in the current quarter, compared to income of $6.2 million for the comparable prior year period. Other (expense) income, net , for the current quarter includes charges of approximately $63.9 million related to the redemption of the 2017 Senior Notes, comprised of the redemption premium and the write-off of deferred financing fees. Other (expense) income, net , also includes losses from equity affiliates, foreign exchange gains and losses and interest and dividend income.

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Nine Months Ended September 30, 2013 , Compared to Nine Months Ended September 30, 2012

Total Revenues and Gross Profit

For the nine months ended September 30, 2013 , Mylan reported total revenues of $5.10 billion , compared to $5.07 billion for the comparable prior year period. Total revenues include both net revenues and other revenues from third parties. Third party net revenues for the nine months ended September 30, 2013 were $5.06 billion , compared to $5.04 billion for the comparable prior year period, representing an increase of $21.9 million , or 0.4% . Other third party revenues for the nine months ended September 30, 2013 were $37.8 million , compared to $32.4 million for the comparable prior year period, an increase of $5.4 million .

Mylan’s revenues were impacted by the effect of foreign currency translation, primarily reflecting changes in the U.S. Dollar as compared to the currencies of Mylan’s subsidiaries in India and Japan. When translating total revenues for the current year period at prior year comparative period exchange rates, the unfavorable impact of foreign currency translation on total revenues was approximately $82 million , or 2% . The contribution from new product launches in the current period of approximately $229 million was not as significant as the contribution in the comparable prior period of approximately $783 million , a decline of approximately 70% . On a constant currency basis, revenues from existing products decreased approximately $125 million , which included a decline in pricing of approximately $447 million and an increase in volume of approximately $322 million . The North American generics business accounted for the majority of the decline in new product revenues. Offsetting this decline in new product revenues, was revenue growth in the Generics segment outside of North America and double digit revenue growth in the Specialty segment.

Cost of sales for the nine months ended September 30, 2013 was $2.86 billion , compared to $2.91 billion for the prior year. Cost of sales for the current period is impacted by the amortization of acquired intangible assets and restructuring and other special items as described further in the section titled “Adjusted Earnings.” These items totaled approximately $289.5 million . Prior year cost of sales included similar purchase accounting and restructuring and other special items in the amount of $353.8 million . The decrease in current year purchase accounting and restructuring and other special items is principally the result of in-process research and development asset impairment charges of $41.6 million in the prior year as compared to $5.1 million in the current year, as well as costs incurred in the prior year due to the ratification of a new union collective bargaining agreement. Excluding these amounts, cost of sales increased slightly to $2.57 billion from $2.55 billion , corresponding to the increase in sales.

Gross profit for the nine months ended September 30, 2013 was $2.24 billion , and gross margins were 44.0% . For the nine months ended September 30, 2012 , gross profit was $2.17 billion , and gross margins were 42.7% . Excluding the purchase accounting and restructuring and other special items discussed in the preceding paragraph, gross margins would have been approximately 50% in both the nine months ended September 30, 2013 and 2012 . Gross margins were positively impacted by 2013 new product introductions, which increased gross margins by approximately 140 basis points, and favorable pricing on the EPIPEN® Auto-Injector in our Specialty segment, the impact of which was approximately 100 basis points. These increases were fully offset by lower gross margins on existing products, including products launched in the prior year, principally as a result of unfavorable pricing in Generics.

From time to time, a limited number of our products may represent a significant portion of our net revenues, gross profit and net earnings. Generally, this is due to the timing of new product launches and the amount, if any, of additional competition in the market. Our top ten products in terms of sales, in the aggregate, represented approximately 31% of the Company’s total revenues for the nine months ended September 30, 2013 .

Generics Segment

For the nine months ended September 30, 2013 , Generics third party net revenues were $4.26 billion , compared to $4.36 billion in the comparable prior year period, a decrease of $104.3 million , or 2.4% . Translating Generics third party net revenues for the current period at prior year foreign currency exchange rates would have resulted in a year-over-year decline of approximately $22 million , or less than 1% .

Third party net revenues from North America were $2.16 billion for the nine months ended September 30, 2013 , compared to $2.43 billion for the comparable prior year period, representing a decrease of $271.3 million , or 11.2% . The decrease in current period third party net revenues was due to a greater amount of revenue from new product launches in the prior year ( $685 million ) as compared to the current year ( $170 million ). This reduction was principally due to the launch of

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Escitalopram in the first quarter of 2012, our most significant product launch with shared exclusivity in the prior year. The effect of foreign currency translation was insignificant within North America.

Third party net revenues from EMEA were $1.11 billion for the nine months ended September 30, 2013 , compared to $987.9 million for the comparable prior year period, an increase of $119.2 million , or 12.1% . Translating current period third party net revenues from EMEA at comparable prior year period exchange rates would have resulted in a year-over-year increase in third party net revenues of approximately $98 million , or 10% . This increase was primarily the result of a double-digit increase in revenues in France and Italy as a result of new product revenue and favorable volumes. Partially offsetting these increases was unfavorable pricing in a number of European markets in which Mylan operates, as a result of government-imposed pricing reductions and competitive market conditions.

Local currency revenues from Mylan’s business in France increased as compared to the prior year period as a result of the impact of favorable volumes on new and existing products, partially offset by lower pricing due to government-imposed pricing reductions and an increasingly competitive market. Our market share in France remained relatively stable in 2013 , and we remain the market leader.

In the United Kingdom, local currency third party net revenues increased as compared to the prior year period as a result of the impact of favorable pricing on some existing products and new product introductions.

In addition to France and Italy, certain other markets in which we do business, including Spain, have undergone government-imposed price reductions, and further government-imposed price reductions are expected in the future. Such measures, along with the tender systems discussed below, are likely to have a negative impact on sales and gross profit in these markets. However, government initiatives in certain markets that appear to favor generic products could help to offset some of this unfavorable effect by potentially increasing rates of generic substitution and penetration.

In Asia Pacific, third party net revenues were $993.1 million for the nine months ended September 30, 2013 , compared to $945.4 million for the comparable prior year period, an increase of $47.8 million , or 5.1% . Excluding the unfavorable effect of foreign currency translation, calculated as described above, net third party revenues would have increased by approximately $149 million , or 16% . This increase is primarily driven by higher third party sales from our operations in India, in particular, strong growth in the ARV franchise.

The increase in third party net revenues from our operations in India is due to significant growth, excluding the effect of foreign currency, in sales of ARV products used in the treatment of HIV/AIDS, both FDF generic products and API. In addition to third party sales, the Asia Pacific region also supplies both FDF generic products and API to Mylan subsidiaries in conjunction with the Company’s vertical integration strategy. Intercompany revenues recognized by the Asia Pacific region were $219.7 million for the nine months ended September 30, 2013 , compared to $201.1 million for the prior year. These intercompany sales eliminate within, and therefore are not included in, Generics or consolidated net revenues.

In Japan, third party net revenues, excluding the effect of foreign currency, experienced double digit growth due to increased volumes and new product introductions. In Australia, local currency third party net revenues were slightly lower than the prior year as a result of significant government-imposed pricing reform, partially offset by new product sales. As in EMEA, both Australia and Japan have undergone government-imposed price reductions, which have had, and could continue to have, a negative impact on sales and gross profit in these markets.

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Specialty Segment

For the nine months ended September 30, 2013 , Specialty reported third party net revenues of $805.7 million , an increase of $126.2 million , or 18.6% , from the comparable prior year period of $679.4 million . The increase was the result of higher sales of the EPIPEN® Auto-Injector as a result of favorable pricing and increased volume. In addition, Perforomist® Inhalation Solution sales increased by double digits from the comparable prior year period as a result of favorable pricing.

Operating Expenses

Research & Development Expense

R&D for the nine months ended September 30, 2013 was $351.9 million , compared to $283.6 million for the comparable prior year period, an increase of $68.3 million . R&D increased due primarily to the expenses related to the development of our respiratory and biologics programs, as well as the timing of internal and external product development projects. In addition, during the nine months ended September 30, 2013 , licensing payments of approximately $23.0 million are included as a component of R&D.

Selling, General & Administrative Expense

SG&A for the nine months ended September 30, 2013 was $1.03 billion , compared to $1.04 billion for the comparable prior year period, a decrease of $6.2 million . Factors contributing to the decrease in SG&A include lower sales and marketing costs in Japan of approximately $25.2 million as compared to the prior year as a result of the collaboration with Pfizer Japan. Under the collaboration, Pfizer Japan is responsible for the commercialization of the combined generics portfolio and managing the marketing and sales effort. Offsetting these decreases in SG&A were acquisition related costs of approximately $24.8 million during the nine months ended September 30, 2013 .

Litigation Settlements, net

During the nine months ended September 30, 2013 , the Company recorded a $1.4 million gain , net, for litigation settlements, principally related to recoveries of lost profits in patent-infringement matters totaling approximately $20 million , including recoveries related to product launches. These recoveries were offset by a $10.3 million charge related to a European Commission matter and $6.2 million of charges related to a patent infringement matter in Europe. In the prior year period, the Company recorded a $2.1 million gain , net, comprised of gains of $34 million for the favorable resolution of patent infringement matters, partially offset by a $20 million charge related to pricing litigation matters and other patent infringement matters.

Interest Expense

Interest expense for the nine months ended September 30, 2013 totaled $233.7 million , compared to $234.1 million for the nine months ended September 30, 2012 . Included in interest expense is the amortization of the discounts on our convertible debt instruments and senior notes, net of amortization of the premium on our 2020 Senior Notes, totaling $20.1 million for the nine months ended September 30, 2013 and $23.3 million for the comparable prior year period. Also included in interest expense is accretion of our contingent consideration liabilities related to certain acquisitions. The amount of accretion included in the nine months ended September 30, 2013 was $23.9 million compared to $24.0 million for the comparable prior year period.

Other (Expense) Income, Net

Other (expense) income, net , was expense of $74.4 million in the nine months ended September 30, 2013 , compared to income of $0.6 million for the comparable prior year period. Other (expense) income, net , for the current year period includes charges of approximately $63.9 million related to the redemption of the 2017 Senior Notes, comprised of the redemption premium and the write-off of deferred financing fees. In addition, the Company incurred charges of approximately $8.7 million in conjunction with the Senior Credit Agreement refinancing transaction related to the write-off of deferred financing fees. Other (expense) income, net , also includes losses from equity affiliates, foreign exchange gains and losses and interest and dividend income.

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Adjusted Earnings

Adjusted earnings are an alternative view of performance used by management. Management believes that, primarily due to acquisitions, an evaluation of the Company’s ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with accounting principles generally accepted in the U.S. (“GAAP”), and management also believes that investors’ understanding of our performance is enhanced by these adjusted measures. Adjusted Earnings and Adjusted Earnings per Diluted Share (“Adjusted EPS”) are two of the most important internal financial metrics related to the ongoing operating performance of the Company. Actual internal and forecasted operating results and annual budgets include Adjusted Earnings and Adjusted EPS, and the financial performance of the Company is measured by senior management on this basis along with other performance metrics. Management’s annual incentive compensation is derived in part based on the Adjusted EPS metric.

Whenever the Company uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. Additionally, since Adjusted Earnings and Adjusted EPS are not measures determined in accordance with GAAP, they have no standardized meaning prescribed by GAAP and, therefore, may not be comparable to the calculation of similar measures of other companies.

The significant items excluded from Adjusted Earnings and Adjusted EPS include:

Acquisition-Related Items

The ongoing impact of certain amounts recorded in connection with acquisitions is excluded. These amounts include the amortization of intangible assets and inventory step-up, intangible asset impairment charges (including in-process research and development), accretion and the fair value adjustments related to contingent consideration and certain acquisition financing related costs. These costs are excluded because management believes that excluding them is helpful to understanding the underlying, ongoing operational performance of the business.

Restructuring and Other Special Items

Costs related to restructuring and other actions are excluded as applicable. These amounts include items such as:


•	Exit costs associated with facilities to be closed or divested, including employee separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs and other exit costs;


•	Certain acquisition related integration and planning costs, as well as other costs associated with acquisitions and other optimization initiatives, which are not part of a formal restructuring program, including employee separation and post-employment costs;


•	Certain transition and other costs associated with the ratification of a new collective bargaining agreement in 2012 governing certain employees at our Morgantown, WV manufacturing facility;


•	The pre-tax loss of the Company’s investments in clean energy partnerships, whose activities qualify for income tax credits under Section 45 of the U.S. Internal Revenue Code; only included in Adjusted Earnings and Adjusted EPS is the net tax effect of the entity’s activities;


•	Certain costs to further develop and optimize our global enterprise resource planning systems, operations and supply chain; and


•	Certain costs related to financing transactions, new operations and significant alliances/business partnerships.

The Company has undertaken restructurings and other optimization initiatives of differing types, scope and amount during the covered periods and, therefore, these charges should not be considered non-recurring; however, management

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excludes these amounts from Adjusted Earnings and Adjusted EPS because it believes it is helpful to understanding the underlying, ongoing operational performance of the business.

Litigation Settlements, net

Charges and gains related to legal matters, such as those discussed in the Notes to Condensed Consolidated Financial Statements — Note 14 , “Contingencies” are excluded. Normal, ongoing defense costs of the Company made in the normal course of our business are not excluded.

A reconciliation between net earnings attributable to Mylan Inc. common shareholders and diluted earnings per share attributable to Mylan Inc. common shareholders, as reported under U.S. GAAP, and Adjusted Earnings and Adjusted EPS for the periods shown follows:



	Three Months Ended										Nine Months Ended
	September 30,										September 30,
(In millions, except per share amounts)	2013					2012					2013					2012
GAAP net earnings attributable to Mylan Inc. and diluted GAAP EPS	$	158.9		$	0.40	$	211.3		$	0.51	$	443.5		$	1.13	$	478.9		$	1.13
Purchase accounting related amortization (included in cost of sales) (a)	85.1					128.7					262.7					303.0
Litigation settlements, net	(5.4		)			7.9					3.3					(2.0		)
Interest expense, primarily amortization of convertible debt discount	9.5					6.8					26.1					27.2
Non-cash accretion and fair value adjustments of contingent consideration liability	23.2					8.0					27.0					32.0
Clean energy investments pre-tax loss (b)	5.2					4.6					13.1					12.3
Financing related costs (included in other (expense) income, net)	63.9					—					72.6					—
Acquisition related costs (primarily included in selling, general and administrative expense)	5.3					—					29.9					—
Restructuring and other special items included in:
Cost of sales	9.6					18.7					26.8					50.8
Research and development expense	1.3					4.2					25.5					7.0
Selling, general and administrative expense	14.3					18.6					50.0					65.6
Other (expense) income, net	16.8					—					20.7					1.3
Tax effect of the above items and other income tax related items	(63.4		)			(67.5		)			(169.4		)			(156.3		)
Adjusted net earnings attributable to Mylan Inc. and adjusted diluted EPS	$	324.3		$	0.82	$	341.3		$	0.83	$	831.8		$	2.11	$	819.8		$	1.94
Weighted average diluted common shares outstanding	395.5					411.6					393.9					422.8


(a)	Purchase accounting related amortization expense for the nine months ended September 30, 2013 includes $5.1 million of in-process research and development asset impairment charges . For the three and nine months ended September 30, 2012 , purchase accounting related amortization expense includes $41.6 million of in-process research and development asset impairment charges .


(b)	Adjustment represents exclusion of the pre-tax loss related to Mylan’s investments in clean energy partnerships, the activities of which qualify for income tax credits under section 45 of the U.S. Internal Revenue Code. The amount is included in other (expense) income, net .

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Liquidity and Capital Resources

Our primary source of liquidity is cash provided by operations. We believe that cash provided by operating activities and available liquidity will continue to allow us to meet our needs for working capital, capital expenditures, interest and principal payments on debt obligations and other cash needs over the next several years. Nevertheless, our ability to satisfy our working capital requirements and debt service obligations, or fund planned capital expenditures, will substantially depend upon our future operating performance (which will be affected by prevailing economic conditions), and financial, business and other factors, some of which are beyond our control.

Net cash provided by operating activities increased by $30.7 million to $688.7 million for the nine months ended September 30, 2013 , as compared to net cash provided by operating activities of $658.0 million for the nine months ended September 30, 2012 . The net increase in cash provided by operating activities was principally due to the following:


•	a net decrease in the amount of cash used through changes in deferred income taxes of $42.0 million ;


•	a net decrease in the amount of cash used through changes in other operating assets and liabilities of $112.1 million , as a result of a decline in legal settlement payments. During the nine months ended September 30, 2012 , the Company made litigation settlement payments of approximately $100.2 million , principally related to the pricing litigation matters; and


•	a net increase in the amount of cash provided through changes in trade accounts payable of $153.9 million as a result of the timing of cash payments.

These items were offset by the following:


•	a decrease in net earnings of $35.1 million , combined with a decrease in the amount of non-cash expenses for depreciation and amortization totaling $43.9 million as a result of prior year impairment charges that did not recur in 2013;


•	a net increase in the amount of cash used for accounts receivable, including estimated sales allowances, of $99.5 million , reflecting the timing of sales and cash collections;


•	a net increase of $55.8 million in the amount of cash used through changes in inventory balances; and


•	during 2013 the Company redeemed its 7.625% Senior Notes due 2017 (“2017 Senior Notes”) for a total of $608.8 million , including a $58.8 million redemption premium, which is included as an outflow in cash from operating activities.

Cash used in investing activities was $363.2 million for the nine months ended September 30, 2013 , as compared to $217.8 million for the nine months ended September 30, 2012 , an increase of $145.4 million . Capital expenditures, primarily for equipment and facilities, were approximately $238.5 million in the current period, as compared to $159.9 million in the comparable prior year period. The increase as compared to 2012 is the result of expenditures to expand our global operating platform, including capital investments in our strategic growth drivers. While there can be no assurance that current expectations will be realized, capital expenditures for the 2013 calendar year are expected to be approximately $300 million to $400 million . In addition, during the nine months ended September 30, 2013 , cash paid for acquisitions totaled $50.9 million and restricted cash increased $49.0 million .

During the nine months ended September 30, 2012 , the Company paid approximately $70 million to acquire product rights and licenses, the majority of which relates to two dermatological products acquired from Valeant Pharmaceuticals. This cash outflow is included in other investing activities on the Condensed Consolidated Statements of Cash Flows .

Cash used in financing activities was $316.0 million for the nine months ended September 30, 2013 , as compared to $485.3 million for the nine months ended September 30, 2012 . During the nine months ended September 30, 2013 , the Company issued $500 million aggregate principal amount of 1.80% Senior Notes due 2016 and $650 million aggregate principal amount of 2.60% Senior Notes due 2018, the proceeds of which were principally utilized to repay the remaining balance on the U.S. Term Loans under the Prior Credit Agreement of $1.13 billion . Also, during the nine months ended September 30, 2013 , the Company redeemed its 2017 Senior Notes for a total of $608.8 million , including a $58.8 million redemption premium and the payment for the principal amount of the 2017 Notes of $550 million , which is included within

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financing activities. During the nine months ended September 30, 2013 , net borrowings under our Revolving Facility totaled $460 million , and the Company borrowed an additional $157 million under our Receivables Facility. The proceeds of these borrowings were principally utilized to fund the redemption of the 2017 Senior Notes and a share repurchase program of approximately $500 million , which was completed in the first quarter of 2013 through the repurchase of approximately 16.3 million shares of common stock.

The Company has no other significant long-term debt due for the remainder of 2013 or 2014 . The Company’s next significant debt maturity is in 2015, and our current intention is to repay such amounts at maturity using available liquidity. In addition, our cash and cash equivalents at our foreign subsidiaries totaled $353 million at September 30, 2013 . The majority of these funds represented earnings considered to be permanently reinvested to support the growth strategies of our foreign subsidiaries.

As of September 30, 2013 , because the closing price of our common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day in the September 30, 2013 period was more than 130% of the applicable conversion reference price of $13.32 , the $574 million of Cash Convertible Notes was currently convertible. Although de minimis conversions have been requested, the Company’s experience is that convertible debentures are not normally converted by investors until close to their maturity date. Upon an investor’s election to convert, the Company is required to pay the full conversion value in cash. Should holders elect to convert, the Company intends to draw on its revolving credit facility to fund any principal payments. The amount payable per $1,000 notional bond would be calculated as the product of (1) the conversion reference rate (currently 75.0751 ) and (2) the average Daily Volume Weighted Average Price per share of common stock for a specified period following the conversion date. Any payment above the principal amount is matched by a convertible note hedge.

The Company is involved in various disputes, governmental and/or regulatory inquiries and proceedings and litigation matters that arise from time to time. The Company is also party to certain litigation matters for which Merck KGaA has agreed to indemnify the Company, pursuant to the agreement by which Mylan acquired the former Merck Generics business. While the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, the process of resolving matters through litigation or other means is inherently uncertain, and it is not possible to predict the ultimate resolution of any such proceedings. It is possible that an unfavorable resolution of any matter, or the inability or denial of Merck KGaA, another indemnitor or insurer to pay an indemnified claim, could have a material effect on the Company’s financial position, results of operations and cash flows. We have approximately $108 million accrued for such legal contingencies. The Company is involved in various other legal proceedings that are considered normal to its business. While it is not possible to predict the ultimate outcome of such other proceedings, the ultimate outcome of any such proceedings is not currently expected to be material to the Company’s financial position, results of operations or cash flows.

We are actively pursuing, and are currently involved in, joint projects related to the development, distribution and marketing of both generic and branded products. Many of these arrangements provide for payments by us upon the attainment of specified milestones. While these arrangements help to reduce the financial risk for unsuccessful projects, fulfillment of specified milestones or the occurrence of other obligations may result in fluctuations in cash flows.

We are continuously evaluating the potential acquisition of products, as well as companies, as a strategic part of our future growth. Consequently, we may utilize current cash reserves or incur additional indebtedness to finance any such acquisitions, which could impact future liquidity. In addition, on an ongoing basis, we review our operations including the evaluation of potential divestitures of products and businesses as part of our future strategy. Any divestitures could impact future liquidity.

At September 30, 2013 and December 31, 2012 , we had $55.0 million and $58.0 million outstanding under existing letters of credit. Additionally, as of September 30, 2013 , we had $137.3 million available under the $150 million subfacility on our Senior Credit Agreement for the issuance of letters of credit.

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(In thousands)	Cash Convertible Notes		2016 Senior Notes		2018 - 6.0% Senior Notes		2018 - 2.6% Senior Notes		2020 Senior Notes		2023 Senior Notes		Revolving Facility		Total
2013	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	3
2014	—		—		—		—		—		—		—		—
2015	573,963		—		—		—		—		—		—		573,963
2016	—		500,000		—		—		—		—		—		500,000
2017	—		—		—		—		—		—		—		—
Thereafter	—		—		800,000		650,000		1,000,000		750,000		460,000		3,660,000
Total	$	573,966	$	500,000	$	800,000	$	650,000	$	1,000,000	$	750,000	$	460,000	$	4,733,966

The Company has a $400 million accounts receivable securitization facility (the “Receivables Facility”). Any amounts outstanding under the facility are recorded as a secured loan and included in short-term borrowings, and the receivables underlying any borrowings are included in accounts receivable, net, in the Condensed Consolidated Balance Sheets . At September 30, 2013 , there were $337 million of short-term borrowings outstanding under the Receivables Facility. The size of the accounts receivable securitization facility may be increased from time to time, upon request by Mylan Securitization and with the consent of the purchaser agents and the Agent, up to a maximum of $500 million .

We are contractually obligated to make potential future development, regulatory and commercial milestone, royalty and/or profit sharing payments in conjunction with collaborative agreements or acquisitions we have entered into with third parties. The most significant of these relates to the potential future consideration related to the respiratory delivery platform. These payments are contingent upon the occurrence of certain future events and the ultimate success of the respective projects. Given the inherent uncertainty of these events, it is unclear when, if ever, we may be required to pay such amounts or pay amounts in excess of those accrued. The amount of contingent consideration recorded was $406.2 million and $379.2 million at September 30, 2013 and December 31, 2012 , respectively. In addition, the Company expects to incur approximately $32 million to $34 million of annual accretion expense related to the increase in the net present value of the contingent consideration liability.

The fair value measurement of contingent consideration is determined using Level 3 inputs. The measurement is calculated using unobservable inputs based on the Company’s own assumptions. Significant unobservable inputs in the valuation include the probability and timing of future development and commercial milestones and future profit sharing payments. A discounted cash flow method was used to value contingent consideration at September 30, 2013 and December 31, 2012 , which was calculated as the present value of the estimated future net cash flows using a market rate of return at September 30, 2013 . Discount rates ranging from 1.9% to 11.0% were utilized in the valuation. Significant changes in unobservable inputs could result in material changes to the contingent consideration liability.

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ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of the Company’s market risk, see “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in the Company’s Annual Report filed on Form 10-K.


ITEM 4.	CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2013 . Based upon that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management has not identified any changes in the Company’s internal control over financial reporting that occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

For information regarding legal proceedings, refer to Note 14 , “Contingencies,” in the accompanying Notes to Condensed Consolidated Financial Statements in this Quarterly Report.


ITEM 1A.	RISK FACTORS

There are no material changes in the Company’s risk factors from those disclosed in the Company’s Form 10-K for the year ended December 31, 2012 .


ITEM 6.	EXHIBITS



3.1	Amended and Restated Articles of Incorporation of the registrant, as amended to date, filed as Exhibit 3.1 to the Report on Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference.

3.2	Bylaws of the registrant, as amended to date, filed as Exhibit 3.2 to the Report on Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference.

4.1(a)	Rights Agreement dated as of August 22, 1996, between the registrant and American Stock Transfer & Trust Company, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on September 3, 1996, and incorporated herein by reference.

4.1(b)	Amendment to Rights Agreement dated as of November 8, 1999, between the registrant and American Stock Transfer & Trust Company, filed as Exhibit 1 to Form 8-A/A filed with the SEC on March 31, 2000, and incorporated herein by reference.

4.1(c)	Amendment No. 2 to Rights Agreement dated as of August 13, 2004, between the registrant and American Stock Transfer & Trust Company, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on August 16, 2004, and incorporated herein by reference.

4.1(d)	Amendment No. 3 to Rights Agreement dated as of September 8, 2004, between the registrant and American Stock Transfer & Trust Company, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on September 9, 2004, and incorporated herein by reference.

4.1(e)	Amendment No. 4 to Rights Agreement dated as of December 2, 2004, between the registrant and American Stock Transfer & Trust Company, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on December 3, 2004, and incorporated herein by reference.
4.1(f)	Amendment No. 5 to Rights Agreement dated as of December 19, 2005, between the registrant and American Stock Transfer & Trust Company, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on December 19, 2005, and incorporated herein by reference.

4.2(a)	Indenture, dated as of July 21, 2005, between the registrant and The Bank of New York, as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on July 27, 2005, and incorporated herein by reference.

4.2(b)	Second Supplemental Indenture, dated as of October 1, 2007, among the registrant, the Subsidiaries of the registrant listed on the signature page thereto and The Bank of New York, as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on October 5, 2007, and incorporated herein by reference.

4.3	Registration Rights Agreement, dated as of July 21, 2005, among the registrant, the Guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNY Capital Markets, Inc., KeyBanc Capital Markets (a Division of McDonald Investments Inc.), PNC Capital Markets, Inc. and SunTrust Capital Markets, Inc., filed as Exhibit 4.2 to the Report on Form 8-K filed with the SEC on July 27, 2005, and incorporated herein by reference.

4.4(a)	Indenture, dated as of September 15, 2008, among the registrant, the guarantors named therein and Bank of New York Mellon as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on September 15, 2008, and incorporated herein by reference.

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4.4(b)	First Supplemental Indenture, dated November 29, 2011, by and among the registrant, Somerset Pharmaceuticals, Inc. and The Bank of New York Mellon, as trustee, to the Indenture, dated as of September 15, 2008, among the registrant, the guarantors named therein and The Bank of New York Mellon, as trustee, filed as Exhibit 4.3 to Form 8-K filed with the SEC on November 30, 2011, and incorporated herein by reference.

4.5(a)	Indenture, dated as of May 19, 2010, among the registrant, the guarantors named therein and The Bank of New York Mellon as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on May 19, 2010, and incorporated herein by reference.

4.5(b)	First Supplemental Indenture, dated November 29, 2011, by and among the registrant, Somerset Pharmaceuticals, Inc. and The Bank of New York Mellon, as trustee, to the Indenture, dated as of May 19, 2010, among the registrant, the guarantors named therein and The Bank of New York Mellon, as trustee, filed as Exhibit 4.2 to Form 8-K filed with the SEC on November 30, 2011, and incorporated herein by reference.

4.6(a)	Indenture, dated as of November 24, 2010, among the registrant, the guarantors named therein and The Bank of New York Mellon as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on November 24, 2010, and incorporated herein by reference.

4.6(b)	First Supplemental Indenture, dated November 29, 2011, by and among the registrant, Somerset Pharmaceuticals, Inc. and The Bank of New York Mellon, as trustee, to the Indenture, dated as of November 24, 2010, among the registrant, the guarantors named therein and The Bank of New York Mellon, as trustee, filed as Exhibit 4.1 to Form 8-K filed with the SEC on November 30, 2011, and incorporated herein by reference.

4.7(a)	Indenture, dated as of March 7, 2007, among the registrant, the guarantors thereto and The Bank of New York Mellon, as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on March 7, 2007, and incorporated herein by reference.

4.7(b)	First Supplemental Indenture, dated November 29, 2011, by and among the registrant, Somerset Pharmaceuticals, Inc., Dey, Inc., Dey Pharma, L.P., Dey Limited Partner, Inc., EMD, Inc., Mylan Delaware Inc., Mylan LHC Inc. and The Bank of New York Mellon, as trustee, to the Indenture, dated March 7, 2007, among the registrant, the guarantors thereto and The Bank of New York Mellon, as trustee, filed as Exhibit 4.4 to Form 8-K filed with the SEC on November 30, 2011, and incorporated herein by reference.

4.8	Indenture, dated as of June 25, 2013, among the registrant, the guarantors thereto and The Bank of New York Mellon, as trustee, filed as Exhibit 4.1 to the Report on Form 8-K filed with the SEC on June 27, 2013, and incorporated herein by reference.

4.9	Registration Rights Agreement, dated as of June 25, 2013, among the registrant, the guarantors thereto, and the representatives of the initial purchasers of the registrant’s $500 million aggregate principal amount of the registrant’s 1.800% Senior Notes due 2016 and $650 million aggregate principal amount of the registrant’s 2.600% senior notes due 2018, filed as Exhibit 10.1 to the Report on the Form 8-K filed with the SEC on June 27, 2013, and incorporated herein by reference.

10.1	Executive Employment Agreement, dated as of July 31, 2013, between the registrant and John D. Sheehan.*

10.2	Amended and Restated Form of Stock Option Award Agreement under the 2003 Long-Term Incentive Plan for Robert J. Coury, Heather Bresch, and Rajiv Malik.*

10.3	Amended and Restated Form of Restricted Stock Unit Award Agreement under the 2003 Long-Term Incentive Plan for Robert J. Coury, Heather Bresch, and Rajiv Malik.*

10.4	Amended and Restated Form of Performance-Based Restricted Stock Unit Award Agreement under the 2003 Long-Term Incentive Plan for Robert J. Coury, Heather Bresch, and Rajiv Malik.*

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema

101.CAL	XBRL Taxonomy Extension Calculation Linkbase

101.DEF	XBRL Taxonomy Definition Linkbase

101.LAB	XBRL Taxonomy Extension Label Linkbase

101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Denotes management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Mylan Inc. (Registrant)

	By:	/s/ Heather Bresch
		Heather Bresch
		Chief Executive Officer
		(Principal Executive Officer)

October 31, 2013



		/s/ John D. Sheehan
		John D. Sheehan
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

October 31, 2013



		/s/ Daniel C. Rizzo, Jr.
		Daniel C. Rizzo, Jr.
		Senior Vice President, Chief Accounting
		Officer and Corporate Controller
		(Principal Accounting Officer)

October 31, 2013

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EXHIBIT INDEX



10.1	Executive Employment Agreement, dated as of July 31, 2013, between the registrant and John D. Sheehan.*

10.2	Amended and Restated Form of Stock Option Award Agreement under the 2003 Long-Term Incentive Plan for Robert J. Coury, Heather Bresch, and Rajiv Malik.*

10.3	Amended and Restated Form of Restricted Stock Unit Award Agreement under the 2003 Long-Term Incentive Plan for Robert J. Coury, Heather Bresch, and Rajiv Malik.*

10.4	Amended and Restated Form of Performance-Based Restricted Stock Unit Award Agreement under the 2003 Long-Term Incentive Plan for Robert J. Coury, Heather Bresch, and Rajiv Malik.*

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema

101.CAL	XBRL Taxonomy Extension Calculation Linkbase

101.DEF	XBRL Taxonomy Definition Linkbase

101.LAB	XBRL Taxonomy Extension Label Linkbase

101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Denotes management contract or compensatory plan or arrangement.

Exhibit 10.1

Confidential

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is dated as of July 31, 2013 (the “Effective Date”), by and between Mylan Inc. (the “Company” or “Mylan”) and John Sheehan (“Executive”).

RECITALS:

WHEREAS, the Company employs Executive as Executive Vice President and Chief Financial Officer; and

WHEREAS, the Company and Executive have executed an employment agreement dated February 24, 2010 (the "Prior Agreement"); and

WHEREAS, the Company wishes to continue to employ Executive as Executive Vice President and Chief Financial Officer but may be interested in utilizing Executive in other capacities, in order to avail itself of Executive’s skills and abilities in light of the Company’s business needs;

NOW, THEREFORE, in consideration of the promises and mutual obligations of the parties contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows:

1. Employment of Executive; Best Efforts . The Company agrees to continue to employ Executive, and Executive accepts continued employment by the Company, as of the Effective Date, on the terms and conditions provided herein. Effective as of the Effective Date, Executive shall serve as Executive Vice President and Chief Financial Officer, or in such other capacity that permits the Company to avail itself of Executive’s skills and abilities in light of the Company’s business needs and consistent with the terms of this Agreement.

2. Effective Date: Term of Employment . This Agreement (i) shall commence and be effective as of the Effective Date, (ii) shall supersede the Prior Agreement, and (iii) shall remain in effect, unless earlier terminated, through the second anniversary of the Effective Date (the “Second Anniversary”). Thereafter, this Agreement shall automatically renew for one (1) year periods (each period referred to as a “Renewal Term”) unless this Agreement is terminated for reasons stated in Section 9 of this Agreement.

3. Performance of Duties; Best Efforts . During the term of this Agreement, Executive shall devote his full working time and attention to the business and affairs of Mylan and the performance of his duties hereunder, serve Mylan faithfully and to the best of his ability, and use his best efforts to promote Mylan’s interests. Without limitation, Executive shall travel in connection with his employment in accordance with the reasonable direction of the Executive Chairman or the Chief Executive Officer of the Company, commensurate with the activities of his position. During the term of this Agreement, Executive agrees to promptly and fully disclose to Mylan, and not to divert to Executive’s own use or benefit or the use or benefit of others, any business opportunities involving any existing or prospective line of business, supplier, product, or activity of Mylan or any business opportunities that otherwise should rightfully be afforded to Mylan.

4. Executive’s Compensation . Executive’s compensation shall be the following:

(a) Annual Base Salary . The Executive’s annual base salary (the “Annual Base Salary”) shall be Six-Hundred Fifty Thousand Dollars ($650,000), payable in accordance with the Company’s normal payroll practices for its executive officers. The Annual Base Salary may be increased from time to time at the discretion of the Compensation Committee of the Board of Directors of the Company, any other committee authorized by the Board of Directors, or any officer having authority over executive compensation.

(b) Annual Bonus . Executive shall be eligible for an annual discretionary bonus opportunity of one hundred percent (100%) of Executive’s then-current Annual Base Salary, to be paid upon satisfaction of certain criteria established by the Compensation Committee of the Board of Directors, or by any other committee or officer having authority over executive compensation. Such bonus shall be paid no later than March 15th of the year following the year in which the annual award is no longer subject to a substantial risk of forfeiture.

(c) Fringe Benefits and Expense Reimbursement . The Executive shall receive benefits and perquisites of employment similar to those as have been customarily provided to the Company’s other executive officers, including but not limited to, health insurance coverage, short-term disability benefits, and twenty (20) vacation days, in each case in accordance with the plan documents or policies that govern such benefits. The Company shall reimburse Executive for all ordinary and necessary business expenses in accordance with established Company policy and procedures.

5. Confidentiality . Executive expressly acknowledges and agrees that, by reason of Executive’s position and employment with the Company, Executive has or may have a heightened level of access to the directors and senior executive officers (“Covered Persons”) of Mylan and its subsidiaries (collectively, the “Mylan Companies”), and that Executive consequently has a heightened level of access to and/or knowledge of highly confidential, proprietary, and non-public discussions, information, assessments and evaluations, strategies, and/or materials (hereafter “Covered Information”), the disclosure of which will or may injure the Mylan Companies and/or their shareholders. Executive further acknowledges and agrees that the business interests of the Mylan Companies require a highly confidential relationship between the Company and Executive and the fullest protection and confidential treatment by employees of the Mylan Companies’ non-public: financial data and information; customer strategies, plans, and information; supplier strategies, plans, and information; market strategies, plans, and information; marketing and/or promotional techniques, strategies, plans, policies, and methods; pricing strategies, plans, and information; purchasing strategies, plans, and information; supply chain strategies, plans, and information; sales strategies, plans, techniques, policies, and information; employee lists; other policies and procedures; business records; advertising strategies, plans, techniques, and information; computer records, programs, and systems; trade secrets; know how; research and development plans, strategies, techniques, and information; intellectual property and/or assessments of strategies relating to intellectual property, regardless of the owner of such intellectual property; regulatory plans, strategies, and information; product plans and strategies, including launch plans and assessments; business development plans, activities, and strategies; plans and programs; sources of supply; earnings and other performance results, assessments, and projections; risk assessments; Board and management deliberations, assessments, and strategies; communications among or with Covered Persons regarding any and all matters referenced in this paragraph; and all other proprietary or confidential information and trade secrets, Covered Information, and other knowledge of the business of the Mylan Companies (all of which are hereinafter jointly termed “Confidential Information”) which have been or may be in whole or in part conceived, learned, received, or obtained by Executive in the course of Executive’s employment with the Company. Accordingly, Executive agrees to keep secret and treat as confidential all Confidential Information whether or not copyrightable or patentable, and agrees not to use or aid others in learning of or using any Confidential Information except in the ordinary course of business and in furtherance of the Company’s interests. During the term of this Agreement and at all times thereafter, except insofar as is necessary disclosure consistent with the Company’s business interests:

(a) Executive will not, directly or indirectly, disclose any Confidential Information to anyone outside the Mylan Companies;

(b) Executive will not make copies of or otherwise disclose the contents of documents containing or constituting Confidential Information;

(c) As to documents which are delivered to Executive or which are made available to him as a necessary part of the working relationships and duties of Executive within the business of the Company, Executive will treat such documents confidentially and will treat such documents as proprietary and confidential, not to be reproduced, disclosed or used without appropriate authority of the Company;

(d) Executive will not advise others that the information and/or know how included in Confidential Information is known to or used by the Company; and

(e) Executive will not in any manner disclose or use Confidential Information for Executive’s own account and will not aid, assist or abet others in the use of Confidential Information for their account or benefit, or for the account or benefit of any person or entity other than the Company.

The obligations set forth in this paragraph are in addition to any other agreements the Executive may have with the Company and any and all rights the Company may have under state or federal statutes or common law.

6. Non-Competition and Non-Solicitation . Executive agrees that for a period ending one (1) year after termination of Executive’s employment with the Company for any reason:

(a) Executive shall not, directly or indirectly, whether for himself or for any other person, company, corporation or other entity be or become associated in any way (including but not limited to the association set forth in i-vii of this subsection) with any business or organization which is directly or indirectly engaged in the research, development, manufacture, production, marketing, promotion or sale of any product the same as or similar to those of the Mylan Companies, or which competes or intends to compete in any line of business with the Mylan Companies. Notwithstanding the foregoing, Executive may during the period in which this paragraph is in effect own stock or other interests in corporations or other entities that engage in businesses the same or substantially similar to those engaged in by the Mylan Companies, provided that Executive does not, directly or indirectly (including without limitation as the result of ownership or control of another corporation or other entity), individually or as part of a group (as that term is defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) (i) control or have the ability to control the corporation or other entity, (ii) provide to the corporation or entity, whether as an Executive, consultant or otherwise, advice or consultation, (iii) provide to the corporation or entity any confidential or proprietary information regarding the Mylan Companies or its businesses or regarding the conduct of businesses similar to those of the Mylan Companies, (iv) hold or have the right by contract or arrangement or understanding with other parties to hold a position on the board of directors or other governing body of the corporation or entity or have the right by contract or arrangement or understanding with other parties to elect one or more persons to any such position, (v) hold a position as an officer of the corporation or entity, (vi) have the purpose to change or influence the control of the corporation or entity (other than solely by the voting of his shares or ownership interest) or (vii) have a business or other relationship, by contract or otherwise, with the corporation or entity other than as a passive investor in it; provided , however , that Executive may vote his shares or ownership interest in such manner as he chooses provided that such action does not otherwise violate the prohibitions set forth in this sentence.

(b) Executive will not, either directly or indirectly, either for himself or for any other person, partnership, firm, company, corporation or other entity, contact, solicit, divert, or take away any of the customers or suppliers of the Mylan Companies.

(c) Executive will not solicit, entice or otherwise induce any employee of the Mylan Companies to leave the employ of the Mylan Companies for any reason whatsoever; nor will Executive directly or indirectly aid, assist or abet any other person or entity in soliciting or hiring any employee of the Mylan Companies, nor will Executive otherwise interfere with any contractual or other business relationships between the Mylan Companies and its employees.

7. Severability . Should a court of competent jurisdiction determine that any section or sub-section of this Agreement is unenforceable because one or all of them are vague or overly broad, the parties agree that this Agreement may and shall be enforced to the maximum extent permitted by law. It is the intent of the parties that each section and sub-section of this Agreement be a separate and distinct promise and that unenforceability of any one subsection shall have no effect on the enforceability of another.

8. Injunctive Relief . The parties agree that in the event of Executive’s violation of Sections 5 and/or 6 of this Agreement or any subsection thereunder, that the damage to the Company will be irreparable and that

money damages will be difficult or impossible to ascertain. Accordingly, in addition to whatever other remedies the Company may have at law or in equity, Executive recognizes and agrees that the Company shall be entitled to a temporary restraining order and a temporary and permanent injunction enjoining and prohibiting any acts not permissible pursuant to those sections of this Agreement. Executive agrees that should either party seek to enforce or determine its rights because of an act of Executive which the Company believes to be in contravention of Sections 5 and/or 6 of this Agreement or any subsection thereunder, the duration of the restrictions imposed thereby shall be extended for a time period equal to the period necessary to obtain judicial enforcement of the Company’s rights.

9. Termination of Employment .

(a) Resignation . (i) Executive may resign from employment at any time upon 90 days written notice to the Chief Executive Officer. During the 90-day notice period Executive shall continue to perform his duties under this Agreement and shall abide by all other terms and conditions of this Agreement. Additionally, Executive shall use his best efforts to effect a smooth and effective transition to whoever will replace Executive. Mylan reserves the right to accelerate the effective date of Executive’s resignation, provided that Executive shall receive Executive’s salary and benefits through the 90-day period. (ii) If Executive resigns without “Good Reason” (as defined below), Mylan shall have no liability or obligation to Executive under this Agreement other than that the Company shall pay Executive’s wages and benefits through the effective date of Executive’s resignation. Executive, however, will continue to be bound by all provisions of this Agreement that survive termination of employment. For purposes of this Agreement “Good Reason” shall mean: (a) a reduction of Executive’s Annual Base Salary below the Annual Base Salary stipulated in this Agreement, unless other executive officers of the Company are required to accept a similar reduction; or (b) the assignment of duties to the Executive that are inconsistent with those of an executive officer. (iii) If Executive resigns with Good Reason and complies in all respects with his obligations hereunder, Mylan shall pay Executive a lump sum amount equal to his then-current Annual Base Salary, plus a prorated annual bonus for the fiscal year in which Executive’s termination occurs (the “Pro Rata Bonus”), such Pro Rata Bonus to be determined by reference to the bonus that Executive would have earned based on actual performance for the relevant fiscal year had Executive’s employment not terminated for Good Reason, with the resulting amount pro-rated to reflect the number of days elapsed in the fiscal year, through and including the date on which Executive’s termination of employment occurs. Subject to Section 9(h), any such Pro Rata Bonus payment shall be made if and when such bonus payments are made to other executives of the Company for the relevant fiscal year. Mylan shall also pay the cost of continuing Executive’s health insurance benefits (including, as applicable, those benefits that cover eligible members of his immediate family) for the 12 months following his separation from the Company; provided , however , that in the case of health insurance continuation, Mylan’s obligation to provide health insurance benefits shall end at such time as Executive obtains health insurance benefits through another employer or otherwise in connection with rendering services for a third party and provided, further, that the parties agree to cooperate such that such benefits are, to the extent practicable, provided in a manner so as to minimize adverse tax consequences to the Company under Section 4980D of the Internal Revenue Code (the “Code”). Executive will continue to be bound by all provisions of this Agreement that survive termination of employment.

(b) Termination for Cause . If Mylan determines to terminate Executive’s employment during the term of this Agreement for Cause, as defined herein, the Company shall have no liability to Executive other than to pay Executive’s wages and benefits through the effective date of Executive’s termination. Executive, however, shall continue to be bound by all provisions of this Agreement that survive termination of employment. For purposes of this Agreement, “Cause” shall mean: (i) Executive’s willful and gross misconduct with respect to the business or affairs of any of the Mylan Companies; (ii) Executive’s insubordination, gross neglect of duties, dishonesty or deliberate disregard of any material rule or policy of any of the Mylan Companies; (iii) Executive’s conviction of a crime involving moral turpitude; or (iv) Executive’s conviction of any felony.

(c) Termination Without Cause . If Mylan discharges Executive without Cause, Mylan shall pay a lump sum amount equal to his then-current Annual Base Salary, plus a Pro Rata Bonus. Subject to Section 9(h), any such Pro Rata Bonus payment shall be made if and when such bonus payments are made to other executives of the Company for the relevant fiscal year. Mylan shall also pay the cost of continuing Executive’s health

insurance benefits (including, as applicable, those benefits that cover eligible members of his immediate family) for the 12 months following such termination without Cause; provided , however , that in the case of health insurance continuation, Mylan’s obligation to provide health insurance benefits shall end at such time as Executive obtains health insurance benefits through another employer or otherwise in connection with rendering services for a third party and provided, further, that the parties agree to cooperate such that such benefits are, to the extent practicable, provided in a manner so as to minimize adverse tax consequences to the Company under Section 4980D of the Code. Executive will continue to be bound by all provisions of this Agreement that survive termination of employment.

(d) Death or Incapacity . The employment of Executive shall automatically terminate upon Executive’s death or upon the occurrence of a disability that renders Executive incapable of performing the essential functions of his position within the meaning of the Americans With Disabilities Act of 1990. For all purposes of this Agreement, any such termination shall be treated in the same manner as a termination without Cause, as described in Section 9(c) above, and Executive, or Executive’s estate, as applicable, shall receive all consideration, compensation and benefits that would be due and payable to Executive for a termination without Cause, provided , however , that such consideration, compensation and benefits shall be reduced by any death or disability benefits (as applicable) that the Executive or his estate or beneficiaries (as applicable) are entitled to pursuant to plans or arrangements of the Company.

(e) Non-Renewal . If the Company elects not to renew this Agreement, Executive’s employment shall terminate as of the Second Anniversary or the end of any Renewal Term, as applicable, and the Company shall pay Executive a lump sum amount equal to his then-current annual Base Salary, which amount shall be paid within 30 days following Executive’s separation from the Company (subject to Section 9(h)) below), and Executive’s health insurance benefits (including, as applicable, those benefits that cover eligible members of his immediate family) shall be continued for 12 months at the Company’s cost; provided , however , that in the case of health insurance continuation, the Company’s obligation to provide health insurance benefits shall end at such time as Executive, at his option, voluntarily obtains health insurance benefits and provided, further, that the parties agree to cooperate such that such benefits are, to the extent practicable, provided in a manner so as to minimize adverse tax consequences to the Company under Section 4980D of the Code.

(f) Return of Company Property . Upon the termination of Executive’s employment for any reason, Executive shall immediately return to Mylan all records, memoranda, files, notes, papers, correspondence, reports, documents, books, diskettes, hard drives, electronic files, and all copies or abstracts thereof that Executive has concerning any or all of the Mylan Companies’ business. Executive shall also immediately return all keys, identification cards or badges and other Company property.

(g) No Duty to Mitigate . There shall be no requirement on the part of Executive to seek other employment or otherwise mitigate damages in order to be entitled to the full amount of any payments and benefits to which Executive is otherwise entitled under any contract and, except as set forth herein with respect to the health insurance benefits, the amount of such payments and benefits shall not be reduced by any compensation or benefits received by Executive from other employment.

(h) Conditions to Payment and Acceleration; Section 409A of the Code . The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, Executive shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payments shall be due to Executive under Section 9 of this Agreement until Executive would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code. For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A of the Code, and any payments described in Section 9 that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. To the extent required in order to avoid accelerated taxation

and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following Executive’s termination of employment (or death, if earlier). To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not affect amounts reimbursable or provided in any subsequent year; provided , however , that with respect to any reimbursements for any taxes which Executive would become entitled to under the terms of the Agreement, the payment of such reimbursements shall be made by the Company no later than the end of the calendar year following the calendar year in which Executive remits the related taxes.

10. Indemnification . The Company shall maintain D&O liability coverage pursuant to which Executive shall be a covered insured. Executive shall receive indemnification in accordance with the Company’s Bylaws in effect as of the date of this Agreement. Such indemnification shall be contractual in nature and shall remain in effect notwithstanding any future change to the Company’s Bylaws.

To the extent not otherwise limited by the Company’s Bylaws in effect as of the date of this Agreement, in the event that Executive is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, (including those brought by or in the right of the Company) whether civil, criminal, administrative or investigative (“proceeding”), by reason of the fact that he is or was an officer, employee or agent of or is or was serving the Company or any subsidiary of the Company, or is or was serving at the request of the Company or another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by law against all expenses, liabilities and losses (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by Executive in connection therewith. Such right shall be a contract right and shall include the right to be paid by the Company expenses incurred in defending any such proceeding in advance of its final disposition; provided , however , that the payment of such expenses incurred by Executive in his capacity as a director or officer (and not in any other capacity in which service was or is rendered by Executive while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of such proceeding will be made only upon delivery to the Company of an undertaking, by or on behalf of Executive, to repay all amounts to Company so advanced if it should be determined ultimately that Executive is not entitled to be indemnified under this section or otherwise.

Promptly after receipt by Executive of notice of the commencement of any action, suit or proceeding for which Executive may be entitled to be indemnified, Executive shall notify the Company in writing of the commencement thereof (but the failure to notify the Company shall not relieve it from any liability which it may have under this Section 10 unless and to the extent that it has been prejudiced in a material respect by such failure or from the forfeiture of substantial rights and defenses). If any such action, suit or proceeding is brought against Executive and he notifies the Company of the commencement thereof, the Company will be entitled to participate therein, and, to the extent it may elect by written notice delivered to Executive promptly after receiving the aforesaid notice from Executive, to assume the defense thereof with counsel reasonably satisfactory to Executive, which may be the same counsel as counsel to the Company. Notwithstanding the foregoing, Executive shall have the right to employ his own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of Executive unless (i) the employment of such counsel shall have been authorized in writing by the Company, (ii) the Company shall not have employed counsel reasonably satisfactory to Executive to take charge of the defense of such action within a reasonable time after notice of commencement of the action or (iii) Executive shall have reasonably concluded, after consultation with counsel to Executive, that a conflict of interest exists which makes representation by counsel chosen by the Company not advisable (in which case the Company shall not have the right to direct the defense of such action on behalf of Executive), in any of which events such fees and expenses of one additional counsel shall be borne by the Company. Anything in this Section 9 to the contrary notwithstanding, the Company shall not be liable for any settlement of any claim or action effected without its written consent.

11. Other Agreements . The rights and obligations contained in this Agreement are in addition to and not in place of any rights or obligations contained in any other agreements between the Executive and the Company; provided, however, that, on and following the Effective Date, this Agreement shall supersede in its entirety the Prior Agreement, which shall have no further force or effect.

12. Notices . All notices hereunder to the parties hereto shall be in writing sent by certified mail, return receipt requested, postage prepaid, and by fax, addressed to the respective parties at the following addresses:


If to the Company:	Mylan Inc. 1500 Corporate Drive Canonsburg, Pennsylvania 15317 Attention: Chief Executive Officer


If to Executive:	at the most recent address on record at the Company.

Either party may, by written notice complying with the requirements of this section, specify another or different person or address for the purpose of notification hereunder. All notices shall be deemed to have been given and received on the day a fax is sent or, if mailed only, on the third business day following such mailing.

13. Withholding . All payments required to be made by the Company hereunder to Executive or his dependents, beneficiaries, or estate will be subject to the withholding of such amounts relating to tax and/or other payroll deductions as may be required by law.

14. Modification and Waiver . This Agreement may not be changed or terminated rally, nor shall any change, termination or attempted waiver of any of the provisions contained in this Agreement be binding unless in writing and signed by the party against whom the same is sought to be enforced, nor shall this section itself by waived verbally. This Agreement may be amended only by a written instrument duly executed by or on behalf of the parties hereto.

15. Construction of Agreement . This Agreement and all of its provisions were subject to negotiation and shall not be construed more strictly against one party than against another party regardless of which party drafted any particular provision.

16. Successors and Assigns . This Agreement and all of its provisions, rights and obligations shall be binding upon and inure to the benefit of the parties hereto and the Company’s successors and assigns. This Agreement may be assigned by the Company to any person, firm or corporation which shall become the owner of substantially all of the assets of the Company or which shall succeed to the business of the Company; provided , however , that in the event of any such assignment the Company shall obtain an instrument in writing from the assignee in which such assignee assumes the obligations of the Company hereunder and shall deliver an executed copy thereof to Executive. No right or interest to or in any payments or benefits hereunder shall be assignable by Executive; provided , however , that this provision shall not preclude him from designating one or more beneficiaries to receive any amount that may be payable after his death and shall not preclude the legal representative of his estate from assigning any right hereunder to the person or persons entitled thereto under his will or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to his estate. The term “beneficiaries” as used in this Agreement shall mean a beneficiary or beneficiary or beneficiaries so designated to receive any such amount, or if no beneficiary has been so designated, the legal representative of the Executive’s estate. No right, benefit, or interest hereunder, shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of any claim, debt, or obligation, or to execution, attachment, levy, or similar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall, to the full extent permitted by law, be null, void, and of no effect.

17. Choice of Law and Forum . This Agreement shall be construed and enforced according to, and the rights and obligations of the parties shall be governed in all respects by, the laws of the Commonwealth of

Pennsylvania. Any controversy, dispute or claim arising out of or relating to this Agreement, or the breach hereof, including a claim for injunctive relief, or any claim which, in any way arises out of or relates to, Executive’s employment with the Company or the termination of said employment, including but not limited to statutory claims for discrimination, shall be resolved by arbitration in accordance with the then current rules of the American Arbitration Association respecting employment disputes except that the parties shall be entitled to engage in all forms of discovery permitted under the Pennsylvania Rules of Civil Procedure (as such rules may be in effect from time to time). The hearing of any such dispute will be held in Pittsburgh, Pennsylvania, and the losing party shall bear the costs, expenses and counsel fees of such proceeding. Executive and Company agree for themselves, their, employees, successors and assigns and their accountants, attorneys and experts that any arbitration hereunder will be held in complete confidence and, without the other party’s prior written consent, will not be disclosed, in whole or in part, to any other person or entity except as may be required by law. The decision of the arbitrator(s) will be final and binding on all parties. Executive and the Company expressly consent to the jurisdiction of any such arbitrator over them.

18. Non-Disparagement . During the term hereof and thereafter, Executive agrees to refrain from any disparaging statements, including but not limited to statements that amount to libel or slander, about any of the Mylan Companies and/or any of their respective employees, officers, or directors.

19. Headings . The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way affect the interpretation of any of the terms or conditions of this Agreement.

20. Execution in Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[ Signature page follows ]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first above mentioned.



MYLAN INC.		EXECUTIVE:
/s/ Robert J. Coury		/s/ John Sheehan
By: Robert J. Coury Its: Executive Chairman		John Sheehan

Exhibit 10.2

MYLAN INC.

2003 LONG-TERM INCENTIVE PLAN

STOCK OPTION AGREEMENT

[ _______________ ] (the “Optionee”) is granted, effective as of the [ ___ ] day of [ _______ ] (the “Date of Grant”), options (the “Options”) to purchase shares of Common Stock (“Common Stock”) of Mylan Inc. (the “Option Shares”) pursuant to the 2003 Long-Term Incentive Plan, as amended to date (the “Plan”), of Mylan Inc. (the “Corporation”). The Options are subject to the terms and conditions set forth below and in the Plan, which is a part of this Stock Option Agreement (the “Agreement”). To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern, except as specifically set forth herein. Any term not defined herein shall have the meaning assigned to such term in the Plan.


1 .	Exercise Price: $ [ ______ ] per Option Share.


2 .	Number of Option Shares: [ _______ ]


3.	Type of Option: [ _____________ ]


4.	Vesting: The Options granted hereunder will become vested in accordance with the following schedule (in each case at 12:01 a.m. on the relevant vesting date), provided that the Optionee is continuously employed by the Corporation on the relevant vesting dates and subject to accelerated vesting as set forth in Section 6.03(e) of the Plan:



[Date of Vesting	Option Shares Vested]
[	]


5.	Exercise of Option: Options may be exercised in accordance with the rules contained in Article VI, Section 6.04 Option Exercise Procedures , of the Plan.

Expiration Date: Subject to earlier termination upon the occurrence of certain events related to the termination of the Optionee’s employment as provided in Section 6.03(e) of the Plan, the Options granted hereunder shall expire at 12:01 a.m. Eastern Standard Time on the tenth (10th) annual anniversary of the Date of Grant, unless earlier exercised (such ten year period, the “Option Term”). If the Optionee experiences a termination of employment without “Cause” or a termination of employment for “Good Reason”, the Option Shares shall vest in full as of the date of such termination of employment. In addition, if the Optionee experiences a termination of employment for any reason other than for Cause, the Option Shares, to the extent vested on the date of termination of employment, shall remain exercisable for the remainder of the Option Term. For purposes of this Agreement, "Cause" and "Good Reason" shall have the meanings assigned to such terms in the [Optionee’s Employment Agreement].


7.	Change in Control: Notwithstanding anything to the contrary in the Plan or in this Agreement, in the event of a Change in Control (as defined in the Plan), any unvested Options granted pursuant to this Agreement shall vest as follows:


a)	With respect to each unvested Option that is assumed or substituted in connection with a Change in Control, in the event of a termination of the Optionee's employment or service during the 24-month period following such Change in Control (i) without Cause or (ii) by the Optionee for Good Reason, such Option shall become fully vested and exercisable as of such termination of employment.

For purposes of this Section 7, an Option shall be considered assumed or substituted for if, following the Change in Control, the Option remains subject to the same terms and conditions that were applicable to the Option immediately prior to the Change in Control (including vesting conditions) except as set forth in this Section 7 and except that the Option instead confers the right to receive publicly traded equity securities of the acquiring entity or the ultimate parent company which results from the Change in Control.


c)	With respect to each unvested Option that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control, such Option shall become fully vested and exercisable.

Notwithstanding any other provision of the Plan, in the event of a Change in Control, the Compensation Committee of the Mylan Inc. Board of Directors (the “Committee”) may, in its discretion, provide that each Option shall, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess of the consideration paid per Share in the Change in Control over the exercise price (if any) per Share subject to the Option multiplied by (ii) the number of Shares then outstanding under the Option.


8.	Limitation Of Liability: The Optionee agrees that any liability of the officers, the Committee, and the Board of Directors of the Corporation to the Optionee under this Agreement shall be limited to those actions or failure to take actions which constitute self-dealing, willful misconduct or recklessness.


9.	Law Governing: This Agreement shall be governed by and construed under the internal laws of the Commonwealth of Pennsylvania.



Mylan Inc.		Optionee

By: Rodney L. Piatt		[NAME]
Title: Chairman, Compensation Committee of the Mylan Inc. Board of Directors

Exhibit 10.3

MYLAN INC.

2003 LONG-TERM INCENTIVE PLAN

NOTICE OF AWARD OF RESTRICTED STOCK UNITS

Notice is hereby given that, by action of the Compensation Committee of the Board of Directors of Mylan Inc. (the “Company”), [ ____________ ] (the “Participant”) has been granted, effective as of the [ ___ ] day of [ _________ ], an award of restricted stock units (the “Award”) payable in shares of common stock (the “Shares”) of the Company pursuant to the Company’s 2003 Long-Term Incentive Plan, as amended (the “Plan”). The Award is subject to the terms and conditions set forth below and in the Plan, which is a part of this Notice of Restricted Share Award (this “Notice”). To the extent that there is a conflict between the terms of the Plan and this Notice, the terms of the Plan shall govern, except as specifically set forth herein. Any term not defined herein shall have the meaning assigned to such term in the Plan.

1. Number of Restricted Stock Units: [ _______ ] where 1 RSU is equal to the right to receive [ __ ] Share[s].

2. Vesting: The Award granted hereunder will become vested in accordance with the following schedule (in each case at 12:01 a.m. (ET) on the relevant vesting date) provided the Participant is continuously employed by the Company on the relevant vesting dates and subject to accelerated vesting as set forth in Sections 4 and 5 of this Notice:



[Vesting Date	Shares Vested]
[	]

3. Issuance of Shares: Within two (2) business days following the vesting of the Award or portion of such Award, the Company shall issue to the Participant Shares in respect of such vested Award in accordance with the Plan (if applicable, net of any Shares withheld by the Company to satisfy tax obligations as permitted by Section 11.05 of the Plan).

4. Forfeiture: In the event of the termination of Participant’s employment by the Company for Cause, any unvested portion of the Award shall automatically be forfeited to the Company and this Notice shall be of no further force and effect. In the event of the termination of the Participant’s employment (i) by reason of the Participant’s death, Retirement or Permanent Disability, (ii) by the Company without Cause or (iii) by the Participant with Good Reason, the Award shall vest in full as of the date of such termination, and the Company shall deliver to the Participant a certificate representing the Shares payable upon such vesting (if applicable, net of any Shares withheld by the Company to satisfy tax obligations as permitted by Section 11.05 of the Plan). For purposes of this Notice, “Cause” and “Good Reason” shall have the meanings assigned to

such terms in the [Participant’s Employment Agreement (the "Employment Agreement")].

5. Change in Control: Notwithstanding anything to the contrary in the Plan or in this Notice, in the event of a Change in Control (as defined in the Plan), any unvested Awards granted pursuant to this Agreement shall vest as follows:

a) With respect to each unvested Award that is assumed or substituted in connection with a Change in Control, in the event of a termination of the Participant’s employment or service during the 24-month period following such Change in Control (i) without Cause or (ii) by the Participant for Good Reason, such Award shall become fully vested and exercisable as of such termination of employment.

b) For purposes of this Section 5, an Award shall be considered assumed or substituted for if, following the Change in Control, the Award remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control (including vesting conditions) except as set forth in this Section 5 and except that the Award instead confers the right to receive publicly traded equity securities of the acquiring entity or the ultimate parent company which results from the Change in Control.

d) Notwithstanding any other provision of the Plan, in the event of a Change in Control, the Compensation Committee of the Mylan Inc. Board of Directors (the “Committee”) may, in its discretion, except as would otherwise result in adverse tax consequences under Section 409A of the United States Internal Revenue Code (the “Code”), provide that each Award shall, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess of the consideration paid per Share in the Change in Control over the purchase price (if any) per Share subject to the Award multiplied by (ii) the number of Shares then outstanding under the Award.

e) Notwithstanding the foregoing, for each Award that constitutes deferred compensation under Section 409A of the Code, a Change in Control shall be deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code.

6. Limitation Of Liability: The Participant agrees that any liability of the officers, the Committee, and the Board of Directors of the Corporation to the Participant under

this Notice shall be limited to those actions or failure to take actions which constitute self-dealing, willful misconduct or recklessness.

7. Governing Law: The terms and conditions of this Notice shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

This Notice is executed by authority of the Committee, effective as of the date first set forth above.



	Rodney L. Piatt Chairman, Compensation Committee of the Mylan Inc. Board of Directors

The undersigned Participant hereby acknowledges receipt of this Notice and agrees to and accepts the terms and conditions set forth herein.



	Participant:
	[NAME]

Exhibit 10.4

MYLAN INC.

2003 LONG-TERM INCENTIVE PLAN

NOTICE OF AWARD OF RESTRICTED STOCK UNITS

- PERFORMANCE-BASED GRANT -

Notice is hereby given that, by action of the Compensation Committee of the Board of Directors of Mylan Inc. (the “Company”), [ _________ ] (the “Participant”) has been granted, effective as of the [ ___ ] day of [ __________ ] (the “Grant Date”), an award of restricted stock units (the “Award”) payable in shares of common stock (the “Shares”) of the Company pursuant to the Company’s 2003 Long-Term Incentive Plan, as amended (the “Plan”). The Award is subject to the terms and conditions set forth below and in the Plan, which is a part of this Notice of Restricted Share Award (this “Notice”). To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern, except as specifically set forth herein. Any term not defined herein shall have the meaning assigned to such term in the Plan.

1. Target Number of Restricted Stock Units (RSUs): [ ________ ] where 1 RSU is equal to the right to receive [ __ ] Share[s] ("Target RSUs").

2. Vesting and Forfeiture: The Award shall represent the right to receive, as soon as practicable following the [ __ ] anniversary of the Grant Date (the "Vesting Date"), a number of Shares equal to a multiple of the Target RSUs (as set forth above), as determined in accordance with Exhibit A. [[ ________ (__%) ] of the Award shall be eligible to be earned based on [ _______ ] (the "[ _____ ] Stock Award") and __% of the Award shall be eligible to be earned based on [ _______ ] (the "[ _____ ] Stock Award"), in each case, as described on Exhibit A and, except as provided in Section 7.03 of the Plan or otherwise provided herein, provided that the Participant is employed by the Company through the Vesting Date.] Any portion of the Award that could have been earned in accordance with the provisions of Exhibit A that is not earned as of the Vesting Date shall be immediately forfeited on the Vesting Date.

Notwithstanding the foregoing, all Shares shall vest and be awarded in full at target performance levels to the Participant prior to the Third Anniversary upon (i) a Change of Control, to the extent provided below; (ii) the Participant’s death, Retirement or Permanent Disability; (iii) a termination of the Participant’s employment by the Company without Cause (as defined in the [Participant’s Employment Agreement (the "Employment Agreement")]) or (iv) a termination of the Participant’s employment by the Participant with Good Reason (as defined in the Employment Agreement).

4. Change in Control: Notwithstanding anything to the contrary in the Plan or in this Notice, in the event of a Change in Control (as defined in the Plan), any unvested Awards granted pursuant to this Agreement shall vest as follows:

b) For purposes of this Section 4, an Award shall be considered assumed or substituted for if, following the Change in Control, the Award remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control (including vesting conditions) except as set forth in this Section 4 and except that the Award instead confers the right to receive publicly traded equity securities of the acquiring entity or the ultimate parent company which results from the Change in Control.

c) With respect to each unvested Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control, such Award shall become fully vested and exercisable and any performance conditions imposed with respect to Awards shall be deemed to be achieved at target performance levels.

5. Limitation Of Liability: The Participant agrees that any liability of the officers, the Committee, and the Board of Directors of the Corporation to the Participant under this Notice shall be limited to those actions or failure to take actions which constitute self-dealing, willful misconduct or recklessness.

6. Governing Law: The terms and conditions of this Notice shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

This Notice is executed on behalf of the Company, effective as of the date first set forth above.



	Rodney L. Piatt Chairman, Compensation Committee of the Mylan Inc. Board of Directors

The undersigned Participant hereby acknowledges receipt of this Notice and agrees to and accepts the terms and conditions set forth herein.



	Participant:
	[NAME]

EXHIBIT A

[ __________________ ]

Exhibit 31.1

Certification of Principal Executive Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Heather Bresch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Mylan Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ Heather Bresch
	Heather Bresch
	Chief Executive Officer
	(Principal Executive Officer)

Date: October 31, 2013

Exhibit 31.2

Certification of Principal Financial Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, John D. Sheehan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Mylan Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ John D. Sheehan
	John D. Sheehan
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

Date: October 31, 2013

Exhibit 32

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Mylan Inc. (the “Company”) for the period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Heather Bresch
	Heather Bresch
	Chief Executive Officer
	(Principal Executive Officer)

	/s/ John D. Sheehan
	John D. Sheehan
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

Date: October 31, 2013

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q.