Ireland
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N/A
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Treasury Building, Lower Grand Canal Street, Dublin 2, Ireland
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-
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(Address of principal executive offices)
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(Zip Code)
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Ordinary shares, €0.001 par value
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New York Stock Exchange
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Title of each class
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Name of each exchange on which registered
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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YES
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[ ]
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NO
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[X]
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.
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YES
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[ ]
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NO
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[X]
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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.
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YES
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[X]
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NO
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[ ]
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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).
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YES
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[X]
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NO
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[ ]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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[ ]
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
.
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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YES
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[ ]
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NO
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[X]
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Page No.
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Part I.
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Item 1.
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||
Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Additional Item.
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Part II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV.
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Item 15.
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ITEM 1.
|
BUSINESS
|
•
|
Consumer Healthcare Americas
(
"CHCA"
), comprises our U.S., Mexico and Canada consumer healthcare business (OTC, contract, infant formula and animal health categories).
|
•
|
Consumer Healthcare International
(
"
CHCI
"
),
comprises our branded consumer healthcare business primarily in Europe and our consumer focused businesses in the U.K., Australia, and Israel. This segment also includes our U.K. liquid licensed products business.
|
•
|
Prescription Pharmaceuticals
(
"
RX
"
),
comprises our U.S. Prescription Pharmaceuticals business.
|
•
|
Certain Abbreviated New Drug Applications ("ANDAs") for
$15.0 million
in proceeds.
|
•
|
Our animal health pet treats plant fixed assets for
$7.7 million
in proceeds.
|
•
|
Our India API business for
$22.2 million
in proceeds.
|
•
|
Our Russian business for
€12.7 million
(
$15.1 million
) in proceeds.
|
•
|
Our Israel API business for
$110.0 million
in proceeds.
|
Product Category
|
|
Description
|
Analgesics
|
|
Pain relievers and fever reducers
|
Cough/cold/allergy/sinus
|
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Cough, cold, allergy, and sinus products
|
Gastrointestinal
|
|
Antacids, anti-diarrheal, and anti-heartburn products
|
Infant nutritionals
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|
Infant formula and food products
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Smoking cessation
|
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Gums, lozenges, and other products designed to help users quit smoking
|
Animal health
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Pet health and wellness products
|
Other
|
|
Feminine hygiene, diabetes care, dermatological care, diagnostic products, scar management, and other miscellaneous healthcare products
|
•
|
Management has developed a strategy to: (1) implement a brand prioritization to address certain market dynamics, with an objective to balance the cost of advertising and promotional investments with expected contributions from category sales, (2) restructure the sales force in certain markets to more effectively serve customers, and (3) in-source certain product manufacturing and development. The combination of these actions is expected to improve the segment's focus on higher value OTC products, reduce selling costs and improve operating margins in the segment.
|
•
|
As part of our previously announced strategic initiatives, management implemented improvements and evaluated the overall cost structures within our
CHCI
segment in the following ways:
|
•
|
On December 8, 2016, we announced the cancellation of the unprofitable EuroGenerics NV distribution agreement in Belgium. The year-over-year effect of the cancellation, combined with the exit of certain OTC distribution agreements, reduced our net sales by
$200.3 million
in 2017, with an immaterial impact to operating income.
|
•
|
We made progress on our previously announced restructuring plans to right-size the
Omega
business due to the impact of market dynamics on sales volumes. During the year ended
December 31, 2017
, we recognized
$17.1 million
of restructuring expense in the
CHCI
segment (refer to
Item 8. Note 18
).
|
•
|
Management continues to evaluate the most effective business model for each country, aligning our sales infrastructure and actively integrating sales strategies with promotional programs.
|
•
|
On
August 25, 2017
, we completed the sale of our Russian business, which was previously classified as held-for-sale, to Alvogen Pharma LLC. The total sale price was
€12.7 million
(
$15.1 million
), inclusive of an estimated working capital adjustment, which resulted in an immaterial gain in the segment (refer to
Item 8. Note 2
).
|
•
|
The
CHCI
segment has been positively impacted by market dynamics in countries such as the Nordics, Italy, and Portugal, offset by softness in certain brand categories in France and Germany, as well as unfavorable foreign currency impacts primarily in the U.K. related to Brexit.
|
Product Category
|
|
Description
|
|
Focus Brands
|
Cough, Cold, and Allergy
|
|
Products that address respiratory symptoms, including traditional medications and alternative treatments such as aromatherapy solutions.
|
|
Bittner
®
/Aflubin
®
Bronchenolo ® /Bronchostop ®
Coldrex
®
Libenar ®
Physiomer
®
Phytosun ® /Valda ® Solpadeine ® /Antigrippine ® |
Lifestyle
|
|
Weight management, pregnancy and fertility kits, pain relief, sleep management, smoking cessation, and eye care.
|
|
Niquitin
®
Silence
®
/Nytol
®
XLS (Medical)
®
Ymea
®
|
|
|
|||
|
|
|||
Personal Care and Derma-Therapeutics
|
|
Products for the face and body, including sun care, baby-specific, and feminine hygiene products, and solutions for various skin conditions and allergies such as eczema, psoriasis and rosacea.
|
|
ACO
®
Biodermal ® Canoderm ®
Dermalex
®
Lactacyd ® Wartner ® |
Natural Health and Vitamin, Minerals, and Supplements ("VMS")
|
|
Vitamins, minerals, supplements, and various other natural remedies.
|
|
Abtei
®
Biover
®
Davitamon ® Granufink ® |
|
|
|||
Anti-Parasite
|
|
Products focused on the elimination of parasites in both humans and pets including lice treatment and insect repellent.
|
|
Jungle Formula
®
Paranix
®
|
|
|
•
|
We continue to experience a significant reduction in pricing expectations from historical levels in our
RX
segment due to competitive pressures. This softness in pricing is attributable to various factors, including increased focus from customers to capture supply chain productivity savings, competition in specific products, and consolidation of certain customers. We expect this softness to continue to impact the segment for the foreseeable future, and we are forecasting a high single digit pricing decline in this segment for the year ending December 31, 2018.
|
•
|
We are continuing our previously announced portfolio review process, which includes the ongoing comprehensive internal evaluation of the
RX
segment's market position, growth opportunities, and interdependencies with our manufacturing and shared service operations to determine if strategic alternatives should be explored related to this segment.
|
•
|
During the
year ended
December 31, 2017
, we sold various ANDAs for a total gain of $23.0 million.
|
Generic Name
(1)
|
|
Comparative Brand-Name Drug
|
Adapalene cream
|
|
Differin
®
|
Bacitracin ophthalmic ointment
|
|
N/A
|
Benzoyl peroxide 5% - clindamycin 1% gel
|
|
BenzaClin
TM
|
Budesonide
|
|
Entocort
®
|
Clindamycin foam
|
|
Evoclin
®
|
Clindamycin phosphate and benzoyl peroxide gel
|
|
Duac
®
|
Clobetasol foam, lotion and shampoo
|
|
Olux
®
, Olux-E
®
, Clobex
®
|
Desonide cream, ointment
|
|
Desonate
®
, Tridesilon
®
|
Dihydroergotamine injection
|
|
D.H.E. 45
|
Halobetasol ointment and cream
|
|
Ultravate
®
|
Hydrocortisone suppositories
|
|
N/A
|
Mupirocin ointment
|
|
Bactroban
®
|
Nystatin topical powder
|
|
Mycostatin
®
|
Olopatadine nasal spray
|
|
Patanase
®
|
Permethrin cream
|
|
Elimite
®
|
Scopolamine patch
|
|
TransdermScop
®
|
Tacrolimus
|
|
Protopic
®
|
Testosterone 1% gel
|
|
Androgel
|
Testosterone cypionate injection
|
|
Depo
®
, Testosterone
|
Testosterone solution
|
|
Axiron
®
|
Triamcinolone acetonide nasal spray
|
|
Nasacort
®
AQ
|
Triamcinolone cream/ointment
|
|
Triderm™/Kenalog™
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
|||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
December 27,
2014 |
|
June 27,
2015 |
|||||
13
|
%
|
|
13
|
%
|
|
13
|
%
|
|
19
|
%
|
|
16
|
%
|
•
|
Helping consumers access safe, effective and affordable healthcare products;
|
•
|
Strong corporate governance;
|
•
|
Complying with regulatory and legal requirements;
|
•
|
Demonstrating environmental stewardship;
|
•
|
Continuously improving packaging sustainability;
|
•
|
Protecting human rights of our global employees and challenging our partners to do the same;
|
•
|
Diversity of thought, experience and perspective;
|
•
|
Providing a safe and healthy work environment for our employees; and
|
•
|
Establishing effective community partnerships.
|
•
|
Physician Payment Sunshine Act
- This act requires certain pharmaceutical manufacturers to engage in extensive tracking of payments or transfers of value to physicians and teaching hospitals, maintenance of a payment database and public reporting of the payment data.
|
•
|
Foreign Corrupt Practices Act of 1977 ("FCPA")
- This act and other similar anti-bribery laws prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties or international organizations with the intent to obtain or retain business or seek a business advantage.
|
•
|
Federal Trade Commission ("FTC")
- This agency oversees the advertising and other promotional practices of consumer products marketers. The FTC considers whether a product’s claims are substantiated, truthful and not misleading. The FTC also reviews mergers and acquisitions of companies exceeding specified thresholds and investigates certain business practices relevant to the healthcare industry.
|
•
|
International Organization for Standardization ("ISO")
- The ISO Standards specify requirements for a Quality Management System that demonstrates the ability to consistently provide products that meet customer and applicable regulatory standards and includes processes to ensure continuous improvement. Our infant formula manufacturing sites are ISO 9001-2008 Certified for Quality Management Systems. ISO inspections are conducted at least annually.
|
•
|
United States Pharmacopeial Convention, Inc. ("USP")
- The USP is a non-governmental, standard-setting organization. By reference, the FFDCA incorporates the USP quality and testing standards and monographs as the standard that must be met for the listed drugs, unless compliance with those standards is specifically disclaimed on the product’s labeling. USP standards exist for most Rx and OTC pharmaceuticals and many nutritional supplements. The FDA typically requires USP compliance as part of cGMP compliance.
|
•
|
Health Insurance Portability and Accountability Act ("HIPAA")
- We could be subject to criminal penalties if we knowingly obtain individually identifiable health information from a covered entity in a manner that is not authorized or permitted by HIPAA or for aiding and abetting the violation of HIPAA.
|
•
|
Consumer Product Safety Commission ("CPSC")
- The CPSC has published regulations requiring child resistant packaging on certain products including pharmaceuticals and dietary supplements. The manufacturer of any product that is subject to any CPSC rule, ban, standard or regulation must certify that, based on a reasonable testing program, the product complies with CPSC requirements.
|
•
|
Anti-Bribery Laws -
Various jurisdictions in which we operate have laws and regulations, including the U.K. Bribery Act 2010, aimed at preventing and penalizing corrupt and anticompetitive behavior.
|
•
|
Other State Agencies
- We are subject to regulation by numerous other state health departments, insurance departments, boards of pharmacy, state controlled substance agencies, state consumer health and safety regulations, and other comparable state agencies, each of which have license requirements and fees that vary by state.
|
•
|
Privacy Regulations -
We are subject to numerous global laws and regulations designed to protect personal data, such as the European Union Directive on Data Protection (which will be replaced by the European Union General Data Protection Regulation (“GDPR”) from May 2018 onward). The GDPR will introduce more stringent data protection requirements in the European Union ("EU"), as well as substantial fines for breaches of the data protection rules. The GDPR will increase our responsibility and potential liability in relation to personal data that we process, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR.
|
•
|
Transparency Laws
- In various jurisdictions in which we operate, we are subject to the laws and regulations aimed at increasing transparency of financial relationships between healthcare professionals and pharmaceutical/medical device manufacturers.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
As a manufacturer of generic versions of brand-name drugs through our
CHCA
and
RX
segments, we experience competition from brand-name drug companies that may try to prevent, discourage or delay the use of generic versions through various measures, including introduction of new branded products, legislative initiatives, changing dosage forms or dosing regimens, regulatory processes, filing new patents or patent extensions, lawsuits, citizens’ petitions, and negative publicity prior to introduction of a generic product. In addition, brand-name competitors may lower their prices to compete with generic products, increase advertising, or launch, either through an affiliate or licensing arrangements with another company, an authorized generic at or near the time the first generic product is launched, depriving the generic product potential market exclusivity.
|
•
|
Our
CHCA
and
RX
segments may experience increased price competition as other generic companies produce the same product, sometimes for dramatically lower margins in order to gain market share. Other generic companies may introduce new drugs and/or drug delivery techniques that make our current products less desirable. A drug may be subject to competition from alternative therapies during the period of patent protection or regulatory exclusivity, and thereafter, we may be subject to further competition from generic products or biosimilars.
|
•
|
The pharmaceutical industry is consolidating. This creates larger competitors and places further pressure on prices, development activities, and customer retention. Our animal health category within the
CHCA
segment has seen an increase in direct to consumer advertising by several branded competitors, which may increase in the future, and our nutritionals category has experienced increased competition through alternative channels such as health food stores, direct mail and direct sales.
|
•
|
We develop and distribute branded products primarily through our
CHCI
segment. We experience competition from other brand-name drug companies, many of which are larger and have more resources to devote to advertising and marketing. These direct competitors may be able to adapt more quickly to changes in customer requirements. Our current and future competitors may develop products comparable or superior to those offered by us at more competitive prices.
|
•
|
Our CHCA and RX segments also experience competition from our generic competitors, some of whom are significantly larger than we are, who may develop their products more rapidly or complete regulatory approval processes sooner, or may market their products earlier than we do.
|
•
|
If we are unable to compete successfully, our business will be harmed through loss of customers or increased negative pricing pressure that would adversely affect our ability to generate revenue and adversely affect our operating results.
|
•
|
We maintain a diversified product line to function as a primary supplier for our customers. Capital investments are driven by growth, technological advancements, cost improvement and the need for manufacturing flexibility. Our future capital expenditures could vary materially due to the uncertainty of these factors. In addition, if we fail to stay current with the latest manufacturing, information and packaging technology, we may be unable to competitively support the launch of new product introductions.
|
•
|
Our product margins may decline over time due to our products' aging life cycles, changes in consumer choice, changes in competition for our existing products, or the introduction of next generation innovative products; therefore, new product introductions are necessary to maintain our current financial condition. If we are unable to continue to create new products, we may lose market share or experience pricing pressure, and our net sales may be negatively impacted.
|
•
|
We must prove that the regulated generic drug products in our
CHCA
and
RX
segments are bioequivalent to their branded counterparts, which may require bioequivalence studies, and in the case of topical products, even more extensive clinical endpoint trials to demonstrate their efficacy. The development and commercialization process, particularly with respect to innovative products, is both time consuming and costly, and subject to a high degree of business risk. Products currently under development may require re-design to meet evolving FDA standards, may not perform as expected, may not pass required bioequivalence studies, or may be the subject of intellectual property challenges. Necessary regulatory approvals may not be obtained in a timely manner, if at all. Any of these events may negatively impact our net sales.
|
•
|
Even if we are successful in developing a product, our customers' failure to launch one of our products successfully, or delays in manufacturing developed products, could adversely affect our operating results. In addition, the FDA or similar regulatory agency could impose higher standards and additional requirements, such as requiring more supporting data and clinical data than previously required, in order to gain regulatory clearance to launch new formulations into the market, which could negatively impact our future net sales.
|
•
|
The future growth and stability of U.S. store brand market share will be impacted, in part, by general economic conditions, which can influence consumers to switch to and from store brand products. Our
CHCA
segment sales could be negatively affected if economic conditions improve and consumers return to purchasing higher-priced brand-name products. Conversely, while store brand products present an
|
•
|
Our
CHCI
segment's success is dependent on the continued growth in demand for its lifestyle products, which include weight-loss products and various dietary supplements. If demand for these products decreases, our
CHCI
segment's results of operations would be negatively impacted.
|
•
|
Our
CHCA
customers may request changes in packaging to meet consumer demands, which could cause us to incur inventory obsolescence charges and redesign costs, which in turn would negatively impact our
CHCA
segment's results of operations.
|
•
|
Our infant formula product category within our
CHCA
segment is subject to changing consumer preferences and health and nutrition-related concerns. Our business depends, in part, on consumer preferences and choices, including the number of mothers who choose to use infant formula products rather than breastfeed their babies. To the extent that private, public, and government sources may promote the benefits of breastfeeding over the use of infant formula, there could be a reduced demand for infant formula products. We could also be adversely impacted by an increase in the number of families that are provided with infant formula by the U.S. federal government through the Women, Infants and Children program, as we do not participate in this program.
|
•
|
We must obtain approval from the appropriate regulatory agencies in order to manufacture and sell our products in the regions in which we operate. Obtaining this approval can be time consuming and costly. There can be no assurance that, in the event we submit an application for a marketing authorization to any global regulatory agency, we will obtain the approval to market a product and/or that we will obtain it on a timely basis. Laws unique to the U.S. regulatory framework encourage generic competition by providing eligibility for first generic marketing exclusivity if certain conditions are met. If we are granted generic exclusivity, the exclusivity may be shared with other generic companies, including authorized generics; or it is possible that we may forfeit 180-day exclusivity if we do not obtain regulatory approval or begin marketing the product within the statutory requirements. Finally, if we are not the first to file our ANDA, the FDA may grant 180-day exclusivity to another company, thereby effectively delaying the launch of our product and/or possibly reducing our market share.
|
•
|
Global regulatory agencies regularly inspect our manufacturing facilities and the facilities of our third-party suppliers. The failure of one of our facilities, or a facility of one of our third-party suppliers, to comply with applicable laws and regulations may lead to a breach of representations made to our customers, or to regulatory or government action against us related to the products made in that facility. Such action could include suspension of or delay in regulatory approvals. If the compliance violations are severe, agencies of the government may initiate product seizure, injunction, recall, suspension of production or distribution of our products, loss of certain licenses or other governmental penalties, or civil or criminal prosecution, thereby impacting the reputation of all of our products.
|
•
|
In the U.S., the DSCSA requires development of an electronic pedigree to track and trace each prescription drug at the salable unit level through the distribution system, which will be effective incrementally over a 10-year period beginning on January 1, 2015, for manufacturers, wholesale distributors, and re-packagers, and on July 1, 2015 for dispensers. Similarly, the European Commission passed legislation requiring new product packaging ‘safety features’ to prevent falsification of medicinal products primarily within the
|
•
|
Global regulatory agencies highly scrutinize any product application submitted to switch a product from physician prescribed Rx to unsupervised OTC use by the general public. The expansion of Rx-to-OTC switches is critical to our future growth. Reluctance of regulatory agencies to approve Rx-to-OTC switches in new product categories could impact that growth.
|
•
|
Our infant formula products may be subject to barriers or sanctions imposed by countries or international organizations limiting international trade and dictating the specific content of infant formula products. Governments could enhance regulations on the industry aimed at ensuring the safety and quality of dairy products, including, but not limited to, compulsory batch-by-batch inspection and testing for additional safety and quality issues. Such inspections and testing may increase our operating costs related to infant formula products.
|
•
|
If we are unable to successfully obtain the necessary quota for controlled substances and List I chemicals, we risk having delayed product launches or failing to meet commercial supply obligations. If we are unable to comply with regulatory requirements for controlled substances and List I chemicals, the DEA, or similar regulatory agency, may take regulatory actions, resulting in temporary or permanent interruption of distribution of our products, withdrawal of our products from the market, or other penalties.
|
•
|
In order to commercially distribute our medical device products in the EU, they need to conform with the requirements of applicable EU directives. The method of assessing conformity varies depending on the class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a Notified Body, an organization accredited by a member state, which includes an audit of the manufacturer’s quality system and, for some products, specific product testing. If our products fail to meet the applicable EU directives, then we may not meet our projected growth targets and/or incur fines and penalties.
|
•
|
Our operations extend to numerous countries outside the U.S. and are subject to the risks inherent in conducting business globally and under the laws, regulations, and customs of various jurisdictions. These risks include compliance with a variety of national and local laws of countries in which we do business, such as restrictions on the import and export of certain intermediates, drugs, and technologies. We must also comply with a variety of U.S. laws related to doing business outside of the U.S., including Office of Foreign Asset Controls; United Nations and EU sanctions; the Iran Threat Reduction and Syria Human Rights Act of 2012; and rules relating to the use of certain “conflict minerals” under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Further changes in laws, regulations, and practices affecting the pharmaceutical industry and the healthcare system, including imports, exports, manufacturing, quality, cost, pricing, reimbursement, approval, inspection, and delivery of healthcare, may affect our business and operations.
|
•
|
Changes in existing regulations or the adoption of new regulations in the countries in which we operate could impose restrictions or delays on our ability to manufacture, distribute, sell or market our products, may be difficult or expensive for us to comply with, and may adversely affect our revenues, results of operations, or financial condition.
|
•
|
By their nature, these programs require us to provide discounts and rebates and therefore reduce our net product revenues. Further, because the amounts of these discounts are based on our commercial sales practices and can be adversely affected by both significant discounts and price increases, it is important that we maintain pricing practices that appropriately take into account these government pricing programs.
|
•
|
We are required to report pricing data to CMS, including AMP, on a monthly and quarterly basis and BP and ASP on a quarterly basis. We also are required to report quarterly and annual Non-FAMPs to the VA. If we fail to submit required information on a timely basis, make misrepresentations, or knowingly submit false information to the government as to AMP, ASP, or BP, we may be liable for substantial civil monetary penalties or subject to other enforcement actions, such as under the False Claims Act, and CMS may terminate our Medicaid drug rebate agreement. In that event, U.S. federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs.
|
•
|
Because many of our products may be subject to Medicaid FULs or CMS’s new Medicaid “actual acquisition cost” payment methodology standard, our products may be subject to reimbursement pressures, and in some cases, those pressures may result from practices outside of our control, including how our competitors price their equivalent products. Based on our initial evaluation, we do not believe that the changes have had a material impact on our business. However, states are continuing to evaluate their payment methods, and we cannot predict how the new FUL or state payment methodologies will affect our pharmacy customers or to what extent these customers may seek additional discounts in light of reimbursement changes. We also cannot predict how the sharing of FUL data and retail survey prices may impact competition in the marketplace in the future.
|
•
|
Under the 340B program, if we fail to provide required discounts to covered entities, we may be subject to refund claims or civil money penalties under that program.
|
•
|
If we inadvertently overcharge the government in connection with our FSS contract or TriCare Agreement, whether due to a misstated FCP or otherwise, we would be required to refund the difference. Failure to make necessary disclosures and/or to identify contract overcharges can result in False Claims Act allegations or potential violations of other laws and regulations. Unexpected refunds to the government, and responses to a government investigation or enforcement action, are expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations, and growth prospects.
|
•
|
Our reporting and payment obligations under the Medicaid rebate program and other governmental purchasing and rebate programs are complex and may involve subjective decisions. Our calculations and methodologies are subject to review by the governmental agencies, and it is possible that these reviews could result in challenges to our submissions. If we do not comply with those reporting and payment obligations, we could be subject to civil and/or criminal sanctions, including fines, penalties, and possible exclusion from U.S. federal healthcare programs.
|
•
|
We maintain several single-source supplier relationships, either because alternative sources are not available or because the relationship is advantageous due to regulatory, performance, quality, support, or price considerations. Unavailability or delivery delays of single-source components or products could adversely affect our ability to ship the related product in a timely manner. The effect of unavailability or delivery delays would be more severe if associated with our higher-volume or more profitable products. Even where alternative sources of supply are available, qualifying the alternate suppliers and establishing reliable supplies could cost more or result in delays and a loss of net sales. Additionally, global regulatory requirements for obtaining product approvals could substantially lengthen the approval of an alternate material source. As a result, the loss of a single-source supplier could have a material adverse effect on our results of operations.
|
•
|
The rapid increase in cost of many raw materials from inflationary forces, such as increased energy costs, and our ability or inability to pass on these increases to our customers could have a negative material impact on our financial results.
|
•
|
Our infant formula products require certain key raw ingredients that are derived from raw milk, such as skim milk powder, whey protein powder, and lactose. Our supply of milk-based ingredients may be limited by the ability of individual dairy farmers and cooperatives to provide raw milk in the amount and quality we deem necessary. Raw milk production is influenced by factors beyond our control including seasonal and environmental factors, governmental agricultural and environmental policy, and global demand. We cannot guarantee that there will be sufficient supplies of these key ingredients necessary to produce infant formula.
|
•
|
Our products, and the raw materials used to make the products mentioned above, generally have limited shelf lives. Our inventory levels are based, in part, on expectations regarding future sales. We may experience build-ups in inventory if sales slow. Any significant shortfall in sales may result in higher inventory levels of raw materials and finished products, thereby increasing the risk of inventory spoilage and corresponding inventory write-downs and write-offs. Cargo thefts and/or diversions, and economically or maliciously motivated product tampering on store shelves may occur, causing unexpected shortages and harm to our reputation, which may have a material impact on our operations.
|
•
|
We rely on third parties to source many of our raw materials, as well as to manufacture sterile, injectable products that we distribute. We maintain a strict program of verification and product testing throughout the ingredient sourcing and manufacturing process to identify potential counterfeit ingredients, adulterants, and toxic substances. Nevertheless, discovery of previously unknown problems with the raw materials or product manufacturing processes, or new data suggesting an unacceptable safety risk associated therewith, could result in a voluntary or mandatory withdrawal of the contaminated product from the marketplace, either temporarily or permanently. Any future recall or removal would result in additional costs and lost revenue, harm our reputation, and may give rise to product liability litigation.
|
•
|
Changes in regulation could impact the supply of the API and certain other raw materials used in our products. For example, the EU recently promulgated new standards requiring all API imported into the EU be certified as complying with GMP established by the EU. The regulations placed the certification
|
•
|
Breaches or disruptions could impair our ability to develop, meet regulatory approval efforts, produce, and/or ship products, take and fulfill orders, and/or collect and make payments on a timely basis;
|
•
|
Any system issue, whether as a result of an intentional breach or a natural disaster, could damage our reputation and cause us to lose customers, experience lower sales volume, and incur significant liabilities;
|
•
|
We could incur significant expense by ensuring compliance with any required disclosures mandated by the numerous global privacy and security laws and regulations; and
|
•
|
Any interruption, security breach, or loss, misappropriation, or unauthorized access, use or disclosure of confidential information, could result in financial, legal, business, and reputational harm to us and could have a material adverse effect on our business, financial condition, and results of operations.
|
•
|
Companies working to develop new therapies or alternative formulations of products for multiple sclerosis that, if successfully developed, would compete with, or could gain greater acceptance than, Tysabri
®
and damage it’s market share. In February 2016, a competitor's pipeline product, Ocrevus
®
, received breakthrough therapy designation from the FDA, this product was launched in 2017. The product is expected to compete with Tysabri
®
and have a significant negative impact on the Tysabri
®
royalty stream;
|
•
|
Biogen is the owner of the patents on Tysabri
®
. The loss of protection of these patents, such as a patent invalidation, could adversely affect the royalty stream from Tysabri
®
. In addition, once the Tysabri
®
patents expire, other generic companies may introduce products similar to Tysabri
®
that could adversely affect the royalty stream;
|
•
|
Foreign currency movement, which could have a negative impact on Biogen's Tysabri
®
sales, thereby reducing the royalties;
|
•
|
Any negative developments relating to Tysabri
®
, such as safety, efficacy, or reimbursement issues, could reduce demand for Tysabri
®
; and
|
•
|
Adverse regulatory or legislative developments could limit or prohibit the sale of Tysabri
®
, such as restrictions on the use of Tysabri
®
or safety-related label changes, including enhanced risk management
|
•
|
Our products involve risks such as product contamination, spoilage, mislabeling, and tampering that could require us to recall one or more of our products. Serious product quality concerns could also result in governmental actions against us that, among other things, could result in the suspension of production or distribution of our products, product seizures, loss of certain licenses, delays in the issuance of governmental approvals for new products, or other governmental penalties, all of which could be detrimental to our reputation and reduce demand for our products.
|
•
|
We cannot guarantee that counterfeiting, imitation or other tampering with our products will not occur or that we will be able to detect and resolve it. Any counterfeiting or contamination of any products could negatively impact our reputation and sales, particularly if counterfeit or imitation products cause death or injury to consumers.
|
•
|
Many of the brands we acquired from Omega have European recognition. This recognition is the result of the large investments Omega has made in its products over many years. The quality and safety of the products are critical to our business. If we are unable to effectively manage real or perceived issues, including concerns about safety, quality, efficacy, or similar matters, sentiments toward us and our products could be negatively impacted.
|
•
|
Our
CHCI
segment's financial success is dependent on the success of its brands, and the success of these brands can suffer if marketing plans or product initiatives do not have the desired impact on a brand’s image or its ability to attract consumers and the performance of the segment may be negatively impacted if spending on such plans and initiatives does not generate the returns we anticipate. In addition, given the association of individual products within the commercial network of our
CHCI
segment, an issue with one of our products could negatively affect the reputation of other products, thereby potentially hurting our financial results.
|
•
|
Powdered infant formula products are not sterile. All of our infant formula products must be prepared and maintained according to label instruction to retain their flavor and nutritional value and avoid contamination or deterioration. Depending on the product, a risk of contamination or deterioration may exist at each stage of the production cycle, including the purchase and delivery of raw materials, the processing and packaging of food products, and the use and handling by consumers, hospital personnel, and healthcare professionals. In the event that certain of our infant formula products are found or alleged to have suffered contamination or deterioration, whether or not under our control, our reputation and our infant formula product category sales could be materially adversely affected.
|
•
|
To the extent that we seek to use social media tools as a means to communicate about our products and/or business, there are uncertainties as to the rules that apply to such communications, or as to the interpretations that authorities will apply to the rules that exist. As a result, despite our efforts to monitor evolving social media communication guidelines and comply with applicable rules, there is risk that our use of social media for such purposes may cause us to be found in violation of them. A violation of such guidelines may damage our reputation as well as cause potential lawsuits and adversely affect our operating activities.
|
•
|
Our employees may knowingly or inadvertently make use of social media tools in ways that may not be aligned with our social media strategy, may give rise to liability, or could lead to the loss of trade secrets or other intellectual property, or public exposure of personal information (including sensitive personal information) of our employees, clinical trial patients, customers, and others.
|
•
|
Negative posts or comments about us, store brands or generic pharmaceuticals, or our products in social media could seriously damage our reputation and could adversely affect the price of our securities. In addition, negative posts or comments about our products could result in increased pharmacovigilance reporting requirements, which may give rise to liability if we fail to fully comply with such requirements.
|
•
|
We have experienced a reduction in pricing expectations during 2017 in comparison to historical patterns in our U.S. businesses, in particular in our
RX
segment, due to competitive pressures in the sector. The reduced pricing is attributable to a variety of factors including increased focus from customers to capture supply chain productivity savings, competition in specific product categories, the loss of exclusivity on certain products, the recent increase in the speed and number of approvals from the FDA, and consolidation of certain customers in the
RX
segment. We expect this pricing environment to continue to impact the Company for the foreseeable future.
|
•
|
The
CHCI
segment has been positively impacted by market dynamics in countries such as the Nordics, Italy, and Portugal offset by softness in certain brand categories in France and Germany, as well as by unfavorable foreign currency impacts primarily in the U.K. related to Brexit. In addition, the segment had been impacted in Belgium due to cancellations of unprofitable distribution agreements. The
CHCI
segment has restructured its approach to addressing these markets including: (1) the implementation of a brand prioritization strategy to address these market dynamics, with an objective to balance the cost of advertising and promotional investments with expected contributions from category sales, and (2) restructured its sales force in each of these markets to more effectively serve customers. The combination of these actions is expected to improve the segment's focus on higher value OTC products, reduce selling costs and improve operating margins in the segment.
|
•
|
We continue to experience a reduction in pricing expectations within our
CHCA
segment, primarily in the cough/cold, animal health, and analgesics categories due to various factors, including focus from customers to capture supply chain productivity savings and competition in specific product categories. We expect this pricing environment to continue to impact our
CHCA
segment for the foreseeable future.
|
•
|
Difficulty involved with managing the expanded operations of the respective parties, as well as identifying the extent of all weaknesses, risks, and contingent and other liabilities;
|
•
|
Uncertainties involved in assessing the value, strengths, and potential profitability of the respective parties, as well as identifying the extent of all weaknesses, risks, and contingent and other liabilities of acquisition targets;
|
•
|
Unanticipated changes in the business, industry, market or general economic conditions different from the assumptions underlying our rationale for pursuing the transaction;
|
•
|
Difficulties due to a lack of, or limited experience in, any new product or geographic markets we enter;
|
•
|
Inability to achieve identified operating and financial synergies, or return on investment, from an acquisition in the amounts or on the time frame anticipated;
|
•
|
Substantial demands on our management, operational resources, technology, and financial and internal control systems, which could lead to dissatisfaction and potential loss of key customers, management, or employees;
|
•
|
Integration activities that may detract attention from our day-to-day business, and substantial costs associated with the transaction process or other material adverse effects as a result of these integration efforts; and
|
•
|
Difficulties, restrictions or increased costs associated with raising future capital in connection with an acquisition may impact our liquidity, credit ratings and financial position, thereby making it more difficult, restrictive or expensive to raise future capital. In addition, the issuance of equity to pay a portion of the purchase price for an acquisition would dilute our existing shareholders.
|
•
|
Our ability to effectively transfer liabilities, contracts, facilities and personnel to any purchaser;
|
•
|
Fees for legal and transaction-related services;
|
•
|
Diversion of management resources; and
|
•
|
Loss of key personnel and reduction in revenue.
|
•
|
Goodwill impairment charges of
$1.1 billion
related to our Specialty Sciences, Branded Consumer Healthcare-Rest of World ("BCH-ROW"), BCH-Belgium, and Animal Health reporting units.
|
•
|
Indefinite-lived and definite-lived intangible asset impairment charges of
$1.5 billion
related to: Trademarks, trade names and brands, developed product technology/formulation and product rights, distribution and license agreements, and supply agreements.
|
•
|
Unexpected changes in regulatory requirements;
|
•
|
Problems related to markets with different cultural biases or political systems;
|
•
|
Possible difficulties in enforcing agreements;
|
•
|
Longer payment cycles and shipping lead-times;
|
•
|
Difficulties obtaining export or import licenses;
|
•
|
Changes to U.S. and foreign trade policies, including the enactment of tariffs on goods imported into the U.S., including but not limited to, goods imported from Mexico; and
|
•
|
Imposition of withholding or other taxes.
|
•
|
Certain countries and international organizations have refused to do business with companies with Israeli operations. We are also precluded from marketing our products to certain countries due to U.S. and Israeli regulatory restrictions. International economic sanctions and boycotts of our products could negatively impact our sales and ability to export our products.
|
•
|
Our facilities in Israel are within a conflict zone. If terrorist acts or military actions were to result in substantial damage to our facilities, our business activities would be disrupted since, with respect to most products, we would need to obtain prior regulatory agency approval for a change in manufacturing site. In addition, our insurance may not adequately compensate us for losses that may occur, and any losses or damages incurred by us could have a material adverse effect on our business.
|
•
|
The U.S. Department of State and other governments have at times issued advisories regarding travel to certain countries in which we do business. As a result, regulatory agencies have at various times curtailed or prohibited their inspectors from traveling to inspect facilities. If these inspectors are unable to inspect our facilities, the regulatory agencies could withhold approval for new products intended to be produced at those facilities.
|
•
|
Our international operations may be subject to interruption due to travel restrictions, war, terrorist acts, and other armed conflicts. Also, further threats of armed hostilities in certain countries could limit or disrupt markets and our operations, including disruptions resulting from the cancellation of contracts or the loss of assets. These events could have a material adverse effect on our international business operations.
|
•
|
The UK held a referendum on June 23, 2016 on its membership in the EU. A majority of UK voters voted to exit the EU (“Brexit”). The UK is scheduled to leave the EU on March 29, 2019, and negotiations are taking place to determine the future terms of the UK’s relationship with the EU, including the terms of withdrawal, the terms of future trading and relations and any potential transition periods. Brexit has created significant instability and volatility in the global financial markets, has led to significant weakening of the British pound compared to the U.S. dollar and other currencies, and could adversely affect European or worldwide economic or market conditions. Although it is unknown what the future trading terms with the EU will be, they may impair the ability of our operations in the EU to transact business in the future in the UK, and similarly the ability of our UK operations to transact business in the future in the EU. Specifically, it is possible that there will be greater restrictions on imports and exports between the UK and EU countries, increased restrictions on freedom of movement for employees, and increased regulatory complexities. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate. Further, among other things, Brexit could reduce consumer spending in the UK and the EU, which could result in decreased demand for our products. Any of these effects of Brexit, and others we cannot anticipate, could adversely affect our business, business opportunities, operations, and financial results.
|
•
|
While the challenging global economic environment has not had a material impact on our liquidity or capital resources, there can be no assurance that possible future changes in global financial markets and global economic conditions will not affect our liquidity or capital resources, impact our ability to obtain financing, or decrease the value of our assets.
|
•
|
The challenging economic conditions have also impacted the movements in exchange rates, which have experienced significant recent volatility. Uncertainty regarding the future growth rates between countries, the influence of central bank actions, and the changing political environment globally may contribute to continued high levels of exchange rate volatility, which could have an adverse impact on our results.
|
•
|
Our customers could be adversely impacted if economic conditions worsen. Our
CHCA
segment does not advertise its products like national brand companies and thus is largely dependent on retailer promotional activities to drive sales volume and increase market share.
If our customers do not have the ability to invest in store brand promotional activities, our sales may suffer. Additionally, while we actively review the credit worthiness of our customers and suppliers, we cannot fully predict to what extent they may be negatively impacted by slowing economic growth.
|
•
|
We may be subject to liability if our products violate applicable laws or regulations in the jurisdictions where our products are distributed. The successful assertion of product liability or other product-related claims against us could result in potentially significant monetary damages, and we could incur substantial legal expenses. Even if a product liability or consumer fraud claim is unsuccessful, not merited, or not fully pursued, we may still incur substantial legal expenses defending against such a claim, and our reputation may suffer.
|
•
|
We may face environmental exposures including, for example, those relating to discharges from and materials handled as part of our operations, the remediation of soil and groundwater contaminated by hazardous substances or wastes, and the health and safety of our employees. While we do not have any material remediation liabilities currently outstanding, we may in the future face liability for the costs of investigation, removal or remediation of certain hazardous substances or petroleum products on, under or in our currently or formerly owned property, or from a third-party disposal facility that we may have used, without regard to whether we knew of, or caused, the presence of the contaminants. The actual or alleged presence of these substances, or the failure to remediate them, could have adverse effects, including, for example, substantial investigative or remedial obligations and limitations on our ability to sell or rent affected property or to borrow funds using affected property as collateral. There can be no assurance that environmental liabilities and costs will not have a material adverse effect on us. See
Item 1. Business - Information Applicable to All Reportable Segments - Environmental for more information
.
|
•
|
Our CHCI segment regularly makes advertising claims regarding the effectiveness of its products, which we are responsible for defending. An unsuccessful defense of product-related claims could result in potentially significant monetary damages and substantial legal expenses. Even if a claim is unsuccessful, not merited, or not fully pursued, we may still incur substantial legal expenses defending against such a claim, and our reputation could suffer.
|
•
|
Additionally, we may be the target of claims asserting violations of securities fraud and derivative actions, or other litigation proceedings in the future.
|
•
|
As a manufacturer of generic pharmaceutical products, the ability of our
CHCA
and
RX
segments to bring new products to market is often limited by third-party patents or proprietary rights and regulatory exclusivity periods awarded on products. Launching new products prior to resolution of intellectual property issues may result in us incurring legal liability if the related litigation is later resolved against us. The cost and time for us to develop prescription and Rx-to-OTC switch products is significantly greater than the rest of the new products that we introduce. Any failure to bring new products to market in a timely manner could cause us to lose market share, and our operating results could suffer.
|
•
|
We could have to defend against charges that we violated patents or proprietary rights of third parties. This could require us to incur substantial expense and could divert significant effort of our technical and management personnel. If we are found to have infringed on the rights of others, we could lose our right to develop or manufacture some products or could be required to pay monetary damages or royalties to license proprietary rights from third parties. Additionally, if we choose to settle a dispute through licensing or similar arrangements, the costs associated with these arrangements may be substantial and could include ongoing royalties. An adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling a number of our products.
|
•
|
At times, our
CHCA
or
RX
segments may seek approval to market drug products before the expiration of patents for those products, based upon our belief that such patents are invalid, unenforceable or would not be infringed by our products. In these cases we may face significant patent litigation. Depending upon a complex analysis of a variety of legal and commercial factors, we may, in certain circumstances, elect to market a generic pharmaceutical product while litigation is pending, before any court decision, or while an appeal of a lower court decision is pending, known as an "at risk" launch. The risk involved in an "at risk" launch can be substantial because, if a patent holder ultimately prevails, the remedies available to the patent holder may include, among other things, damages measured by the profits lost by the holder, which are often significantly higher than the profits we make from selling the generic version of the product. By electing to proceed in this manner, we could face substantial damages if we receive an adverse final court decision. In the case where a patent holder is able to prove that our infringement was "willful" or "exceptional," under applicable law, the patent holder may be awarded up to three times the amount of its actual damages or we may be required to pay attorneys’ fees.
|
•
|
We have been issued patents covering certain of our products, and we have filed, and expect to continue to file, patent applications seeking to protect newly developed technologies and products in various countries. Any existing or future patents issued to or licensed by us may not provide us with any significant competitive advantages for our products or may even be challenged, invalidated, or circumvented by competitors. In addition, patent rights may not prevent our competitors from developing, using, or commercializing non-infringing products that are similar or functionally equivalent to our products.
|
•
|
We also rely on trade secrets, unpatented proprietary know-how, and continuing technological innovation that we seek to protect, in part by confidentiality agreements with licensees, suppliers, employees, and consultants. If these agreements are breached, we may not have adequate remedies for any such breach. Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality agreements. Furthermore, trade secrets and proprietary technology may otherwise become known or be independently developed by competitors or, if patents are not issued with respect to products arising from research, we may not be able to maintain the value of such intellectual property rights.
|
•
|
Insurance costs could increase significantly, or the availability of insurance may decrease, either of which could adversely impact our financial condition;
|
•
|
Deductible or retention amounts could increase or our coverage could be reduced in the future and to the extent losses occur, there could be an adverse effect on our financial results depending on the nature of the loss and the level of insurance coverage we maintained (refer to
Item 8. Note 16
for further information related to legal proceedings);
|
•
|
Product liability insurance may not be available to us at an economically reasonable cost (or at all for certain specific products) or our insurance may not adequately cover our liability in connection with product liability claims (refer to
Item 8. Note 16
for further information related to legal proceedings); and
|
•
|
As our business inherently exposes us to claims for injuries allegedly resulting from the use of our products, we may become subject to claims for which we are not adequately insured. Unanticipated payment of a large claim may have a material adverse effect on our business.
|
•
|
Changes to the inversion rules in section 7874 of the Code, the IRS Treasury regulations promulgated thereunder, or other IRS guidance; and
|
•
|
Legislative proposals aimed at expanding the scope of U.S. corporate tax residence.
|
•
|
Changes to tax laws or the interpretation of such tax laws (including additional proposals for fundamental international tax reform);
|
•
|
Income tax rate changes by governments;
|
•
|
The jurisdictions in which our profits are determined to be earned and taxed;
|
•
|
Changes in the valuation of our deferred tax assets and liabilities;
|
•
|
Adjustments to estimated taxes upon finalization of various tax returns;
|
•
|
Adjustments to our interpretation of transfer pricing standards, treatment or characterization of intercompany transactions, changes in available tax credits, grants and other incentives;
|
•
|
Changes in stock-based compensation expense;
|
•
|
Changes in U.S. generally accepted accounting principles;
|
•
|
Expiration or the inability to renew tax rulings or tax holiday incentives;
|
•
|
Divestitures of current operations; and
|
•
|
Repatriation of non-U.S. earnings with respect to which we have not previously provided for U.S. taxes.
|
•
|
Our senior credit facilities, the agreements governing our senior notes, and agreements governing our other indebtedness contain a number of restrictions and covenants that limit our ability to make distributions or other payments to our investors and creditors unless certain financial tests or other criteria are satisfied.
|
•
|
We also must comply with certain specified financial ratios and tests. These restrictions could affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities, such as acquisitions. If we do not comply with the covenants and restrictions contained in our senior credit facilities, agreements governing our senior notes, and agreements governing our other indebtedness, we could be in default under those agreements, and the debt, together with accrued interest, could then be declared immediately due and payable.
|
•
|
Any default under our senior credit facilities or agreements governing our senior notes or other indebtedness could lead to an acceleration of debt under other debt instruments that contain cross-acceleration or cross-default provisions. If our indebtedness is accelerated, there can be no assurance that we would be able to repay or refinance our debt or obtain sufficient new financing.
|
•
|
Downgrades to our credit ratings may limit our access to capital and materially increase borrowing costs on current or future financing, including via trade payables with vendors. Customers' inclination to purchase goods from us may also be affected by the publicity associated with deterioration of our credit ratings.
|
•
|
There are various maturity dates associated with our credit facilities, senior notes, and other debt facilities. There is no assurance that cash, future borrowings or equity financing will be available for the payment or refinancing of our indebtedness. Further, there is no assurance that future refinancing or renegotiation of our senior credit facilities, senior notes or other debt facilities, or additional agreements will not have materially different or more stringent terms (refer to
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
).
|
•
|
Under Irish law, our authorized share capital can be increased by an ordinary resolution of our shareholders, and the directors may issue new ordinary or preferred shares up to a maximum amount equal to the authorized but unissued share capital, without shareholder approval, once authorized to do so by the articles of association or by an ordinary resolution of our shareholders.
|
•
|
Subject to specified exceptions, Irish law grants statutory preemption rights to existing shareholders to subscribe for new issuances of shares for cash, but allows shareholders to authorize the waiver of the statutory preemption rights by way of special resolution with respect to any particular allotment of shares.
|
•
|
Our articles of association contain, as permitted by Irish company law, a provision authorizing our Board of Directors to issue new shares for cash without offering preemption rights. The authorization of the directors to issue shares and the authorization of the waiver of the statutory preemption rights must both be renewed by the shareholders at least every five years, and we cannot provide any assurance that these authorizations will always be approved, which could limit our ability to issue equity and thereby adversely affect the holders of our securities.
|
•
|
Under Irish law, the duties of directors and officers of a company are generally owed to the company only. As a result, shareholders of Irish companies do not have the right to bring an action against the directors or officers of a company, except in limited circumstances.
|
•
|
Depending on the circumstances, shareholders may be subject to different or additional tax consequences under Irish law as a result of the acquisition, ownership and/or disposition of ordinary shares, including, but not limited to, Irish stamp duty, dividend withholding tax, and capital acquisitions tax.
|
•
|
There is no treaty between Ireland and the U.S. providing for the reciprocal enforcement of foreign judgments. Before a foreign judgment would be deemed enforceable in Ireland, the judgment must be provided by a court of competent jurisdiction and be for a final and conclusive sum. An Irish court may exercise its right to refuse to recognize and enforce a foreign judgment if the foreign judgment was obtained by fraud, if it violated Irish public policy, if it is in breach of natural justice, or if it is irreconcilable with an earlier judgment.
|
•
|
An Irish court may stay proceedings if concurrent proceedings are being brought elsewhere. Judgments of U.S. courts of liabilities predicated upon U.S. federal securities laws may not be enforced by Irish courts if deemed to be contrary to public policy in Ireland.
|
•
|
The availability of distributable reserves, as approved by our shareholders and the Irish High Court;
|
•
|
Our ability to receive cash dividends and distributions from our subsidiaries;
|
•
|
Compliance with applicable laws and debt covenants; and
|
•
|
Our financial condition, results of operations, capital requirements, general business conditions, and other factors that our Board of Directors may deem relevant.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Country
|
|
Number of Facilities
|
|
Segment(s) Supported
|
|
||||
Ireland
|
|
1
|
|
CHCA, CHCI, RX
|
United States
|
|
44
|
|
CHCA, RX, Other
|
Mexico
|
|
9
|
|
CHCA
|
United Kingdom
|
|
7
|
|
CHCI
|
France
|
|
6
|
|
CHCI
|
Belgium
|
|
4
|
|
CHCI
|
Austria
|
|
4
|
|
CHCI
|
Australia
|
|
3
|
|
CHCI
|
Israel
|
|
3
|
|
CHCA, CHCI, RX
|
India
|
|
2
|
|
CHCA
|
Germany
|
|
2
|
|
CHCI
|
Switzerland
|
|
2
|
|
CHCI
|
Italy
|
|
1
|
|
CHCI
|
Portugal
|
|
1
|
|
CHCI
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
|
|
Title and Business Experience
|
|
Age
|
Svend Andersen
|
|
Mr. Andersen was named Executive Vice President and President, Consumer Healthcare International in February 2017. Prior to joining Perrigo in May 2016, Mr. Andersen served as Executive Vice President - Europe for LEO-Pharma from December 2015 to May 2016. Prior to that, he was Regional President and Corporate officer at Hospira, Inc.’s Europe, Middle East and Africa (“EMEA”) business for five years, was Executive Vice President responsible for the Western European division’s pharmaceuticals, generics, OTC and hospital products businesses at Actavis from 2008 to 2015 including leading Alpharma’s EMEA businesses prior to its acquisition by Actavis, and prior to that, spent 10 years with Ferrosan (A Novo Nordisk Subsidiary) specialized in OTC and consumer health products as Vice President for Global Commercial Operations.
|
|
56
|
Thomas M. Farrington
|
|
Mr. Farrington was named Executive Vice President and Chief Information Officer in November 2015. He formerly served as Senior Vice President and Chief Information Officer from October 2006 to November 2015.
|
|
60
|
Ronald Janish
|
|
Mr. Janish was named Executive Vice President of Global Operations and Supply Chain in October 2015. He served as Senior Vice President of International and Rx Operations from 2012 until 2015 and as Managing Director of Perrigo’s Australian operations from 2010 to 2012. Previously, he held Senior Vice President roles for Perrigo in International Market Development, China Business Development and Global Procurement.
|
|
52
|
Todd W. Kingma
|
|
Mr. Kingma was named Executive Vice President, General Counsel and Secretary in May 2006. He served as Vice President, General Counsel and Secretary from August 2003 to May 2006.
|
|
58
|
Sharon Kochan
|
|
Mr. Kochan was named Executive Vice President and President, Branded Consumer Healthcare and International in February 2017. He served as Executive Vice President and General Manager, Consumer Healthcare International from August 2012 to February 2017. He served as Executive Vice President, General Manager of Prescription Pharmaceuticals from March 2007 to July 2012 and as Senior Vice President of Business Development and Strategy from March 2005 to March 2007. Mr. Kochan was Vice President, Business Development of Agis Industries (1983) Ltd. from July 2001 until the acquisition of Agis by the Company in March 2005.
|
|
49
|
James R. Michaud
|
|
Mr. Michaud was named Executive Vice President, Chief Human Resources Officer in August 2016. In 2014, Mr. Michaud was President of Human Resources Strategies, a consulting company focused on providing business based human resource strategies to a wide variety of companies in multiple industries. His corporate career spanned senior human resource roles in Alcoa, Arcelor Mittal Steel, and most recently, Cliffs Natural Resources, where he served as Executive Vice President, Chief Human Resources Officer from 2010 to 2014.
|
|
62
|
Jeffrey R. Needham
|
|
Mr. Needham was named Executive Vice President and President of Consumer Healthcare Americas in October 2009. He served as Senior Vice President of Commercial Business Development for Consumer Healthcare from March 2005 through October 2009. Previously, he served as Senior Vice President of International from November 2004 to March 2005. He served as Managing Director of Perrigo’s U.K. operations from May 2002 to November 2004 and as Vice President of Marketing from 1993 to 2002.
|
|
61
|
Grainne Quinn
|
|
Ms. Quinn was named Executive Vice President in July 2016 and has served as Chief Medical Officer since November 2015. Prior to that she served as Vice President and Head of Global Patient Safety from January 2014 until November 2015. Dr. Quinn was Vice President and Head of Global Pharmacovigilance and Risk Management for Elan from April 2009 until December 2013 when the Company acquired Elan.
|
|
48
|
Uwe F. Roehrhoff
|
|
Mr. Roehrhoff was appointed President, Chief Executive Officer and Board Member effective January 15, 2018. Prior to joining Perrigo, Mr. Roehrhoff served as Chief Executive Officer of Gerresheimer AG, a leading global manufacturer of pharmaceutical packaging products and medical devices for storage, dosage and safe administration of drugs. He began his career with Gerresheimer AG in 1991 and steadily advanced to serve in a number of key leadership roles in Europe and North America, including leading the American subsidiary Gerresheimer Glass Inc. from 2001 to 2010. He served as an executive board member from 2003 to 2017, responsible for two of the company’s three business units, and CEO of Gerresheimer AG from 2010 until his retirement in August 2017. Mr. Roehrhoff served as Audit Committee Chairman on the Board of Directors of Catalent, Inc. from February 2017 to February 2018 and as deputy chairman of Klöckner&Co SE since May 2017.
|
|
55
|
Paul Weninger
|
|
Mr. Weninger was named Executive Vice President of Global Quality Operations in December 2015. He served as Senior Vice President, U.S. Quality Operations from 2013 to 2015; Vice President, Consumer Healthcare and Rx Quality Operations, U.S. and Asia Pacific from 2010 to 2013; Vice President, Global CHC Quality Operations from 2007 to 2010.
|
|
54
|
John Wesolowski
|
|
Mr. Wesolowski was named Executive Vice President, President RX in November 2016. He previously was named as Acting General Manager, RX, in July 2016 and served in that capacity until November 2016. Previously, he served as Senior Vice President of RX Commercial Operations, from 2013 until July 2016. Mr. Wesolowski joined Perrigo in February 2004 as the Vice President, RX Sales and Marketing and was subsequently promoted to the Senior Vice President of RX Sales and Marketing in 2012.
|
|
50
|
Ronald L. Winowiecki
|
|
Mr. Winowiecki was appointed CFO in February 2018. He served as Acting CFO from February 2017 to February 2018; Senior Vice President of Business Finance from January 2014 to February 2017; Vice President for Treasury and Accounting Shared Services from September 2011 to December 2013; and the Company’s Corporate Vice President Treasurer from October 2008 to August 2011.
|
|
51
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Year Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||||||
First quarter
|
$
|
87.48
|
|
|
$
|
66.29
|
|
|
$
|
152.36
|
|
|
$
|
122.62
|
|
|
$
|
198.42
|
|
|
$
|
158.35
|
|
Second quarter
|
$
|
77.74
|
|
|
$
|
65.47
|
|
|
$
|
133.53
|
|
|
$
|
84.85
|
|
|
$
|
167.92
|
|
|
$
|
140.40
|
|
Third quarter
|
$
|
89.87
|
|
|
$
|
63.68
|
|
|
$
|
99.14
|
|
|
$
|
82.50
|
|
|
N/A
|
|
|
N/A
|
|
||
Fourth quarter
|
$
|
91.73
|
|
|
$
|
79.70
|
|
|
$
|
97.17
|
|
|
$
|
79.72
|
|
|
N/A
|
|
|
N/A
|
|
|
12/31/2012
|
12/31/2013
|
12/31/2014
|
12/31/2015
|
12/31/2016
|
12/31/2017
|
Perrigo Company plc
|
$100.00
|
$147.94
|
$161.60
|
$140.30
|
$81.18
|
$85.72
|
S&P 500
|
$100.00
|
$132.39
|
$150.51
|
$152.59
|
$170.84
|
$208.14
|
S&P Pharmaceuticals
|
$100.00
|
$135.23
|
$165.27
|
$174.84
|
$172.10
|
$193.74
|
*
|
$100 invested on December 31, 2012 in stock or index - including reinvestment of dividends. Indexes calculated on month-end basis.
|
**
|
Perrigo Company prior to December 18, 2013. Perrigo Company plc beginning December 18, 2013.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||||
(in millions, except per share amounts)
|
December 31, 2017
|
|
December 31, 2016
(1)
|
|
December 31, 2015
(2)
|
|
December 27, 2014
(3)
|
|
June 27, 2015
(4)
|
|
June 28, 2014
(5)
|
||||||||||||
Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
4,946.2
|
|
|
$
|
5,280.6
|
|
|
$
|
2,632.2
|
|
|
$
|
1,844.7
|
|
|
$
|
4,227.1
|
|
|
$
|
3,914.1
|
|
Cost of sales
|
2,966.7
|
|
|
3,228.8
|
|
|
1,553.3
|
|
|
1,170.9
|
|
|
2,582.9
|
|
|
2,462.0
|
|
||||||
Gross profit
|
1,979.5
|
|
|
2,051.8
|
|
|
1,078.9
|
|
|
673.8
|
|
|
1,644.2
|
|
|
1,452.1
|
|
||||||
Operating expenses
|
1,381.3
|
|
|
4,051.5
|
|
|
1,011.3
|
|
|
384.1
|
|
|
971.7
|
|
|
880.7
|
|
||||||
Operating income (loss)
|
$
|
598.2
|
|
|
$
|
(1,999.7
|
)
|
|
$
|
67.6
|
|
|
$
|
289.7
|
|
|
$
|
672.5
|
|
|
$
|
571.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
119.6
|
|
|
$
|
(4,012.8
|
)
|
|
$
|
42.5
|
|
|
$
|
180.6
|
|
|
$
|
136.1
|
|
|
$
|
232.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings from continuing operations per share
|
$
|
0.84
|
|
|
$
|
(28.01
|
)
|
|
$
|
0.29
|
|
|
$
|
1.34
|
|
|
$
|
0.97
|
|
|
$
|
2.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividends declared per share
|
$
|
0.64
|
|
|
$
|
0.58
|
|
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
$
|
0.46
|
|
|
$
|
0.39
|
|
(1)
|
Includes the results of operations for assets acquired from Barr Laboratories, Inc. and assets acquired from Matawan Pharmaceuticals, LLC for the five months and eleven months and one week ended
December 31, 2016
, respectively.
|
(2)
|
Includes the results of operations of Naturwohl and the GSK, ScarAway
®
, and Entocort
®
asset acquisitions for the two and a half months, three months, three months, and two weeks ended
December 31, 2015
, respectively.
|
(3)
|
Includes the results of operations for assets acquired from Lumara Health, Inc. for the two months ended
December 27, 2014
.
|
(4)
|
Includes the results of operations for assets acquired from Lumara Health, Inc. and the results of operations of Omega Pharma Invest N.V. and Gelcaps Exportadora de Mexico, S.A. de C.V. for the eight, three, and two months ended
June 27, 2015
, respectively.
|
(5)
|
Includes the results of operations for Elan Corporation, plc and results of operations for assets acquired from Fera Pharmaceuticals, LLC (Methazolomide) and Aspen Global Inc. for the six, five and four months ended
June 28, 2014
, respectively.
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 27, 2014
|
|
June 27,
2015 |
|
June 28,
2014 |
||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
678.7
|
|
|
$
|
622.3
|
|
|
$
|
417.8
|
|
|
$
|
3,596.1
|
|
|
$
|
785.6
|
|
|
$
|
799.5
|
|
Total assets
|
11,628.8
|
|
|
13,870.1
|
|
|
$
|
19,349.6
|
|
|
16,508.4
|
|
|
$
|
19,591.9
|
|
|
$
|
13,879.1
|
|
|||
Long-term debt, less current portion
|
3,270.8
|
|
|
5,224.5
|
|
|
4,971.6
|
|
|
4,439.4
|
|
|
5,246.9
|
|
|
5,246.9
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
The twelve-month period from January 1, 2017 through December 31, 2017;
|
•
|
The twelve-month period from January 1, 2016 through December 31, 2016;
|
•
|
The twelve-month period from January 1, 2015 through December 31, 2015;
|
•
|
The six-month period from June 28, 2015 through December 31, 2015; and
|
•
|
The six-month period from June 29, 2014 through December 27, 2014.
|
•
|
Consumer Healthcare Americas
(
"CHCA"
), comprises our U.S., Mexico and Canada consumer healthcare business (OTC, contract, infant formula and animal health categories).
|
•
|
Consumer Healthcare International
(
"
CHCI
"
),
comprises our branded consumer healthcare business primarily in Europe and our consumer focused businesses in the U.K., Australia, and Israel. This segment also includes our U.K. liquid licensed products business.
|
•
|
Prescription Pharmaceuticals
(
"
RX
"
),
comprises our U.S. Prescription Pharmaceuticals business.
|
•
|
High quality;
|
•
|
Superior customer service;
|
•
|
Leading innovation;
|
•
|
Best cost; and
|
•
|
Empowered people.
|
•
|
Leadership in first-to-market product development and product life cycle management;
|
•
|
Turn-key regulatory, and promotional capabilities;
|
•
|
Management of supply chain complexity and utilizing economies of scale;
|
•
|
Quality and cost effectiveness throughout the supply chain creating a sustainable, low-cost network; and
|
•
|
Expansive pan-European commercial infrastructure, brand-building capabilities, and a diverse product portfolio.
|
•
|
On
March 27, 2017
, we completed the sale of our Tysabri
®
financial asset, effective January 1, 2017, to Royalty Pharma for up to
$2.85 billion
, consisting of
$2.2 billion
in cash and up to
$250.0 million
and
$400.0 million
in milestone payments if the royalties on global net sales of Tysabri
®
that are received by Royalty Pharma meet specific thresholds in 2018 and 2020, respectively. As a result of this transaction, we derecognized the Tysabri
®
financial asset and recorded a
$17.1 million
gain (refer to
Item 8. Note 6
).
|
•
|
On
April 6, 2017
, we completed the sale of our India API business to Strides Shasun Limited for
$22.2 million
, inclusive of an estimated working capital adjustment. The sale did not have a material impact on our operations (refer to
Item 8. Note 2
).
|
•
|
On
August 25, 2017
, we completed the sale of our Russian business to Alvogen Pharma LLC. for
€12.7 million
(
$15.1 million
), inclusive of an estimated working capital adjustment. The sale did not have a material impact on our operations (refer to
Item 8. Note 2
).
|
•
|
On
November 21, 2017
, we completed the sale of our Israel API business to SK Capital, for a sale price of
$110.0 million
, which resulted in an immaterial gain recorded in our
Other
segment in
Other expense (Income), net
on the Consolidated Statements of Operations (refer to
Item 8. Note 2
and
Note 6
).
|
•
|
We completed
$2.6 billion
of debt repayments (refer to
Item 8. Note 10
).
|
•
|
We repurchased
$191.5 million
worth of shares as part of our authorized share repurchase plan (refer to
Item 8. Note 11
).
|
•
|
We executed initiatives related to our cost optimization strategy that was announced on February 21, 2017. Restructuring charges totaled
$61.0 million
(refer to
Item 8. Note 18
).
|
•
|
Consistent with previously announced actions, we added a number of positions and processes to our Dublin headquarters across a range of corporate functions, including supply chain/global operations, procurement, enterprise risk management, and corporate finance, leveraging the strength of our global platform.
|
•
|
We repaid
$500.0 million
outstanding under our 1.300% Senior Notes due 2016 ("1.300% 2016 Notes") on September 29, 2016 (refer to
Item 8. Note 10
).
|
•
|
On August 5, 2016, we completed the sale of our U.S. Vitamins, Minerals, and Supplements ("VMS") business to International Vitamins Corporation (refer to
Item 8. Note 2
).
|
•
|
On November 13, 2015, our shareholders rejected an unsolicited tender offer from Mylan N.V. ("Mylan"). During the
six months ended
December 31, 2015, the total cost to effectively defend against Mylan was
$86.9 million
, which was recorded in
Administration
expense.
|
•
|
We expanded our product offerings through targeted acquisitions including (refer to
Item 8. Note 2
):
|
•
|
The announced acquisition of
a portfolio of generic dosage forms and strengths of
Retin-A
®
(tretinoin), a topical prescription acne treatment, from Matawan Pharmaceuticals, LLC, which closed in January 2016 and expanded our "prescription only" ("Rx") portfolio.
|
•
|
The acquisition of Crohn's disease treatment Entocort
®
(budesonide) capsules and its authorized generic (for sale within the U.S.), from AstraZeneca plc, which expanded our Rx portfolio.
|
•
|
The acquisition of Naturwohl Pharma GmbH ("Naturwohl"), a nutritional business known for its leading German dietary supplement brand, Yokebe
®
, and the acquisition of a portfolio of well-established OTC brands, such as Niquitin
®
and Coldrex
®
,
from GlaxoSmithKline Consumer Healthcare (“GSK”). Both of these acquisitions built upon the global platform we established through the Omega Pharma Invest N.V. (
"
Omega") acquisition, leveraging our European market share and expanding our product offerings.
|
•
|
The ScarAway
®
brand portfolio acquisition, which served as our entry into the branded OTC business in the U.S.
|
•
|
We repurchased $500.0 million worth of shares as part of our authorized share repurchase plan (refer to
Item 8. Note 11
).
|
•
|
We executed initiatives designed to increase operational efficiency and improve our return on invested capital by globalizing our supply chain through global shared service arrangements, streamlining our organizational structure, and disposing of certain assets. During the
six months ended
December 31, 2015
, restructuring charges totaled
$26.9 million
(refer to
Item 8. Note 18
).
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
|
December 31,
2015 |
|
December 31,
2016 |
|
December 31,
2017 |
||||||||||
Net sales
|
$
|
1,844.7
|
|
|
$
|
2,632.2
|
|
|
$
|
5,014.7
|
|
|
$
|
5,280.6
|
|
|
$
|
4,946.2
|
|
Gross profit
|
$
|
673.8
|
|
|
$
|
1,078.9
|
|
|
$
|
2,049.4
|
|
|
$
|
2,051.8
|
|
|
$
|
1,979.5
|
|
Gross profit %
|
36.5
|
%
|
|
41.0
|
%
|
|
40.9
|
%
|
|
38.9
|
%
|
|
40.0
|
%
|
|||||
Operating expenses
|
$
|
384.1
|
|
|
$
|
1,011.3
|
|
|
$
|
1,599.0
|
|
|
$
|
4,051.5
|
|
|
$
|
1,381.3
|
|
Operating expenses %
|
20.8
|
%
|
|
38.4
|
%
|
|
31.9
|
%
|
|
76.7
|
%
|
|
27.9
|
%
|
|||||
Operating income (loss)
|
$
|
289.7
|
|
|
$
|
67.6
|
|
|
$
|
450.4
|
|
|
$
|
(1,999.7
|
)
|
|
$
|
598.2
|
|
Operating income (loss) %
|
15.7
|
%
|
|
2.6
|
%
|
|
9.0
|
%
|
|
(37.9
|
)%
|
|
12.1
|
%
|
|||||
Change in financial assets
|
$
|
(46.9
|
)
|
|
$
|
(57.3
|
)
|
|
$
|
(88.8
|
)
|
|
$
|
2,608.2
|
|
|
$
|
24.9
|
|
Interest and other, net
|
$
|
117.0
|
|
|
$
|
115.1
|
|
|
$
|
478.2
|
|
|
$
|
239.3
|
|
|
$
|
158.0
|
|
Loss on extinguishment of debt
|
$
|
9.6
|
|
|
$
|
0.9
|
|
|
$
|
1.8
|
|
|
$
|
1.1
|
|
|
$
|
135.2
|
|
Income tax expense (benefit)
|
$
|
29.4
|
|
|
$
|
(33.6
|
)
|
|
$
|
61.1
|
|
|
$
|
(835.5
|
)
|
|
$
|
160.5
|
|
Net income (loss)
|
$
|
180.6
|
|
|
$
|
42.5
|
|
|
$
|
(1.9
|
)
|
|
$
|
(4,012.8
|
)
|
|
$
|
119.6
|
|
*
|
Total net sales by geography is derived from the location of the entity that sells to a third party. For geographic information for the year ended
December 31, 2016
,
six months ended
December 31, 2015
, and the
year ended
June 27, 2015
, refer to
Item 8. Note 19
.
|
|
|
Year Ended
|
||||||||||||||||||
|
|
December 31, 2017
|
||||||||||||||||||
|
|
Definite-Lived Intangible Assets
|
|
Assets
Held-For-Sale |
|
IPR&D
|
|
Fixed Assets
|
|
Total
|
||||||||||
CHCA
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.5
|
|
|
$
|
4.5
|
|
CHCI
(2)
|
|
—
|
|
|
3.7
|
|
|
1.1
|
|
|
—
|
|
|
4.8
|
|
|||||
RX
(3)
|
|
19.7
|
|
|
—
|
|
|
11.6
|
|
|
3.6
|
|
|
34.9
|
|
|||||
Other
(4)
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|||||
|
|
$
|
19.7
|
|
|
$
|
7.0
|
|
|
$
|
12.7
|
|
|
$
|
8.1
|
|
|
$
|
47.5
|
|
|
|
Year Ended
|
||||||||||||||||||||||||||
|
|
December 31, 2016
|
||||||||||||||||||||||||||
|
|
Goodwill
|
|
Indefinite-Lived Intangible Assets
|
|
Definite-Lived Intangible Assets
|
|
Assets
Held-For-Sale |
|
IPR&D
|
|
Fixed Assets
|
|
Total
|
||||||||||||||
CHCA
(1)
|
|
$
|
24.5
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
9.9
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
38.3
|
|
CHCI
(2)
|
|
868.4
|
|
|
849.1
|
|
|
321.4
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
|
2,042.4
|
|
|||||||
RX
(3)
|
|
—
|
|
|
—
|
|
|
342.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
342.4
|
|
|||||||
Specialty Sciences
(4)
|
|
199.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199.6
|
|
|||||||
Other
(5)
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
|||||||
|
|
$
|
1,092.5
|
|
|
$
|
849.5
|
|
|
$
|
665.6
|
|
|
$
|
16.2
|
|
|
$
|
3.5
|
|
|
$
|
3.7
|
|
|
$
|
2,631.0
|
|
•
|
We continue to experience a reduction in pricing expectations within our
CHCA
segment, primarily in the cough/cold, animal health, and analgesics categories due to various factors, including focus from customers to capture supply chain productivity savings and competition in specific product categories. We expect this pricing environment to continue to impact our
CHCA
segment for the foreseeable future.
|
•
|
We completed the sale of the animal health pet treats plant fixed assets on
February 1, 2017
and received
$7.7 million
in proceeds (refer to
Item 8. Note 2
).
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
||||
Net sales
|
$
|
2,507.1
|
|
|
$
|
2,429.9
|
|
Gross profit
|
$
|
825.2
|
|
|
$
|
817.8
|
|
Gross profit %
|
32.9
|
%
|
|
33.7
|
%
|
||
Operating income
|
$
|
399.8
|
|
|
$
|
445.0
|
|
Operating income %
|
15.9
|
%
|
|
18.3
|
%
|
•
|
The absence of
$110.2 million
in sales attributable to the U.S. VMS business (refer to
Item 8. Note 2
);
|
•
|
A net decrease in sales of existing products of
$21.5 million
due to pricing pressures and lower volumes in certain categories; and
|
•
|
Discontinued products of
$14.0 million
; partially offset by
|
•
|
New product sales of
$68.7 million
related primarily to the launches of fluticasone nasal spray (store brand equivalent to Flonase
®
), smoking cessation products and esomeprazole magnesium (store brand equivalent to Nexium
®
24HR capsules).
|
•
|
A decrease
of
$7.4 million
in gross profit due to:
|
•
|
Favorable product mix in certain categories; and
|
•
|
Positive contributions from supply chain efficiencies; more than offset by
|
•
|
The absence of
$17.6 million
in gross profit as a result of the sale of the U.S. VMS business (refer to
Item 8. Note 2
); and
|
•
|
Pricing pressures in certain categories as discussed above.
|
•
|
A decrease
of
$52.6 million
in operating expenses due to:
|
•
|
The absence of a $36.7 million intangible asset and goodwill impairment charges related to the sale of the U.S. VMS business, held-for-sale assets associated with our animal health pet treats plant and our animal health business (refer to
Item 8. Note 2
,
Note 3
, and
Note 9
);
|
•
|
Decreased selling and administrative expenses of $31.0 million due primarily to timing of promotions related to our animal health category and savings related to our cost reduction initiatives taken in the prior year;
|
•
|
Decreased R&D expenses of $8.2 million due to timing of clinical trials, reduced spending on infant formula clinical trials and lower costs related to our cost reduction initiatives; and
|
•
|
A $4.1 million gain related to contingent consideration (refer to
Item 8. Note 6
); offset partially by
|
•
|
Increased restructuring expenses of $21.8 million related primarily to strategic organizational enhancements (refer to
Item 8. Note 18
); and
|
•
|
A $4.5 million impairment charge recorded on idle property, plant and equipment.
|
•
|
Gross profit as a percentage of net sales was
0.8%
higher
due primarily to favorable product mix and supply chain efficiencies as discussed above.
|
•
|
Operating income as a percentage of net sales was
2.4%
higher
due primarily to favorable product mix as discussed above and decreased operating expenses.
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2015 |
|
December 31,
2016 |
||||
Net sales
|
$
|
2,554.2
|
|
|
$
|
2,507.1
|
|
Gross profit
|
$
|
846.7
|
|
|
$
|
825.2
|
|
Gross profit %
|
33.2
|
%
|
|
32.9
|
%
|
||
Operating income
|
$
|
439.9
|
|
|
$
|
399.8
|
|
Operating income %
|
17.2
|
%
|
|
15.9
|
%
|
•
|
Discontinued products of $61.3 million related primarily to a label refresh within the infant formula category; and
|
•
|
A net $56.5 million decrease in existing product sales as a result of:
|
•
|
Strong sales in our infant nutrition, and smoking cessation categories; more than offset by
|
•
|
A milder cold and flu season in the first and second quarters of 2016, which led to weaker sales in the cough/cold and analgesics categories;
|
•
|
Pricing pressure, which impacted sales in the cough/cold, analgesics, and animal health categories in particular;
|
•
|
Lower sales in the antacids category; and
|
•
|
Timing of promotions in the second and third quarters of 2015 and a milder allergy season in the third quarter of 2016, which had a negative impact on year-over-year sales in the cough/cold category;
|
•
|
Lower year-over-year sales of $52.1 million attributable to the U.S. VMS business, which was sold in August 2016; and
|
•
|
Unfavorable foreign currency translation movement of $15.0 million; offset partially by
|
•
|
New product sales of $117.4 million related primarily to the launches of fluticasone nasal spray (store brand equivalent to Flonase
®
), certain guaifenesin products (store brand equivalent to Mucinex
®
), several new infant formula and food products, and new animal health products; and
|
•
|
Incremental net sales of $20.3 million related primarily to the Gelcaps and ScarAway
®
acquisitions.
|
•
|
A decrease of $21.5 million in gross profit due to:
|
•
|
Pricing pressure as noted above; and
|
•
|
Increased intangible asset amortization expense associated primarily with the Gelcaps and ScarAway
®
acquisitions; offset partially by
|
•
|
Margin contributions from new products and strong performance in the infant nutrition and smoking cessation categories; and
|
•
|
Continued manufacturing and supply chain efficiencies.
|
•
|
An increase of $18.6 million in operating expenses due to:
|
•
|
A $24.5 million goodwill impairment charge related to our animal health business, (refer to
Item 8. Note 3
);
|
•
|
Increased research and development investments of $6.5 million due to timing of clinical trials;
|
•
|
A $6.2 million impairment charge related to the sale of the U.S. VMS business, (refer to
Item 8. Note 2
);
|
•
|
A $3.7 million impairment charge recorded on the held-for-sale assets associated with our animal health pet treats plant, (refer to
Item 8. Note 9
); partially offset by
|
•
|
Decreased restructuring expense of $9.9 million (refer to
Item 8. Note 18
); and
|
•
|
Decreased selling and administrative expenses due to cost containment.
|
|
|||||||
|
Six Months Ended
|
||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
||||
Net sales
|
$
|
1,176.1
|
|
|
$
|
1,251.5
|
|
Gross profit
|
$
|
361.2
|
|
|
$
|
417.9
|
|
Gross profit %
|
30.7
|
%
|
|
33.4
|
%
|
||
Operating income
|
$
|
151.1
|
|
|
$
|
209.2
|
|
Operating income %
|
12.9
|
%
|
|
16.7
|
%
|
•
|
New product sales of
$122.9 million
related primarily to certain new infant formula products;
|
•
|
Incremental net sales due primarily to the Gelcaps and ScarAway
®
acquisitions of $20.2 million; and
|
•
|
A
$66.0 million increase in existing sales primarily attributable to increased sales volumes of smoking cessation, cough/cold, and gastrointestinal products; offset partially by
|
•
|
A decline of $22.9 million in sales of existing products, primarily in animal health and diabetic care;
|
•
|
Discontinued products of $99.6 million related primarily to reformulated infant formula, analgesic, and animal health products; and
|
•
|
Unfavorable foreign currency translation movement of $11.2 million.
|
•
|
An increase
of
$56.7 million
in gross profit due to:
|
•
|
Improved purchase prices and efficiencies in manufacturing facilities; and
|
•
|
Incrementally higher gross profit attributable primarily to the Gelcaps and ScarAway
®
acquisitions; and
|
•
|
A decrease
of
$1.4 million
in operating expenses due to:
|
•
|
Decreased R&D spend of $13.6 million due to relative timing of clinical trials; offset partially by
|
•
|
An increase in restructuring expense of $10.9 million related to strategic organizational enhancements; and
|
•
|
Increased administrative expenses of $1.9 million primarily related to the Gelcaps and ScarAway
®
acquisitions.
|
•
|
Management has developed a strategy to: (1) implement a brand prioritization to address certain market dynamics, with an objective to balance the cost of advertising and promotional investments with expected contributions from category sales, (2) restructure the sales force in certain markets to more effectively serve customers, and (3) in-source certain product manufacturing and development. The combination of these actions is expected to improve the segment's focus on higher value OTC products, reduce selling costs and improve operating margins in the segment.
|
•
|
As part of our previously announced strategic initiatives, management implemented improvements and evaluated the overall cost structures within our
CHCI
segment in the following ways:
|
•
|
On December 8, 2016, we announced the cancellation of the unprofitable EuroGenerics NV distribution agreement in Belgium. The year-over-year effect of the cancellation, combined with the
|
•
|
We made progress on our previously announced restructuring plans to right-size the
Omega
business due to the impact of market dynamics on sales volumes. During the year ended
December 31, 2017
, we recognized
$17.1 million
of restructuring expense in the
CHCI
segment (refer to
Item 8. Note 18
).
|
•
|
Management continues to evaluate the most effective business model for each country, aligning our sales infrastructure and actively integrating sales strategies with promotional programs.
|
•
|
On
August 25, 2017
, we completed the sale of our Russian business, which was previously classified as held-for-sale, to Alvogen Pharma LLC. The total sale price was
€12.7 million
(
$15.1 million
), inclusive of an estimated working capital adjustment, which resulted in an immaterial gain in the segment (refer to
Item 8. Note 2
).
|
•
|
The
CHCI
segment has been positively impacted by market dynamics in countries such as the Nordics, Italy, and Portugal offset by softness in certain brand categories in France and Germany, as well as by unfavorable foreign currency impacts primarily in the U.K. related to Brexit.
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
||||
Net sales
|
$
|
1,652.2
|
|
|
$
|
1,491.0
|
|
Gross profit
|
$
|
693.4
|
|
|
$
|
682.0
|
|
Gross profit %
|
42.0
|
%
|
|
45.7
|
%
|
||
Operating income (loss)
|
$
|
(2,087.4
|
)
|
|
$
|
12.5
|
|
Operating income (loss) %
|
(126.3
|
)%
|
|
0.8
|
%
|
•
|
The absence of
$200.3 million
in sales attributable to the cancellation of unprofitable distribution contracts;
|
•
|
Discontinued products of
$14.7 million
; and
|
•
|
A net decrease in sales of existing products of
$11.3 million
due primarily to the absence of sales from our exited Russian business (refer to
Item 8. Note 2
); partially offset by
|
•
|
New product sales of
$64.1 million
.
|
•
|
A
$11.4 million
decrease
in gross profit due primarily to:
|
•
|
Operational efficiencies across the organization; more than offset by
|
•
|
Lower volumes in sales; and
|
•
|
Lower margins in our U.K. store brand business.
|
•
|
A decrease
of
$2.1 billion
in operating expenses due primarily to:
|
•
|
The absence of $2.0 billion of impairment charges on certain indefinite-lived and definite-lived intangible brand category assets and goodwill impairments in the Branded Consumer Healthcare-Rest of World ("BCH-ROW") and BCH-Belgium reporting units recorded in the prior year period (refer to
Item 8. Note 3
); and
|
•
|
A decrease in selling and administrative expenses of $66.6 million due to previously announced strategic initiatives to better align promotional investments with sales and cost reduction initiatives taken in the current year; offset partially by
|
•
|
A $4.8 million impairment charge recorded related to the Russian business (refer to
Item 8. Note 2
); and
|
•
|
Increased restructuring expense of $3.8 million related to strategic organizational enhancements (refer to
Item 1. Note 18
).
|
•
|
Gross profit as a percentage of net sales was
3.7%
higher
due primarily to improved product mix primarily driven by the cancellation of certain unprofitable distribution contracts, as described above.
|
•
|
Operating income as a percentage of net sales was
127.1%
higher
due primarily to the absence of $2.0 billion of intangible asset and goodwill impairment charges as discussed above (refer to
Item 8. Note 3
).
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31, 2015
(1)
|
|
December 31,
2016 |
||||
Net sales
|
$
|
1,360.6
|
|
|
$
|
1,652.2
|
|
Gross profit
|
$
|
614.7
|
|
|
$
|
693.4
|
|
Gross profit %
|
45.2
|
%
|
|
42.0
|
%
|
||
Operating loss
|
$
|
(124.3
|
)
|
|
$
|
(2,087.4
|
)
|
Operating loss %
|
(9.1
|
)%
|
|
(126.3
|
)%
|
•
|
An additional three months of results from operations attributable to Omega;
|
•
|
New products totaling $119.0 million; and
|
•
|
Incremental nets sales due to the Naturwohl and GSK Product acquisitions totaling $84.2 million; offset partially by
|
•
|
A net $143.6 million decrease in sales volumes of existing products due primarily to:
|
•
|
Lower sales in the lifestyle category due in part to a product launch in the prior year;
|
•
|
Lower sales in the natural health and VMS category due primarily to timing of promotional activities;
|
•
|
Divestment of a European sports brand; and
|
•
|
The expiration of a distribution contract in the prior year;
|
•
|
Unfavorable foreign currency translation movement of $44.1 million; and
|
•
|
Discontinued products of $8.4 million.
|
•
|
A $78.7 million increase in gross profit due to an additional three months of operations attributable to Omega; offset partially by
|
•
|
Decreased sales of existing products in the higher-margin lifestyle and natural health and VMS categories noted above;
|
•
|
Weaker performance in Belgium and Germany; and
|
•
|
Unfavorable foreign currency translation effect; more than offset by
|
•
|
An increase of $2.0 billion in operating expenses due primarily to:
|
•
|
Intangible asset and goodwill impairment charges totaling $2.0 billion, (refer to
Item 8. Note 3
); and
|
•
|
Restructuring charges totaling $20.9 million related to strategic organizational enhancements (refer to
Item 8. Note 18
);
|
•
|
An additional three months of operations from the Omega acquisition; offset partially by
|
•
|
Cost control measures.
|
|
Six Months Ended
|
||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
||||
Net sales
|
$
|
177.1
|
|
|
$
|
833.0
|
|
Gross profit
|
$
|
55.9
|
|
|
$
|
386.0
|
|
Gross profit %
|
31.6
|
%
|
|
46.3
|
%
|
||
Operating income (loss)
|
$
|
14.1
|
|
|
$
|
(148.5
|
)
|
Operating income (loss) %
|
8.0
|
%
|
|
(17.8
|
)%
|
•
|
Incremental net sales attributable to the Omega, Naturwohl and GSK acquisitions totaling
$569.1 million
; and
|
•
|
New products totaling
$66.8 million
; offset partially by
|
•
|
Unfavorable foreign currency translation movement of
$14.8 million
; and
|
•
|
Discontinued products of
$3.8 million
.
|
•
|
A
$330.1 million
increase
in gross profit and a
$492.7 million
increase in operating expenses due to an additional six months of operations attributable to Omega.
|
•
|
We continue to experience a significant reduction in pricing expectations from historical levels in our
RX
segment due to competitive pressures. This softness in pricing is attributable to various factors, including increased focus from customers to capture supply chain productivity savings, competition in specific products, and consolidation of certain customers. We expect this softness to continue to impact the segment for the foreseeable future, and we are forecasting a high single digit pricing decline in this segment for the year ending December 31, 2018.
|
•
|
During the three months ended December 31, 2016, the U.S. market for Entocort
®
(Budesonide) capsules, including both brand and authorized generic capsules, experienced significant and unexpected increased competition, which reduced our future revenue stream. As a result, our net sales in the
RX
segment for the year ended December 31, 2017 were negatively impacted by
$67.2 million
.
|
•
|
We are continuing our previously announced portfolio review process, which includes the ongoing comprehensive internal evaluation of the
RX
segment's market position, growth opportunities, and interdependencies with our manufacturing and shared service operations to determine if strategic alternatives should be explored.
|
•
|
During the
year ended
December 31, 2017
, we sold various Abbreviated New Drug Applications ("ANDAs") for a total gain of $23.0 million.
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
||||
Net sales
|
$
|
1,042.8
|
|
|
$
|
969.7
|
|
Gross profit
|
$
|
501.1
|
|
|
$
|
449.7
|
|
Gross profit %
|
48.1
|
%
|
|
46.4
|
%
|
||
Operating income (loss)
|
$
|
(0.2
|
)
|
|
$
|
307.6
|
|
Operating income (loss) %
|
—
|
%
|
|
31.7
|
%
|
•
|
New product sales of
$75.9 million
due primarily to sales of Scopolamine and Testosterone 2% topical (generic equivalent to Axiron
®
); more than offset by
|
•
|
Decreased sales of existing products of
$78.5 million
due primarily to pricing pressures across the portfolio;
|
•
|
Lower Entocort
®
sales of
$67.2 million
; and
|
•
|
Discontinued products of
$3.3 million
.
|
•
|
A decrease
of
$51.4 million
in gross profit due primarily to:
|
•
|
Lower Entocort
®
sales as noted above; and
|
•
|
Pricing pressures as discussed above.
|
•
|
A decrease
of
$359.2 million
in operating expenses due to:
|
•
|
The absence of a $342.2 million impairment charge related to the Entocort
®
intangible asset (refer to
Item 8. Note 3
);
|
•
|
A $23.0 million gain on sales of certain ANDAs;
|
•
|
A $15.4 million net gain related to contingent consideration (refer to
Item 8. Note 6
);
|
•
|
Decreased selling expenses of $17.4 million due primarily to the prior year specialty pharmaceuticals sales force restructuring initiative; and
|
•
|
Decreased R&D expenses of $8.3 million due to timing of clinical trials, lower legal spend, and lower ongoing costs on certain projects; offset partially by
|
•
|
Impairment charges related to certain definite-lived intangible assets, certain fixed assets and IPR&D of $34.9 million (refer to
Item 8. Note 3
);
|
•
|
Increased administrative expenses of $6.2 million due primarily to the settlement of our antitrust violation lawsuit (refer to
Item 8. Note 16
); and
|
•
|
Increased restructuring expenses of $3.8 million related to strategic organizational enhancements (refer to
Item 8. Note 18
).
|
•
|
Gross profit as a percentage of net sales was
1.7%
lower
due primarily to lower sales of Entocort
®
as discussed above.
|
•
|
Operating income as a percentage of net sales was
31.7%
higher
due primarily to the absence of a
$342.2 million
impairment charge related to the Entocort
®
intangible asset (refer to
Item 8. Note 3
).
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2015 |
|
December 31,
2016 |
||||
Net sales
|
$
|
1,001.9
|
|
|
$
|
1,042.8
|
|
Gross profit
|
$
|
543.3
|
|
|
$
|
501.1
|
|
Gross profit %
|
54.2
|
%
|
|
48.1
|
%
|
||
Operating income (loss)
|
$
|
377.8
|
|
|
$
|
(0.2
|
)
|
Operating income %
|
37.7
|
%
|
|
—
|
%
|
•
|
Net sales attributable to the Entocort
®
and Tretinoin Products acquisitions totaling $150.9 million; and
|
•
|
New product sales of $68.0 million due primarily to sales of Benzoyl Peroxide 5%-Clindamycin 1% gel (a generic version of Benzaclin™); offset partially by
|
•
|
Decreased sales of existing products of $174.1 million due to declined sales volume of certain products, pricing pressure across the portfolio, and the lack of exclusive market position for two key products versus the prior year; and
|
•
|
Discontinued products of $3.9 million.
|
•
|
A decrease of $42.2 million in gross profit due primarily to the pricing pressure noted above, as well as higher amortization expense from the Entocort
®
and Tretinoin Products acquisitions; and
|
•
|
An increase of $335.8 million in operating expenses due primarily to:
|
•
|
A $342.2 million impairment charge related to the Entocort
®
intangible assets, (refer to
Item 8. Note 3
);
|
•
|
Increased selling and administration expenses of $9.3 million, and
|
•
|
Increased R&D investments of $3.0 million due to timing of clinical trials; offset partially by
|
•
|
The absence of an $18.0 million R&D payment made in connection with a R&D contractual arrangement in the prior year (refer to
Item 8. Note 17
).
|
|
|||||||
|
Six Months Ended
|
||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
||||
Net sales
|
$
|
436.7
|
|
|
$
|
502.6
|
|
Gross profit
|
$
|
230.5
|
|
|
$
|
253.4
|
|
Gross profit %
|
52.8
|
%
|
|
50.4
|
%
|
||
Operating income
|
$
|
168.8
|
|
|
$
|
181.9
|
|
Operating income %
|
38.6
|
%
|
|
36.2
|
%
|
•
|
New product sales of
$41.2 million
related primarily to the launches of Clobetasol Propionate 0.05% spray, Tacrolimus 0.1% ointment, and Testosterone gel 1%; and
|
•
|
Net sales attributable to the Lumara product acquisition of
$7.0 million
; offset partially by
|
•
|
A decrease in volumes of certain existing products.
|
•
|
An increase
of
$22.9 million
in gross profit due primarily to:
|
•
|
Higher net sales and favorable product mix; and
|
•
|
Certain pricing initiatives.
|
•
|
Partially offset by a
$9.8 million
increase
in operating expenses due to:
|
•
|
Increased selling and administration expense related to the specialty pharmaceuticals sales force; and
|
•
|
An increase in restructuring expense of $2.6 million related to our strategic organizational enhancements (refer to
Item 8. Note 18
).
|
•
|
On
March 27, 2017
, we announced the completed divestment of our Tysabri
®
financial asset to Royalty Pharma for up to
$2.85 billion
, consisting of
$2.2 billion
in cash and up to
$250.0 million
and
$400.0 million
in milestone payments if the royalties on global net sales of Tysabri
®
that are received by Royalty Pharma meet specific thresholds in 2018 and 2020, respectively. As a result of this transaction, we transferred the entire financial asset to Royalty Pharma and recorded a
$17.1 million
gain during the
three months ended
April 1, 2017. We elected to account for the contingent milestone payments using the fair value option method, and these were recorded at an estimated fair value of
$134.5 million
as of
December 31, 2017
(refer to
Item 8. Note 6
and
Critical Accounting Estimates
for additional information on the contingent milestones).
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
||||
Net sales
|
$
|
78.5
|
|
|
$
|
55.6
|
|
Gross profit
|
$
|
32.3
|
|
|
$
|
30.9
|
|
Gross profit %
|
41.2
|
%
|
|
55.6
|
%
|
||
Operating income
|
$
|
6.1
|
|
|
$
|
8.7
|
|
Operating income %
|
7.8
|
%
|
|
15.6
|
%
|
|
|||||||
|
Year Ended
|
||||||
($ in millions)
|
December 31,
2015 |
|
December 31,
2016 |
||||
Net sales
|
$
|
98.0
|
|
|
$
|
78.5
|
|
Gross profit
|
$
|
44.7
|
|
|
$
|
32.3
|
|
Gross profit %
|
45.5
|
%
|
|
41.2
|
%
|
||
Operating income (loss)
|
$
|
(7.1
|
)
|
|
$
|
6.1
|
|
Operating income (loss) %
|
(7.3
|
)%
|
|
7.8
|
%
|
|
|||||||
|
Six Months Ended
|
||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
||||
Net sales
|
$
|
54.8
|
|
|
$
|
45.1
|
|
Gross profit
|
$
|
26.2
|
|
|
$
|
21.6
|
|
Gross profit %
|
47.7
|
%
|
|
47.8
|
%
|
||
Operating income (loss)
|
$
|
14.5
|
|
|
$
|
(19.5
|
)
|
Operating income (loss) %
|
26.4
|
%
|
|
(43.3
|
)%
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||
December 27,
2014 |
|
December 31,
2015 |
|
December 31,
2015 |
|
December 31,
2016 |
|
December 31,
2017 |
||||||||||
$
|
49.6
|
|
|
$
|
149.0
|
|
|
$
|
220.9
|
|
|
$
|
116.6
|
|
|
$
|
174.7
|
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
|
December 31,
2015 |
|
December 31,
2016 |
|
December 31,
2017 |
||||||||||
Change in financial assets
|
$
|
(46.9
|
)
|
|
$
|
(57.3
|
)
|
|
$
|
(88.8
|
)
|
|
$
|
2,608.2
|
|
|
$
|
24.9
|
|
Interest expense, net
|
$
|
56.7
|
|
|
$
|
89.9
|
|
|
$
|
179.1
|
|
|
$
|
216.6
|
|
|
$
|
168.1
|
|
Other expense (Income), net
|
$
|
60.3
|
|
|
$
|
25.2
|
|
|
$
|
299.1
|
|
|
$
|
22.7
|
|
|
$
|
(10.1
|
)
|
Loss on extinguishment of debt
|
$
|
9.6
|
|
|
$
|
0.9
|
|
|
$
|
1.8
|
|
|
$
|
1.1
|
|
|
$
|
135.2
|
|
Six Months Ended
|
|
Year Ended
|
|||||||||||
December 27,
2014 |
|
December 31,
2015 |
|
December 31,
2015 |
|
December 31,
2016 |
|
December 31,
2017 |
|||||
14.0
|
%
|
|
(376.2
|
)%
|
|
103.3
|
%
|
|
17.2
|
%
|
|
57.3
|
%
|
|
Year Ended
|
||||||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
|
Increase/(Decrease)
|
||||||
Cash Flows From (For) Operating Activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(4,012.8
|
)
|
|
$
|
119.6
|
|
|
$
|
4,132.4
|
|
Non-cash adjustments
|
4,769.2
|
|
|
683.2
|
|
|
(4,086.0
|
)
|
|||
Subtotal
|
756.4
|
|
|
802.8
|
|
|
46.4
|
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash due to:
|
|
|
|
|
|
||||||
Accounts receivable
|
(0.6
|
)
|
|
3.2
|
|
|
3.8
|
|
|||
Inventories
|
100.7
|
|
|
(16.0
|
)
|
|
(116.7
|
)
|
|||
Accounts payable
|
(75.7
|
)
|
|
(39.6
|
)
|
|
36.1
|
|
|||
Payroll and related taxes
|
(41.1
|
)
|
|
(27.4
|
)
|
|
13.7
|
|
|||
Accrued customer programs
|
(13.9
|
)
|
|
34.6
|
|
|
48.5
|
|
|||
Accrued liabilities
|
(79.5
|
)
|
|
(47.8
|
)
|
|
31.7
|
|
|||
Accrued income taxes
|
20.9
|
|
|
(6.1
|
)
|
|
(27.0
|
)
|
|||
Other, net
|
(12.3
|
)
|
|
(4.8
|
)
|
|
7.5
|
|
|||
Subtotal
|
$
|
(101.5
|
)
|
|
$
|
(103.9
|
)
|
|
$
|
(2.4
|
)
|
|
|
|
|
|
|
||||||
Net cash from operating activities
|
$
|
654.9
|
|
|
$
|
698.9
|
|
|
$
|
44.0
|
|
•
|
Increased net earnings after adjustments for items such as deferred income taxes, impairment charges, restructuring charges, changes in our financial assets, loss on extinguishment of debt, and depreciation and amortization;
|
•
|
Changes in accrued customer-related programs due primarily to new product launches, resulting in higher customer related-accruals, pricing dynamics in the RX segment, as well as timing of rebate and chargeback payments;
|
•
|
Changes in accounts payable due primarily to changes to the Omega accounts payable structure that occurred in the prior year period; and
|
•
|
Changes in accrued liabilities due primarily to deferred revenue associated with BCH-Belgium distribution contracts and the absence of accruals related to the sale of our U.S. VMS business; partially offset by increased litigation accruals (refer to
Item 8. Note 16
), and fair market value adjustments related to contingent consideration (refer to
Item 8. Note 6
); offset partially by
|
•
|
Changes in inventory due to the build up of inventory levels to support customer demands in the current period; offset by improved inventory management in the comparable prior year period; and
|
•
|
Changes in accrued income taxes due primarily to Federal tax obligation payments made in the current year period, offset by expected tax refunds (refer to
Item 8. Note 14
).
|
|
Year Ended
|
||||||||||
($ in millions)
|
December 31,
2015 |
|
December 31,
2016 |
|
Increase/ (Decrease)
|
||||||
Cash Flows From (For) Operating Activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(1.9
|
)
|
|
$
|
(4,012.8
|
)
|
|
$
|
(4,010.9
|
)
|
Non-cash adjustments
|
745.4
|
|
|
4,769.2
|
|
|
4,023.8
|
|
|||
Subtotal
|
743.5
|
|
|
756.4
|
|
|
12.9
|
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash due to:
|
|
|
|
|
|
||||||
Accounts receivable
|
4.8
|
|
|
(0.6
|
)
|
|
(5.4
|
)
|
|||
Inventories
|
(21.5
|
)
|
|
100.7
|
|
|
122.2
|
|
|||
Accounts payable
|
(26.7
|
)
|
|
(75.7
|
)
|
|
(49.0
|
)
|
|||
Payroll and related taxes
|
(42.0
|
)
|
|
(41.1
|
)
|
|
0.9
|
|
|||
Accrued customer programs
|
53.9
|
|
|
(13.9
|
)
|
|
(67.8
|
)
|
|||
Accrued liabilities
|
98.9
|
|
|
(79.5
|
)
|
|
(178.4
|
)
|
|||
Accrued income taxes
|
(67.9
|
)
|
|
20.9
|
|
|
88.8
|
|
|||
Other, net
|
21.3
|
|
|
(12.3
|
)
|
|
(33.6
|
)
|
|||
Subtotal
|
$
|
20.8
|
|
|
$
|
(101.5
|
)
|
|
$
|
(122.3
|
)
|
|
|
|
|
|
|
||||||
Net cash from operating activities
|
$
|
764.3
|
|
|
$
|
654.9
|
|
|
$
|
(109.4
|
)
|
•
|
Changes in accrued liabilities due primarily to payment of legal expenses associated with the Mylan defense which were accrued at December 31, 2015, deferred revenue associated with the BCH Belgium Distribution Contracts, and timing of payments;
|
•
|
Changes in accrued customer-related programs due to the pricing dynamics in the
RX
segment; and
|
•
|
Changes in accounts payable due to changes to the Omega accounts payable structure as discussed below; offset partially by
|
•
|
Changes in inventories due to improved inventory management in our
CHCI
and
CHCA
segments and increased sales of cough/cold products at the end of the year ended December 31, 2016; and
|
•
|
Changes in accrued income taxes due primarily to the prior year including a $68.9 million incremental tax payment made in connection with the contested IRS audit (refer to
Item 8. Note 14
).
|
|
Six Months Ended
|
||||||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
|
Increase / (Decrease)
|
||||||
Cash Flows From (For) Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
180.6
|
|
|
$
|
42.5
|
|
|
$
|
(138.1
|
)
|
Non-cash adjustments
|
88.6
|
|
|
279.2
|
|
|
190.6
|
|
|||
Subtotal
|
269.2
|
|
|
321.7
|
|
|
52.5
|
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash due to:
|
|
|
|
|
|
||||||
Accounts receivable
|
(3.4
|
)
|
|
52.5
|
|
|
55.9
|
|
|||
Inventories
|
(19.4
|
)
|
|
(29.6
|
)
|
|
(10.2
|
)
|
|||
Accounts payable
|
(46.8
|
)
|
|
(194.1
|
)
|
|
(147.3
|
)
|
|||
Payroll and related taxes
|
(26.3
|
)
|
|
(38.2
|
)
|
|
(11.9
|
)
|
|||
Accrued customer programs
|
51.8
|
|
|
34.4
|
|
|
(17.4
|
)
|
|||
Accrued liabilities
|
52.1
|
|
|
108.1
|
|
|
56.0
|
|
|||
Accrued income taxes
|
33.1
|
|
|
(56.8
|
)
|
|
(89.9
|
)
|
|||
Other, net
|
(18.3
|
)
|
|
2.9
|
|
|
21.2
|
|
|||
Subtotal
|
$
|
22.8
|
|
|
$
|
(120.8
|
)
|
|
$
|
(143.6
|
)
|
|
|
|
|
|
|
||||||
Net cash from operating activities
|
$
|
292.0
|
|
|
$
|
200.9
|
|
|
$
|
(91.1
|
)
|
•
|
Changes in accounts payable due primarily to the addition of Omega as well as changes to the Omega accounts payable structure as discussed below; and
|
•
|
Changes in accrued income taxes due primarily to a $68.9 million incremental tax payment made in connection with the contested IRS audit (refer to
Item 8. Note 14
); offset partially by
|
•
|
Changes in accrued liabilities due primarily to amounts not yet paid related to our defense against Mylan;
|
•
|
Changes in accounts receivable due to timing of receipt of payments; and
|
•
|
Increased net earnings after adjusting for non-cash items such as impairment charges, changes in our financial assets, and depreciation and amortization.
|
|
Year Ended
|
||||||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
|
Increase/(Decrease)
|
||||||
Cash Flows From (For) Investing Activities
|
|||||||||||
Proceeds from royalty rights
|
$
|
353.7
|
|
|
$
|
87.3
|
|
|
$
|
(266.4
|
)
|
Acquisitions of businesses, net of cash acquired
|
(427.4
|
)
|
|
(0.4
|
)
|
|
$
|
427.0
|
|
||
Asset acquisitions
|
(65.1
|
)
|
|
—
|
|
|
$
|
65.1
|
|
||
Proceeds from sale of securities
|
4.5
|
|
|
—
|
|
|
$
|
(4.5
|
)
|
||
Additions to property, plant and equipment
|
(106.2
|
)
|
|
(88.6
|
)
|
|
$
|
17.6
|
|
||
Net proceeds from sale of business and other assets
|
69.1
|
|
|
154.6
|
|
|
$
|
85.5
|
|
||
Proceeds from sale of the Tysabri
®
financial asset
|
—
|
|
|
2,200.0
|
|
|
$
|
2,200.0
|
|
||
Other investing, net
|
(3.6
|
)
|
|
(14.8
|
)
|
|
$
|
(11.2
|
)
|
||
Net cash from (for) investing activities
|
$
|
(175.0
|
)
|
|
$
|
2,338.1
|
|
|
$
|
2,513.1
|
|
|
Year Ended
|
||||||||||
($ in millions)
|
December 31,
2015 |
|
December 31,
2016 |
|
Increase/ (Decrease)
|
||||||
Cash Flows From (For) Investing Activities
|
|||||||||||
Proceeds from royalty rights
|
$
|
335.1
|
|
|
$
|
353.7
|
|
|
$
|
18.6
|
|
Acquisitions of businesses, net of cash acquired
|
(2,886.4
|
)
|
|
(427.4
|
)
|
|
2,459.0
|
|
|||
Asset acquisitions
|
(4.0
|
)
|
|
(65.1
|
)
|
|
(61.1
|
)
|
|||
Settlement of acquisition-related foreign currency derivatives
|
(304.8
|
)
|
|
—
|
|
|
304.8
|
|
|||
Proceeds from sale of securities
|
—
|
|
|
4.5
|
|
|
4.5
|
|
|||
Additions to property, plant and equipment
|
(166.8
|
)
|
|
(106.2
|
)
|
|
60.6
|
|
|||
Proceeds from sale of business
|
—
|
|
|
69.1
|
|
|
69.1
|
|
|||
Other investing, net
|
(2.7
|
)
|
|
(3.6
|
)
|
|
(0.9
|
)
|
|||
Net cash from (for) investing activities
|
$
|
(3,029.6
|
)
|
|
$
|
(175.0
|
)
|
|
$
|
2,854.6
|
|
|
Six Months Ended
|
||||||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
|
Increase / (Decrease)
|
||||||
Cash Flows From (For) Investing Activities
|
|||||||||||
Proceeds from royalty rights
|
$
|
175.8
|
|
|
$
|
166.3
|
|
|
$
|
(9.5
|
)
|
Acquisitions of businesses, net of cash acquired
|
(83.0
|
)
|
|
(791.6
|
)
|
|
$
|
(708.6
|
)
|
||
Settlement of acquisition-related foreign currency derivatives
|
(26.4
|
)
|
|
(1.3
|
)
|
|
$
|
25.1
|
|
||
Additions to property, plant and equipment
|
(48.0
|
)
|
|
(77.8
|
)
|
|
$
|
(29.8
|
)
|
||
Other investing, net
|
0.8
|
|
|
(3.7
|
)
|
|
$
|
(4.5
|
)
|
||
Net cash from (for) investing activities
|
$
|
19.2
|
|
|
$
|
(708.1
|
)
|
|
$
|
(727.3
|
)
|
|
Year Ended
|
||||||||||
($ in millions)
|
December 31,
2016 |
|
December 31,
2017 |
|
Increase/(Decrease)
|
||||||
Cash Flows From (For) Financing Activities
|
|||||||||||
Issuances of long-term debt
|
$
|
1,190.3
|
|
|
$
|
—
|
|
|
$
|
(1,190.3
|
)
|
Borrowings (repayments) of revolving credit agreements and other financing, net
|
(802.5
|
)
|
|
6.8
|
|
|
809.3
|
|
|||
Payments on long-term debt
|
(559.2
|
)
|
|
(2,611.0
|
)
|
|
(2,051.8
|
)
|
|||
Deferred financing fees
|
(2.8
|
)
|
|
(4.8
|
)
|
|
(2.0
|
)
|
|||
Premium on early debt retirement
|
(0.6
|
)
|
|
(116.1
|
)
|
|
(115.5
|
)
|
|||
Issuance of ordinary shares
|
8.3
|
|
|
0.7
|
|
|
(7.6
|
)
|
|||
Equity issuance costs
|
(10.3
|
)
|
|
—
|
|
|
10.3
|
|
|||
Repurchase of ordinary shares
|
—
|
|
|
(191.5
|
)
|
|
(191.5
|
)
|
|||
Cash dividends
|
(83.2
|
)
|
|
(91.1
|
)
|
|
(7.9
|
)
|
|||
Other financing, net
|
(8.7
|
)
|
|
2.3
|
|
|
11.0
|
|
|||
Net cash for financing activities
|
$
|
(268.7
|
)
|
|
$
|
(3,004.7
|
)
|
|
$
|
(2,736.0
|
)
|
|
Year Ended
|
||||||||||
($ in millions)
|
December 31,
2015 |
|
December 31,
2016 |
|
Increase / (Decrease)
|
||||||
Cash Flows From (For) Financing Activities
|
|
|
|
|
|
||||||
Borrowings (repayments) of revolving credit agreements and other financing, net
|
$
|
666.0
|
|
|
$
|
(802.5
|
)
|
|
$
|
(1,468.5
|
)
|
Issuances of long-term debt
|
—
|
|
|
1,190.3
|
|
|
1,190.3
|
|
|||
Payments on long-term debt
|
(917.3
|
)
|
|
(559.2
|
)
|
|
358.1
|
|
|||
Premium on early debt retirement
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Deferred financing fees
|
(3.6
|
)
|
|
(2.8
|
)
|
|
0.8
|
|
|||
Issuance of ordinary shares
|
8.9
|
|
|
8.3
|
|
|
(0.6
|
)
|
|||
Equity issuance costs
|
—
|
|
|
(10.3
|
)
|
|
(10.3
|
)
|
|||
Repurchase of ordinary shares
|
(500.0
|
)
|
|
—
|
|
|
500.0
|
|
|||
Cash dividends
|
(72.2
|
)
|
|
(83.2
|
)
|
|
(11.0
|
)
|
|||
Other financing, net
|
(19.0
|
)
|
|
(8.7
|
)
|
|
10.3
|
|
|||
Net cash from (for) financing activities
|
$
|
(837.2
|
)
|
|
$
|
(268.7
|
)
|
|
$
|
568.5
|
|
|
Six Months Ended
|
||||||||||
($ in millions)
|
December 27,
2014 |
|
December 31,
2015 |
|
Increase / (Decrease)
|
||||||
Cash Flows From (For) Financing Activities
|
|||||||||||
Issuances of long-term debt
|
$
|
2,504.3
|
|
|
$
|
—
|
|
|
$
|
(2,504.3
|
)
|
Borrowings (repayments) of revolving credit agreements and other financing, net
|
(2.1
|
)
|
|
718.0
|
|
|
$
|
720.1
|
|
||
Payments on long-term debt
|
(934.5
|
)
|
|
(28.3
|
)
|
|
$
|
906.2
|
|
||
Deferred financing fees
|
(24.8
|
)
|
|
(0.3
|
)
|
|
$
|
24.5
|
|
||
Issuance of ordinary shares
|
1,039.5
|
|
|
4.9
|
|
|
$
|
(1,034.6
|
)
|
||
Equity issuance costs
|
(35.7
|
)
|
|
—
|
|
|
$
|
35.7
|
|
||
Repurchase of ordinary shares
|
—
|
|
|
(500.0
|
)
|
|
$
|
(500.0
|
)
|
||
Cash dividends
|
(29.0
|
)
|
|
(36.3
|
)
|
|
$
|
(7.3
|
)
|
||
Other financing, net
|
(8.8
|
)
|
|
(8.4
|
)
|
|
$
|
0.4
|
|
||
Net cash from financing activities
|
$
|
2,508.9
|
|
|
$
|
149.6
|
|
|
$
|
(2,359.3
|
)
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||
|
December 27,
2014 |
|
December 31,
2015 |
|
December 31,
2016 |
|
December 31,
2017 |
||||||||
Dividends paid (in millions)
|
$
|
29.0
|
|
|
$
|
36.3
|
|
|
$
|
83.2
|
|
|
$
|
91.1
|
|
Dividends paid per share
|
$
|
0.21
|
|
|
$
|
0.25
|
|
|
$
|
0.58
|
|
|
$
|
0.64
|
|
•
|
We had
$2.9 billion
,
$5.4 billion
, and
$4.7 billion
outstanding under our notes and bonds, and
$420.0 million
,
$420.7 million
, and
$488.8 million
outstanding under our term loan, as of
December 31, 2017
,
December 31, 2016
, and
December 31, 2015
, respectively. On September 29, 2016, we repaid the 1.300% senior notes due 2016 in full.
|
•
|
On March 7, 2016, Perrigo Finance issued
$500.0 million
in aggregate principal amount of
3.500%
senior notes due 2021 and
$700.0 million
in aggregate principal amount of
4.375%
senior notes due 2026 (together, the "2016 Notes") and received net proceeds of
$1.2 billion
after fees and market discount, which were used to repay the amounts outstanding under the 2015 Revolver and 2014 Revolver mentioned above.
|
•
|
On September 2, 2014, we offered to exchange what were previously private placement senior notes for public bonds registered with the Securities and Exchange Commission. Substantially all of the private placement senior notes have been exchanged.
|
•
|
On December 2, 2014, Perrigo Finance, our 100% owned finance subsidiary, issued $500.0 million in aggregate principal amount of 3.50% senior notes due 2021, $700.0 million in aggregate principal amount of 3.90% senior notes due 2024, and $400.0 million in aggregate principal amount of 4.90% senior notes due 2044 (collectively, the "2014 Bonds").
|
•
|
The 2014 Bonds are fully and unconditionally guaranteed on a senior unsecured basis by Perrigo Company
|
•
|
On
December 5, 2014
, Perrigo Finance entered into a term loan agreement consisting of a
€500.0 million
(
$614.3 million
) tranche, with the ability to draw an additional
€300.0 million
(
$368.6 million
) tranche, maturing December 5, 2019, and we entered into a
$300.0 million
term loan tranche maturing December 18, 2015, which we repaid in full on June 25, 2015.
|
•
|
On December 5, 2014, we repaid the remaining $895.0 million outstanding under our 2013 Term Loan described below, then terminated it.
|
•
|
On June 24, 2015, we repaid the $300.0 million portion of the 2014 Term Loan.
|
•
|
On March 30, 2015, we assumed $20.0 million in aggregate principal amount of 6.19% senior notes due 2016 (the "2016 Notes"), €135.0 million ($147.0 million) aggregate principal amount of 5.1045% senior notes due 2023, €300.0 million ($326.7 million) in aggregate principal amount of 5.125% retail bonds due 2017, €180.0 million ($196.0 million) in aggregate principal amount of 4.500% retail bonds due 2017, and €120.0 million ($130.7 million) in aggregate principal amount of 5.000% retail bonds due 2019 (collectively, the "Retail Bonds") in connection with the Omega acquisition.
|
•
|
The fair value of the 2023 Notes and Retail Bonds
exceeded par value by €93.6 million
($101.9 million) on the date of the acquisition. As a result, a fair value adjustment was recorded as part of the carrying value of the underlying debt and will be amortized as a reduction of interest expense over the remaining terms of the respective debt instruments. The adjustment does not affect cash interest payments.
|
•
|
On May 29, 2015, we repaid the $20.0 million in aggregate principal amount of the 2016 Notes.
|
Date
|
|
Series
|
|
Transaction Type
|
|
Principal Retired
|
||
April 1, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
$
|
13.3
|
|
May 8, 2017
|
|
$600.0 2.300% senior notes due 2018
|
|
Early redemption
|
|
600.0
|
|
|
May 23, 2017
|
|
€180.0 4.500% retail bonds due 2017
|
|
Scheduled maturity
|
|
201.3
|
|
|
June 15, 2017
|
|
$500.0 3.500% senior notes due 2021
|
|
Tender offer
|
|
190.4
|
|
|
June 15, 2017
|
|
$500.0 3.500% senior notes due 2021
|
|
Tender offer
|
|
219.6
|
|
|
June 15, 2017
|
|
$800.0 4.000% senior notes due 2023
|
|
Tender offer
|
|
584.4
|
|
|
June 15, 2017
|
|
$400.0 5.300% senior notes due 2043
|
|
Tender offer
|
|
309.5
|
|
|
June 15, 2017
|
|
$400.0 4.900% senior notes due 2044
|
|
Tender offer
|
|
96.1
|
|
|
July 1, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
14.3
|
|
|
September 30, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
14.8
|
|
|
December 12, 2017
|
|
€300.0 5.125% senior notes due 2017
|
|
Scheduled maturity
|
|
352.3
|
|
|
December 31, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
15.0
|
|
|
|
|
|
|
|
|
$
|
2,611.0
|
|
Premium on debt repayment
|
|
$
|
116.1
|
|
Transaction costs
|
|
3.8
|
|
|
Write-off of deferred financing fees
|
|
10.6
|
|
|
Write-off of remaining discount on bond
|
|
4.7
|
|
|
Total loss on extinguishment of debt
|
|
$
|
135.2
|
|
|
Payment Due
|
||||||||||||||||||
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After 2022
|
|
Total
|
||||||||||
Short and long-term debt
(1)
|
$
|
198.3
|
|
|
$
|
746.9
|
|
|
$
|
791.9
|
|
|
$
|
2,767.8
|
|
|
$
|
4,504.9
|
|
Capital lease obligations
|
0.8
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
Purchase obligations
(2)
|
757.2
|
|
|
13.7
|
|
|
0.1
|
|
|
—
|
|
|
771.0
|
|
|||||
Operating leases
(3)
|
38.1
|
|
|
56.2
|
|
|
32.3
|
|
|
16.6
|
|
|
143.2
|
|
|||||
Other contractual liabilities reflected on the consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred compensation and benefits
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
92.1
|
|
|
92.1
|
|
|||||
Other
(5)
|
90.0
|
|
|
6.6
|
|
|
4.9
|
|
|
1.5
|
|
|
103.0
|
|
|||||
Total
|
$
|
1,084.4
|
|
|
$
|
824.8
|
|
|
$
|
829.2
|
|
|
$
|
2,878.0
|
|
|
$
|
5,616.4
|
|
(1)
|
Short-term and long-term debt includes interest payments, which were calculated using the effective interest rate at
December 31, 2017
.
|
(2)
|
Consists of commitments for both materials and services.
|
(3)
|
Used in normal course of business, principally for warehouse facilities and computer equipment.
|
(4)
|
Includes amounts associated with non-qualified plans related to deferred compensation, executive retention and post employment benefits. Of this amount, we have funded
$34.6 million
, which is recorded in Other non-current assets on the balance sheet. These amounts are assumed payable after five years, although certain circumstances, such as termination, would require earlier payment.
|
(5)
|
Primarily includes consulting fees, legal settlements, contingent consideration obligations, restructuring accruals, insurance obligations, and electrical and gas purchase contracts, which were accrued in Other current liabilities and Other non-current liabilities at
December 31, 2017
for all years.
|
*
|
Primarily
CHCA
and
CHCI
.
|
•
|
the amount and timing of projected future cash flows, adjusted for the probability of technical and marketing success;
|
•
|
the amount and timing of projected costs to develop IPR&D into commercially viable products;
|
•
|
the discount rate selected to measure the risks inherent in the future cash flows;
|
•
|
the estimate of an appropriate market royalty rate; and
|
•
|
an assessment of the asset's life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry.
|
|
Year Ended
|
|
Six Months Ended
|
||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Tysabri
®
financial asset
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
2,350.0
|
|
|
$
|
5,310.0
|
|
|
$
|
5,420.0
|
|
Royalties earned
|
—
|
|
|
(351.8
|
)
|
|
(167.3
|
)
|
|||
Change in fair value
|
—
|
|
|
(2,608.2
|
)
|
|
57.3
|
|
|||
Divestiture
|
(2,350.0
|
)
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
$
|
—
|
|
|
$
|
2,350.0
|
|
|
$
|
5,310.0
|
|
|
Year Ended
|
|
Six Months Ended
|
||||||||
|
December 31, 2017
|
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Goodwill
|
$
|
—
|
|
|
$
|
1,092.6
|
|
|
$
|
—
|
|
Indefinite-lived intangible assets
|
$
|
—
|
|
|
$
|
849.5
|
|
|
$
|
185.1
|
|
IPR&D
|
$
|
12.7
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
Year Ended
|
||||||
|
December 31, 2017
|
|
December 31,
2016 |
||||
Definite-lived Intangible assets
|
$
|
19.7
|
|
|
$
|
665.5
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
PAGE NO.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
1
|
||
|
|
|
2
|
||
|
|
|
3
|
||
|
|
|
4
|
||
|
|
|
5
|
||
|
|
|
6
|
||
|
|
|
7
|
||
|
|
|
8
|
||
|
|
|
9
|
||
|
|
|
10
|
||
|
|
|
11
|
||
|
|
|
12
|
||
|
|
|
13
|
||
|
|
|
14
|
||
|
|
|
15
|
||
|
|
|
16
|
||
|
|
|
17
|
||
|
|
|
18
|
||
|
|
|
19
|
||
|
|
|
20
|
||
|
|
|
21
|
||
|
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Net sales
|
$
|
4,946.2
|
|
|
$
|
5,280.6
|
|
|
$
|
2,632.2
|
|
|
$
|
4,227.1
|
|
Cost of sales
|
2,966.7
|
|
|
3,228.8
|
|
|
1,553.3
|
|
|
2,582.9
|
|
||||
Gross profit
|
1,979.5
|
|
|
2,051.8
|
|
|
1,078.9
|
|
|
1,644.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Distribution
|
87.0
|
|
|
88.3
|
|
|
47.9
|
|
|
67.7
|
|
||||
Research and development
|
167.7
|
|
|
184.0
|
|
|
88.2
|
|
|
187.8
|
|
||||
Selling
|
598.4
|
|
|
665.0
|
|
|
325.9
|
|
|
319.0
|
|
||||
Administration
|
461.1
|
|
|
452.2
|
|
|
306.8
|
|
|
385.3
|
|
||||
Impairment charges
|
47.5
|
|
|
2,631.0
|
|
|
215.6
|
|
|
6.8
|
|
||||
Restructuring
|
61.0
|
|
|
31.0
|
|
|
26.9
|
|
|
5.1
|
|
||||
Other operating income
|
(41.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total operating expenses
|
1,381.3
|
|
|
4,051.5
|
|
|
1,011.3
|
|
|
971.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
598.2
|
|
|
(1,999.7
|
)
|
|
67.6
|
|
|
672.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in financial assets
|
24.9
|
|
|
2,608.2
|
|
|
(57.3
|
)
|
|
(78.5
|
)
|
||||
Interest expense, net
|
168.1
|
|
|
216.6
|
|
|
89.9
|
|
|
146.0
|
|
||||
Other expense (Income), net
|
(10.1
|
)
|
|
22.7
|
|
|
25.2
|
|
|
334.2
|
|
||||
Loss on extinguishment of debt
|
135.2
|
|
|
1.1
|
|
|
0.9
|
|
|
10.5
|
|
||||
Income (loss) before income taxes
|
280.1
|
|
|
(4,848.3
|
)
|
|
8.9
|
|
|
260.3
|
|
||||
Income tax expense (benefit)
|
160.5
|
|
|
(835.5
|
)
|
|
(33.6
|
)
|
|
124.2
|
|
||||
Net income (loss)
|
$
|
119.6
|
|
|
$
|
(4,012.8
|
)
|
|
$
|
42.5
|
|
|
$
|
136.1
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.84
|
|
|
$
|
(28.01
|
)
|
|
$
|
0.29
|
|
|
$
|
0.97
|
|
Diluted
|
$
|
0.84
|
|
|
$
|
(28.01
|
)
|
|
$
|
0.29
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
142.3
|
|
|
143.3
|
|
|
145.6
|
|
|
139.3
|
|
||||
Diluted
|
142.6
|
|
|
143.3
|
|
|
146.1
|
|
|
139.8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
$
|
0.64
|
|
|
$
|
0.58
|
|
|
$
|
0.25
|
|
|
$
|
0.46
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
119.6
|
|
|
$
|
(4,012.8
|
)
|
|
$
|
42.5
|
|
|
$
|
136.1
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
328.5
|
|
|
(63.3
|
)
|
|
(135.5
|
)
|
|
(33.5
|
)
|
||||
Change in fair value of derivative financial instruments
(1)
|
9.7
|
|
|
(5.3
|
)
|
|
2.1
|
|
|
(0.2
|
)
|
||||
Change in fair value of investment securities
(2)
|
(14.1
|
)
|
|
8.7
|
|
|
9.3
|
|
|
(5.3
|
)
|
||||
Change in post-retirement and pension liability
(3)
|
10.8
|
|
|
(6.6
|
)
|
|
5.3
|
|
|
2.9
|
|
||||
Other comprehensive income (loss), net of tax
|
334.9
|
|
|
(66.5
|
)
|
|
(118.8
|
)
|
|
(36.1
|
)
|
||||
Comprehensive income (loss)
|
$
|
454.5
|
|
|
$
|
(4,079.3
|
)
|
|
$
|
(76.3
|
)
|
|
$
|
100.0
|
|
(1)
|
Includes tax effect of
$3.5 million
,
$2.1 million
,
$0.4 million
and
$5.7 million
for the
years ended
December 31, 2017
,
December 31, 2016
, the
six months ended
December 31, 2015
, and the
year ended
June 27, 2015
, respectively.
|
(2)
|
Includes tax effect of
$0.5 million
,
$4.1 million
,
$3.6 million
and
$2.7 million
for the
years ended
December 31, 2017
,
December 31, 2016
, the
six months ended
December 31, 2015
, and the
year ended
June 27, 2015
, respectively.
|
(3)
|
Includes tax effect of
$0.0 million
,
$2.5 million
,
$2.8 million
and
$0.6 million
for the
years ended
December 31, 2017
,
December 31, 2016
, the
six months ended
December 31, 2015
, and the
year ended
June 27, 2015
, respectively.
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
678.7
|
|
|
$
|
622.3
|
|
|
$
|
417.8
|
|
Accounts receivable, net of allowance for doubtful accounts of $6.2, $6.3 and $4.5, respectively
|
1,130.8
|
|
|
1,176.0
|
|
|
1,189.0
|
|
|||
Inventories
|
806.9
|
|
|
795.0
|
|
|
898.7
|
|
|||
Prepaid expenses and other current assets
|
203.2
|
|
|
212.0
|
|
|
286.1
|
|
|||
Total current assets
|
2,819.6
|
|
|
2,805.3
|
|
|
2,791.6
|
|
|||
Property, plant and equipment, net
|
833.1
|
|
|
870.1
|
|
|
886.2
|
|
|||
Financial assets
|
—
|
|
|
2,350.0
|
|
|
5,310.0
|
|
|||
Goodwill and other indefinite-lived intangible assets
|
4,265.7
|
|
|
4,163.9
|
|
|
7,069.0
|
|
|||
Other intangible assets, net
|
3,290.5
|
|
|
3,396.8
|
|
|
2,973.1
|
|
|||
Non-current deferred income taxes
|
10.4
|
|
|
72.1
|
|
|
71.4
|
|
|||
Other non-current assets
|
409.5
|
|
|
211.9
|
|
|
248.3
|
|
|||
Total non-current assets
|
8,809.2
|
|
|
11,064.8
|
|
|
16,558.0
|
|
|||
Total assets
|
$
|
11,628.8
|
|
|
$
|
13,870.1
|
|
|
$
|
19,349.6
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
450.2
|
|
|
$
|
471.7
|
|
|
$
|
555.8
|
|
Payroll and related taxes
|
148.8
|
|
|
115.8
|
|
|
125.3
|
|
|||
Accrued customer programs
|
419.7
|
|
|
380.3
|
|
|
396.0
|
|
|||
Accrued liabilities
|
230.8
|
|
|
263.3
|
|
|
351.9
|
|
|||
Accrued income taxes
|
116.1
|
|
|
32.4
|
|
|
62.7
|
|
|||
Current indebtedness
|
70.4
|
|
|
572.8
|
|
|
1,060.5
|
|
|||
Total current liabilities
|
1,436.0
|
|
|
1,836.3
|
|
|
2,552.2
|
|
|||
Long-term debt, less current portion
|
3,270.8
|
|
|
5,224.5
|
|
|
4,971.6
|
|
|||
Non-current deferred income taxes
|
321.9
|
|
|
389.9
|
|
|
1,372.7
|
|
|||
Other non-current liabilities
|
429.5
|
|
|
461.8
|
|
|
346.3
|
|
|||
Total non-current liabilities
|
4,022.2
|
|
|
6,076.2
|
|
|
6,690.6
|
|
|||
Total liabilities
|
5,458.2
|
|
|
7,912.5
|
|
|
9,242.8
|
|
|||
Commitments and contingencies - Note 16
|
|
|
|
|
|
||||||
Shareholders’ equity
|
|
|
|
|
|
||||||
Controlling interest:
|
|
|
|
|
|
||||||
Preferred shares, $0.0001 par value per share, 10 shares authorized
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ordinary shares, €0.001 par value per share, 10,000 shares authorized
|
7,892.9
|
|
|
8,135.0
|
|
|
8,142.6
|
|
|||
Accumulated other comprehensive income (loss)
|
253.1
|
|
|
(81.8
|
)
|
|
(15.3
|
)
|
|||
Retained earnings (accumulated deficit)
|
(1,975.5
|
)
|
|
(2,095.1
|
)
|
|
1,980.1
|
|
|||
Total controlling interest
|
6,170.5
|
|
|
5,958.1
|
|
|
10,107.4
|
|
|||
Noncontrolling interest
|
0.1
|
|
|
(0.5
|
)
|
|
(0.6
|
)
|
|||
Total shareholders’ equity
|
6,170.6
|
|
|
5,957.6
|
|
|
10,106.8
|
|
|||
Total liabilities and shareholders' equity
|
$
|
11,628.8
|
|
|
$
|
13,870.1
|
|
|
$
|
19,349.6
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures of Balance Sheet Information
|
|
|
|
|
|
||||||
Preferred shares, issued and outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ordinary shares, issued and outstanding
|
140.8
|
|
|
143.4
|
|
|
143.1
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Cash Flows From (For) Operating Activities
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
119.6
|
|
|
$
|
(4,012.8
|
)
|
|
$
|
42.5
|
|
|
$
|
136.1
|
|
Adjustments to derive cash flows
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
444.8
|
|
|
457.0
|
|
|
182.4
|
|
|
258.7
|
|
||||
Loss on acquisition-related foreign currency derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
326.4
|
|
||||
Share-based compensation
|
43.8
|
|
|
23.0
|
|
|
22.8
|
|
|
31.6
|
|
||||
Impairment charges
|
47.5
|
|
|
2,631.0
|
|
|
215.6
|
|
|
6.8
|
|
||||
Change in financial assets
|
24.9
|
|
|
2,608.2
|
|
|
(57.3
|
)
|
|
(78.5
|
)
|
||||
Loss on extinguishment of debt
|
135.2
|
|
|
1.1
|
|
|
0.9
|
|
|
10.5
|
|
||||
Restructuring charges
|
61.0
|
|
|
31.0
|
|
|
26.9
|
|
|
5.1
|
|
||||
Deferred income taxes
|
(48.9
|
)
|
|
(990.9
|
)
|
|
(120.0
|
)
|
|
(16.3
|
)
|
||||
Amortization of debt premium
|
(22.4
|
)
|
|
(24.7
|
)
|
|
(10.2
|
)
|
|
0.2
|
|
||||
Other non-cash adjustments, net
|
(2.7
|
)
|
|
33.5
|
|
|
18.1
|
|
|
10.2
|
|
||||
Subtotal
|
802.8
|
|
|
756.4
|
|
|
321.7
|
|
|
690.8
|
|
||||
Increase (decrease) in cash due to:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
3.2
|
|
|
(0.6
|
)
|
|
52.5
|
|
|
(51.1
|
)
|
||||
Inventories
|
(16.0
|
)
|
|
100.7
|
|
|
(29.6
|
)
|
|
(11.4
|
)
|
||||
Accounts payable
|
(39.6
|
)
|
|
(75.7
|
)
|
|
(194.1
|
)
|
|
120.5
|
|
||||
Payroll and related taxes
|
(27.4
|
)
|
|
(41.1
|
)
|
|
(38.2
|
)
|
|
(30.2
|
)
|
||||
Accrued customer programs
|
34.6
|
|
|
(13.9
|
)
|
|
34.4
|
|
|
71.3
|
|
||||
Accrued liabilities
|
(47.8
|
)
|
|
(79.5
|
)
|
|
108.1
|
|
|
42.8
|
|
||||
Accrued income taxes
|
(6.1
|
)
|
|
20.9
|
|
|
(56.8
|
)
|
|
21.9
|
|
||||
Other, net
|
(4.8
|
)
|
|
(12.3
|
)
|
|
2.9
|
|
|
0.6
|
|
||||
Subtotal
|
(103.9
|
)
|
|
(101.5
|
)
|
|
(120.8
|
)
|
|
164.4
|
|
||||
Net cash from operating activities
|
698.9
|
|
|
654.9
|
|
|
200.9
|
|
|
855.2
|
|
||||
Cash Flows From (For) Investing Activities
|
|
|
|
|
|
|
|
||||||||
Proceeds from royalty rights
|
87.3
|
|
|
353.7
|
|
|
166.3
|
|
|
344.6
|
|
||||
Acquisitions of businesses, net of cash acquired
|
(0.4
|
)
|
|
(427.4
|
)
|
|
(791.6
|
)
|
|
(2,177.8
|
)
|
||||
Asset acquisitions
|
—
|
|
|
(65.1
|
)
|
|
—
|
|
|
(4.0
|
)
|
||||
Settlement of acquisition-related foreign currency derivatives
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(329.9
|
)
|
||||
Proceeds from sale of securities
|
—
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
||||
Additions to property, plant and equipment
|
(88.6
|
)
|
|
(106.2
|
)
|
|
(77.8
|
)
|
|
(137.0
|
)
|
||||
Net proceeds from sale of business and other assets
|
154.6
|
|
|
69.1
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from sale of the Tysabri
®
financial asset
|
2,200.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other investing, net
|
(14.8
|
)
|
|
(3.6
|
)
|
|
(3.7
|
)
|
|
1.8
|
|
||||
Net cash from (for) investing activities
|
2,338.1
|
|
|
(175.0
|
)
|
|
(708.1
|
)
|
|
(2,302.3
|
)
|
||||
Cash Flows From (For) Financing Activities
|
|
|
|
|
|
|
|
||||||||
Borrowings (repayments) of revolving credit agreements and other financing, net
|
6.8
|
|
|
(802.5
|
)
|
|
718.0
|
|
|
(54.0
|
)
|
||||
Issuances of long-term debt
|
—
|
|
|
1,190.3
|
|
|
—
|
|
|
2,504.3
|
|
||||
Payments on long-term debt
|
(2,611.0
|
)
|
|
(559.2
|
)
|
|
(28.3
|
)
|
|
(1,823.5
|
)
|
||||
Premium on early debt retirement
|
(116.1
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
||||
Deferred financing fees
|
(4.8
|
)
|
|
(2.8
|
)
|
|
(0.3
|
)
|
|
(28.1
|
)
|
||||
Issuance of ordinary shares
|
0.7
|
|
|
8.3
|
|
|
4.9
|
|
|
1,043.5
|
|
||||
Equity issuance costs
|
—
|
|
|
(10.3
|
)
|
|
—
|
|
|
(35.7
|
)
|
||||
Repurchase of ordinary shares
|
(191.5
|
)
|
|
—
|
|
|
(500.0
|
)
|
|
—
|
|
||||
Cash dividends
|
(91.1
|
)
|
|
(83.2
|
)
|
|
(36.3
|
)
|
|
(64.8
|
)
|
||||
Other financing, net
|
2.3
|
|
|
(8.7
|
)
|
|
(8.4
|
)
|
|
(19.3
|
)
|
||||
Net cash from (for) financing activities
|
(3,004.7
|
)
|
|
(268.7
|
)
|
|
149.6
|
|
|
1,522.4
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
24.1
|
|
|
(6.7
|
)
|
|
(10.2
|
)
|
|
(89.2
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
56.4
|
|
|
204.5
|
|
|
(367.8
|
)
|
|
(13.9
|
)
|
||||
Cash and cash equivalents, beginning of period
|
622.3
|
|
|
417.8
|
|
|
785.6
|
|
|
799.5
|
|
||||
Cash and cash equivalents, end of period
|
$
|
678.7
|
|
|
$
|
622.3
|
|
|
$
|
417.8
|
|
|
$
|
785.6
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
|
|
||||||||
Cash paid/received during the year for:
|
|
|
|
|
|
|
|
||||||||
Interest paid
|
$
|
187.6
|
|
|
$
|
205.1
|
|
|
$
|
84.2
|
|
|
$
|
143.2
|
|
Interest received
|
$
|
9.3
|
|
|
$
|
1.2
|
|
|
$
|
0.7
|
|
|
$
|
1.1
|
|
Income taxes paid
|
$
|
186.9
|
|
|
$
|
139.5
|
|
|
$
|
87.8
|
|
|
$
|
131.0
|
|
Income taxes refunded
|
$
|
3.6
|
|
|
$
|
9.3
|
|
|
$
|
1.7
|
|
|
$
|
9.6
|
|
|
Ordinary Shares
Issued |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings (Accumulated Deficit) |
|
Total
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|||||||||||||
Balance at June 28, 2014
|
133.8
|
|
|
$
|
6,678.2
|
|
|
$
|
139.6
|
|
|
$
|
1,902.6
|
|
|
$
|
8,720.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
136.1
|
|
|
136.1
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(36.1
|
)
|
|
—
|
|
|
(36.1
|
)
|
||||
Issuance of ordinary shares under:
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity offering
|
6.8
|
|
|
1,035.0
|
|
|
—
|
|
|
—
|
|
|
1,035.0
|
|
||||
Omega acquisition
|
5.4
|
|
|
904.9
|
|
|
—
|
|
|
—
|
|
|
904.9
|
|
||||
Stock options
|
0.2
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
||||
Restricted stock plan
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Compensation for stock options
|
—
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
||||
Compensation for restricted stock
|
—
|
|
|
24.7
|
|
|
—
|
|
|
—
|
|
|
24.7
|
|
||||
Cash dividends, $0.46 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(64.8
|
)
|
|
(64.8
|
)
|
||||
Tax effect from stock transactions
|
—
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
||||
Shares withheld for payment of employee's withholding tax liability
|
(0.1
|
)
|
|
(7.6
|
)
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
||||
Equity issuance costs
|
—
|
|
|
(35.7
|
)
|
|
—
|
|
|
—
|
|
|
(35.7
|
)
|
||||
Balance at June 27, 2015
|
146.3
|
|
|
8,621.9
|
|
|
103.5
|
|
|
1,973.9
|
|
|
10,699.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
42.5
|
|
|
42.5
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(118.8
|
)
|
|
—
|
|
|
(118.8
|
)
|
||||
Issuance of ordinary shares under:
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock options
|
0.1
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
||||
Restricted stock plan
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Compensation for stock options
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
||||
Compensation for restricted stock
|
—
|
|
|
20.3
|
|
|
—
|
|
|
—
|
|
|
20.3
|
|
||||
Cash dividends, $0.25 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(36.3
|
)
|
|
(36.3
|
)
|
||||
Tax effect from stock transactions
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
||||
Shares withheld for payment of employee's withholding tax liability
|
(0.1
|
)
|
|
(10.3
|
)
|
|
—
|
|
|
—
|
|
|
(10.3
|
)
|
||||
Repurchases of ordinary shares
|
(3.3
|
)
|
|
(500.0
|
)
|
|
—
|
|
|
—
|
|
|
(500.0
|
)
|
||||
Balance at December 31, 2015
|
143.1
|
|
|
8,142.6
|
|
|
(15.3
|
)
|
|
1,980.1
|
|
|
10,107.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,012.8
|
)
|
|
(4,012.8
|
)
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(66.5
|
)
|
|
—
|
|
|
(66.5
|
)
|
||||
Issuance of ordinary shares under:
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock options
|
0.2
|
|
|
8.3
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
||||
Restricted stock plan
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Compensation for stock options
|
—
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
||||
Compensation for restricted stock
|
—
|
|
|
18.0
|
|
|
—
|
|
|
—
|
|
|
18.0
|
|
||||
Cash dividends, $0.58 per share
|
—
|
|
|
(20.8
|
)
|
|
—
|
|
|
(62.4
|
)
|
|
(83.2
|
)
|
||||
Tax effect from stock transactions
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||
Shares withheld for payment of employee's
withholding tax liability |
(0.1
|
)
|
|
(6.3
|
)
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
||||
Equity issuance costs
|
—
|
|
|
(10.3
|
)
|
|
—
|
|
|
—
|
|
|
(10.3
|
)
|
||||
Balance at December 31, 2016
|
143.4
|
|
|
8,135.0
|
|
|
(81.8
|
)
|
|
(2,095.1
|
)
|
|
5,958.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
119.6
|
|
|
119.6
|
|
||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
334.9
|
|
|
—
|
|
|
334.9
|
|
||||
Stock options
|
0.1
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||
Restricted stock plan
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Compensation for stock options
|
—
|
|
|
8.9
|
|
|
—
|
|
|
—
|
|
|
8.9
|
|
|
Ordinary Shares
Issued |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings (Accumulated Deficit) |
|
Total
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|||||||||||||
Compensation for restricted stock
|
—
|
|
|
34.9
|
|
|
—
|
|
|
—
|
|
|
34.9
|
|
||||
Cash dividends, $0.64 per share
|
—
|
|
|
(91.1
|
)
|
|
—
|
|
|
—
|
|
|
(91.1
|
)
|
||||
Shares withheld for payment of employee's
withholding tax liability |
(0.1
|
)
|
|
(4.0
|
)
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
||||
Repurchases of ordinary shares
|
(2.7
|
)
|
|
(191.5
|
)
|
|
—
|
|
|
—
|
|
|
(191.5
|
)
|
||||
Balance at December 31, 2017
|
140.8
|
|
|
$
|
7,892.9
|
|
|
$
|
253.1
|
|
|
$
|
(1,975.5
|
)
|
|
$
|
6,170.5
|
|
•
|
The twelve-month period from January 1, 2017 through December 31, 2017;
|
•
|
The twelve-month period from January 1, 2016 through December 31, 2016;
|
•
|
The six-month period from June 28, 2015 through December 31, 2015;
|
•
|
The twelve-month period from June 29, 2014 to June 27, 2015; and
|
•
|
The six-month period from June 29, 2014 through December 27, 2014.
|
•
|
Consumer Healthcare Americas
("
CHCA
")
,
comprises our U.S., Mexico and Canada consumer healthcare business (OTC, contract, infant formula and animal health categories).
|
•
|
Consumer Healthcare International
("
CHCI
")
,
comprises our branded consumer healthcare business primarily in Europe and our consumer focused businesses in the U.K., Australia, and Israel. This segment also includes our U.K. liquid licensed products business.
|
•
|
Prescription Pharmaceuticals
("
RX
")
,
comprises our U.S. Prescription Pharmaceuticals business.
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Land
|
$
|
45.5
|
|
|
$
|
45.0
|
|
|
$
|
47.5
|
|
Buildings
|
514.3
|
|
|
520.2
|
|
|
508.2
|
|
|||
Machinery and equipment
|
1,078.6
|
|
|
1,094.7
|
|
|
1,103.3
|
|
|||
Gross property, plant and equipment
|
1,638.4
|
|
|
1,659.9
|
|
|
1,659.0
|
|
|||
Less accumulated depreciation
|
(805.3
|
)
|
|
(789.8
|
)
|
|
(772.8
|
)
|
|||
Property, plant and equipment, net
|
$
|
833.1
|
|
|
$
|
870.1
|
|
|
$
|
886.2
|
|
•
|
Relief from royalty method
: This method assumes that if the acquired company did not own the intangible asset or intellectual property, it would be willing to pay a royalty for its use. The benefit of ownership of the intellectual property is valued as the relief from the royalty expense that would otherwise be incurred. We typically use this method for valuing readily transferable intangible assets that have licensing appeal, such as trade names and trademarks and certain technology assets.
|
•
|
Multi-period excess earnings method
: This method starts with a forecast of the net cash flows expected to be generated by the asset over its estimated useful life. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. We typically use this method for valuing intangible assets such as developed product technology, customer relationships, product formulations and IPR&D.
|
•
|
Lost income method
: This method estimates the fair value of an asset by comparing the value of the business, inclusive of the asset, to the hypothetical value of the same business excluding the asset.
|
Year Ended
|
Six Months Ended
|
|
Year Ended
|
|||||||||||
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
145.3
|
|
|
$
|
155.9
|
|
|
$
|
77.5
|
|
|
$
|
55.7
|
|
Recently Issued Accounting Standards Adopted
|
||||||
Standard
|
|
Description
|
|
Date of adoption
|
|
Effect on the Financial Statements or Other Significant Matters
|
Clarifying the Definition of a Business
|
|
This update clarifies the definition of a business and addresses whether transactions should be accounted for as asset acquisitions or business combinations (or divestitures). The guidance includes an initial threshold that an acquired set of assets will not be considered a business if substantially all of the fair value of the assets acquired is concentrated in a single tangible or identifiable intangible asset (or group of similar assets). If the acquired set does not pass the initial threshold, then the guidance requires that, to be a business, the set must include an input and a substantive process that together significantly contribute to the ability to create outputs. Different factors are considered to determine whether the set includes a substantive process, such as the inclusion of an organized workforce. Further, the guidance removes language stating that a business need not include all of the inputs and processes that the seller used in operating the business.
|
|
January 1, 2017
|
|
We early adopted this new standard and will apply it prospectively when determining whether transactions should be accounted for as asset acquisitions (divestitures) or business combinations (divestitures). During the year ended December 31, 2017, we applied the new guidance when determining whether certain product divestitures represented sales of assets or businesses.
|
Improvements to Employee Share-Based Payment Accounting
|
|
This guidance is intended to simplify several aspects of the accounting for share-based payment award transactions. It will require all income tax effects of awards to be recorded through the income statement when the awards vest or settle as opposed to certain amounts being recorded in additional paid-in capital. An entity will also have to elect whether to account for forfeitures as they occur or by estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change (as currently required). The guidance will also increase the amount an employer can withhold to cover income taxes on awards.
|
|
January 1, 2017
|
|
We adopted this standard as of January 1, 2017. We elected to estimate the number of awards expected to be forfeited and adjust the estimate when it is likely to change, consistent with past practice. We did not change the amounts that we withhold to cover income taxes on awards. As the requirement to record all income tax effects of vested or settled awards through the income statement is prospective in nature, there was no cumulative effect of adopting the standard on our balance sheet.
|
Recently Issued Accounting Standards Not Yet Adopted
|
||||||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
Revenue from Contracts with Customers
|
|
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. This guidance allows for two adoption methods, full retrospective approach or modified retrospective approach.
|
|
January 1, 2018
|
|
We have substantially completed our evaluation of the impact of adoption of the new revenue standard on our Consolidated Financial Statements. We will adopt the new revenue standard effective January 1, 2018 using the modified retrospective method. Upon adoption, we anticipate recognizing an adjustment of $5.4 million to the opening balance of retained earnings. The impact of adoption relates primarily to the new guidance on when revenue should be recognized, focusing on indicators of the customer gaining control. Under this new model, in certain cases revenue may be recognized over-time as opposed to a point in time. In our business, revenue may be recognized over-time for certain of our contract manufacturing and private label arrangements in which we produce products that do not have an alternative use, and if the contracts with customers were canceled, we would have an enforceable right to payment for performance completed to date, inclusive of a reasonable profit margin. As a result, we expect to recognize revenue earlier in the performance period for these arrangements as product is customized, as opposed to when units are shipped or delivered. Our assessment of the new revenue standard has also included, but has not been limited to, estimation of variable consideration and identification of performance obligations and we have determined that the related accounting is not materially different compared to our current practice.
|
Intra-Entity Asset Transfers of Assets Other Than Inventory
|
|
Under the new guidance, the tax impact to the seller on the profit from the transfers and the buyer’s deferred tax benefit on the increased tax basis would be recognized when the transfers occur, resulting in the recognition of expense sooner than under historical guidance. The guidance excludes intra-entity transfers of inventory. For intra-entity transfers of inventory, the Financial Accounting Standards Board ("FASB") decided to retain current GAAP, which requires an entity to recognize the income tax consequences when the inventory has been sold to an outside party.
|
|
January 1, 2018
|
|
We have identified certain intra-entity asset transfers that will require an adjustment; based on our current analysis, no material adjustments have been identified at this time.
|
Financial Instruments - Recognition and Measurement of Financial Assets and Liabilities
|
|
The objective of this simplification update is to improve the decision usefulness of financial instrument reporting, and it principally affects accounting for equity investments currently classified as available for sale and financial liabilities where the fair value option has been elected. Entities will have to measure many equity investments at fair value and recognize changes in fair value in net income rather than other comprehensive income as required under current U.S. GAAP.
|
|
January 1, 2018
|
|
We have identified certain investments that will require an adjustment; based on our current analysis, no material adjustments have been identified at this time.
|
Recently Issued Accounting Standards Not Yet Adopted (continued)
|
||||||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
Leases
|
|
This guidance was issued to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. For leases with a term of 12 months or less, lessees are permitted to make an election to not recognize right-of-use assets and lease liabilities. Upon adoption, lessees will apply the new standard as of the beginning of the earliest comparative period presented in the financial statements, however lessees will be able to exclude leases that expire as of the implementation date. Early adoption is permitted.
|
|
January 1, 2019
|
|
We are currently evaluating the implications of adoption on our Consolidated Financial Statements. The actual impact will depend on our lease portfolio at the time of adoption. We have commenced the first step of identifying a task force to take the lead in implementing the new lease standard.
|
Derivatives and Hedging
|
|
This update was issued to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. In addition, the amendments simplify the application of hedge accounting in certain situations. Under the new rule, the entity’s ability to hedge non-financial and financial risk components is expanded. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and also eases certain documentation and assessment requirements. Early adoption is permitted.
|
|
January 1, 2019
|
|
We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
|
Measurement of Credit Losses on Financial Instruments
|
|
This guidance changes the impairment model for most financial assets and certain other instruments, replacing the current "incurred loss" approach with an "expected loss" credit impairment model, which will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, and off-balance sheet credit exposures such as letters of credit. Early adoption is permitted.
|
|
January 1, 2020
|
|
We are currently evaluating the new standard for potential impacts on our receivables, debt, and other financial instruments.
|
Intangibles - Goodwill and Other Simplifying the Test for Goodwill
|
|
The objective of this update is to reduce the cost and complexity of subsequent goodwill accounting by simplifying the impairment test by removing the Step 2 requirement to perform a hypothetical purchase price allocation when the carrying value of a reporting unit exceeds its fair value. If a reporting unit’s carrying value exceeds its fair value, an entity would record an impairment charge based on that difference, limited to the amount of goodwill attributed to that reporting unit. The proposal would not change the guidance on completing Step 1 of the goodwill impairment test. The proposed guidance would be applied prospectively. Early adoption is permitted.
|
|
January 1, 2020
|
|
We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
|
|
Tretinoin Products
|
|
Development-Stage Rx Products
|
|
All Other
(1)
|
||||||
Purchase price paid
|
$
|
416.4
|
|
|
$
|
—
|
|
|
$
|
17.1
|
|
Contingent consideration
|
—
|
|
|
24.9
|
|
|
26.2
|
|
|||
Total purchase consideration
|
$
|
416.4
|
|
|
$
|
24.9
|
|
|
$
|
43.3
|
|
|
|
|
|
|
|
||||||
Assets acquired:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.8
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
4.9
|
|
|||
Inventories
|
1.4
|
|
|
—
|
|
|
7.1
|
|
|||
Prepaid expenses and other current assets
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
1.2
|
|
|||
Goodwill
|
1.7
|
|
|
—
|
|
|
—
|
|
|||
Definite-lived intangibles
:
|
|
|
|
|
|
||||||
Distribution and license agreements, supply agreements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.8
|
|
Developed product technology, formulations, and product rights
|
411.0
|
|
|
—
|
|
|
18.0
|
|
|||
Customer relationships and distribution networks
|
—
|
|
|
—
|
|
|
8.2
|
|
|||
Non-compete agreements
|
2.3
|
|
|
—
|
|
|
—
|
|
|||
Indefinite-lived intangibles
:
|
|
|
|
|
|
||||||
In-process research and development
|
$
|
—
|
|
|
$
|
24.9
|
|
|
$
|
4.9
|
|
Total intangible assets
|
$
|
413.3
|
|
|
$
|
24.9
|
|
|
$
|
32.9
|
|
Total assets
|
$
|
416.4
|
|
|
$
|
24.9
|
|
|
$
|
50.0
|
|
Liabilities assumed:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
Accrued liabilities
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Long-term debt
|
—
|
|
|
—
|
|
|
3.3
|
|
|||
Net deferred income tax liabilities
|
—
|
|
|
—
|
|
|
0.5
|
|
|||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.7
|
|
Net assets acquired
|
$
|
416.4
|
|
|
$
|
24.9
|
|
|
$
|
43.3
|
|
(1)
|
Consists of
four
product acquisitions in our
CHCA
,
CHCI
and
RX
segments.
|
|
Entocort
®
|
|
Naturwohl
|
|
ScarAway
®
|
|
GSK Products
|
|
All Other
(1)
|
||||||||||
Purchase price paid
|
$
|
380.2
|
|
|
$
|
150.4
|
|
|
$
|
26.7
|
|
|
$
|
223.6
|
|
|
$
|
15.3
|
|
Contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.9
|
|
|||||
Total purchase consideration
|
$
|
380.2
|
|
|
$
|
150.4
|
|
|
$
|
26.7
|
|
|
$
|
223.6
|
|
|
$
|
29.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets acquired:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable
|
—
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Inventories
|
0.2
|
|
|
1.5
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
61.0
|
|
|
3.5
|
|
|
32.6
|
|
|
—
|
|
|||||
Definite-lived intangibles
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Distribution and license agreements, supply agreements
|
$
|
—
|
|
|
$
|
21.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Developed product technology, formulations, and product rights
|
380.0
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||||
Customer relationships and distribution networks
|
—
|
|
|
25.9
|
|
|
9.8
|
|
|
61.5
|
|
|
—
|
|
|||||
Trademarks, trade names, and brands
|
—
|
|
|
64.2
|
|
|
11.4
|
|
|
129.5
|
|
|
—
|
|
|||||
Non-compete agreements
|
—
|
|
|
0.3
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||||
Indefinite-lived intangibles
:
|
|
|
|
|
|
|
|
|
|
||||||||||
In-process research and development
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29.2
|
|
Total intangible assets
|
$
|
380.0
|
|
|
$
|
111.8
|
|
|
$
|
22.2
|
|
|
$
|
191.0
|
|
|
$
|
29.2
|
|
Total assets
|
$
|
380.2
|
|
|
$
|
182.2
|
|
|
$
|
26.7
|
|
|
$
|
223.6
|
|
|
$
|
29.2
|
|
Liabilities assumed:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued liabilities
|
—
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net deferred income tax liabilities
|
—
|
|
|
27.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
$
|
—
|
|
|
$
|
31.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net assets acquired
|
$
|
380.2
|
|
|
$
|
150.4
|
|
|
$
|
26.7
|
|
|
$
|
223.6
|
|
|
$
|
29.2
|
|
(1)
|
Consists of
eight
product development acquisitions in our
CHCA
,
CHCI
and
RX
segments.
|
Perrigo ordinary shares issued
|
|
5.4
|
|
|
Perrigo per share price at transaction close on March 30, 2015
|
|
$
|
167.64
|
|
Total value of Perrigo ordinary shares issued
|
|
$
|
904.9
|
|
Cash consideration
|
|
2,078.3
|
|
|
Total consideration
|
|
$
|
2,983.2
|
|
|
Year Ended
|
||
Line item
|
June 27,
2015 |
||
Administration
|
$
|
29.7
|
|
Interest expense, net
|
23.7
|
|
|
Other expense, net
|
324.0
|
|
|
Loss on extinguishment of debt
|
9.6
|
|
|
Total acquisition-related costs
|
$
|
387.0
|
|
|
June 27,
2015 |
|
Measurement Period Adjustments
|
|
December 31,
2015 |
||||||
Accounts receivable
|
$
|
227.4
|
|
|
$
|
(4.5
|
)
|
|
$
|
222.9
|
|
Inventories
|
$
|
288.9
|
|
|
$
|
(11.9
|
)
|
|
$
|
277.0
|
|
Property, plant and equipment, net
|
$
|
121.2
|
|
|
$
|
9.6
|
|
|
$
|
130.8
|
|
Goodwill
|
$
|
1,269.6
|
|
|
$
|
419.1
|
|
|
$
|
1,688.7
|
|
Intangible assets:
|
|
|
|
|
|
||||||
Developed product technology, formulations, and product rights
|
$
|
36.9
|
|
|
$
|
(5.5
|
)
|
|
$
|
31.4
|
|
Customer relationships and distribution networks
|
1,342.7
|
|
|
(286.4
|
)
|
|
1,056.3
|
|
|||
Definite-lived trademarks, trade names, and brands
|
282.0
|
|
|
5.5
|
|
|
287.5
|
|
|||
Indefinite-lived trademarks, trade names, and brands
|
2,145.2
|
|
|
(141.4
|
)
|
|
2,003.8
|
|
|||
Total intangible assets
|
$
|
3,806.8
|
|
|
$
|
(427.8
|
)
|
|
$
|
3,379.0
|
|
Accrued liabilities
|
$
|
50.0
|
|
|
$
|
(0.7
|
)
|
|
$
|
49.3
|
|
Net deferred income tax liabilities
|
$
|
771.1
|
|
|
$
|
14.4
|
|
|
$
|
785.5
|
|
Other non-current liabilities
|
$
|
88.9
|
|
|
$
|
(29.0
|
)
|
|
$
|
59.9
|
|
|
Gelcaps
|
|
Omega
|
|
Lumara
|
||||||
Total purchase consideration
|
$
|
37.9
|
|
|
$
|
2,983.2
|
|
|
$
|
83.0
|
|
Assets acquired:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
4.6
|
|
|
$
|
14.7
|
|
|
$
|
—
|
|
Accounts receivable
|
7.3
|
|
|
222.9
|
|
|
2.9
|
|
|||
Inventories
|
7.2
|
|
|
277.0
|
|
|
1.5
|
|
|||
Prepaid expenses and other current assets
|
2.1
|
|
|
51.2
|
|
|
0.4
|
|
|||
Property, plant and equipment, net
|
6.0
|
|
|
130.8
|
|
|
0.1
|
|
|||
Goodwill
|
6.0
|
|
|
1,688.7
|
|
|
—
|
|
|||
Definite-lived intangibles
:
|
|
|
|
|
|
||||||
Developed product technology, formulations, and product rights
|
$
|
—
|
|
|
$
|
31.4
|
|
|
$
|
82.0
|
|
Customer relationships and distribution networks
|
6.6
|
|
|
1,056.3
|
|
|
—
|
|
|||
Trademarks, trade names, and brands
|
—
|
|
|
287.5
|
|
|
—
|
|
|||
Indefinite-lived intangibles
:
|
|
|
|
|
|
||||||
Trademarks, trade names, and brands
|
4.4
|
|
|
2,003.8
|
|
|
—
|
|
|||
Total intangible assets
|
$
|
11.0
|
|
|
$
|
3,379.0
|
|
|
$
|
82.0
|
|
Other non-current assets
|
0.4
|
|
|
2.4
|
|
|
—
|
|
|||
Total assets
|
$
|
44.6
|
|
|
$
|
5,766.7
|
|
|
$
|
86.9
|
|
Liabilities assumed:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
3.3
|
|
|
$
|
225.0
|
|
|
$
|
—
|
|
Short-term debt
|
—
|
|
|
112.6
|
|
|
—
|
|
|||
Accrued liabilities
|
1.6
|
|
|
49.3
|
|
|
3.9
|
|
|||
Payroll and related taxes
|
—
|
|
|
51.3
|
|
|
—
|
|
|||
Accrued customer programs
|
—
|
|
|
28.9
|
|
|
—
|
|
|||
Long-term debt
|
—
|
|
|
1,471.0
|
|
|
—
|
|
|||
Net deferred income tax liabilities
|
1.4
|
|
|
785.5
|
|
|
—
|
|
|||
Other non-current liabilities
|
0.4
|
|
|
59.9
|
|
|
—
|
|
|||
Total liabilities
|
$
|
6.7
|
|
|
$
|
2,783.5
|
|
|
$
|
3.9
|
|
Net assets acquired
|
$
|
37.9
|
|
|
$
|
2,983.2
|
|
|
$
|
83.0
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||
(Unaudited)
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27,
2015 |
||||||
Net sales
|
$
|
5,288.6
|
|
|
$
|
2,748.8
|
|
|
$
|
5,682.5
|
|
Net income (loss)
|
$
|
(4,011.0
|
)
|
|
$
|
81.0
|
|
|
$
|
250.2
|
|
|
CHCA
|
|
CHCI
|
|
RX
|
|
Specialty Sciences
|
|
Other
|
|
Total
|
||||||||||||
Balance at June 27, 2015
|
$
|
1,817.2
|
|
|
$
|
1,530.2
|
|
|
$
|
1,086.0
|
|
|
$
|
199.6
|
|
|
$
|
88.2
|
|
|
$
|
4,721.2
|
|
Business acquisitions
|
9.7
|
|
|
87.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97.1
|
|
||||||
Changes in assets held-for-sale
|
(13.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.6
|
)
|
|
(27.6
|
)
|
||||||
Currency translation adjustments
|
(0.8
|
)
|
|
(53.3
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(2.1
|
)
|
|
(58.1
|
)
|
||||||
Purchase accounting adjustments
|
1.2
|
|
|
418.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
420.1
|
|
||||||
Balance at December 31, 2015
|
1,814.3
|
|
|
1,983.2
|
|
|
1,084.1
|
|
|
199.6
|
|
|
71.5
|
|
|
5,152.7
|
|
||||||
Business acquisitions
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
||||||
Changes in assets held-for-sale
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
13.5
|
|
||||||
Impairments
|
(24.5
|
)
|
|
(868.4
|
)
|
|
—
|
|
|
(199.6
|
)
|
|
—
|
|
|
(1,092.5
|
)
|
||||||
Currency translation adjustments
|
(0.9
|
)
|
|
(27.5
|
)
|
|
0.8
|
|
|
—
|
|
|
0.9
|
|
|
(26.7
|
)
|
||||||
Purchase accounting adjustments
|
17.2
|
|
|
(16.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||||
Balance at December 31, 2016
|
1,810.6
|
|
|
1,070.8
|
|
|
1,086.6
|
|
|
—
|
|
|
81.4
|
|
|
4,049.4
|
|
||||||
Re-allocation of goodwill
(1)
|
35.3
|
|
|
—
|
|
|
27.7
|
|
|
—
|
|
|
(63.0
|
)
|
|
—
|
|
||||||
Business divestitures
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(26.4
|
)
|
|
(30.5
|
)
|
||||||
Currency translation adjustments
|
1.5
|
|
|
139.0
|
|
|
8.0
|
|
|
—
|
|
|
8.0
|
|
|
156.5
|
|
||||||
Balance at December 31, 2017
|
$
|
1,847.4
|
|
|
$
|
1,205.7
|
|
|
$
|
1,122.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,175.4
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Gross
|
|
Accumulated
Amortization
|
|
Gross
|
|
Accumulated Amortization
|
||||||||||||
Definite-lived intangibles
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distribution and license agreements, supply agreements
|
$
|
311.2
|
|
|
$
|
169.8
|
|
|
$
|
305.6
|
|
|
$
|
120.4
|
|
|
$
|
242.4
|
|
|
$
|
77.7
|
|
Developed product technology, formulations, and product rights
|
1,358.4
|
|
|
598.7
|
|
|
1,418.1
|
|
|
526.0
|
|
|
1,387.6
|
|
|
426.0
|
|
||||||
Customer relationships and distribution networks
|
1,642.0
|
|
|
460.6
|
|
|
1,489.9
|
|
|
307.5
|
|
|
1,520.7
|
|
|
193.0
|
|
||||||
Trademarks, trade names, and brands
|
1,335.4
|
|
|
129.5
|
|
|
1,189.3
|
|
|
55.3
|
|
|
539.4
|
|
|
22.8
|
|
||||||
Non-compete agreements
|
14.7
|
|
|
12.6
|
|
|
14.3
|
|
|
11.2
|
|
|
15.2
|
|
|
12.7
|
|
||||||
Total definite-lived intangibles
|
$
|
4,661.7
|
|
|
$
|
1,371.2
|
|
|
$
|
4,417.2
|
|
|
$
|
1,020.4
|
|
|
$
|
3,705.3
|
|
|
$
|
732.2
|
|
Indefinite-lived intangibles
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks, trade names, and brands
|
$
|
52.1
|
|
|
$
|
—
|
|
|
$
|
50.5
|
|
|
$
|
—
|
|
|
$
|
1,868.1
|
|
|
$
|
—
|
|
In-process research and development
|
38.2
|
|
|
—
|
|
|
64.0
|
|
|
—
|
|
|
48.2
|
|
|
—
|
|
||||||
Total indefinite-lived intangibles
|
$
|
90.3
|
|
|
$
|
—
|
|
|
$
|
114.5
|
|
|
$
|
—
|
|
|
$
|
1,916.3
|
|
|
$
|
—
|
|
Total other intangible assets
|
$
|
4,752.0
|
|
|
$
|
1,371.2
|
|
|
$
|
4,531.7
|
|
|
$
|
1,020.4
|
|
|
$
|
5,621.6
|
|
|
$
|
732.2
|
|
|
Year Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||
|
Definite-Lived Intangible Assets
|
|
IPR&D
|
|
Indefinite-Lived Intangible Assets
|
|
Definite-Lived Intangible Assets
|
|
IPR&D
|
|
Indefinite-Lived Intangible Assets
|
||||||||||||
CHCA
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
CHCI
|
—
|
|
|
1.1
|
|
|
849.1
|
|
|
321.4
|
|
|
3.5
|
|
|
185.1
|
|
||||||
RX
|
19.7
|
|
|
11.6
|
|
|
—
|
|
|
342.2
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
19.7
|
|
|
$
|
12.7
|
|
|
$
|
849.5
|
|
|
$
|
665.6
|
|
|
$
|
3.5
|
|
|
$
|
185.1
|
|
Amortizable Intangible Asset Category
|
|
Remaining Weighted-Average Useful Life (Years)
|
Distribution and license agreements, supply agreements
|
|
7
|
Developed product technology, formulations, and product rights
|
|
12
|
Customer relationships and distribution networks
|
|
17
|
Trademarks, trade names, and brands
|
|
20
|
Non-compete agreements
|
|
2
|
Year
|
|
Amount
|
||
2018
|
|
$
|
341.0
|
|
2019
|
|
316.4
|
|
|
2020
|
|
280.8
|
|
|
2021
|
|
251.8
|
|
|
2022
|
|
222.0
|
|
|
Thereafter
|
|
1,878.5
|
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Finished goods
|
$
|
454.3
|
|
|
$
|
431.1
|
|
|
$
|
537.2
|
|
Work in process
|
152.8
|
|
|
165.7
|
|
|
151.6
|
|
|||
Raw materials
|
199.8
|
|
|
198.2
|
|
|
209.9
|
|
|||
Total inventories
|
$
|
806.9
|
|
|
$
|
795.0
|
|
|
$
|
898.7
|
|
Level 1:
|
Quoted prices for identical instruments in active markets.
|
Level 2:
|
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
|
Level 3:
|
Valuations derived from valuation techniques in which one or more significant inputs are not observable.
|
|
|
|
|
Fair Value
|
||||||||||
|
|
Fair Value Hierarchy
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||
Investment securities
|
|
Level 1
|
|
$
|
17.0
|
|
|
$
|
38.2
|
|
|
$
|
14.9
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
Level 2
|
|
$
|
6.3
|
|
|
$
|
3.8
|
|
|
$
|
4.8
|
|
Funds associated with Israeli severance liability
|
|
Level 2
|
|
16.3
|
|
|
15.9
|
|
|
17.2
|
|
|||
Total level 2 assets
|
|
|
|
$
|
22.6
|
|
|
$
|
19.7
|
|
|
$
|
22.0
|
|
|
|
|
|
|
|
|
|
|
||||||
Royalty Pharma contingent milestone payments
|
|
Level 3
|
|
$
|
134.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial assets
|
|
Level 3
|
|
—
|
|
|
2,350.0
|
|
|
5,310.0
|
|
|||
Total level 3 assets
|
|
|
|
$
|
134.5
|
|
|
$
|
2,350.0
|
|
|
$
|
5,310.0
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap agreements
|
|
Level 2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Foreign currency forward contracts
|
|
Level 2
|
|
3.8
|
|
|
5.0
|
|
|
3.9
|
|
|||
Total level 2 liabilities
|
|
|
|
$
|
3.8
|
|
|
$
|
5.0
|
|
|
$
|
4.2
|
|
|
|
|
|
|
|
|
|
|
||||||
Contingent consideration
|
|
Level 3
|
|
$
|
22.0
|
|
|
$
|
69.9
|
|
|
$
|
17.9
|
|
|
|
|
|
|
|
|
|
|
||||||
Measured at fair value on a non-recurring basis:
|
|
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||
Goodwill
(1)
|
|
Level 3
|
|
$
|
—
|
|
|
$
|
1,148.4
|
|
|
$
|
—
|
|
Indefinite-lived intangible assets
(2)
|
|
Level 3
|
|
—
|
|
|
0.3
|
|
|
1,031.8
|
|
|||
Definite-lived intangible assets
(3)
|
|
Level 3
|
|
11.5
|
|
|
758.0
|
|
|
—
|
|
|||
Assets held for sale, net
|
|
Level 3
|
|
—
|
|
|
18.2
|
|
|
37.5
|
|
|||
Total level 3 assets
|
|
|
|
$
|
11.5
|
|
|
$
|
1,924.9
|
|
|
$
|
1,069.3
|
|
(1)
|
As of December 31, 2016, goodwill with a carrying amount of
$2.2 billion
was written down to its implied fair value of
$1.1 billion
.
|
(2)
|
As of December 31, 2016, indefinite-lived intangible assets with a carrying amount of
$0.7 million
were written down to a fair value of
$0.3 million
. As of December 31, 2015, indefinite-lived intangible assets with a carrying amount of
$1.2 billion
were written down to a fair value of
$1.0 billion
.
|
(3)
|
As of December 31, 2017, definite-lived intangible assets with a carrying amount of
$31.2 million
were written down to a fair value of
$11.5 million
. As of December 31, 2016, definite-lived intangible assets with a carrying amount of
$2.3 billion
were written down to a fair value of
$758.0 million
. Included in this balance are indefinite-lived intangible assets with a fair value of
$364.5 million
and
$674.2 million
that were reclassified to definite-lived assets at April 3, 2016 and October 2, 2016, respectively.
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Tysabri
®
financial asset
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
2,350.0
|
|
|
$
|
5,310.0
|
|
|
$
|
5,420.0
|
|
|
$
|
5,680.0
|
|
Royalties earned
|
—
|
|
|
(351.8
|
)
|
|
(167.3
|
)
|
|
(338.5
|
)
|
||||
Change in fair value
|
—
|
|
|
(2,608.2
|
)
|
|
57.3
|
|
|
78.5
|
|
||||
Divestitures
|
(2,350.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
$
|
—
|
|
|
$
|
2,350.0
|
|
|
$
|
5,310.0
|
|
|
$
|
5,420.0
|
|
|
Year Ended
|
|
Six Months Ended
|
||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Contingent Consideration
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
69.9
|
|
|
$
|
17.9
|
|
|
$
|
—
|
|
Net realized losses
|
(19.5
|
)
|
|
(2.1
|
)
|
|
—
|
|
|||
Purchases or additions
|
—
|
|
|
56.7
|
|
|
17.9
|
|
|||
Divestiture
|
(12.5
|
)
|
|
—
|
|
|
—
|
|
|||
Currency translation adjustments
|
1.5
|
|
|
0.1
|
|
|
—
|
|
|||
Settlements
|
(17.4
|
)
|
|
(2.7
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
22.0
|
|
|
$
|
69.9
|
|
|
$
|
17.9
|
|
|
Year Ended
|
|
December 31, 2017
|
|
Lumara
|
5-year average growth rate
|
(4.1)%
|
Discount rate
|
13.5%
|
Valuation method
|
MPEEM
|
|
Year Ended
|
||||||||
|
December 31, 2016
|
||||||||
|
Omega - Lifestyle
|
|
Omega -
XLS |
|
Entocort
®
- Branded Products
|
|
Entocort
®
- AG Products
|
|
Herron Trade Names and Trademarks
|
5-year average growth rate
|
2.5%
|
|
3.2%
|
|
(31.7)%
|
|
(30.4)%
|
|
4.6%
|
Long-term growth rates
|
2.0%
|
|
NA
|
|
(10.0)%
|
|
(4.7)%
|
|
2.5%
|
Discount rate
|
9.3%
|
|
9.5%
|
|
13.0%
|
|
10.5%
|
|
10.8%
|
Royalty rate
|
NA
|
|
4.0%
|
|
NA
|
|
NA
|
|
11.0%
|
Valuation method
|
MPEEM
|
|
Relief from Royalty
|
|
MPEEM
|
|
MPEEM
|
|
Relief from Royalty
|
|
|
|
Year Ended
|
||||||||||
|
Fair Value Hierarchy
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
|
|
|
|
|
|
|
|
||||||
Public bonds
|
Level 1
|
|
|
|
|
|
|
||||||
Carrying value
|
|
|
$
|
2.6
|
|
|
$
|
4.6
|
|
|
$
|
3.9
|
|
Fair value
|
|
|
$
|
2.7
|
|
|
$
|
4.6
|
|
|
$
|
3.8
|
|
|
|
|
|
|
|
|
|
||||||
Retail bonds and private placement note
|
Level 2
|
|
|
|
|
|
|
||||||
Carrying value (excluding premium)
|
|
|
$
|
306.0
|
|
|
$
|
773.1
|
|
|
$
|
798.3
|
|
Fair value
|
|
|
$
|
342.1
|
|
|
$
|
825.0
|
|
|
$
|
859.8
|
|
Premium
|
|
|
$
|
21.4
|
|
|
$
|
49.8
|
|
|
$
|
82.5
|
|
|
Year Ended
|
|
Six Months Ended
|
||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Equity securities, at cost less impairments
|
$
|
15.5
|
|
|
$
|
16.5
|
|
|
$
|
6.4
|
|
Gross unrealized gains
|
1.5
|
|
|
21.7
|
|
|
9.3
|
|
|||
Gross unrealized losses
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||
Estimated fair value of equity securities
|
$
|
17.0
|
|
|
$
|
38.2
|
|
|
$
|
14.9
|
|
|
|
|
Asset Derivatives
|
||||||||||
|
|
|
Fair Value
|
||||||||||
|
Balance Sheet Location
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Designated derivatives:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
Other current assets
|
|
$
|
4.1
|
|
|
$
|
3.1
|
|
|
$
|
3.8
|
|
Non-designated derivatives:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
Other current assets
|
|
$
|
2.2
|
|
|
$
|
0.7
|
|
|
$
|
1.0
|
|
|
|
|
Liability Derivatives
|
||||||||||
|
|
|
Fair Value
|
||||||||||
|
Balance Sheet Location
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Designated derivatives:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
Accrued liabilities
|
|
$
|
1.4
|
|
|
$
|
3.0
|
|
|
$
|
2.0
|
|
Interest rate swap agreements
|
Other non-current liabilities
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||
Total designated derivatives
|
|
|
$
|
1.4
|
|
|
$
|
3.0
|
|
|
$
|
2.3
|
|
Non-designated derivatives:
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
Accrued liabilities
|
|
$
|
2.4
|
|
|
$
|
2.0
|
|
|
$
|
1.9
|
|
|
|
Amount of Gain/(Loss) Recorded in OCI
(Effective Portion) |
||||||||||||||
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
Designated Cash Flow Hedges
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Treasury locks
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.7
|
)
|
Interest rate swap agreements
|
|
—
|
|
|
(9.0
|
)
|
|
(0.3
|
)
|
|
(10.1
|
)
|
||||
Foreign currency forward contracts
|
|
9.4
|
|
|
2.1
|
|
|
1.7
|
|
|
(7.7
|
)
|
||||
|
|
$
|
9.4
|
|
|
$
|
(6.9
|
)
|
|
$
|
1.4
|
|
|
$
|
(20.5
|
)
|
|
|
|
|
Amount of Gain/(Loss) Reclassified from AOCI into Earnings
(Effective Portion) |
||||||||||||||
|
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
Designated Cash Flow Hedges
|
|
Income Statement
Location
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Treasury locks
|
|
Interest expense, net
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
Interest rate swap agreements
|
|
Interest expense, net
|
|
(2.1
|
)
|
|
(2.3
|
)
|
|
(0.8
|
)
|
|
(16.4
|
)
|
||||
|
|
Other expense (Income), net
|
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
|
Net sales
|
|
1.5
|
|
|
1.3
|
|
|
(1.8
|
)
|
|
1.9
|
|
||||
|
|
Cost of sales
|
|
5.6
|
|
|
3.0
|
|
|
0.8
|
|
|
(4.2
|
)
|
||||
|
|
Interest expense, net
|
|
(2.6
|
)
|
|
(1.6
|
)
|
|
(0.4
|
)
|
|
—
|
|
||||
|
|
Other expense (Income), net
|
|
(1.5
|
)
|
|
0.4
|
|
|
1.1
|
|
|
(4.4
|
)
|
||||
|
|
|
|
$
|
(5.2
|
)
|
|
$
|
0.7
|
|
|
$
|
(1.1
|
)
|
|
$
|
(23.2
|
)
|
|
|
|
|
Amount of Gain/(Loss) Recognized against Earnings
(Ineffective Portion) |
||||||||||||||
|
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
Designated Cash Flow Hedges
|
|
Income Statement
Location
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Treasury locks
|
|
Other expense (Income), net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
Interest rate swap agreements
|
|
Other expense (Income), net
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Foreign currency forward contracts
|
|
Net sales
|
|
0.2
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
|
|
Cost of sales
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.2
|
|
||||
|
|
Other expense, net
|
|
1.0
|
|
|
$
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
|
|
$
|
1.3
|
|
|
$
|
0.3
|
|
|
$
|
0.1
|
|
|
$
|
(1.0
|
)
|
|
|
|
|
Amount of Gain/(Loss) Recognized in Income
|
||||||||||||||
|
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
Non-Designated Derivatives
|
|
Income Statement
Location
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Foreign currency forward contracts
|
|
Other expense (Income), net
|
|
$
|
12.6
|
|
|
$
|
(2.4
|
)
|
|
$
|
(8.0
|
)
|
|
$
|
(295.4
|
)
|
|
|
Interest expense, net
|
|
(5.3
|
)
|
|
(2.2
|
)
|
|
(0.7
|
)
|
|
(3.4
|
)
|
||||
Foreign exchange option contracts
|
|
Other expense (Income), net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.4
|
)
|
||||
Total
|
|
|
|
$
|
7.3
|
|
|
$
|
(4.6
|
)
|
|
$
|
(8.7
|
)
|
|
$
|
(325.2
|
)
|
|
December 31,
2016 |
||||||
|
CHCA
|
|
Other
|
||||
Assets held for sale
|
|
|
|
||||
Current assets
|
$
|
—
|
|
|
$
|
5.1
|
|
Goodwill
|
—
|
|
|
5.5
|
|
||
Property, plant and equipment
|
13.5
|
|
|
33.2
|
|
||
Other assets
|
—
|
|
|
3.8
|
|
||
Less: impairment reserves
|
(3.7
|
)
|
|
(35.3
|
)
|
||
Total assets held for sale
|
$
|
9.8
|
|
|
$
|
12.3
|
|
Liabilities held for sale
|
|
|
|
||||
Current liabilities
|
$
|
0.1
|
|
|
$
|
1.9
|
|
Other liabilities
|
—
|
|
|
1.9
|
|
||
Total liabilities held for sale
|
$
|
0.1
|
|
|
$
|
3.8
|
|
|
|
|
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Revolving credit agreements
|
|
|
|
|
|
|
|
||||||||
|
2015 Revolver
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
380.0
|
|
|||
|
2014 Revolver
|
—
|
|
|
—
|
|
|
300.0
|
|
||||||
|
Total revolving credit agreements
|
—
|
|
|
—
|
|
|
680.0
|
|
||||||
Term loans
|
|
|
|
|
|
|
|
||||||||
*
|
2014 term loan due December 5, 2019
|
420.0
|
|
|
420.7
|
|
|
488.8
|
|
||||||
Notes and bonds
|
|
|
|
|
|
|
|
||||||||
|
Coupon
|
Due
|
|
|
|
|
|
|
|
||||||
|
1.300%
|
November 8, 2016
|
(2)
|
|
—
|
|
|
—
|
|
|
500.0
|
|
|||
*
|
4.500%
|
May 23, 2017
|
(3)
|
|
—
|
|
|
189.3
|
|
|
195.5
|
|
|||
*
|
5.125%
|
December 12, 2017
|
(3)
|
|
—
|
|
|
315.6
|
|
|
325.8
|
|
|||
|
2.300%
|
November 8, 2018
|
(2)
|
|
—
|
|
|
600.0
|
|
|
600.0
|
|
|||
*
|
5.000%
|
May 23, 2019
|
(3)
|
|
144.0
|
|
|
126.2
|
|
|
130.3
|
|
|||
|
3.500%
|
March 15, 2021
|
(4)
|
|
280.4
|
|
|
500.0
|
|
|
—
|
|
|||
|
3.500%
|
December 15, 2021
|
(1)
|
|
309.6
|
|
|
500.0
|
|
|
500.0
|
|
|||
*
|
5.105%
|
July 19, 2023
|
(3)
|
|
162.0
|
|
|
142.0
|
|
|
146.7
|
|
|||
|
4.000%
|
November 15, 2023
|
(2)
|
|
215.6
|
|
|
800.0
|
|
|
800.0
|
|
|||
|
3.900%
|
December 15, 2024
|
(1)
|
|
700.0
|
|
|
700.0
|
|
|
700.0
|
|
|||
|
4.375%
|
March 15, 2026
|
(4)
|
|
700.0
|
|
|
700.0
|
|
|
—
|
|
|||
|
5.300%
|
November 15, 2043
|
(2)
|
|
90.5
|
|
|
400.0
|
|
|
400.0
|
|
|||
|
4.900%
|
December 15, 2044
|
(1)
|
|
303.9
|
|
|
400.0
|
|
|
400.0
|
|
|||
|
Total notes and bonds
|
|
|
2,906.0
|
|
|
5,373.1
|
|
|
4,698.3
|
|
||||
Other financing
|
11.7
|
|
|
3.6
|
|
|
128.2
|
|
|||||||
Unamortized premium (discount), net
|
21.4
|
|
|
33.0
|
|
|
73.4
|
|
|||||||
Deferred financing fees
|
(17.9
|
)
|
|
(33.1
|
)
|
|
(36.6
|
)
|
|||||||
Total borrowings outstanding
|
3,341.2
|
|
|
5,797.3
|
|
|
6,032.1
|
|
|||||||
|
Current indebtedness
|
(70.4
|
)
|
|
(572.8
|
)
|
|
(1,060.5
|
)
|
||||||
Total long-term debt less current portion
|
$
|
3,270.8
|
|
|
$
|
5,224.5
|
|
|
$
|
4,971.6
|
|
(1)
|
Discussed below collectively as the "2014 Notes."
|
(2)
|
Discussed below collectively as the "2013 Notes."
|
(3)
|
Debt assumed from Omega.
|
(4)
|
Discussed below collectively as the "2016 Notes."
|
*
|
Debt denominated in euros subject to fluctuations in the euro-to-U.S. dollar exchange rate.
|
•
|
$20.0 million
in aggregate principal amount of
6.190%
senior notes due
2016
, which was repaid on May 29, 2015 in full;
|
•
|
€135.0 million
(
$147.0 million
) in aggregate principal amount of
5.105%
senior notes due
2023
(the "2023 Notes");
|
•
|
€300.0 million
(
$326.7 million
) in aggregate principal amount of
5.125%
retail bonds due
2017
;
|
Date
|
|
Series
|
|
Transaction Type
|
|
Principal Retired
|
||
April 1, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
$
|
13.3
|
|
May 8, 2017
|
|
$600.0 2.300% senior notes due 2018
|
|
Early redemption
|
|
600.0
|
|
|
May 23, 2017
|
|
€180.0 4.500% retail bonds due 2017
|
|
Scheduled maturity
|
|
201.3
|
|
|
June 15, 2017
|
|
$500.0 3.500% senior notes due 2021
|
|
Tender offer
|
|
190.4
|
|
|
June 15, 2017
|
|
$500.0 3.500% senior notes due 2021
|
|
Tender offer
|
|
219.6
|
|
|
June 15, 2017
|
|
$800.0 4.000% senior notes due 2023
|
|
Tender offer
|
|
584.4
|
|
|
June 15, 2017
|
|
$400.0 5.300% senior notes due 2043
|
|
Tender offer
|
|
309.5
|
|
|
June 15, 2017
|
|
$400.0 4.900% senior notes due 2044
|
|
Tender offer
|
|
96.1
|
|
|
July 1, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
14.3
|
|
|
September 30, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
14.8
|
|
|
December 12, 2017
|
|
€300.0 5.125% senior notes due 2017
|
|
Scheduled maturity
|
|
352.3
|
|
|
December 31, 2017
|
|
2014 term loan due December 5, 2019
|
|
Scheduled quarterly payment
|
|
15.0
|
|
|
|
|
|
|
|
|
$
|
2,611.0
|
|
Premium on debt repayment
|
|
$
|
116.1
|
|
Transaction costs
|
|
3.8
|
|
|
Write-off of deferred financing fees
|
|
10.6
|
|
|
Write-off of remaining discount on bond
|
|
4.7
|
|
|
Total loss on extinguishment of debt
|
|
$
|
135.2
|
|
Payment Due
|
|
Amount
|
||
2018
|
|
$
|
70.4
|
|
2019
|
|
504.7
|
|
|
2020
|
|
0.7
|
|
|
2021
|
|
590.0
|
|
|
2022
|
|
—
|
|
|
Thereafter
|
|
2,171.9
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
119.6
|
|
|
$
|
(4,012.8
|
)
|
|
$
|
42.5
|
|
|
$
|
136.1
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding for basic EPS
|
142.3
|
|
|
143.3
|
|
|
145.6
|
|
|
139.3
|
|
||||
Dilutive effect of share-based awards*
|
0.3
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||
Weighted average shares outstanding for diluted EPS
|
142.6
|
|
|
143.3
|
|
|
146.1
|
|
|
139.8
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive share-based awards excluded from computation of diluted EPS*
|
0.8
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Dividends paid (in millions)
|
$
|
91.1
|
|
|
$
|
83.2
|
|
|
$
|
36.3
|
|
|
$
|
64.8
|
|
Dividends paid (per share)
|
$
|
0.64
|
|
|
$
|
0.58
|
|
|
$
|
0.25
|
|
|
$
|
0.46
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
43.8
|
|
|
$
|
23.0
|
|
|
$
|
22.8
|
|
|
$
|
31.6
|
|
|
Number of
Options |
|
Weighted-Average
Exercise Price Per Share |
|
Weighted-
Average Remaining Term in Years |
|
Aggregate
Intrinsic Value |
|||||
Options outstanding at December 31, 2015
|
783
|
|
|
$
|
99.93
|
|
|
|
|
|
||
Granted
|
344
|
|
|
$
|
126.67
|
|
|
|
|
|
||
Exercised
|
(122
|
)
|
|
$
|
67.68
|
|
|
|
|
|
||
Forfeited or expired
|
(256
|
)
|
|
$
|
126.54
|
|
|
|
|
|
||
Options outstanding at December 31, 2016
|
749
|
|
|
$
|
108.40
|
|
|
6.6
|
|
$
|
5.5
|
|
Granted
|
439
|
|
|
$
|
70.34
|
|
|
|
|
|
||
Exercised
|
(31
|
)
|
|
$
|
24.75
|
|
|
|
|
|
||
Forfeited or expired
|
(85
|
)
|
|
$
|
118.47
|
|
|
|
|
|
||
Options outstanding December 31, 2017
|
1,072
|
|
|
$
|
94.90
|
|
|
6.9
|
|
$
|
10.9
|
|
Options exercisable
|
519
|
|
|
$
|
107.14
|
|
|
5.0
|
|
$
|
3.8
|
|
Options expected to vest
|
533
|
|
|
$
|
83.63
|
|
|
8.7
|
|
$
|
6.8
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
1.7
|
|
|
$
|
5.2
|
|
|
$
|
6.7
|
|
|
$
|
20.7
|
|
|
Year Ended
|
|||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
June 27,
2015 |
|||
Dividend yield
|
0.9
|
%
|
|
0.5
|
%
|
|
0.3
|
%
|
Volatility, as a percent
|
30.0
|
%
|
|
27.6
|
%
|
|
27.1
|
%
|
Risk-free interest rate
|
1.8
|
%
|
|
1.3
|
%
|
|
1.7
|
%
|
Expected life in years
|
5.41
|
|
|
5.5
|
|
|
5.3
|
|
|
Number of
Non-vested Service- Based Share Units |
|
Weighted-
Average Grant Date Fair Value Per Share |
|
Weighted-
Average Remaining Term in Years |
|
Aggregate
Intrinsic Value |
|||||
Non-vested service-based share units outstanding at December 31, 2015
|
382
|
|
|
$
|
154.07
|
|
|
|
|
|
||
Granted
|
298
|
|
|
$
|
113.26
|
|
|
|
|
|
||
Vested
|
(92
|
)
|
|
$
|
137.15
|
|
|
|
|
|
||
Forfeited
|
(120
|
)
|
|
$
|
151.64
|
|
|
|
|
|
||
Non-vested service-based share units outstanding at December 31, 2016
|
468
|
|
|
$
|
137.53
|
|
|
1.7
|
|
$
|
39.0
|
|
Granted
|
298
|
|
|
$
|
70.55
|
|
|
|
|
|
||
Vested
|
(112
|
)
|
|
$
|
128.86
|
|
|
|
|
|
||
Forfeited
|
(55
|
)
|
|
$
|
120.97
|
|
|
|
|
|
||
Non-vested service-based share units outstanding at December 31, 2017
|
599
|
|
|
$
|
107.26
|
|
|
1.5
|
|
$
|
52.2
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
70.55
|
|
|
$
|
113.26
|
|
|
$
|
165.64
|
|
|
$
|
153.99
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
14.5
|
|
|
$
|
12.6
|
|
|
$
|
11.7
|
|
|
$
|
9.1
|
|
|
Number of
Non-vested Performance- Based Share Units |
|
Weighted-
Average Grant Date Fair Value Per Share |
|
Weighted-
Average Remaining Term in Years* |
|
Aggregate
Intrinsic Value |
|||||
Non-vested performance-based share units outstanding at December 31, 2015
|
223
|
|
|
$
|
146.31
|
|
|
|
|
|
||
Granted
|
159
|
|
|
$
|
126.37
|
|
|
|
|
|
||
Vested
|
(81
|
)
|
|
$
|
128.74
|
|
|
|
|
|
||
Forfeited
|
(124
|
)
|
|
$
|
143.64
|
|
|
|
|
|
||
Non-vested performance-based share units outstanding at December 31, 2016
|
177
|
|
|
$
|
138.29
|
|
|
1.7
|
|
$
|
14.8
|
|
Granted
|
191
|
|
|
$
|
70.34
|
|
|
|
|
|
||
Vested
|
(27
|
)
|
|
$
|
142.18
|
|
|
|
|
|
||
Forfeited
|
(38
|
)
|
|
$
|
130.34
|
|
|
|
|
|
||
Non-vested performance-based share units outstanding at December 31, 2017
|
303
|
|
|
$
|
93.65
|
|
|
2.0
|
|
$
|
26.5
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
70.34
|
|
|
$
|
126.37
|
|
|
$
|
184.49
|
|
|
$
|
150.14
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
3.8
|
|
|
$
|
10.4
|
|
|
$
|
6.4
|
|
|
$
|
5.1
|
|
|
Year Ended
|
|
|
December 31,
2017 |
|
Dividend yield
|
0.9
|
%
|
Volatility, as a percent
|
36.1
|
%
|
Risk-free interest rate
|
1.4
|
%
|
Expected life in years
|
2.57
|
|
|
Number of
Non-vested RTSR Performance Share Units |
|
Weighted-
Average Grant Date Fair Value Per Share |
|
Weighted-
Average Remaining Term in Years* |
|
Aggregate
Intrinsic Value |
|||||
Non-vested RTSR performance share units outstanding at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
0
|
|
$
|
—
|
|
Granted
|
39
|
|
|
$
|
64.82
|
|
|
|
|
|
||
Non-vested RTSR performance share units outstanding at December 31, 2017
|
39
|
|
|
$
|
64.82
|
|
|
2.0
|
|
$
|
3.4
|
|
|
Fair value of derivative financial instruments, net of tax
|
|
Foreign currency translation adjustments
|
|
Fair value of investment securities, net of tax
|
|
Post-retirement and pension liability adjustments, net of tax
|
|
Total AOCI
|
||||||||||
Balance at June 27, 2015
|
$
|
(16.3
|
)
|
|
$
|
130.9
|
|
|
$
|
(2.9
|
)
|
|
$
|
(8.2
|
)
|
|
$
|
103.5
|
|
OCI before reclassifications
|
1.1
|
|
|
(135.5
|
)
|
|
(1.4
|
)
|
|
6.7
|
|
|
(129.1
|
)
|
|||||
Amounts reclassified from AOCI
|
1.0
|
|
|
—
|
|
|
10.7
|
|
|
(1.4
|
)
|
|
10.3
|
|
|||||
Other comprehensive income (loss)
|
2.1
|
|
|
(135.5
|
)
|
|
9.3
|
|
|
5.3
|
|
|
(118.8
|
)
|
|||||
Balance at December 31, 2015
|
(14.2
|
)
|
|
(4.6
|
)
|
|
6.4
|
|
|
(2.9
|
)
|
|
(15.3
|
)
|
|||||
OCI before reclassifications
|
(5.4
|
)
|
|
(63.3
|
)
|
|
7.4
|
|
|
(3.2
|
)
|
|
(64.5
|
)
|
|||||
Amounts reclassified from AOCI
|
0.1
|
|
|
—
|
|
|
1.3
|
|
|
(3.4
|
)
|
|
(2.0
|
)
|
|||||
Other comprehensive income (loss)
|
(5.3
|
)
|
|
(63.3
|
)
|
|
8.7
|
|
|
(6.6
|
)
|
|
(66.5
|
)
|
|||||
Balance at December 31, 2016
|
(19.5
|
)
|
|
(67.9
|
)
|
|
15.1
|
|
|
(9.5
|
)
|
|
(81.8
|
)
|
|||||
OCI before reclassifications
|
7.1
|
|
|
328.5
|
|
|
(12.5
|
)
|
|
15.0
|
|
|
338.1
|
|
|||||
Amounts reclassified from AOCI
|
2.6
|
|
|
—
|
|
|
(1.6
|
)
|
|
(4.2
|
)
|
|
(3.2
|
)
|
|||||
Other comprehensive income (loss)
|
9.7
|
|
|
328.5
|
|
|
(14.1
|
)
|
|
10.8
|
|
|
334.9
|
|
|||||
Balance at December 31, 2017
|
$
|
(9.8
|
)
|
|
$
|
260.6
|
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
|
$
|
253.1
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Pre-tax income (loss):
|
|
|
|
|
|
|
|
||||||||
Ireland
|
$
|
(454.0
|
)
|
|
$
|
(3,624.1
|
)
|
|
$
|
(310.2
|
)
|
|
$
|
(792.8
|
)
|
Other
|
734.1
|
|
|
(1,224.2
|
)
|
|
319.1
|
|
|
1,053.1
|
|
||||
Total pre-tax income (loss)
|
280.1
|
|
|
(4,848.3
|
)
|
|
8.9
|
|
|
260.3
|
|
||||
(Benefit) provision for income taxes:
|
|
|
|
|
|
|
|
||||||||
Current:
|
|
|
|
|
|
|
|
||||||||
Ireland
|
(8.1
|
)
|
|
0.3
|
|
|
1.6
|
|
|
(2.2
|
)
|
||||
United States - federal
|
96.4
|
|
|
93.0
|
|
|
58.9
|
|
|
77.2
|
|
||||
United States - state
|
4.0
|
|
|
0.7
|
|
|
3.0
|
|
|
6.8
|
|
||||
Other foreign
|
46.1
|
|
|
26.7
|
|
|
53.0
|
|
|
67.4
|
|
||||
Subtotal
|
138.4
|
|
|
120.7
|
|
|
116.5
|
|
|
149.2
|
|
||||
Deferred (credit):
|
|
|
|
|
|
|
|
||||||||
Ireland
|
13.1
|
|
|
(549.4
|
)
|
|
(23.1
|
)
|
|
11.1
|
|
||||
United States - federal
|
6.8
|
|
|
(7.6
|
)
|
|
(34.4
|
)
|
|
(19.9
|
)
|
||||
United States - state
|
1.0
|
|
|
(5.1
|
)
|
|
(3.3
|
)
|
|
(0.8
|
)
|
||||
Other foreign
|
1.2
|
|
|
(394.1
|
)
|
|
(89.3
|
)
|
|
(15.4
|
)
|
||||
Subtotal
|
22.1
|
|
|
(956.2
|
)
|
|
(150.1
|
)
|
|
(25.0
|
)
|
||||
Total (benefit) provision for income taxes
|
$
|
160.5
|
|
|
$
|
(835.5
|
)
|
|
$
|
(33.6
|
)
|
|
$
|
124.2
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||
|
|
|
|
|
|
|
|
||||
Provision at statutory rate
|
12.5
|
%
|
|
12.5
|
%
|
|
12.5
|
%
|
|
12.5
|
%
|
Ireland tax on non-trading differences
|
(47.7
|
)
|
|
(0.4
|
)
|
|
(207.4
|
)
|
|
(9.9
|
)
|
Expenses not deductible for tax purposes/deductions not expensed for book, net
|
63.4
|
|
|
(0.7
|
)
|
|
394.0
|
|
|
14.7
|
|
Goodwill impairment not deductible for tax purposes
|
—
|
|
|
(2.8
|
)
|
|
—
|
|
|
—
|
|
U.S. Operations:
|
|
|
|
|
|
|
|
||||
State income taxes, net of federal benefit
|
(1.4
|
)
|
|
0.1
|
|
|
38.4
|
|
|
(1.0
|
)
|
Research and development credit
|
(0.6
|
)
|
|
—
|
|
|
(13.2
|
)
|
|
(0.7
|
)
|
Other
|
(5.8
|
)
|
|
0.4
|
|
|
112.3
|
|
|
4.8
|
|
Tax Law Change - US
|
5.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Tax Law Change - Belgium
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Other foreign differences (earnings taxed at other than applicable statutory rate)
|
(22.7
|
)
|
|
3.3
|
|
|
(647.2
|
)
|
|
(16.1
|
)
|
Intangible impairment differences
|
(3.0
|
)
|
|
4.8
|
|
|
(397.6
|
)
|
|
—
|
|
Worldwide operations:
|
|
|
|
|
|
|
|
||||
Valuation allowance changes
|
17.8
|
|
|
0.8
|
|
|
249.3
|
|
|
25.7
|
|
Change in unrecognized taxes
|
25.3
|
|
|
(0.8
|
)
|
|
82.7
|
|
|
17.7
|
|
Withholding taxes
|
17.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Effective income tax rate
|
57.3
|
%
|
|
17.2
|
%
|
|
(376.2
|
)%
|
|
47.7
|
%
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Deferred income tax asset (liability):
|
|
|
|
|
|
||||||
Depreciation and amortization
|
$
|
(457.8
|
)
|
|
$
|
(765.2
|
)
|
|
$
|
(1,550.6
|
)
|
Inventory basis differences
|
21.3
|
|
|
27.4
|
|
|
22.8
|
|
|||
Accrued liabilities
|
87.9
|
|
|
68.5
|
|
|
50.8
|
|
|||
Allowance for doubtful accounts
|
1.5
|
|
|
1.7
|
|
|
1.3
|
|
|||
Research and development
|
58.9
|
|
|
61.7
|
|
|
63.7
|
|
|||
Loss and credit carryforwards
|
292.5
|
|
|
292.4
|
|
|
244.2
|
|
|||
Share-based compensation
|
16.2
|
|
|
18.1
|
|
|
20.6
|
|
|||
Foreign tax credit
|
—
|
|
|
10.6
|
|
|
10.6
|
|
|||
Federal benefit of unrecognized tax positions
|
17.0
|
|
|
24.3
|
|
|
22.8
|
|
|||
Interest carryforwards
|
30.5
|
|
|
435.3
|
|
|
334.6
|
|
|||
Other, net
|
28.2
|
|
|
3.0
|
|
|
14.7
|
|
|||
Subtotal
|
$
|
96.2
|
|
|
$
|
177.8
|
|
|
$
|
(764.5
|
)
|
Valuation allowance
|
(407.7
|
)
|
|
(495.6
|
)
|
|
(536.8
|
)
|
|||
Net deferred income tax asset (liability):
|
$
|
(311.5
|
)
|
|
$
|
(317.8
|
)
|
|
$
|
(1,301.3
|
)
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Assets
|
$
|
10.4
|
|
|
$
|
72.1
|
|
|
$
|
71.4
|
|
Liabilities
|
(321.9
|
)
|
|
(389.9
|
)
|
|
(1,372.7
|
)
|
|||
Net deferred income tax (liability) asset
|
$
|
(311.5
|
)
|
|
$
|
(317.8
|
)
|
|
$
|
(1,301.3
|
)
|
|
December 31, 2017
|
||||||
|
Gross
Carryforwards (1) |
|
Gross Valuation Allowances
|
||||
U.S. state net operating losses
|
$
|
248.5
|
|
|
$
|
203.6
|
|
Worldwide federal net operating losses excluding U.S. states
|
$
|
1,389.0
|
|
|
$
|
861.6
|
|
Worldwide federal capital losses
|
$
|
22.0
|
|
|
$
|
22.0
|
|
U.S. federal credits
|
$
|
82.6
|
|
|
$
|
82.6
|
|
U.S. state credits
|
$
|
71.9
|
|
|
$
|
71.9
|
|
Interest carryforwards
|
$
|
478.8
|
|
|
$
|
127.0
|
|
|
Unrecognized
Tax Benefits
|
||
Balance at June 27, 2015
|
$
|
324.0
|
|
Additions:
|
|
||
Positions related to the current year
|
22.9
|
|
|
Reductions:
|
|
||
Positions related to prior years
|
(43.5
|
)
|
|
Settlements with taxing authorities
|
(15.3
|
)
|
|
Balance at December 31, 2015
|
288.1
|
|
|
Additions:
|
|
||
Positions related to the current year
|
45.5
|
|
|
Positions related to prior years
|
8.6
|
|
|
Reductions:
|
|
||
Settlements with taxing authorities
|
(2.4
|
)
|
|
Lapse of statutes of limitation
|
(5.3
|
)
|
|
Balance at December 31, 2016
|
334.5
|
|
|
Additions:
|
|
||
Positions related to the current year
|
55.0
|
|
|
Positions related to prior years
|
76.6
|
|
|
Reductions:
|
|
||
Settlements with taxing authorities
|
(11.1
|
)
|
|
Lapse of statutes of limitation
|
(0.1
|
)
|
|
Decrease in prior year positions
|
(35.2
|
)
|
|
Balance at December 31, 2017
|
$
|
419.7
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27, 2015*
|
||||||||
$
|
25.5
|
|
|
$
|
26.1
|
|
|
$
|
18.9
|
|
|
$
|
25.9
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
|
Six Months Ended
|
||||||||||||||||
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
||||||||||||
Projected benefit obligation at beginning of period
|
$
|
158.9
|
|
|
$
|
135.0
|
|
|
$
|
140.3
|
|
|
$
|
5.8
|
|
|
$
|
7.0
|
|
|
$
|
6.0
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Service costs
|
4.5
|
|
|
4.1
|
|
|
2.2
|
|
|
0.6
|
|
|
0.6
|
|
|
0.3
|
|
||||||
Interest cost
|
3.3
|
|
|
3.6
|
|
|
1.7
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
||||||
Actuarial (gain) loss
|
(10.3
|
)
|
|
22.6
|
|
|
(10.1
|
)
|
|
(0.3
|
)
|
|
(1.9
|
)
|
|
0.5
|
|
||||||
Contributions paid
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(2.5
|
)
|
|
(1.7
|
)
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||||
Foreign currency translation
|
21.0
|
|
|
(5.0
|
)
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Projected benefit obligation at end of period
|
$
|
174.0
|
|
|
$
|
158.9
|
|
|
$
|
135.0
|
|
|
$
|
6.2
|
|
|
$
|
5.8
|
|
|
$
|
7.0
|
|
Fair value of plan assets at beginning of period
|
138.2
|
|
|
126.7
|
|
|
128.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
5.5
|
|
|
9.4
|
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(2.5
|
)
|
|
(1.7
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employer contributions
|
2.2
|
|
|
8.2
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Contributions paid
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation
|
19.0
|
|
|
(4.7
|
)
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets at end of period
|
$
|
162.5
|
|
|
$
|
138.2
|
|
|
$
|
126.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unfunded status
|
$
|
(11.5
|
)
|
|
$
|
(20.7
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(7.0
|
)
|
Presented as:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other non-current assets
|
$
|
22.0
|
|
|
$
|
10.4
|
|
|
$
|
16.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other non-current liabilities
|
$
|
(33.5
|
)
|
|
$
|
(31.1
|
)
|
|
$
|
(24.8
|
)
|
|
$
|
—
|
|
|
$
|
(5.8
|
)
|
|
$
|
(7.0
|
)
|
Year Ended
|
|
Six Months Ended
|
||||||||
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
||||||
$
|
167.6
|
|
|
$
|
136.3
|
|
|
$
|
109.4
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
$
|
0.3
|
|
|
$
|
(0.7
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
0.1
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27, 2015*
|
||||||||
$
|
(1.3
|
)
|
|
$
|
9.5
|
|
|
$
|
2.9
|
|
|
$
|
8.2
|
|
Payment Due
|
|
Pension Benefits
|
|
Other Benefits
|
||||
2018
|
|
$
|
1.4
|
|
|
$
|
0.1
|
|
2019
|
|
1.5
|
|
|
0.2
|
|
||
2020
|
|
2.3
|
|
|
0.2
|
|
||
2021
|
|
2.1
|
|
|
0.2
|
|
||
2022
|
|
2.6
|
|
|
0.3
|
|
||
Thereafter
|
|
20.1
|
|
|
1.9
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||||||||||
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||||||||||
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27, 2015*
|
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27, 2015*
|
||||||||||||||||
Service cost
|
$
|
4.5
|
|
|
$
|
4.1
|
|
|
$
|
2.2
|
|
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Interest cost
|
3.3
|
|
|
3.6
|
|
|
1.7
|
|
|
2.4
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
||||||||
Expected return on assets
|
(4.3
|
)
|
|
(3.9
|
)
|
|
(1.8
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Curtailment
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net actuarial loss
|
0.8
|
|
|
0.5
|
|
|
0.4
|
|
|
1.0
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||||
Net periodic pension cost
|
$
|
3.6
|
|
|
$
|
4.3
|
|
|
$
|
2.5
|
|
|
$
|
1.6
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
|
$
|
0.4
|
|
|
$
|
0.6
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27, 2015*
|
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27, 2015*
|
||||||||
Discount rate
|
1.91
|
%
|
|
1.76
|
%
|
|
2.22
|
%
|
|
2.11
|
%
|
|
3.59
|
%
|
|
4.00
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
Inflation
|
1.45
|
%
|
|
1.43
|
%
|
|
2.25
|
%
|
|
1.93
|
%
|
|
|
|
|
|
|
|
|
||||
Expected return on assets
|
2.90
|
%
|
|
2.89
|
%
|
|
2.93
|
%
|
|
2.85
|
%
|
|
|
|
|
|
|
|
|
Equities
|
6.0
|
%
|
Bonds
|
1.9
|
%
|
Absolute return fund
|
4.0
|
%
|
Insurance contracts
|
2.8
|
%
|
Other
|
2.5
|
%
|
Equities
|
10% - 20%
|
Bonds
|
20% - 30%
|
Absolute return
|
50% - 60%
|
|
Quoted Prices in Active Markets
|
|
Other Observable Inputs
|
|
Unobservable Inputs
|
|
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||
Equities
|
$
|
0.1
|
|
|
$
|
19.1
|
|
|
$
|
—
|
|
|
$
|
19.2
|
|
Bonds
|
1.8
|
|
|
30.2
|
|
|
—
|
|
|
32.0
|
|
||||
Insurance contracts
|
—
|
|
|
—
|
|
|
50.8
|
|
|
50.8
|
|
||||
Absolute return fund
|
—
|
|
|
54.5
|
|
|
—
|
|
|
54.5
|
|
||||
Other
|
—
|
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
||||
Total
|
$
|
1.9
|
|
|
$
|
109.8
|
|
|
$
|
50.8
|
|
|
$
|
162.5
|
|
|
Quoted Prices in Active Markets
|
|
Other Observable Inputs
|
|
Unobservable Inputs
|
|
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||
Equities
|
$
|
0.1
|
|
|
$
|
13.6
|
|
|
$
|
—
|
|
|
$
|
13.7
|
|
Bonds
|
1.6
|
|
|
22.8
|
|
|
—
|
|
|
24.4
|
|
||||
Insurance contracts
|
—
|
|
|
—
|
|
|
43.4
|
|
|
43.4
|
|
||||
Absolute return fund
|
—
|
|
|
51.5
|
|
|
—
|
|
|
51.5
|
|
||||
Other
|
—
|
|
|
5.2
|
|
|
—
|
|
|
5.2
|
|
||||
Total
|
$
|
1.7
|
|
|
$
|
93.1
|
|
|
$
|
43.4
|
|
|
$
|
138.2
|
|
|
Other Observable Inputs
|
|
Unobservable Inputs
|
|
|
||||||
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||
Equities
|
$
|
14.5
|
|
|
$
|
—
|
|
|
$
|
14.5
|
|
Bonds
|
38.1
|
|
|
—
|
|
|
38.1
|
|
|||
Property
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|||
Insurance contracts
|
—
|
|
|
34.9
|
|
|
34.9
|
|
|||
Absolute return fund
|
33.7
|
|
|
—
|
|
|
33.7
|
|
|||
Other
|
5.2
|
|
|
—
|
|
|
5.2
|
|
|||
Total
|
$
|
91.5
|
|
|
$
|
35.2
|
|
|
$
|
126.7
|
|
|
Year Ended
|
|
Six Months Ended
|
||||||||
|
December 31,
2017 |
|
December 31, 2016
|
|
December 31,
2015 |
||||||
Assets at beginning of year
|
$
|
43.4
|
|
|
$
|
35.2
|
|
|
$
|
34.3
|
|
Actual return on plan assets
|
1.0
|
|
|
6.7
|
|
|
0.1
|
|
|||
Purchases, sales and settlements, net
|
0.9
|
|
|
(4.2
|
)
|
|
2.1
|
|
|||
Net transfers
|
—
|
|
|
7.6
|
|
|
—
|
|
|||
Foreign exchange
|
5.5
|
|
|
(1.9
|
)
|
|
(1.3
|
)
|
|||
Assets at end of year
|
$
|
50.8
|
|
|
$
|
43.4
|
|
|
$
|
35.2
|
|
Due
|
|
Amount
|
||
2018
|
|
$
|
38.1
|
|
2019
|
|
31.9
|
|
|
2020
|
|
24.3
|
|
|
2021
|
|
18.6
|
|
|
2022
|
|
13.7
|
|
|
Thereafter
|
|
16.6
|
|
Balance at June 28, 2014
|
$
|
16.4
|
|
Additional charges
|
5.1
|
|
|
Payments
|
(18.5
|
)
|
|
Non-cash adjustments
|
(1.4
|
)
|
|
Balance at June 27, 2015
|
1.6
|
|
|
Additional charges
|
26.9
|
|
|
Payments
|
(6.4
|
)
|
|
Non-cash adjustments
|
(1.4
|
)
|
|
Balance at December 31, 2015
|
20.7
|
|
|
Additional charges
|
31.0
|
|
|
Payments
|
(35.8
|
)
|
|
Non-cash adjustments
|
3.8
|
|
|
Balance at December 31, 2016
|
19.7
|
|
|
Additional charges
|
61.0
|
|
|
Payments
|
(59.6
|
)
|
|
Non-cash adjustments
|
0.3
|
|
|
Balance at December 31, 2017
|
$
|
21.4
|
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
Ireland
|
$
|
30.4
|
|
|
$
|
89.1
|
|
|
$
|
11.4
|
|
|
$
|
7.2
|
|
U.S.
|
3,272.3
|
|
|
3,353.0
|
|
|
1,686.2
|
|
|
3,303.2
|
|
||||
Europe
|
1,313.2
|
|
|
1,493.0
|
|
|
758.2
|
|
|
576.4
|
|
||||
All other countries
(2)
|
330.3
|
|
|
345.5
|
|
|
176.4
|
|
|
340.3
|
|
||||
|
$
|
4,946.2
|
|
|
$
|
5,280.6
|
|
|
$
|
2,632.2
|
|
|
$
|
4,227.1
|
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Ireland
|
$
|
4.6
|
|
|
$
|
2.7
|
|
|
$
|
1.3
|
|
U.S.
|
538.3
|
|
|
556.6
|
|
|
555.0
|
|
|||
Europe
|
155.6
|
|
|
144.6
|
|
|
157.2
|
|
|||
Israel
|
81.5
|
|
|
114.3
|
|
|
115.7
|
|
|||
All other countries
|
53.1
|
|
|
51.9
|
|
|
57.0
|
|
|||
|
$
|
833.1
|
|
|
$
|
870.1
|
|
|
$
|
886.2
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
June 27,
2015 |
||||
13.0
|
%
|
|
13.0
|
%
|
|
13.0
|
%
|
|
16.0
|
%
|
|
CHCA
|
|
CHCI
(1)
|
|
RX
|
|
Specialty Sciences
|
|
Other
|
|
Unallocated
|
|
Total
|
|||||||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
$
|
2,429.9
|
|
|
$
|
1,491.0
|
|
|
$
|
969.7
|
|
|
$
|
—
|
|
|
$
|
55.6
|
|
|
$
|
—
|
|
|
$
|
4,946.2
|
|
|
Operating income (loss)
|
$
|
445.0
|
|
|
$
|
12.5
|
|
|
$
|
307.6
|
|
|
$
|
—
|
|
|
$
|
8.7
|
|
|
$
|
(175.6
|
)
|
|
$
|
598.2
|
|
|
Operating income (loss) %
|
18.3
|
%
|
|
0.8
|
%
|
|
31.7
|
%
|
|
—
|
%
|
|
15.6
|
%
|
|
—
|
%
|
|
12.1
|
%
|
||||||||
Total assets
|
$
|
3,786.8
|
|
|
$
|
5,029.0
|
|
|
$
|
2,813.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,628.8
|
|
|
Capital expenditures
|
$
|
39.5
|
|
|
$
|
27.5
|
|
|
$
|
21.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88.6
|
|
|
Property, plant and equipment, net
|
$
|
512.7
|
|
|
$
|
180.9
|
|
|
$
|
139.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
833.1
|
|
|
Depreciation/amortization
|
$
|
115.2
|
|
|
$
|
223.7
|
|
|
$
|
100.1
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
444.8
|
|
|
Change in financial assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
$
|
2,507.1
|
|
|
$
|
1,652.2
|
|
|
$
|
1,042.8
|
|
|
$
|
—
|
|
|
$
|
78.5
|
|
|
$
|
—
|
|
|
$
|
5,280.6
|
|
|
Operating income (loss)
|
$
|
399.8
|
|
|
$
|
(2,087.4
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(201.2
|
)
|
|
$
|
6.1
|
|
|
$
|
(116.8
|
)
|
|
$
|
(1,999.7
|
)
|
|
Operating income (loss) %
|
15.9
|
%
|
|
(126.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
7.8
|
%
|
|
—
|
%
|
|
(37.9
|
)%
|
||||||||
Total assets
|
$
|
3,351.3
|
|
|
$
|
4,795.2
|
|
|
$
|
2,646.4
|
|
|
$
|
2,775.8
|
|
|
$
|
301.4
|
|
|
$
|
—
|
|
|
$
|
13,870.1
|
|
|
Capital expenditures
|
$
|
59.1
|
|
|
$
|
23.7
|
|
|
$
|
20.4
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
$
|
—
|
|
|
$
|
106.2
|
|
|
Property, plant and equip, net
|
$
|
528.3
|
|
|
$
|
167.2
|
|
|
$
|
129.7
|
|
|
$
|
0.4
|
|
|
$
|
44.5
|
|
|
$
|
—
|
|
|
$
|
870.1
|
|
|
Depreciation/amortization
|
$
|
119.1
|
|
|
$
|
210.0
|
|
|
$
|
120.1
|
|
|
$
|
—
|
|
|
$
|
7.8
|
|
|
$
|
—
|
|
|
$
|
457.0
|
|
|
Change in financial assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,608.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,608.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Six Months Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
$
|
1,251.5
|
|
|
$
|
833.0
|
|
|
$
|
502.6
|
|
|
$
|
—
|
|
|
$
|
45.1
|
|
|
$
|
—
|
|
|
$
|
2,632.2
|
|
|
Operating income (loss)
|
$
|
209.2
|
|
|
$
|
(148.5
|
)
|
|
$
|
181.9
|
|
|
$
|
(6.5
|
)
|
|
$
|
(19.5
|
)
|
|
$
|
(149.0
|
)
|
|
$
|
67.6
|
|
|
Operating income (loss) %
|
16.7
|
%
|
|
(17.8
|
)%
|
|
36.2
|
%
|
|
—
|
%
|
|
(43.3
|
)%
|
|
—
|
%
|
|
2.6
|
%
|
||||||||
Total assets
|
$
|
3,384.8
|
|
|
$
|
7,083.5
|
|
|
$
|
2,738.0
|
|
|
$
|
5,930.2
|
|
|
$
|
213.1
|
|
|
$
|
—
|
|
|
$
|
19,349.6
|
|
|
Capital expenditures
|
$
|
38.0
|
|
|
$
|
26.3
|
|
|
$
|
12.1
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
77.8
|
|
|
Property, plant and equip, net
|
$
|
540.9
|
|
|
$
|
179.5
|
|
|
$
|
118.5
|
|
|
$
|
—
|
|
|
$
|
47.3
|
|
—
|
|
$
|
—
|
|
|
$
|
886.2
|
|
Depreciation/amortization
|
$
|
60.9
|
|
|
$
|
81.9
|
|
|
$
|
34.3
|
|
|
$
|
—
|
|
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
182.4
|
|
|
Change in financial assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(57.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(57.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year Ended June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net sales
|
$
|
2,478.8
|
|
|
$
|
704.6
|
|
|
$
|
936.0
|
|
|
$
|
—
|
|
|
$
|
107.7
|
|
|
$
|
—
|
|
|
$
|
4,227.1
|
|
|
Operating income (loss)
|
$
|
381.9
|
|
|
$
|
38.2
|
|
|
$
|
364.7
|
|
|
$
|
(17.6
|
)
|
|
$
|
26.8
|
|
|
$
|
(121.5
|
)
|
|
$
|
672.5
|
|
|
Operating income %
|
15.4
|
%
|
|
5.4
|
%
|
|
39.0
|
%
|
|
—
|
%
|
|
24.9
|
%
|
|
—
|
%
|
|
15.9
|
%
|
||||||||
Total assets
|
$
|
3,763.8
|
|
|
$
|
7,163.0
|
|
|
$
|
2,373.4
|
|
|
$
|
6,040.7
|
|
|
$
|
251.0
|
|
|
$
|
—
|
|
|
$
|
19,591.9
|
|
|
Capital expenditures
|
$
|
76.8
|
|
|
$
|
13.1
|
|
|
$
|
41.0
|
|
|
$
|
0.5
|
|
|
$
|
5.6
|
|
|
$
|
—
|
|
|
$
|
137.0
|
|
|
Property, plant and equip, net
|
$
|
556.8
|
|
|
$
|
176.8
|
|
|
$
|
113.0
|
|
|
$
|
—
|
|
|
$
|
85.8
|
|
|
$
|
—
|
|
|
$
|
932.4
|
|
|
Depreciation/amortization
|
$
|
108.4
|
|
|
$
|
72.5
|
|
|
$
|
65.7
|
|
|
$
|
1.5
|
|
|
$
|
10.6
|
|
|
$
|
—
|
|
|
$
|
258.7
|
|
|
Change in financial assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(78.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(78.5
|
)
|
|
Year Ended
|
|
Six Months Ended
|
|
Year Ended
|
||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31,
2015 |
|
June 27,
2015 |
||||||||
CHCA
|
|
|
|
|
|
|
|
||||||||
Cough/Cold/Allergy/Sinus
(1)
|
$
|
483.7
|
|
|
$
|
454.6
|
|
|
$
|
234.6
|
|
|
$
|
455.6
|
|
Analgesics
(1)
|
349.8
|
|
|
343.5
|
|
|
173.1
|
|
|
375.7
|
|
||||
Gastrointestinal
(1)
|
340.0
|
|
|
335.4
|
|
|
195.8
|
|
|
384.0
|
|
||||
Infant nutritionals
|
413.9
|
|
|
427.0
|
|
|
200.2
|
|
|
383.8
|
|
||||
Smoking cessation
|
297.2
|
|
|
308.5
|
|
|
147.5
|
|
|
284.5
|
|
||||
Vitamins, minerals and dietary supplements
(1)
|
45.4
|
|
|
160.4
|
|
|
105.8
|
|
|
183.5
|
|
||||
Animal health
|
141.3
|
|
|
143.7
|
|
|
62.3
|
|
|
157.0
|
|
||||
Other CHCA
(1),(2)
|
358.6
|
|
|
334.0
|
|
|
132.2
|
|
|
254.7
|
|
||||
Total CHCA
|
2,429.9
|
|
|
2,507.1
|
|
|
1,251.5
|
|
|
2,478.8
|
|
||||
CHCI
|
|
|
|
|
|
|
|
||||||||
Branded OTC
|
1,174.0
|
|
|
1,349.2
|
|
|
665.9
|
|
|
368.4
|
|
||||
Other CHCI
(3)
|
317.0
|
|
|
303.0
|
|
|
167.1
|
|
|
336.2
|
|
||||
Total CHCI
|
1,491.0
|
|
|
1,652.2
|
|
|
833.0
|
|
|
704.6
|
|
||||
Generic prescription drugs
|
969.7
|
|
|
1,042.8
|
|
|
502.6
|
|
|
936.0
|
|
||||
Active pharmaceutical ingredients
|
55.6
|
|
|
78.5
|
|
|
45.1
|
|
|
107.7
|
|
||||
Total revenue
|
$
|
4,946.2
|
|
|
$
|
5,280.6
|
|
|
$
|
2,632.2
|
|
|
$
|
4,227.1
|
|
(2)
|
Consists primarily of feminine hygiene, diabetes care, dermatological care, branded OTC, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the
CHCA
segment.
|
(3)
|
Consists primarily of liquids licensed products, cough/cold/allergy, analgesics, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the CHCI segment.
|
Year Ended December 31, 2017
|
First
Quarter (2) |
|
Second
Quarter (3) |
|
Third
Quarter (4) |
|
Fourth
Quarter (5) |
||||||||
Net sales
|
$
|
1,194.0
|
|
|
$
|
1,237.9
|
|
|
$
|
1,231.3
|
|
|
$
|
1,283.0
|
|
Gross profit
|
$
|
464.4
|
|
|
$
|
504.6
|
|
|
$
|
497.8
|
|
|
$
|
512.7
|
|
Change in financial assets
|
$
|
(17.1
|
)
|
|
$
|
38.7
|
|
|
$
|
2.6
|
|
|
$
|
0.7
|
|
Net income (loss)
|
$
|
71.6
|
|
|
$
|
(69.6
|
)
|
|
$
|
44.5
|
|
|
$
|
73.1
|
|
Earnings (loss) per share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.50
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.31
|
|
|
$
|
0.52
|
|
Diluted
|
$
|
0.50
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.31
|
|
|
$
|
0.52
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
143.4
|
|
|
143.3
|
|
|
141.3
|
|
|
140.8
|
|
||||
Diluted
|
143.6
|
|
|
143.3
|
|
|
141.7
|
|
|
141.2
|
|
(2)
|
Includes
IPR&D impairment charges
of
$12.2 million
,
gain on certain divestiture
of
$21.8 million
, and
restructuring charges
of
$38.7 million
.
|
(3)
|
Includes
intangible asset impairment charges
of
$18.5 million
,
changes in financial assets
of
$38.7 million
, and
loss on early debt extinguishment
of
$135.2 million
.
|
(4)
|
Includes
held-for-sale impairment charges
of
$3.3 million
, and
fixed asset impairment charges
of
$4.0 million
.
|
(5)
|
Includes
unusual litigation charge reversal
of
$0.2 million
.
|
Year Ended December 31, 2016
|
First
Quarter (2) |
|
Second
Quarter (3) |
|
Third
Quarter (4) |
|
Fourth
Quarter (5) |
||||||||
Net sales
|
$
|
1,347.3
|
|
|
$
|
1,340.5
|
|
|
$
|
1,261.6
|
|
|
$
|
1,331.2
|
|
Gross profit
|
$
|
533.1
|
|
|
$
|
546.5
|
|
|
$
|
484.5
|
|
|
$
|
487.7
|
|
Change in financial assets
|
$
|
204.4
|
|
|
$
|
910.8
|
|
|
$
|
377.4
|
|
|
$
|
1,115.6
|
|
Net loss
|
$
|
(529.2
|
)
|
|
$
|
(534.3
|
)
|
|
$
|
(1,590.2
|
)
|
|
$
|
(1,359.1
|
)
|
Loss per share
(1)
:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(3.70
|
)
|
|
$
|
(3.73
|
)
|
|
$
|
(11.10
|
)
|
|
$
|
(9.48
|
)
|
Diluted
|
$
|
(3.70
|
)
|
|
$
|
(3.73
|
)
|
|
$
|
(11.10
|
)
|
|
$
|
(9.48
|
)
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
143.2
|
|
|
143.2
|
|
|
143.3
|
|
|
143.4
|
|
||||
Diluted
|
143.2
|
|
|
143.2
|
|
|
143.3
|
|
|
143.4
|
|
(2)
|
Includes an
intangible asset impairment charges
of
$273.3 million
, and a
goodwill impairment charge
of
$130.5 million
.
|
(3)
|
Includes
held-for-sale impairment charges
of
$10.5 million
and
change in financial assets
of
$910.8 million
.
|
(4)
|
Includes
intangible asset impairment charges
of
$866.6 million
,
goodwill impairment charge
of
$737.9 thousand
, and
held-for-sale impairment charges
of
$10.2 million
.
|
(5)
|
Includes
intangible asset impairment charges
of
$378.6 million
,
goodwill impairment charge
of
$224.1 million
, and a
reduction in held-for-sale impairment charges
of
$4.5 million
.
|
Six Months Ended December 31, 2015
|
September 26, 2015
(2)
|
|
December 31, 2015
(3)
|
||||
Net sales
|
$
|
1,273.1
|
|
|
$
|
1,359.1
|
|
Gross profit
|
$
|
535.2
|
|
|
$
|
543.7
|
|
Change in financial assets
|
$
|
(173.8
|
)
|
|
$
|
116.6
|
|
Net income (loss)
|
$
|
260.9
|
|
|
$
|
(218.4
|
)
|
Earnings (loss) per share
(1)
:
|
|
|
|
||||
Basic
|
$
|
1.78
|
|
|
$
|
(1.51
|
)
|
Diluted
|
$
|
1.78
|
|
|
$
|
(1.51
|
)
|
Weighted average shares outstanding
|
|
|
|
||||
Basic
|
146.3
|
|
|
144.9
|
|
||
Diluted
|
146.9
|
|
|
144.9
|
|
(1)
|
The sum of individual per share amounts may not equal due to rounding.
|
(2)
|
Includes
Mylan defense-related fees
of
$15.6 million
.
|
(3)
|
Includes an
intangible asset impairment charge
of
$185.1 million
,
Mylan defense-related fees
of
$71.3 million
, an
impairment charge on our India API held for sale assets
of
$29.0 million
,
restructuring charges
of
$24.7 million
, and an
investment impairment charge
of
$10.7 million
.
|
|
Six Months Ended
|
||||||
|
December 31,
2015 |
|
December 27,
2014 |
||||
|
|
|
(Unaudited)
|
||||
Net sales
|
$
|
2,632.2
|
|
|
$
|
1,844.7
|
|
Cost of sales
|
1,553.3
|
|
|
1,170.9
|
|
||
Gross profit
|
1,078.9
|
|
|
673.8
|
|
||
|
|
|
|
||||
Operating expenses
|
|
|
|
||||
Distribution
|
47.9
|
|
|
29.2
|
|
||
Research and development
|
88.2
|
|
|
89.8
|
|
||
Selling
|
325.9
|
|
|
95.3
|
|
||
Administration
|
306.8
|
|
|
165.6
|
|
||
Impairment charges
|
215.6
|
|
|
—
|
|
||
Restructuring
|
26.9
|
|
|
4.2
|
|
||
Total operating expenses
|
1,011.3
|
|
|
384.1
|
|
||
|
|
|
|
||||
Operating income
|
67.6
|
|
|
289.7
|
|
||
|
|
|
|
||||
Change in financial assets
|
(57.3
|
)
|
|
(46.9
|
)
|
||
Interest expense, net
|
89.9
|
|
|
56.7
|
|
||
Other expense (Income), net
|
25.2
|
|
|
60.3
|
|
||
Loss on extinguishment of debt
|
0.9
|
|
|
9.6
|
|
||
Income before income taxes
|
8.9
|
|
|
210.0
|
|
||
Income tax expense (benefit)
|
(33.6
|
)
|
|
29.4
|
|
||
Net income
|
$
|
42.5
|
|
|
$
|
180.6
|
|
|
|
|
|
||||
Income per share
|
|
|
|
||||
Basic
|
$
|
0.29
|
|
|
$
|
1.34
|
|
Diluted
|
$
|
0.29
|
|
|
$
|
1.34
|
|
|
|
|
|
||||
Weighted-average shares outstanding
|
|
|
|
||||
Basic
|
145.6
|
|
|
135.1
|
|
||
Diluted
|
146.1
|
|
|
135.6
|
|
||
|
|
|
|
||||
Dividends declared per share
|
$
|
0.25
|
|
|
$
|
0.21
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
•
|
Reviewing our income tax processes and controls and enhancing the overall design and procedures performed in calculating our income tax provision on an interim and annual basis
|
•
|
Significantly strengthening our tax capabilities through a combination of key new hires and providing additional resources
|
•
|
Re-designing our management review controls and enhancing the precision of review around the key income tax areas
|
•
|
Evaluate the sufficiency of our income tax resources and personnel to determine whether additional enhancements are needed
|
•
|
Evaluate whether further enhancements are needed to the design of our income tax procedures and controls
|
•
|
Demonstrate consistent operating effectiveness of our management review controls over income taxes over a number of quarterly periods
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
The following documents are filed or incorporated by reference as part of this Form 10-K:
|
1.
|
All financial statements. See Index to Consolidated Financial Statements.
|
2.
|
Financial Schedules.
|
3.
|
Exhibits:
|
2.1
|
|
|
|
2.2
|
|
|
|
2.3
+
|
|
|
|
2.4
|
|
|
|
2.5
|
|
|
|
2.6
|
|
|
|
2.7
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
4.10
|
|
|
|
4.11
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14*
|
|
|
|
10.15*
|
|
|
|
10.16*
|
|
|
|
10.17*
|
|
|
|
10.18*
|
|
|
|
10.19*
|
|
|
10.20*
|
|
|
|
10.21*
|
|
|
|
10.22*
|
|
|
|
10.23*
|
|
|
|
10.24*
|
|
|
|
10.25*
|
|
|
|
10.26*
|
|
|
|
10.27*
|
|
|
|
10.28*
|
|
|
|
10.29*
|
|
|
|
10.30*
|
|
|
|
10.31*
|
|
|
|
10.32*
|
|
|
|
10.33*
|
|
|
|
10.34*
|
|
|
|
10.35*
|
|
|
|
10.36*
|
|
|
|
10.37*
|
|
|
|
10.38*
|
|
|
|
10.39*
|
|
|
|
10.40*
|
|
|
|
10.41*
|
|
|
|
10.42*
|
|
|
|
10.43*
|
|
|
|
10.44*
|
|
|
|
10.45*
|
|
|
|
10.46*
|
|
|
|
10.47*
|
|
|
|
10.48*
|
|
|
|
10.49*
|
|
|
|
10.50*
|
|
|
|
10.51*
|
|
|
|
10.52*
|
|
|
|
10.53*
|
|
|
|
10.54*
|
|
|
|
10.55*
|
|
|
|
10.56*
|
|
|
|
10.57*
|
|
|
|
10.58*
|
|
|
|
10.59*
|
|
|
|
10.60*
|
|
|
|
10.61*
|
|
|
|
10.62*
|
|
|
|
10.63*
|
|
|
|
10.64*
|
|
|
|
10.65*
|
|
|
|
10.66*
|
|
|
|
10.67*
|
|
|
|
10.68*
|
|
|
|
10.69*
|
|
|
|
21
|
|
|
|
23
|
|
|
|
24
|
|
|
|
31
|
|
|
|
32
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
+
|
Confidential treatment has been requested for portions of this agreement. A completed copy of the agreement, including the redacted portions, has been filed separately with the SEC.
|
*
|
Denotes management contract or compensatory plan or arrangement.
|
(b)
|
Exhibits.
|
(c)
|
Financial Statement Schedules.
|
|
|
Year Ended
|
|
Six Months Ended
|
||||||||
Allowance for doubtful accounts
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Balance at beginning of period
|
|
$
|
6.3
|
|
|
$
|
4.5
|
|
|
$
|
2.6
|
|
Net bad debt expenses
(1)
|
|
1.4
|
|
|
2.1
|
|
|
2.5
|
|
|||
Additions/(deductions)
(2)
|
|
(1.5
|
)
|
|
(0.3
|
)
|
|
(0.6
|
)
|
|||
Balance at end of period
|
|
$
|
6.2
|
|
|
$
|
6.3
|
|
|
$
|
4.5
|
|
(1)
|
Includes effects of changes in foreign exchange rates.
|
(2)
|
Uncollectible accounts written off, net of recoveries. Also includes effects of changes in foreign exchange rates.
|
PERRIGO COMPANY PLC
|
|
|
|
By:
|
/s/ Uwe F. Roehrhoff
|
|
Uwe F. Roehrhoff
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
|
|
/s/
Uwe F.
Roehrhoff
|
|
President and Chief Executive Officer
|
Uwe F. Roehrhoff
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Ronald L. Winowiecki
|
|
Chief Financial Officer
|
Ronald L. Winowiecki
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
/s/ Laurie Brlas
|
|
Chairman
|
Laurie Brlas
|
|
|
|
|
|
/s/ Bradley A. Alford
|
|
Director
|
Bradley A. Alford
|
|
|
|
|
|
/s/ Rolf A. Classon
|
|
Director
|
Rolf A. Classon
|
|
|
|
|
|
/s/ Adriana Karaboutis
|
|
Director
|
Adriana Karaboutis
|
|
|
|
|
|
/s/ Gary M. Cohen
|
|
Director
|
Gary M. Cohen
|
|
|
|
|
|
/s/ Jeffrey B. Kindler
|
|
Director
|
Jeffrey B. Kindler
|
|
|
|
|
|
/s/ Donal O'Connor
|
|
Director
|
Donal O'Connor
|
|
|
|
|
|
/s/ Geoffrey M. Parker
|
|
Director
|
Geoffrey M. Parker
|
|
|
|
|
|
/s/ Theodore R. Samuels
|
|
Director
|
Theodore R. Samuels
|
|
|
|
|
|
/s/ Jeffrey C. Smith
|
|
Director
|
Jeffrey C. Smith
|
|
|
|
|
|
(i)
|
Participation in the Plan does not constitute an acquired right;
|
(ii)
|
The Plan and participation in the Plan is offered by the Company on a wholly discretionary basis;
|
(iii)
|
Participation in the Plan is voluntary; and
|
(iv)
|
The Company and any Parent, Subsidiary or Affiliates are not responsible for any decrease in the value of the shares.
|
(i)
|
La participación en el Plan no constituye un derecho adquirido;
|
(ii)
|
El plan y la participación en el mismo, son ofrecidos por la Compañía de manera totalmente discrecional;
|
(iii)
|
La participación en el Plan es voluntaria; y
|
(iv)
|
La Compañía, y cualquier Sociedad controladora, Subsidiaria o Filiales no son responsables por ningún decremento en el valor de las Acciones.
|
(i)
|
Participation in the Plan does not constitute an acquired right;
|
(ii)
|
The Plan and participation in the Plan is offered by the Company on a wholly discretionary basis;
|
(iii)
|
Participation in the Plan is voluntary; and
|
(iv)
|
The Company and any Parent, Subsidiary or Affiliates are not responsible for any decrease in the value of the shares.
|
(i)
|
La participación en el Plan no constituye un derecho adquirido;
|
(ii)
|
El plan y la participación en el mismo, son ofrecidos por la Compañía de manera totalmente discrecional;
|
(iii)
|
La participación en el Plan es voluntaria; y
|
(iv)
|
La Compañía, y cualquier Sociedad controladora, Subsidiaria o Filiales no son responsables por ningún decremento en el valor de las Acciones.
|
(i)
|
Participation in the Plan does not constitute an acquired right;
|
(ii)
|
The Plan and participation in the Plan is offered by the Company on a wholly discretionary basis;
|
(iii)
|
Participation in the Plan is voluntary; and
|
(iv)
|
The Company and any Parent, Subsidiary or Affiliates are not responsible for any decrease in the value of the shares.
|
(i)
|
La participación en el Plan no constituye un derecho adquirido;
|
(ii)
|
El plan y la participación en el mismo, son ofrecidos por la Compañía de manera totalmente discrecional;
|
(iii)
|
La participación en el Plan es voluntaria; y
|
(iv)
|
La Compañía, y cualquier Sociedad controladora, Subsidiaria o Filiales no son responsables por ningún decremento en el valor de las Acciones.
|
(i)
|
Participation in the Plan does not constitute an acquired right;
|
(ii)
|
The Plan and participation in the Plan is offered by the Company on a wholly discretionary basis;
|
(iii)
|
Participation in the Plan is voluntary; and
|
(iv)
|
The Company and any Parent, Subsidiary or Affiliates are not responsible for any decrease in the value of the shares underlying the options.
|
(i)
|
La participación en el Plan no constituye un derecho adquirido;
|
(ii)
|
El plan y la participación en el mismo, son ofrecidos por la Compañía de manera totalmente discrecional;
|
(iii)
|
La participación en el Plan es voluntaria; y
|
(iv)
|
La Compañía, y cualquier Sociedad controladora, Subsidiaria o Filiales no son responsables por ningún decremento en el valor de las Acciones.
|
1.
|
The second sentence of Paragraph 2(c) of the Agreement (“
Standard of Services
”) is amended and restated in its entirety, as follows:
|
2.
|
This Amendment may be executed in counterparts and each counterpart will be deemed an original.
|
3.
|
Except as expressly provided herein, the Agreement shall remain unaltered and of full force and effect.
|
EXECUTIVE
|
|
|
|
/s/ Uwe Röhrhoff
|
|
Name:
|
Uwe Röhrhoff
|
Title:
|
President and Chief Executive Officer,
|
Perrigo Pharma International DAC and Perrigo
|
|
Company plc
|
COMPANY
|
|
|
|
/s/ Todd W. Kingma
|
|
Name:
|
Todd W. Kingma
|
Title:
|
Executive Vice President, General
|
Counsel, and Secretary
|
1.
|
Svend Andersen of 126 Harley Street, Flat 4, Marylebone, W2G 7JS, London, UK (the “
Executive
”); and
|
1.
|
INTERPRETATION
|
1.1
|
The definitions and rules of interpretation in this Clause 1 apply in this agreement.
|
2.
|
TERMS AND CONDITIONS
|
2.1
|
The Executive is employed by the Company on the terms and conditions set out in this Agreement.
|
2.2
|
Subject to Clause 28.3, the Company reserves the right to make reasonable changes to the terms and conditions of the Executives employment. If the Company changes any of the terms and conditions of the Appointment, it will notify the Executive in writing with reasonable notice in advance of the changes taking effect.
|
2.3
|
The Executive consents to the transfer of his employment under this Agreement to any company within the group Company at any time during the Appointment.
|
3.
|
TERM OF APPOINTMENT
|
3.1
|
The Appointment shall be deemed to have commenced on the Commencement Date.
|
3.2
|
No employment with any previous employer counts towards the Executive’s period of continuous employment with the Company.
|
4.
|
EXECUTIVE’S WARRANTIES
|
4.1
|
The Executive warrants to the Company that, by entering into this Agreement or performing any of his obligations under it, he will not be in breach of any court order or any express or implied terms of any contract or other obligation binding on him.
|
4.2
|
The Executive warrants that he is entitled to work in the United Kingdom without any additional approvals and that he will notify the Company immediately if he ceases to be entitled to work in the United Kingdom at any time during the Appointment.
|
5.
|
DUTIES AND RESPONSIBILITIES
|
5.1
|
The Executive shall serve the Company as EVP & President Consumer Healthcare International or such other role as the Company considers appropriate. The Executive shall report to the Chief Executive Officer and President.
|
5.2
|
During the Appointment the Executive shall perform such duties, both as an employee and where relevant as an office holder, as are associated with his position and such other duties as the Board may from time to time properly and reasonably assign to him either in his capacity as director or in connection with the business of the Company or of the business of any one or more Group Companies (including serving on the board of any other executive body of such Group Company) without further remuneration.
|
5.3
|
During the Appointment the Executive shall:
|
(a)
|
act as an employee and director of the Company and carry out duties on behalf of any other Group Company including, if so required by the Board, acting as an officer or consultant of any such Group Company;
|
(b)
|
comply with the articles of association (as amended from time to time) of any Group Company of which he is a director;
|
(c)
|
abide by any statutory, fiduciary or common-law duties to any Group Company of which he is a director or employee;
|
(d)
|
not do anything that would cause him to be disqualified from acting as a director;
|
(e)
|
comply with the Company's anti-corruption and bribery policy and related procedures;
|
(f)
|
unless prevented by Incapacity, devote the whole of his time, attention and abilities to the business of the Company and any Group Company of which he is an officer or consultant;
|
(g)
|
faithfully and diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Board together with such person or persons as the Board may appoint to act jointly with him;
|
(h)
|
comply with all reasonable and lawful directions given to him by the Board;
|
(i)
|
report his own wrongdoing and any wrongdoing or proposed wrongdoing of any other employee or director of any Group Company to the Board immediately on becoming aware of it; and
|
(j)
|
use his best endeavours to promote, protect, develop and extend the business of the Company and the Group.
|
5.4
|
The Executive shall comply with any rules, policies and procedures set out in the Employee Handbook. The Employee Handbook, unless otherwise stated, is non-contractual and does not form part of the Executive’s terms and conditions of employment.
|
6.
|
PLACE OF WORK
|
6.1
|
The Executive’s normal place of work is 32 Vauxhall Bridge Road Vauxhall, London SW1V 2SA or such other place in the UK, either on a temporary or permanent basis, which the Company reasonably requires the Executive to discharge their duties.
|
6.2
|
The Executive agrees to travel on the Company's business (both within the United Kingdom or abroad) as may be required for the proper performance of his duties under the Appointment.
|
7.
|
HOURS OF WORK
|
7.1
|
The Executive’s normal working hours shall be 9:00 to 5:00 on Mondays to Fridays and such additional hours as are necessary for the proper performance of his duties. The Executive acknowledges that he shall not receive further remuneration in respect of such additional hours.
|
7.2
|
The Company reserves the right to change the Executive’s working pattern from time to time upon reasonable notice. This flexibility is required in order for the needs of the business to be met.
|
7.3
|
The parties each agree that the nature of the Executive's position is such that his working time cannot be measured and, accordingly, that the Appointment falls within the scope of regulation 20 of the Working Time Regulations 1998 (
SI 1998/1833
).
|
8.
|
SALARY
|
8.1
|
The Executive shall be paid a gross basic salary of £418,527 per annum (inclusive of any fees due to the Executive by Group Company as an officer of any Group Company).
|
8.2
|
The Executive’s salary shall accrue from day to day and be payable monthly in arrears on or about the 25th of each month directly into the Executive’s bank or building society.
|
8.3
|
The Company may deduct from the salary, or any other sums owed to the Executive, any money owed to any Group Company by the Executive. This includes, but is not limited to, any sums owed to any Group Company as a consequence of any failure by the Executive to return, or safeguard the condition of, any Group Company property and any overpayment of wages or expenses or any overpayment of annual leave in excess of the Executive’s accrued entitlement.
|
9.
|
CAR ALLOWANCE
|
9.1
|
Provided that the Executive holds a current driving licence, the Executive shall receive a car allowance for use of the Executive's own car of £10,000 per annum which shall be payable together with and in the same manner as the salary in accordance with Clause 8. The car allowance shall not be treated as part of the basic salary for any purpose and shall not be pensionable.
|
9.2
|
The Company shall reimburse the Executive in respect of fuel costs for business miles at the Company's business mileage.
|
9.3
|
The Executive shall immediately inform the Company if he is disqualified from driving and shall cease to be entitled to receive the allowance under Clause 9.1 or reimbursement of fuel expenses under Clause 9.2.
|
10.
|
BONUS
|
10.1
|
The Board may in its absolute discretion pay the Executive a bonus of such amount, at such intervals and subject to such conditions as the Board may in its absolute discretion determine taking into account specific performance targets to be notified to the Executive by the Board at the beginning of each financial year.
|
10.2
|
Any bonus payment made to the Executive shall be purely discretionary and shall not form part of the Executive’s contractual remuneration under this Agreement. If the Company makes a bonus payment to the Executive in respect of a particular financial year of the Company, it shall not be obliged to make subsequent bonus payments in respect of subsequent financial years of the Company.
|
10.3
|
The Company may alter the terms of any bonus targets or withdraw them altogether at any time without prior notice.
|
10.4
|
Notwithstanding Clause 10.1 the Executive shall in any event have no right to a bonus or a time-apportioned bonus:
|
(a)
|
if the Appointment terminates for any reason or he is under notice of termination (whether given by the Executive or the Company) at or before the date when a bonus might otherwise have been payable; or
|
(b)
|
for any period where the Executive is subject to a live warning for either conduct or capability.
|
10.5
|
Any bonus payments shall not be pensionable.
|
11.
|
EXPENSES
|
12.
|
HOLIDAYS
|
12.1
|
The Executive shall be entitled to 33 days' paid holiday in each holiday year which shall include the usual public holidays in England and Wales.
|
12.2
|
The Executive shall be entitled to carry forward up to 5 days of unused holiday entitlement from one year to a subsequent holiday year provided it is taken by 30 April in that subsequent holiday year.
|
12.3
|
The Executive shall have no entitlement to any payment in lieu of accrued but untaken holiday except on termination of the Appointment.
|
12.4
|
If either party has served notice to terminate the Appointment, the Board may require the Executive to take any accrued but unused holiday entitlement during the notice period.
|
13.
|
BENEFITS
|
13.1
|
Membership of the Pension Scheme is optional but the Executive will be entitled to contribute 3% of his basic salary and the Company will provide a contribution of 5% of basic salary. Additionally, the Executive would have the option to take up the Company’s High Earner Policy, and instead take a supplement in line with the Policy within the options permissible, from time to time.
|
13.2
|
The Company reserves the right to vary or amend any aspect of the Pension Scheme or withdraw it at any time as long as a replacement scheme is put in place that meets the requirements established by pension legislation.
|
13.3
|
Full details of the Pension Scheme, including the rules, conditions of eligibility and the rates of contributions and benefits, can be obtained from the Company.
|
13.4
|
The Company will at all times comply with its obligations pursuant to Part 1 of the Pensions Act 2008.
|
13.5
|
The Executive is eligible to join the Company’s Life Assurance Scheme (“
Life Assurance Scheme
”), subject to:
|
(a)
|
the terms of the Company's Life Assurance Scheme, as amended from time to time;
|
(b)
|
the rules or insurance policy of the relevant insurance provider, as amended from time to time; and
|
(c)
|
the Executive satisfying the normal underwriting requirements of the relevant insurance provider and the premium being at a rate which the Company considers reasonable.
|
13.6
|
The terms of the Life Assurance Scheme are binding on the Executive in the event of a claim. The Company accepts no liability for payment beyond that which the insurer makes.
|
13.7
|
If the insurance provider refuses for any reason to provide life assurance benefit to the Executive, the Company shall not be liable to provide to any replacement benefit of the same or similar kind or to pay any compensation in lieu of such benefit.
|
13.8
|
The Executive is eligible to be covered personally by the Company Medical Expenses Insurance Scheme (“
Medical Expenses Insurance Scheme
”), subject to:
|
(a)
|
the terms of the Company's Medical Expenses Insurance Scheme, as amended from time to time;
|
(b)
|
the rules or insurance policy of the relevant insurance provider, as amended from time to time; and
|
(c)
|
the Executive satisfying the normal underwriting requirements of the relevant insurance provider and the premium being at a rate which the Company considers reasonable.
|
13.9
|
Membership of the Medical Expenses Insurance Scheme is optional and non-contributory. The Executive’s dependent family may also be covered at the Executive’s own expense at the rates applicable to the Company. The terms of the Medical Expenses Insurance Scheme are binding on the Executive in the event of a claim.
|
13.10
|
If the insurance provider refuses for any reason to provide medical benefit to the Executive the Company shall not be liable to provide any replacement benefit of the same or similar kind or to pay any compensation in lieu of such benefit.
|
13.11
|
The Company in its sole and absolute discretion may discontinue, replace, withdraw, vary or amend any schemes or benefits pursuant to this Clause 13 at any time and without liability to provide any replacement scheme or benefit or compensation to the Executive.
|
14.
|
DIRECTORS’ AND OFFICERS’ INSURANCE
|
15.
|
INCAPACITY
|
15.1
|
If the Executive is absent from work due to Incapacity, the Executive shall notify the Board of the reason for the absence as soon as possible but no later than 09.00 on the first day of absence.
|
15.2
|
The Company operates a Discretionary Sick Pay Scheme and the Executive may be paid for periods of sickness entirely at the Company’s discretion. Any payments made to the Executive during periods of sickness will be inclusive of Statutory Sick Pay (‘SSP’). Discretionary Sick Pay will only be considered to be paid regarding genuine absence relating to the Executive’s Incapacity and not for other dependents or family members. For further details on absence reporting procedures, Discretionary Sick Pay and SSP eligibility please refer to the Employee Handbook.
|
15.3
|
The Executive agrees to consent to medical examinations (at the Company's expense) by a doctor nominated by the Company should the Company so require. The Executive agrees that any report produced in connection with any such examination may be disclosed to the Company and the Company may discuss the contents of the report with the relevant doctor.
|
15.4
|
If the Incapacity is or appears to be occasioned by actionable negligence, nuisance or breach of any statutory duty on the part of a third party in respect of which damages are or may be recoverable, the Executive shall immediately notify the Board of that fact and of any claim, settlement or judgment made or awarded in connection with it and all relevant particulars that the Board may reasonably require.
|
15.5
|
The rights of the Company to terminate the Appointment under the terms of this Agreement apply even when such termination would or might cause the Executive to forfeit any entitlement to sick pay, permanent health insurance or other benefits.
|
16.
|
OUTSIDE INTERESTS
|
16.1
|
During the Appointment the Executive shall not, except as a representative of the Company or with the prior written approval of the Board, whether paid or unpaid, be directly or indirectly engaged, concerned or have any financial interest in any Capacity in any other business, trade, profession or occupation (or the setting up of any business, trade, profession or occupation).
|
16.2
|
The Executive agrees to disclose to the Board any matters relating to his spouse or civil partner (or anyone living as such), children or parents which may, in the reasonable opinion of the Board, be considered to interfere, conflict or compete with the proper performance of the Executive obligations under this Agreement.
|
17.
|
CONFIDENTIAL INFORMATION
|
17.1
|
The Executive acknowledges that in the course of the Appointment he will have access to Confidential Information. The Employee has therefore agreed to accept the restrictions in this Clause 17.
|
17.2
|
The Executive shall not (except in the proper course of his duties), either during the Appointment or at any time after its termination (however arising), use or disclose to any person, company or other organisation whatsoever (and shall use his best endeavours to prevent the publication or disclosure of) any Confidential Information. This shall not apply to:
|
(a)
|
any use or disclosure authorised by the Board or required by law;
|
(b)
|
any information which is already in, or comes into, the public domain other than through the Executive’s unauthorised disclosure; or
|
(c)
|
any protected disclosure within the meaning of section 43A of the Employment Rights Act 1996.
|
17.3
|
All correspondence, documents, papers, notes, customer contacts or records (individually held or in list form) (including any of the aforementioned contained in electronic or other data storage) and where applicable Company clothing, safety equipment, general tools and equipment related to the Appointment, keys, Company credit cards, Company mobile phones, Company laptops and other electronic devices, DVD’s/videos/tapes or any other property belonging to the Company or its customers concerning the business of the Company or any of its suppliers, agents, distributors or customers which shall be acquired, received or made by the Executive during the course of the Appointment shall be the property of the Company. This list is not exhaustive.
|
18.
|
INTELLECTUAL PROPERTY
|
18.1
|
The Executive shall give the Company full written details of all Inventions and of all works embodying Intellectual Property Rights made wholly or partially by him at any time during the course of the Appointment. The Executive acknowledges that all Intellectual Property Rights subsisting (or which may in the future subsist) in all such Inventions and works shall automatically, on creation, vest in the Company absolutely. To the extent that they do not vest automatically, the Executive holds them on trust for the Company. The Executive agrees promptly to execute all documents and do all acts as may, in the opinion of the Company, be necessary to give effect to this Clause 18.1.
|
18.2
|
The Executive hereby irrevocably waives all moral rights under the Copyright, Designs and Patents Act 1988 (and all similar rights in other jurisdictions) which he has or will have in any existing or future works referred to in Clause 18.1.
|
18.3
|
The Executive irrevocably appoints the Company to be his attorney in his name and on his behalf to execute documents, use the Executive’s name and do all things which are necessary or desirable for the Company to obtain for itself or its nominee the full benefit of this clause. A certificate in writing, signed by any director or the secretary of the Company, that any instrument or act falls within the authority conferred by this Agreement shall be conclusive evidence that such is the case so far as any third party is concerned.
|
19.
|
COMPANY PROPERTY
|
19.1
|
If issued with Company property, the Executive must make sure at all times that it is kept safe, in good condition and properly maintained. If the Executive fails to do this or Company property is damaged or lost as a result of the Executive’s actions or omissions, the Company reserves the right to require the Executive to pay for the cost of repair or replacement of the property.
|
19.2
|
At any time during the Appointment on demand from the Company, and in any event upon the Termination the Executive will:
|
(a)
|
Immediately return to the Company all documents (in whatever form) in the Executive’s possession or control relating to the business of the Company or any Group Company and belonging to the Company or any Group Company;
|
(b)
|
Immediately disclose to the Company all passwords to all password protected files which have been created or protected by the Executive and which are on the Company’s or any Group Companies’ computers;
|
(c)
|
Immediately return to the Company all other Company or Group Company property in his possession or control; or
|
(d)
|
immediately upon request from the Company, irretrievably delete any information relating to the business of the Company or any Group Company which is in his possession or control.
|
20.
|
TERMINATION OF APPOINTMENT
|
21.
|
TERMINATION WITHOUT NOTICE
|
21.1
|
The Company may also terminate the Appointment with immediate effect without notice and with no liability to make any further payment to the Executive (other than in respect of amounts accrued due at the date of Termination) if the Executive:
|
(a)
|
is disqualified from acting as a director or resigns as a director from any Group Company without the prior written approval of the Board;
|
(b)
|
is in breach of the Company's anti-corruption and bribery policy and related procedures;
|
(c)
|
is guilty of any gross misconduct affecting the business of any Group Company;
|
(d)
|
commits any serious or repeated breach or non-observance of any of the provisions of this Agreement or refuses or neglects to comply with any reasonable and lawful directions of the Board;
|
(e)
|
is, in the reasonable opinion of the Board, negligent and incompetent in the performance of his duties;
|
(f)
|
is declared bankrupt or makes any arrangement with or for the benefit of his creditors or has a county court administration order made against him under the County Court Act 1984;
|
(g)
|
is convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed);
|
(h)
|
becomes of unsound mind (which includes lacking capacity under the Mental Capacity Act 2005), or a patient under any statute relating to mental health;
|
(i)
|
ceases to be eligible to work in the United Kingdom;
|
(j)
|
is guilty of any fraud or dishonesty or acts in any manner which in the opinion of the Board brings or is likely to bring the Executive or any Group Company into disrepute or is materially adverse to the interests of any Group Company; or
|
(k)
|
is guilty of a serious breach of any rules issued by the Company from time to time regarding its electronic communications systems.
|
22.
|
PAYMENT IN LIEU OF NOTICE
|
22.1
|
Notwithstanding Clauses 20 and 21, the Company may, in its sole and absolute discretion, terminate the Appointment at any time and with immediate effect by notifying the Executive that the Company is exercising its right under this Clause 22.1 and that it will make a payment in lieu of notice (
Payment in Lieu
) to the Executive. This Payment in Lieu will be equal to the basic salary (as at the date of termination) which the Executive would have been entitled to receive under this Agreement during the notice period referred to at Clause 20 (or, if notice has already been given, during the remainder of the notice period) less income tax and National Insurance contributions.
|
22.2
|
For the avoidance of doubt, the Payment in Lieu shall not include any element in relation to:
|
(a)
|
any bonus or commission payments that might otherwise have been due during the period for which the Payment in Lieu is made;
|
(b)
|
any payment in respect of any benefits (including, without limitation, company car allowance or Company pension contributions) which the Executive would have been entitled to receive during the period for which the Payment in Lieu is made; and
|
(c)
|
any payment in respect of any holiday entitlement that would have accrued during the period for which the Payment in Lieu is made.
|
22.3
|
The Executive shall have no right to receive a Payment in Lieu unless the Company has exercised its discretion in Clause 22.
|
23.
|
GARDEN LEAVE
|
23.1
|
Following service of notice to terminate the Appointment by either party, or if the Executive purports to terminate the Appointment in breach of contract, the Board may by written notice place the Executive on Garden Leave for the whole or part of the remainder of the Appointment.
|
23.2
|
During any period of Garden Leave:
|
(a)
|
the Company shall be under no obligation to provide any work to the Executive and may revoke any powers the Executive holds on behalf of the Company or any Group Company;
|
(b)
|
the Company may require the Executive to carry out alternative duties or to only perform such specific duties as are expressly assigned to the Executive, at such location (including the Executive’s home) as the Company may decide;
|
(c)
|
the Executive shall continue to receive his basic salary and all contractual benefits in the usual way and subject to the terms of any benefit arrangement;
|
(d)
|
the Executive shall remain an employee of the Company and bound by the terms of this agreement (including any implied duties of good faith and fidelity);
|
(e)
|
the Employee shall ensure that the Board knows where he will be and how he can be contacted during each working day (except during any periods taken as holiday in the usual way);
|
(f)
|
the Company may exclude the Executive from any premises of the Company or any Group Company; and
|
(g)
|
the Company may require the Executive not to contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client, customer, supplier, agent, distributor, shareholder, adviser or other business contact of the Company or any Group Company.
|
24.
|
CEASING TO BE A DIRECTOR
|
24.1
|
Except with the prior approval of the Board, or as provided in the articles of association of any Group Company of which he is a director, the Executive shall not resign as a director of any Group Company.
|
24.2
|
If during the Appointment the Executive ceases to be a director of any Group Company (otherwise than by reason of his death, resignation or disqualification pursuant to the articles of association of any relevant Group Company, as amended from time to time, or by statute or court order) the Appointment shall continue with the Executive as an employee only and the terms of this Agreement (other than those relating to the holding of the office of director) shall continue in full force and effect. The Executive shall have no claims in respect of such cessation of office.
|
25.
|
OBLIGATIONS ON TERMINATION
|
25.1
|
On termination of the Appointment (however arising) or, if earlier, at the start of a period of Garden Leave, the Executive shall:
|
(a)
|
resign immediately without compensation from any office or trusteeship that he holds in or on behalf of any Group Company;
|
(b)
|
immediately deliver to the Company all documents, books, materials, records, correspondence, papers and information (on whatever media and wherever located) relating to the business or affairs of any Group Company or its business contacts, any keys, credit card and any other property of any Group Company including any car provided to the Executive, which is in his possession or under his control; and
|
(c)
|
irretrievably delete any information relating to the business of the any Group Company stored on any magnetic or optical disk or memory and all matter derived from such sources which is in his possession or under his control outside the Company's premises.
|
25.2
|
On termination of the Appointment however arising the Executive shall not be entitled to any compensation for the loss of any rights or benefits under any share option, bonus, long-term incentive plan or other profit sharing scheme operated by any Group Company in which he may participate.
|
25.3
|
During and after the executive’s employment with the Company the executive agrees to make himself available to, be truthful, and to cooperate with, the Company or its advisers in any internal investigation or administrative, regulatory, judicial or quasi-judicial proceedings. The executive acknowledges that this could involve, but is not limited to, pursuing, responding to or defending any regulatory or legal process, providing information in relation to any such process, preparing witness statements and giving evidence in person on behalf of the Company or any group company. The Company shall reimburse any reasonable expenses incurred by the executive as a consequence of complying with his obligations under this clause, provided that such expenses are approved in advance in writing by the Company.
|
26.
|
POST TERMINATION RESTRICTIONS
|
26.1
|
In order to protect the Confidential Information and business connections of the Company and each Group Company to which he has access as a result of the Appointment, the Employee covenants with the Company (for itself and as trustee and agent for each Group Company) that he shall not:
|
(a)
|
for 12 months after Termination solicit or endeavour to entice away from the Company or any Group Company the business or custom of a Restricted Customer with a view to providing goods or services to that Restricted Customer in competition with any Restricted Business;
|
(b)
|
for 12 months after Termination offer to employ or engage or otherwise endeavour to entice away from the Company or any Group Company any Restricted Person;
|
(c)
|
for 12 months after Termination, employ or engage or otherwise facilitate the employment or engagement of any Restricted Person, whether or not such person would be in breach of contract as a result of such employment or engagement;
|
(d)
|
for 6 months after Termination, be involved in any Capacity with any business concern which is (or intends to be) in competition with any Restricted Business;
|
(e)
|
for 12 months after Termination be involved with the provision of goods or services to (or otherwise have any business dealings with) any Restricted Customer in the course of any business concern which is in competition with any Restricted Business; or
|
(f)
|
at any time after Termination, represent himself as connected with the Company or any Group Company in any Capacity, other than as a former employee, or use any registered business names or trading names associated with the Company or any Group Company.
|
26.2
|
The restrictions imposed on the Executive by this Clause 26 apply to him acting:
|
(a)
|
directly or indirectly; and
|
(b)
|
on his own behalf or on behalf of, or in conjunction with, any firm, company or person.
|
26.3
|
The Company and the Executive entered into the restrictions in this Clause 26 having been separately legally advised.
|
26.4
|
Each of the restrictions in this Clause 26 is intended to be separate and severable. If any of the restrictions shall be held to be void but would be valid if part of their wording were deleted, such restriction shall apply with such deletion as may be necessary to make it valid or effective.
|
26.5
|
The Company acknowledges that any period which the Executive is placed on Garden Leave under Clause 23 shall be offset against the restrictions in this Clause 26.
|
27.
|
DATA PROTECTION
|
27.1
|
The Executive confirms he has read and understood the Company's data protection policy, a copy of which is contained in the Employee Handbook. The Company may change its data protection policy at any time and will notify employees in writing of any changes.
|
27.2
|
The Executive acknowledges that the Company holds a personnel file and computer records within England and Wales which contain data relating to the Executive and concerning a wide variety of matters. These include matters such as the Executive’s contact details, application, references, bank details, and other personal details. It may include some sensitive data concerning the Executive’s health and ethnic origin. It is held for the following purposes:
|
(a)
|
staff administration;
|
(b)
|
administration of pensions and other employee benefits;
|
(c)
|
internal accounts and records, marketing and business transactions;
|
(d)
|
the provision of management information for business purposes such as marketing activities and corporate and staff planning; and
|
(e)
|
to ensure fair treatment and to otherwise permit the Company to comply with its legal responsibilities.
|
27.3
|
The Company may collect from the Executive certain details relating to another individual, for example:
|
(a)
|
details of a person to contact in case of emergency; or
|
(b)
|
the Executive’s next of kin for the purpose of death in service benefits.
|
27.4
|
In such cases, the Executive agrees that it is his responsibility to ensure that he has informed any such individual of the use of the Executive’s data by the Company or Group Company for one or more of the purposes set out in Clause 27.2 and its possible disclosure in accordance with Clause 27.5.
|
27.5
|
The Executive acknowledges that it may, in certain circumstances, for the purposes listed in Clause 27.2, be necessary to disclose his or another individual's personal data to:
|
(a)
|
a Group Company;
|
(b)
|
third parties who provide services to the Company or any Group Company;
|
(c)
|
business partners or third parties of the Company or any Group Company;
|
(d)
|
the Company's advisers or any relevant regulatory authorities; and/or
|
(e)
|
other third parties where required by law.
|
27.6
|
Some of the disclosures referred to in clause 27.5 may involve the transfer of the Executive or other individual's details outside the European Economic Area (“
EEA
”) where the laws may not give the same level of legal protection to personal data as within the EEA.
|
27.7
|
[Where transfers outside the EEA are necessary, the Company has taken, or shall take, the appropriate steps to satisfy itself that the entity to which the data is transferred has in place the appropriate technical and organisational measures to protect the data against unauthorised or unlawful processing and against accidental loss or destruction of, or damage to the data. In all cases, third parties to whom the Executive’s personal data is transferred will be contractually obliged to use the data only for the relevant purpose specified above and not to forward the data to other parties without the Executive’s consent.]
|
27.8
|
By signing this Agreement, the Executive agrees to the processing of his personal information for the purposes referred to in this Clause 27 by the Company and by any party to whom data is disclosed in accordance with Clauses 27.5 and 27.6.]
|
28.
|
GENERAL
|
28.1
|
There is no collective agreement which directly affects the Appointment.
|
28.2
|
This Agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.
|
28.3
|
No variation or agreed termination of this Agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).
|
28.4
|
This Agreement may be executed in any number of counterparts, each of which when executed shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement.
|
28.5
|
No one other than a party to this Agreement shall have any right to enforce any of its terms.
|
28.6
|
This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.
|
28.7
|
Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement.
|
|
|
|
|
Executed as a deed by the Company acting by [James Michaud], a director, in the presence of:
.......................................
[SIGNATURE OF WITNESS]
[NAME, ADDRESS [AND OCCUPATION] OF WITNESS]
|
.......................................
[SIGNATURE OF DIRECTOR]
Director
|
Signed as a deed by Svend Andersen in the presence of:
.......................................
[SIGNATURE OF WITNESS]
[NAME, ADDRESS [AND OCCUPATION] OF WITNESS]
|
.......................................
[SIGNATURE OF EMPLOYEE]
|
Name of Subsidiary
|
State/Country of Incorporation
|
Chefaro Ireland Designated Activity Company
|
Ireland
|
Perrigo Corporation Designated Activity Company
|
Ireland
|
Perrigo Holdings Unlimited Company
|
Ireland
|
Perrigo International Finance Designated Activity Company
|
Ireland
|
Perrigo Company plc
|
Ireland
|
Perrigo Pharma International Designated Activity Company
|
Ireland
|
Perrigo Science One Designated Activity Company
|
Ireland
|
Habsont Unlimited Company
|
Ireland
|
Irish Biosciences Venture Capital Fund
|
Ireland
|
Perrigo Ireland 1 Designated Activity Company
|
Ireland
|
Perrigo Ireland 2 Designated Activity Company
|
Ireland
|
Perrigo Ireland 3 Designated Activity Company
|
Ireland
|
Perrigo Ireland 4 Designated Activity Company
|
Ireland
|
Perrigo Ireland 5 Designated Activity Company
|
Ireland
|
Perrigo Ireland 6 Designated Activity Company
|
Ireland
|
Perrigo Ireland 7 Designated Activity Company
|
Ireland
|
Perrigo Ireland 8 Designated Activity Company
|
Ireland
|
Perrigo Ireland Management Designated Activity Company
|
Ireland
|
Omega Pharma Ireland Designated Activity Company
|
Ireland
|
Omega Teknika Designated Activity Company
|
Ireland
|
Perrigo Science Eight Unlimited Company
|
Ireland
|
Perrigo Finance Unlimited Company
|
Ireland
|
Perrigo Ireland 9 Unlimited Company
|
Ireland
|
Perrigo Ireland 10 Unlimited Company
|
Ireland
|
Perrigo Foundation
|
Ireland
|
PMI Branded Pharmaceuticals, Inc.
|
Michigan
|
Perrigo Company
|
Michigan
|
Perrigo Company Charitable Foundation
|
Michigan
|
Perrigo Management Company
|
Michigan
|
L. Perrigo Company
|
Michigan
|
Perrigo Pharmaceuticals Company
|
Michigan
|
Perrigo International, Inc.
|
Michigan
|
Perrigo Company of South Carolina, Inc.
|
Michigan
|
Perrigo Sales Corporation
|
Michigan
|
Perrigo International Holdings, LLC
|
Michigan
|
Perrigo Research & Development Company
|
Michigan
|
Perrigo Sourcing Solutions, Inc.
|
Michigan
|
P2C, Inc.
|
Michigan
|
Sergeant's Pet Care Products, Inc.
|
Michigan
|
Athena Neurosciences, LLC
|
Delaware
|
Elan Pharmaceuticals, LLC
|
Delaware
|
Perrigo New York, Inc.
|
Delaware
|
Perrigo International Holdings II, Inc.
|
Delaware
|
Perrigo LLC
|
Delaware
|
Perrigo China Business Trustee, LLC
|
Delaware
|
Perrigo Diabetes Care, LLC
|
Delaware
|
Perrigo Mexico Investment Holdings, LLC
|
Delaware
|
Pet Logic, LLC
|
Delaware
|
PBM Holdings, LLC
|
Delaware
|
PBM Nutritionals, LLC
|
Delaware
|
PBM Products, LLC
|
Delaware
|
PBM Foods, LLC
|
Delaware
|
PBM International Holdings, LLC
|
Delaware
|
PBM Canada Holdings, LLC
|
Delaware
|
PBM Mexico Holdings, LLC
|
Delaware
|
PBM China Holdings, LLC
|
Delaware
|
Paddock Laboratories, LLC
|
Delaware
|
Velcera, Inc.
|
Delaware
|
FidoPharm, Inc.
|
Delaware
|
FidoPharmBrands, LLC
|
Delaware
|
Cobrek Pharmaceuticals, Inc.
|
Delaware
|
Perrigo Company of Tennessee
|
Tennessee
|
Perrigo Florida, Inc.
|
Florida
|
Meridian Animal Health, LLC
|
Nevada
|
LoradoChem, Inc.
|
Colorado
|
SPC Trademarks, LLC
|
Texas
|
Geiss, Destin & Dunn, Inc
|
Georgia
|
NewcoGen-Elan, LLC
|
Massachusetts
|
Arginet Investments and Property (2003) Ltd.
|
Israel
|
Pharma Clal (1983) Ltd.
|
Israel
|
Perrigo Israel Holdings Ltd
|
Israel
|
Perrigo Israel Pharmaceuticals Ltd.
|
Israel
|
Perrigo Israel Opportunities II Ltd.
|
Israel
|
Perrigo Israel Agencies Ltd
|
Israel
|
Perrigo Israel Enterprises & Investments Ltd.
|
Israel
|
Perrigo Israel Trading Limited Partnership
|
Israel
|
Wrafton Laboratories Limited
|
United Kingdom
|
Perrigo UK Acquisition Limited
|
United Kingdom
|
Perrigo Ventures Limited Partnership
|
United Kingdom
|
Perrigo UK Finco Limited Partnership
|
United Kingdom
|
Galpharm Healthcare Limited
|
United Kingdom
|
Galpharm International Limited
|
United Kingdom
|
Kiteacre Limited
|
United Kingdom
|
Perrigo Pharma Limited
|
United Kingdom
|
Rosemont Holdings Limited
|
United Kingdom
|
Rosemont Group Limited
|
United Kingdom
|
Rosemont Trustee Company Limited
|
United Kingdom
|
Acacia Biopharma Limited
|
United Kingdom
|
Rosemont Pharmaceuticals Limited
|
United Kingdom
|
Rosemont Pensions Limited
|
United Kingdom
|
Omega Pharma Limited
|
United Kingdom
|
The Learning Pharmacy Limited
|
United Kingdom
|
Perrigo de Mexico S.A. de C.V.
|
Mexico
|
Quimica y Farmacia S.A. de C.V.
|
Mexico
|
Laboratorios DIBA S.A.
|
Mexico
|
Perrigo Mexico Holdings S.A. de C.V.
|
Mexico
|
PBM Products Mexico S de R.L. de C.V.
|
Mexico
|
Servicios PBM S. de R.L. de C.V.
|
Mexico
|
Sergeant's Pet Care Products Mexico, S, DE R.L.DE C.V.
|
Mexico
|
Gelcaps Exportadora de Mexico, S.A. de C.V.
|
Mexico
|
Cinetic Laboratories Argentina SA
|
Argentina
|
Perrigo Australian Holding Company II PTY Limited
|
Australia
|
Orion Laboratories PTY Limited
|
Australia
|
Aurora Pharmaceuticals Pty Ltd
|
Australia
|
Omega Pharma Australia Pty Ltd
|
Australia
|
Rubicon Healthcare Holdings Pty Ltd
|
Australia
|
Orion Laboratories (NZ) Ltd.
|
New Zealand
|
Perrigo Laboratories India Private Limited
|
India
|
Herbs Trading GmbH
|
Austria
|
Omega Pharma Austria Healthcare GmbH
|
Austria
|
Omega Pharma GmbH
|
Austria
|
Richard Bittner AG
|
Austria
|
Elan International Services Limited
|
Bermuda
|
Perrigo International Insurance Limited
|
Bermuda
|
Perrigo Do Brasil Serviços E Participações LTDA.
|
Brazil
|
Perrigo Danmark A/S
|
Denmark
|
Perrigo Denmark Holdings K/S
|
Denmark
|
Elan Europa Finance S.á r.l.
|
Luxembourg
|
Hud SA
|
Luxembourg
|
Omega Pharma Luxembourg SarL
|
Luxembourg
|
Promedent SA
|
Luxembourg
|
Monksland Holdings B.V.
|
Netherlands
|
Perrigo Netherlands B.V.
|
Netherlands
|
Perrigo Ireland Holding Company B.V.
|
Netherlands
|
Perrigo Israel Holdings II B.V.
|
Netherlands
|
Perrigo Netherlands Finco 1 Coöperatief U.A.
|
Netherlands
|
Perrigo Netherlands Finco 2 B.V.
|
Netherlands
|
Perrigo Netherlands International Partnership C.V.
|
Netherlands
|
Bional Nederland B.V.
|
Netherlands
|
Damianus B.V.
|
Netherlands
|
Insect Repellents B.V.
|
Netherlands
|
Oce-Bio Nederland B.V.
|
Netherlands
|
Omega Pharma Holding (Nederland) B.V.
|
Netherlands
|
Omega Pharma Nederland B.V.
|
Netherlands
|
Samenwerkende Apothekers Nederland B.V.
|
Netherlands
|
Wartner Europe B.V.
|
Netherlands
|
Ymea B.V.
|
Netherlands
|
Elan Pharmaceuticals GmbH
|
Switzerland
|
Interdelta S.A.
|
Switzerland
|
JLR Pharma S.A.
|
Switzerland
|
Perrigo China Business Trust
|
China
|
Perrigo Trading (Shanghai) Co., Ltd.
|
China
|
American Business Sergeant's Pet Care Products Trade (Shanghai) Co., Ltd.
|
China
|
Zibo Xinhua - Perrigo Pharmaceutical Company Ltd.
|
China
|
Perrigo Asia Holding Company Ltd.
|
Mauritius
|
Omega Pharma Ukraine LLC
|
Ukraine
|
Belgian Cycling Company NV
|
Belgium
|
Biover NV
|
Belgium
|
Jaico R.D.P. NV
|
Belgium
|
Medgenix Benelux NV
|
Belgium
|
Oce Bio BVBA
|
Belgium
|
Omega Pharma Belgium NV
|
Belgium
|
Omega Pharma Capital NV
|
Belgium
|
Omega Pharma Innovation & Development NV
|
Belgium
|
Omega Pharma International NV
|
Belgium
|
Omega Pharma Invest NV
|
Belgium
|
Omega Pharma NV
|
Belgium
|
Omega Pharma Trading NV
|
Belgium
|
Perrigo Belgium Holding 1 NV
|
Belgium
|
Vianatura NV
|
Belgium
|
Newbridge Pharmaceuticals Ltd.
|
British Virgin Islands
|
Perrigo Bulgaria OOD
|
Bulgaria
|
Omega Alpharm Cyprus Ltd.
|
Cyprus
|
Omega Pharma AS
|
Czech Republic
|
Perrigo Suomi Oy
|
Finland
|
Bioxydiet France SAS
|
France
|
Cosmediet - Biotechnie SAS
|
France
|
Laboratoire de la Mer SAS
|
France
|
Laboratoires Omega Pharma France SAS
|
France
|
Omega Pharma SAS
|
France
|
Naturwohl Pharma GmbH
|
Germany
|
Abtei Omega Pharma GmbH
|
Germany
|
Omega Pharma Deutschland GmbH
|
Germany
|
Omega Pharma Manufacturing GmbH & Co. KG
|
Germany
|
Omega Pharma Manufacturing Verwaltungs GmbH
|
Germany
|
Paracelsia Pharma GmbH
|
Germany
|
Omega Pharma Hellas SA Health and Beauty Products
|
Greece
|
Despharma Kft.
|
Hungary
|
Omega Pharma Hungary Kft.
|
Hungary
|
Chefaro Pharma Italia SrL
|
Italy
|
Omega Pharma Baltics SIA
|
Latvia
|
Perrigo Norge AS
|
Norway
|
Omega Pharma Poland Sp.z.o.o.
|
Poland
|
Omega Pharma Portuguesa LDA
|
Portugal
|
SC Hipocrate 2000 SRL
|
Romania
|
Adriatic Distribution doo Beograd
|
Serbia
|
Omega Pharma s.r.o.
|
Slovakia
|
Adriatic BST Trgovina in Storitve D.o.o.
|
Slovenia
|
OmegaLabs (Pty) Ltd
|
South Africa
|
Omega Pharma Espana SA
|
Spain
|
Aco Hud Nordic AB
|
Sweden
|
Perrigo Sverige AB
|
Sweden
|
Omega Pharma Kişisel Bakım Ürünleri Sanayi VE Ticaret Limited Şirketi
|
Turkey
|
1.
|
I have reviewed this annual report on Form 10-K of Perrigo Company plc;
|
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 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 fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer 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:
|
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/
Uwe F.
Roehrhoff
|
Uwe F. Roehrhoff
|
Chief Executive Officer and President
|
|
1.
|
I have reviewed this annual report on Form 10-K of Perrigo Company plc;
|
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 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 fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer 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:
|
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/ Ronald L. Winowiecki
|
Ronald L. Winowiecki
|
Chief Financial Officer
|
|
(i)
|
this annual Report on Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(ii)
|
the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Perrigo Company plc.
|
|
|
|
|
Date:
|
March 1, 2018
|
|
/s/
Uwe F.
Roehrhoff
|
|
|
|
Uwe F. Roehrhoff
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
March 1, 2018
|
|
/s/ Ronald L. Winowiecki
|
|
|
|
Ronald L. Winowiecki
|
|
|
|
Chief Financial Officer
|
|
|
|
|