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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended March 31, 2015
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
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British Columbia, Canada
(State or other jurisdiction of incorporation or organization) |
98-0448205
(I.R.S. Employer Identification No.) |
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2150 St. Elzéar Blvd. West, Laval, Quebec
(Address of principal executive offices) |
H7L 4A8
(Zip Code) |
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company
o
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Part I.
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Financial Information
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Other Information
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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the challenges and difficulties associated with managing the rapid growth of our Company and a large complex business;
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•
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our ability to retain, motivate and recruit executives and other key employees;
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the introduction of products that compete against our products that do not have patent or data exclusivity rights;
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our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
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our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis;
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•
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factors relating to the acquisition and integration of the companies, businesses and products acquired by the Company, such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in sales activities and potential challenges with information technology systems integrations), the difficulties and challenges associated with entering into new business areas and new geographic markets, the difficulties, challenges and costs associated with managing and integrating new facilities,
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•
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factors relating to our ability to achieve all of the estimated synergies from our acquisitions as a result of cost-rationalization and integration initiatives. These factors may include greater than expected operating costs, the difficulty in eliminating certain duplicative costs, facilities and functions, and the outcome of many operational and strategic decisions, some of which have not yet been made;
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factors relating to our recent acquisition of Salix, including the impact of substantial additional debt on our financial condition and results of operations; our ability to effectively and efficiently integrate the operations of the Company and Salix; our ability to achieve the estimated synergies from this transaction; the challenges associated with entering into Salix's gastrointestinal (GI) business, which is a new business for our Company; our ability to reduce inventory levels of certain of Salix's products and the timing of such reduction; and, once integrated, the effects of such business combination on our future financial condition, operating results, strategy and plans;
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our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements;
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our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
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our substantial debt and debt service obligations and their impact on our financial condition and results of operations;
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our future cash flow, our ability to service and repay our existing debt, our ability to raise additional funds, if needed, and any restrictions that are or may be imposed as a result of our current and future indebtedness, in light of our current and projected levels of operations, acquisition activity and general economic conditions;
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any downgrade by rating agencies in our corporate credit ratings, which may impact, among other things, our ability to raise additional debt capital and implement elements of our growth strategy;
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interest rate risks associated with our floating rate debt borrowings;
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the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets (including the challenges created by new and different regulatory regimes in such countries);
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adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in the countries in which we do business (such as the recent instability in Russia, Ukraine and the Middle East);
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economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
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the introduction of generic competitors of our branded products;
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our ability to obtain and maintain sufficient intellectual property rights over our products and defend against challenges to such intellectual property;
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the expense, timing and outcome of legal proceedings, arbitrations, investigations and regulatory proceedings and settlements thereof;
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the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or withdrawals of products from the market;
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the availability of and our ability to obtain and maintain adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-insurance;
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the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the U.S. Food and Drug Administration (the "FDA"), Health Canada and similar agencies in other countries (such as the anticipated approval by the FDA of Salix's Xifaxan
®
product for the indication of irritable bowel syndrome with diarrhea ("IBS-D")), legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
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the results of continuing safety and efficacy studies by industry and government agencies;
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the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products;
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the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith;
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the impact of price control restrictions on our products, including the risk of mandated price reductions;
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the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, which could lead to material impairment charges;
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the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
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negative publicity or reputational harm to our products and business;
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the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing;
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our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and related supply difficulties, interruptions and delays;
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the disruption of delivery of our products and the routine flow of manufactured goods;
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the seasonality of sales of certain of our products;
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declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;
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compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations;
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the impacts of the Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate;
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potential ramifications, including possible financial penalties, relating to Salix's restatement of its historical financial results and our ability to address historic weaknesses in Salix's internal control over financial reporting;
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interruptions, breakdowns or breaches in our information technology systems; and
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other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing.
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As of
March 31,
2015
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As of
December 31,
2014
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Assets
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Current assets:
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Cash and cash equivalents
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$
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1,864.4
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$
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322.6
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Trade receivables, net
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2,108.8
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2,075.8
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Inventories, net
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998.9
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950.6
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Restricted cash and cash equivalents (Note 8)
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10,354.9
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9.1
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Prepaid expenses and other current assets
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660.9
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632.8
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Assets held for sale
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7.8
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8.9
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Deferred tax assets, net
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196.5
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193.3
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Total current assets
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16,192.2
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4,193.1
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Property, plant and equipment, net
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1,334.8
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1,310.5
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Intangible assets, net
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11,554.6
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11,255.9
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Goodwill
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9,161.4
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9,346.4
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Deferred tax assets, net
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151.7
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54.0
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Other long-term assets, net
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171.2
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193.1
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Total assets
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$
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38,565.9
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$
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26,353.0
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Liabilities
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Current liabilities:
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Accounts payable
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$
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352.5
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$
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398.0
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Accrued and other current liabilities
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2,424.4
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2,179.4
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Acquisition-related contingent consideration
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186.3
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141.8
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Current portion of long-term debt
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122.8
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0.9
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Deferred tax liabilities, net
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11.1
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10.7
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Total current liabilities
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3,097.1
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2,730.8
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Acquisition-related contingent consideration
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198.9
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167.0
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Long-term debt
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25,897.9
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15,253.7
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Pension and other benefit liabilities
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227.7
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239.8
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Liabilities for uncertain tax positions
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98.7
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102.6
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Deferred tax liabilities, net
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2,261.5
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2,227.5
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Other long-term liabilities
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208.9
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197.1
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Total liabilities
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31,990.7
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20,918.5
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Commitments and contingencies (Note 15)
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Equity
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||||
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Common shares, no par value, unlimited shares authorized, 342,266,409 and
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||||
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334,402,964 issued and outstanding at March 31, 2015 and December 31, 2014, respectively
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9,810.3
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8,349.2
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Additional paid-in capital
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260.9
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243.9
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Accumulated deficit
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(2,291.3
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)
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(2,365.0
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)
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Accumulated other comprehensive loss
|
(1,327.6
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)
|
|
(915.9
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)
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Total Valeant Pharmaceuticals International, Inc. shareholders’ equity
|
6,452.3
|
|
|
5,312.2
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Noncontrolling interest
|
122.9
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|
|
122.3
|
|
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Total equity
|
6,575.2
|
|
|
5,434.5
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Total liabilities and equity
|
$
|
38,565.9
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$
|
26,353.0
|
|
|
|
Three Months Ended
March 31,
|
||||||
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|
2015
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2014
|
||||
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Revenues
|
|
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|
||||
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Product sales
|
$
|
2,146.9
|
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$
|
1,851.1
|
|
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Other revenues
|
44.0
|
|
|
35.1
|
|
||
|
|
2,190.9
|
|
|
1,886.2
|
|
||
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Expenses
|
|
|
|
||||
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Cost of goods sold (exclusive of amortization and impairments of
|
|
|
|
||||
|
finite-lived intangible assets shown separately below)
|
560.4
|
|
|
504.1
|
|
||
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Cost of other revenues
|
14.3
|
|
|
14.3
|
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||
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Selling, general and administrative
|
573.8
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|
|
482.0
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||
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Research and development
|
55.8
|
|
|
61.3
|
|
||
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Amortization and impairments of finite-lived intangible assets
|
365.2
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|
355.2
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Restructuring, integration and other costs
|
55.0
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|
133.6
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In-process research and development impairments and other charges
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—
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|
12.0
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||
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Acquisition-related costs
|
9.8
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|
1.5
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||
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Acquisition-related contingent consideration
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7.1
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|
|
8.9
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Other expense (income)
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6.1
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(43.3
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)
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||
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1,647.5
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1,529.6
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Operating income
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543.4
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|
356.6
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Interest income
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0.9
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1.8
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Interest expense
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(297.8
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)
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(246.5
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)
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Loss on extinguishment of debt
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(20.0
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)
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(93.7
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)
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Foreign exchange and other
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(71.1
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)
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(13.4
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)
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Income before provision for income taxes
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155.4
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|
4.8
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Provision for income taxes
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80.9
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|
25.1
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|
||
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Net income (loss)
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74.5
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(20.3
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)
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Less: Net income attributable to noncontrolling interest
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0.8
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|
2.3
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||
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Net income (loss) attributable to Valeant Pharmaceuticals International, Inc.
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$
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73.7
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$
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(22.6
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)
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Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.:
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Basic
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$
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0.22
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$
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(0.07
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)
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Diluted
|
$
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0.21
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$
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(0.07
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)
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Weighted-average common shares (in millions)
|
|
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|
||||
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Basic
|
336.8
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|
|
334.9
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Diluted
|
343.4
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|
|
334.9
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Three Months Ended
March 31,
|
||||||
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|
2015
|
|
2014
|
||||
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Net income (loss)
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$
|
74.5
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$
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(20.3
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)
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Other comprehensive loss
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|
||||
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Foreign currency translation adjustment
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(411.5
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)
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(7.4
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)
|
||
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Pension and postretirement benefit plan adjustments
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(0.4
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)
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|
(0.6
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)
|
||
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Other comprehensive loss
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(411.9
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)
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|
(8.0
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)
|
||
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Comprehensive loss
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(337.4
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)
|
|
(28.3
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)
|
||
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Less: Comprehensive income attributable to noncontrolling interest
|
0.6
|
|
|
1.5
|
|
||
|
Comprehensive loss attributable to Valeant Pharmaceuticals International, Inc.
|
$
|
(338.0
|
)
|
|
$
|
(29.8
|
)
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
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Cash Flows From Operating Activities
|
|
|
|
||||
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Net income (loss)
|
$
|
74.5
|
|
|
$
|
(20.3
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
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Depreciation and amortization, including impairments of finite-lived intangible assets
|
407.0
|
|
|
401.1
|
|
||
|
Amortization and write-off of debt discounts and debt issuance costs
|
10.5
|
|
|
12.2
|
|
||
|
Acquisition accounting adjustment on inventory sold
|
24.5
|
|
|
5.2
|
|
||
|
Acquisition-related contingent consideration
|
7.1
|
|
|
8.9
|
|
||
|
Allowances for losses on accounts receivable and inventories
|
12.2
|
|
|
19.6
|
|
||
|
Deferred income taxes
|
62.5
|
|
|
10.0
|
|
||
|
Additions (reductions) to accrued legal settlements
|
1.5
|
|
|
(48.8
|
)
|
||
|
Payments of accrued legal settlements
|
(3.0
|
)
|
|
—
|
|
||
|
Share-based compensation
|
35.0
|
|
|
24.8
|
|
||
|
Tax benefits from stock options exercised
|
(17.9
|
)
|
|
(1.2
|
)
|
||
|
Foreign exchange loss
|
75.9
|
|
|
12.6
|
|
||
|
Loss on extinguishment of debt
|
20.0
|
|
|
93.7
|
|
||
|
Payment of accreted interest on contingent consideration
|
(2.2
|
)
|
|
(0.7
|
)
|
||
|
Other
|
(7.2
|
)
|
|
9.7
|
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
||||
|
Trade receivables
|
(67.0
|
)
|
|
(30.1
|
)
|
||
|
Inventories
|
(38.5
|
)
|
|
(69.2
|
)
|
||
|
Prepaid expenses and other current assets
|
(45.1
|
)
|
|
4.2
|
|
||
|
Accounts payable, accrued and other liabilities
|
(58.7
|
)
|
|
52.6
|
|
||
|
Net cash provided by operating activities
|
491.1
|
|
|
484.3
|
|
||
|
|
|
|
|
||||
|
Cash Flows From Investing Activities
|
|
|
|
||||
|
Acquisition of businesses, net of cash acquired
|
(795.0
|
)
|
|
(306.3
|
)
|
||
|
Acquisition of intangible assets and other assets
|
(48.8
|
)
|
|
(21.1
|
)
|
||
|
Purchases of property, plant and equipment
|
(65.8
|
)
|
|
(58.1
|
)
|
||
|
Proceeds from sales and maturities of short-term investments
|
17.7
|
|
|
—
|
|
||
|
Increase in restricted cash and cash equivalents (Note 8)
|
(10,349.1
|
)
|
|
—
|
|
||
|
Other
|
0.5
|
|
|
1.4
|
|
||
|
Net cash used in investing activities
|
(11,240.5
|
)
|
|
(384.1
|
)
|
||
|
|
|
|
|
||||
|
Cash Flows From Financing Activities
|
|
|
|
||||
|
Issuance of long-term debt, net of discount
|
12,004.4
|
|
|
360.6
|
|
||
|
Repayments of long-term debt
|
(1,110.3
|
)
|
|
(433.9
|
)
|
||
|
Issuance of common stock, net
|
1,433.7
|
|
|
—
|
|
||
|
Proceeds from exercise of stock options
|
14.5
|
|
|
3.5
|
|
||
|
Tax benefits from stock options exercised
|
17.9
|
|
|
1.2
|
|
||
|
Payment of employee withholding tax upon vesting of share-based awards
|
(15.9
|
)
|
|
(27.7
|
)
|
||
|
Payments of contingent consideration
|
(12.3
|
)
|
|
(9.7
|
)
|
||
|
Payments of financing costs
|
(26.6
|
)
|
|
(9.9
|
)
|
||
|
Other
|
0.9
|
|
|
(6.8
|
)
|
||
|
Net cash provided by (used in) financing activities
|
12,306.3
|
|
|
(122.7
|
)
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
(15.1
|
)
|
|
(1.5
|
)
|
||
|
Net increase (decrease) in cash and cash equivalents
|
1,541.8
|
|
|
(24.0
|
)
|
||
|
Cash and cash equivalents, beginning of period
|
322.6
|
|
|
600.3
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
1,864.4
|
|
|
$
|
576.3
|
|
|
|
|
|
|
||||
|
Non-Cash Investing and Financing Activities
|
|
|
|
||||
|
Acquisition of businesses, contingent and deferred consideration obligations at fair value
|
$
|
(286.9
|
)
|
|
$
|
(21.7
|
)
|
|
Acquisition of businesses, debt assumed
|
—
|
|
|
(4.0
|
)
|
||
|
1.
|
DESCRIPTION OF BUSINESS
|
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
3.
|
BUSINESS COMBINATIONS
|
|
|
|
Amounts
Recognized as of
Acquisition Dates
|
||
|
Cash
|
|
$
|
80.2
|
|
|
Accounts receivable
(a)
|
|
23.9
|
|
|
|
Inventories
|
|
104.3
|
|
|
|
Other current assets
|
|
17.9
|
|
|
|
Property, plant and equipment
|
|
71.3
|
|
|
|
Identifiable intangible assets, excluding acquired IPR&D
(b)
|
|
851.8
|
|
|
|
Acquired IPR&D
|
|
1.5
|
|
|
|
Other non-current assets
|
|
1.2
|
|
|
|
Deferred tax asset, net
|
|
5.8
|
|
|
|
Current liabilities
(c)
|
|
(91.8
|
)
|
|
|
Non-current liabilities
(c)
|
|
(96.0
|
)
|
|
|
Total identifiable net assets
|
|
970.1
|
|
|
|
Goodwill
(d)
|
|
50.8
|
|
|
|
Total fair value of consideration transferred
|
|
$
|
1,020.9
|
|
|
(a)
|
The gross contractual amount of trade accounts receivable acquired was
$24 million
, which the Company expects will be fully collectible.
|
|
(b)
|
The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:
|
|
|
|
Weighted-
Average
Useful Lives
(Years)
|
|
Amounts
Recognized as of
Acquisition Dates
|
||
|
Product brands
|
|
7
|
|
$
|
580.4
|
|
|
Product rights
|
|
3
|
|
42.6
|
|
|
|
Partner relationships
|
|
8
|
|
7.8
|
|
|
|
Technology/know-how
|
|
10
|
|
219.0
|
|
|
|
Other
|
|
6
|
|
2.0
|
|
|
|
Total identifiable intangible assets acquired
|
|
8
|
|
$
|
851.8
|
|
|
(c)
|
As part of the Marathon acquisition, the Company assumed a contingent consideration liability related to potential payments for Isuprel® and Nitropress®, the amounts of which are dependent on the timing of generic entrants for these products. The fair value of the liability was determined using probability-weighted projected cash flows, with
$41 million
classified in Current liabilities and
$46 million
classified in Non-current liabilities in the table above.
|
|
(d)
|
The goodwill relates primarily to the Marathon and other smaller acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is expected to be deductible for tax purposes.
The goodwill represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company.
|
|
•
|
On July 7, 2014, the Company acquired all of the outstanding common stock of PreCision Dermatology, Inc. (“PreCision”) for an aggregate purchase price of
$453 million
. Under the terms of the merger agreement, the Company may also pay contingent consideration of
$25 million
upon the achievement of a sales-based milestone.
The fair value of this contingent consideration was determined to be nominal as of the acquisition date, based on the sales forecast. As of March 31, 2015, the assumptions used for determining the fair value of contingent consideration have not changed significantly from those used at the acquisition date. The Company recognized a post-combination expense of
$20 million
within Other (income) expense in the third quarter of 2014 related to the acceleration of unvested stock options for PreCision employees. In connection with the acquisition of PreCision, the Company was required by the Federal Trade Commission (“FTC”) to divest the rights to PreCision’s Tretin-X® (tretinoin) cream product and PreCision’s generic tretinoin gel and cream products. PreCision develops and markets a range of medical dermatology products, treating a number of topical disease states such as acne and atopic dermatitis with products such as Locoid® and Clindagel®.
|
|
•
|
On January 23, 2014, the Company acquired all of the outstanding common stock of Solta Medical, Inc. (“Solta Medical”) for
$293 million
, which includes
$2.92
per share in cash and
$44 million
for the repayment of Solta Medical’s long-term debt, including accrued interest. Solta Medical designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications, and its products include the Thermage CPT® system, the Fraxel® repair system, the Clear + Brilliant® system, and the Liposonix® system.
|
|
•
|
During the year ended December 31, 2014, the Company completed other smaller acquisitions, including the consolidation of variable interest entities, which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below.
|
|
•
|
amounts for intangible assets, property and equipment, inventories, receivables and other working capital adjustments pending finalization of the valuation;
|
|
•
|
amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and
|
|
•
|
amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed.
|
|
|
|
Amounts
Recognized as of
Acquisition Dates
|
|
Measurement
Period
Adjustments
(a)
|
|
Amounts
Recognized as of
March 31, 2015
(as adjusted)
|
||||||
|
Cash and cash equivalents
|
|
$
|
33.6
|
|
|
$
|
1.0
|
|
|
$
|
34.6
|
|
|
Accounts receivable
(b)
|
|
87.7
|
|
|
(6.5
|
)
|
|
81.2
|
|
|||
|
Assets held for sale
(c)
|
|
125.7
|
|
|
(0.6
|
)
|
|
125.1
|
|
|||
|
Inventories
|
|
170.4
|
|
|
(15.3
|
)
|
|
155.1
|
|
|||
|
Other current assets
|
|
19.1
|
|
|
(1.1
|
)
|
|
18.0
|
|
|||
|
Property, plant and equipment, net
|
|
58.5
|
|
|
(3.0
|
)
|
|
55.5
|
|
|||
|
Identifiable intangible assets, excluding acquired IPR&D
(d)
|
|
697.2
|
|
|
6.3
|
|
|
703.5
|
|
|||
|
Acquired IPR&D
(e)
|
|
65.8
|
|
|
(2.8
|
)
|
|
63.0
|
|
|||
|
Other non-current assets
|
|
4.0
|
|
|
(2.1
|
)
|
|
1.9
|
|
|||
|
Current liabilities
|
|
(152.0
|
)
|
|
(18.2
|
)
|
|
(170.2
|
)
|
|||
|
Long-term debt, including current portion
|
|
(11.2
|
)
|
|
—
|
|
|
(11.2
|
)
|
|||
|
Deferred income taxes, net
|
|
(116.0
|
)
|
|
36.0
|
|
|
(80.0
|
)
|
|||
|
Other non-current liabilities
|
|
(13.4
|
)
|
|
(0.1
|
)
|
|
(13.5
|
)
|
|||
|
Total identifiable net assets
|
|
969.4
|
|
|
(6.4
|
)
|
|
963.0
|
|
|||
|
Noncontrolling interest
|
|
(15.0
|
)
|
|
0.2
|
|
|
(14.8
|
)
|
|||
|
Goodwill
(f)
|
|
410.4
|
|
|
(9.5
|
)
|
|
400.9
|
|
|||
|
Total fair value of consideration transferred
|
|
$
|
1,364.8
|
|
|
$
|
(15.7
|
)
|
|
$
|
1,349.1
|
|
|
(a)
|
The measurement period adjustments primarily reflect: (i) a decrease in the net deferred tax liability primarily related to the PreCision and Solta Medical acquisitions and (ii) reductions in the estimated fair value of inventory for Solta Medical and other smaller acquisitions.
The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements.
|
|
(b)
|
The fair value of trade accounts receivable acquired was
$81 million
, with the gross contractual amount being
$88 million
, of which the Company expects that
$7 million
will be uncollectible.
|
|
(c)
|
Assets held for sale relate to the Tretin-X® product rights and the product rights for the generic tretinoin gel and cream products acquired in the PreCision acquisition, which were subsequently divested in the third quarter of 2014.
|
|
(d)
|
The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:
|
|
|
|
Weighted-
Average
Useful Lives
(Years)
|
|
Amounts
Recognized as of
Acquisition Dates
|
|
Measurement
Period
Adjustments
|
|
Amounts
Recognized as of
March 31, 2015
(as adjusted)
|
||||||
|
Product brands
|
|
10
|
|
$
|
506.0
|
|
|
$
|
8.3
|
|
|
$
|
514.3
|
|
|
Product rights
|
|
8
|
|
95.2
|
|
|
(3.3
|
)
|
|
91.9
|
|
|||
|
Corporate brand
|
|
15
|
|
28.9
|
|
|
1.7
|
|
|
30.6
|
|
|||
|
In-licensed products
|
|
9
|
|
1.5
|
|
|
(0.4
|
)
|
|
1.1
|
|
|||
|
Partner relationships
|
|
9
|
|
37.5
|
|
|
—
|
|
|
37.5
|
|
|||
|
Other
|
|
9
|
|
28.1
|
|
|
—
|
|
|
28.1
|
|
|||
|
Total identifiable intangible assets acquired
|
|
10
|
|
$
|
697.2
|
|
|
$
|
6.3
|
|
|
$
|
703.5
|
|
|
(e)
|
The acquired IPR&D assets primarily relate to programs from smaller acquisitions. In addition, the Solta Medical acquisition includes a program for the development of a next generation Thermage® product.
|
|
(f)
|
The goodwill relates primarily to the PreCision and Solta Medical acquisitions. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Substantially all of the goodwill is not expected to be deductible for tax purposes. The goodwill recorded from the PreCision and Solta Medical acquisitions represents the following:
|
|
•
|
cost savings, operating synergies and other benefits expected to result from combining the operations of PreCision and Solta Medical with those of the Company;
|
|
•
|
the Company’s expectation to develop and market new products and technology; and
|
|
•
|
intangible assets that do not qualify for separate recognition (for instance, PreCision’s and Solta Medical’s assembled workforces).
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
Revenues
|
$
|
2,270.4
|
|
|
$
|
2,056.4
|
|
|
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc.
|
93.8
|
|
|
(73.9
|
)
|
||
|
|
|
|
|
||||
|
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.:
|
|
|
|
||||
|
Basic
|
$
|
0.28
|
|
|
$
|
(0.22
|
)
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
(0.22
|
)
|
|
•
|
elimination of the historical intangible asset amortization expense of these acquisitions;
|
|
•
|
additional amortization expense related to the fair value of identifiable intangible assets acquired;
|
|
•
|
adjustments to depreciation expense related to fair value adjustments to property, plant and equipment acquired;
|
|
•
|
the exclusion from pro forma earnings in the three-month periods ended March 31, 2015 and 2014 of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of
$24 million
and
$5 million
for the three-month periods ended
March 31, 2015
and
2014
and the acquisition-related costs incurred for these acquisitions, and the inclusion of those amounts in pro forma earnings for the corresponding comparative periods.
|
|
4.
|
RESTRUCTURING, INTEGRATION AND OTHER COSTS
|
|
•
|
workforce reductions across the Company and other organizational changes;
|
|
•
|
closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities;
|
|
•
|
leveraging research and development spend; and
|
|
•
|
procurement savings.
|
|
|
|
Employee Termination Costs
|
|
IPR&D
Termination
Costs
|
|
Contract
Termination,
Facility Closure
and Other Costs
|
|
|
||||||||||||
|
|
Severance and
Related Benefits
|
|
Share-Based
Compensation
(1)
|
|
|
|
Total
|
|||||||||||||
|
Balance, January 1, 2013
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Costs incurred and/or charged to expense
|
|
155.7
|
|
|
52.8
|
|
|
—
|
|
|
25.6
|
|
|
234.1
|
|
|||||
|
Cash payments
|
|
(77.8
|
)
|
|
(52.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
|
(138.4
|
)
|
|||||
|
Non-cash adjustments
|
|
11.4
|
|
|
—
|
|
|
—
|
|
|
(6.8
|
)
|
|
4.6
|
|
|||||
|
Balance, December 31, 2013
|
|
$
|
89.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.0
|
|
|
$
|
100.3
|
|
|
Costs incurred and charged to expense
|
|
46.0
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
|
69.7
|
|
|||||
|
Cash payments
|
|
(110.7
|
)
|
|
—
|
|
|
—
|
|
|
(24.9
|
)
|
|
(135.6
|
)
|
|||||
|
Non-cash adjustments
|
|
(5.7
|
)
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
(11.1
|
)
|
|||||
|
Balance, December 31, 2014
(2)
|
|
$
|
18.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
|
$
|
23.3
|
|
|
Costs incurred and charged to expense
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
3.9
|
|
|||||
|
Cash payments
|
|
(12.6
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
(13.9
|
)
|
|||||
|
Non-cash adjustments
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(2.7
|
)
|
|||||
|
Balance, March 31, 2015
|
|
$
|
7.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
10.6
|
|
|
(1)
|
Relates to B&L’s previously cancelled performance-based options and the acceleration of unvested stock options for B&L employees as a result of the B&L Acquisition were recognized in Other (income) expense.
|
|
(2)
|
In the three-month period ended March 31, 2014, the Company recognized
$29 million
of restructuring charges and made payments of
$54 million
related to the B&L Acquisition.
|
|
5.
|
FAIR VALUE MEASUREMENTS
|
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
|
|
|
|
As of March 31, 2015
|
|
As of December 31, 2014
|
||||||||||||||||||||||||||||
|
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Carrying
Value
|
|
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Cash equivalents
(1)
|
|
$
|
120.3
|
|
|
$
|
115.0
|
|
|
$
|
5.3
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
2.8
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
Restricted cash and cash equivalents
(2)
|
|
$
|
10,354.9
|
|
|
$
|
10,354.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.1
|
|
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Foreign exchange contracts
(3)
|
|
$
|
(26.6
|
)
|
|
$
|
—
|
|
|
$
|
(26.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Acquisition-related contingent consideration
|
|
$
|
(385.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(385.2
|
)
|
|
$
|
(308.8
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(308.8
|
)
|
|
(1)
|
Cash equivalents include highly liquid investments with an original maturity of
three
months or less at acquisition, primarily including money market funds, reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature.
|
|
(2)
|
The restricted cash and cash equivalents is primarily invested in highly liquid money market funds, reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. Refer to Note 8 titled "LONG-TERM DEBT" for additional information regarding the restricted cash and cash equivalents.
|
|
(3)
|
In March 2015, the Company entered into foreign currency forward-exchange contracts to sell
€1.53 billion
and buy U.S. Dollars in order to reduce its exposure to the variability in expected cash inflows attributable to the changes in foreign exchange rates related to the
€1.50 billion
aggregate principal amount and related interest of
4.50%
senior unsecured notes due 2023 (the "Euro Notes") issued on March 27, 2015, the proceeds of which were used to finance the Salix Acquisition (see note 8 titled "LONG-TERM DEBT" for additional information). These derivative contracts are not designated as hedges for accounting purposes, and such contracts matured on April 1, 2015 (which coincides with the consummation of the Salix Acquisition). As of March 31, 2015, the Company recorded
$27 million
within Accrued and other current liabilities in the consolidated balance sheets representing the fair value of these derivatives (the fair value approximates the settlement amount), and a foreign exchange loss of
$27 million
was recognized in Foreign exchange and other in the consolidated income (loss) for the three-month period ended March 31, 2015.
|
|
|
Balance,
January 1,
2015
|
|
Issuances
(a)
|
|
Payments
(b)
|
|
Net
Unrealized
Loss
(c)
|
|
Foreign
Exchange
(d)
|
|
Release from Restricted Cash
|
|
Balance,
March 31,
2015
(e)
|
||||||||||||||
|
Acquisition-related contingent consideration
|
$
|
(308.8
|
)
|
|
$
|
(90.2
|
)
|
|
$
|
14.5
|
|
|
$
|
(7.1
|
)
|
|
$
|
3.9
|
|
|
$
|
2.5
|
|
|
$
|
(385.2
|
)
|
|
(a)
|
Primarily relates to a contingent consideration liability assumed in the Marathon acquisition, as described in note 3 titled "BUSINESS COMBINATIONS".
|
|
(b)
|
Primarily relates to payments of acquisition-related contingent consideration for the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL in June 2011 (the "Elidel®/Xerese®/Zovirax® agreement").
|
|
(c)
|
For the
three months ended March 31, 2015
, a net loss of
$7 million
was recognized as Acquisition-related contingent consideration in the consolidated statements of income (loss), primarily reflecting accretion for the time value of money for the Elidel®/Xerese®/Zovirax® agreement.
|
|
(d)
|
Included in other comprehensive income (loss).
|
|
(e)
|
For the
three months ended March 31, 2015
, there were
no
transfers into or out of Level 3.
|
|
6.
|
INVENTORIES
|
|
|
|
As of
March 31, 2015 |
|
As of
December 31, 2014 |
||||
|
Raw materials
(1)
|
|
$
|
239.1
|
|
|
$
|
191.1
|
|
|
Work in process
(1)
|
|
101.1
|
|
|
94.2
|
|
||
|
Finished goods
(1)
|
|
658.7
|
|
|
665.3
|
|
||
|
|
|
998.9
|
|
|
950.6
|
|
||
|
(1)
|
The components of inventories shown in the table above are presented net of allowance for obsolescence.
|
|
7.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
|
As of March 31, 2015
|
|
As of December 31, 2014
|
||||||||||||||||||||
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization,
Including
Impairments
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization,
Including
Impairments
|
|
Net
Carrying
Amount
|
||||||||||||
|
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Product brands
|
|
$
|
10,691.4
|
|
|
$
|
(3,763.8
|
)
|
|
$
|
6,927.6
|
|
|
$
|
10,320.2
|
|
|
$
|
(3,579.8
|
)
|
|
$
|
6,740.4
|
|
|
Corporate brands
|
|
352.7
|
|
|
(67.4
|
)
|
|
285.3
|
|
|
364.2
|
|
|
(65.2
|
)
|
|
299.0
|
|
||||||
|
Product rights
|
|
3,248.2
|
|
|
(1,360.8
|
)
|
|
1,887.4
|
|
|
3,225.9
|
|
|
(1,263.8
|
)
|
|
1,962.1
|
|
||||||
|
Partner relationships
|
|
203.0
|
|
|
(102.5
|
)
|
|
100.5
|
|
|
223.1
|
|
|
(107.5
|
)
|
|
115.6
|
|
||||||
|
Technology and other
|
|
496.3
|
|
|
(131.6
|
)
|
|
364.7
|
|
|
275.5
|
|
|
(124.3
|
)
|
|
151.2
|
|
||||||
|
Total finite-lived intangible assets
|
|
14,991.6
|
|
|
(5,426.1
|
)
|
|
9,565.5
|
|
|
14,408.9
|
|
|
(5,140.6
|
)
|
|
9,268.3
|
|
||||||
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Acquired IPR&D
|
|
291.6
|
|
|
—
|
|
|
291.6
|
|
|
290.1
|
|
|
—
|
|
|
290.1
|
|
||||||
|
Corporate brand
(1)
|
|
1,697.5
|
|
|
—
|
|
|
1,697.5
|
|
|
1,697.5
|
|
|
—
|
|
|
1,697.5
|
|
||||||
|
|
|
$
|
16,980.7
|
|
|
$
|
(5,426.1
|
)
|
|
$
|
11,554.6
|
|
|
$
|
16,396.5
|
|
|
$
|
(5,140.6
|
)
|
|
$
|
11,255.9
|
|
|
(1)
|
Represents the B&L corporate trademark, which has an indefinite useful life and is therefore not amortized.
|
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||
|
Amortization expense
(1)
|
|
$
|
1,466.4
|
|
|
$
|
1,379.5
|
|
|
$
|
1,317.2
|
|
|
$
|
1,184.1
|
|
|
$
|
1,043.6
|
|
|
(1)
|
Estimated amortization expense shown in the table above does not include potential future impairments of finite-lived intangible assets, if any, nor does it include any amortization with respect to the Salix Acquisition which was completed on April 1, 2015.
|
|
|
|
Developed
Markets
|
|
Emerging
Markets
|
|
Total
|
||||||
|
Balance, January 1, 2015
|
|
$
|
7,115.0
|
|
|
$
|
2,231.4
|
|
|
$
|
9,346.4
|
|
|
Additions
(a)
|
|
41.4
|
|
|
9.4
|
|
|
50.8
|
|
|||
|
Adjustments
(b)
|
|
4.0
|
|
|
0.6
|
|
|
4.6
|
|
|||
|
Foreign exchange and other
|
|
(161.2
|
)
|
|
(79.2
|
)
|
|
(240.4
|
)
|
|||
|
Balance, March 31, 2015
|
|
$
|
6,999.2
|
|
|
$
|
2,162.2
|
|
|
$
|
9,161.4
|
|
|
(a)
|
Primarily relates to the Marathon acquisition, as well as other smaller acquisitions (as described in note 3).
|
|
(b)
|
Primarily reflects the impact of measurement period adjustments related to the PreCision acquisition.
|
|
8.
|
|
|
|
|
Maturity
Date
|
|
As of
March 31,
2015
|
|
As of
December 31,
2014
|
||||
|
Revolving Credit Facility
(1)
|
|
April 2018
|
|
$
|
225.0
|
|
|
$
|
165.0
|
|
|
Series A-1 Tranche A Term Loan Facility
(1)
|
|
April 2016
|
|
139.1
|
|
|
139.6
|
|
||
|
Series A-2 Tranche A Term Loan Facility
(1)
|
|
April 2016
|
|
135.3
|
|
|
135.7
|
|
||
|
Series A-3 Tranche A Term Loan Facility
(1)
|
|
October 2018
|
|
1,877.3
|
|
|
1,637.9
|
|
||
|
Series D-2 Tranche B Term Loan Facility
(1)
|
|
February 2019
|
|
1,084.1
|
|
|
1,089.7
|
|
||
|
Series C-2 Tranche B Term Loan Facility
(1)
|
|
December 2019
|
|
834.0
|
|
|
838.3
|
|
||
|
Series E-1 Tranche B Term Loan Facility
(1)
|
|
August 2020
|
|
2,529.5
|
|
|
2,544.9
|
|
||
|
Senior Notes:
|
|
|
|
|
|
|
||||
|
6.875%
|
|
December 2018
|
|
—
|
|
|
497.7
|
|
||
|
7.00%
|
|
October 2020
|
|
687.6
|
|
|
687.5
|
|
||
|
6.75%
|
|
August 2021
|
|
650.0
|
|
|
650.0
|
|
||
|
7.25%
|
|
July 2022
|
|
543.4
|
|
|
543.2
|
|
||
|
6.375%
|
|
October 2020
|
|
2,226.6
|
|
|
2,225.6
|
|
||
|
6.75%
|
|
August 2018
|
|
1,586.8
|
|
|
1,585.8
|
|
||
|
7.50%
|
|
July 2021
|
|
1,609.1
|
|
|
1,608.4
|
|
||
|
5.625%
|
|
December 2021
|
|
892.9
|
|
|
892.6
|
|
||
|
5.50%
|
|
March 2023
|
|
991.7
|
|
|
—
|
|
||
|
5.375%
|
|
March 2020
|
|
1,977.6
|
|
|
—
|
|
||
|
5.875%
|
|
May 2023
|
|
3,213.5
|
|
|
—
|
|
||
|
4.50%
(2)
|
|
May 2023
|
|
1,591.5
|
|
|
—
|
|
||
|
6.125%
|
|
April 2025
|
|
3,213.5
|
|
|
—
|
|
||
|
Other
(3)
|
|
Various
|
|
12.2
|
|
|
12.7
|
|
||
|
|
|
|
|
26,020.7
|
|
|
15,254.6
|
|
||
|
Less current portion
|
|
|
|
(122.8
|
)
|
|
(0.9
|
)
|
||
|
Total long-term debt
|
|
|
|
$
|
25,897.9
|
|
|
$
|
15,253.7
|
|
|
(1)
|
Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement, as amended (the “Credit Agreement”).
|
|
(2)
|
Represents the U.S. dollar equivalent of Euro-denominated debt (discussed below).
|
|
(3)
|
Relates primarily to the debentures from B&L.
|
|
9.
|
SHARE-BASED COMPENSATION
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
Stock options
|
$
|
3.9
|
|
|
$
|
5.1
|
|
|
RSUs
|
31.1
|
|
|
19.7
|
|
||
|
Share-based compensation expense
|
$
|
35.0
|
|
|
$
|
24.8
|
|
|
|
|
|
|
||||
|
Research and development expenses
|
$
|
1.5
|
|
|
$
|
1.4
|
|
|
Selling, general and administrative expenses
|
33.5
|
|
|
23.4
|
|
||
|
Share-based compensation expense
|
$
|
35.0
|
|
|
$
|
24.8
|
|
|
10.
|
PENSION AND POSTRETIREMENT EMPLOYEE BENEFIT PLANS
|
|
|
|
Pension Benefit Plans
|
|
Postretirement
Benefit
Plan
|
||||||||||||||||||||
|
|
U.S. Plan
|
|
Non-U.S. Plans
|
|
||||||||||||||||||||
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
Service cost
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
|
Interest cost
|
|
2.4
|
|
|
2.7
|
|
|
1.6
|
|
|
2.2
|
|
|
0.5
|
|
|
0.6
|
|
||||||
|
Expected return on plan assets
|
|
(3.6
|
)
|
|
(3.7
|
)
|
|
(2.0
|
)
|
|
(2.0
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||||
|
Amortization of prior service credit
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||||
|
Amortization of net loss
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Net periodic (benefit) cost
|
|
$
|
(0.8
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
0.7
|
|
|
$
|
1.2
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
11.
|
SHAREHOLDERS’ EQUITY
|
|
|
Valeant Pharmaceuticals International, Inc. Shareholders
|
|
|
|
|
|||||||||||||||||||||||||
|
|
Common Shares
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Valeant
Pharmaceuticals
International, Inc.
Shareholders’
Equity
|
|
Noncontrolling
Interest
|
|
Total
Equity
|
|||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Balance, January 1, 2014
|
333.0
|
|
|
$
|
8,301.2
|
|
|
$
|
228.8
|
|
|
$
|
(3,278.5
|
)
|
|
$
|
(132.8
|
)
|
|
$
|
5,118.7
|
|
|
$
|
114.6
|
|
|
$
|
5,233.3
|
|
|
Common shares issued under share-based compensation plans
|
0.5
|
|
|
15.0
|
|
|
(11.5
|
)
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
|
3.5
|
|
|||||||
|
Share-based compensation
|
—
|
|
|
—
|
|
|
24.8
|
|
|
—
|
|
|
—
|
|
|
24.8
|
|
|
—
|
|
|
24.8
|
|
|||||||
|
Employee withholding taxes related to share-based awards
|
—
|
|
|
—
|
|
|
(27.7
|
)
|
|
—
|
|
|
—
|
|
|
(27.7
|
)
|
|
—
|
|
|
(27.7
|
)
|
|||||||
|
Tax benefits from stock options exercised
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|||||||
|
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(2.2
|
)
|
|
(3.3
|
)
|
|||||||
|
|
333.5
|
|
|
8,316.2
|
|
|
214.5
|
|
|
(3,278.5
|
)
|
|
(132.8
|
)
|
|
5,119.4
|
|
|
112.4
|
|
|
5,231.8
|
|
|||||||
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net loss (income)
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.6
|
)
|
|
—
|
|
|
(22.6
|
)
|
|
2.3
|
|
|
(20.3
|
)
|
|||||||
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.2
|
)
|
|
(7.2
|
)
|
|
(0.8
|
)
|
|
(8.0
|
)
|
|||||||
|
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(29.8
|
)
|
|
1.5
|
|
|
(28.3
|
)
|
||||||||||||
|
Balance, March 31, 2014
|
333.5
|
|
|
$
|
8,316.2
|
|
|
$
|
214.5
|
|
|
$
|
(3,301.1
|
)
|
|
$
|
(140.0
|
)
|
|
$
|
5,089.6
|
|
|
$
|
113.9
|
|
|
$
|
5,203.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance, January 1, 2015
|
334.4
|
|
|
$
|
8,349.2
|
|
|
$
|
243.9
|
|
|
$
|
(2,365.0
|
)
|
|
$
|
(915.9
|
)
|
|
$
|
5,312.2
|
|
|
$
|
122.3
|
|
|
$
|
5,434.5
|
|
|
Issuance of common stock (see below)
|
7.3
|
|
|
1,431.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,431.9
|
|
|
—
|
|
|
1,431.9
|
|
|||||||
|
Common shares issued under share-based compensation plans
|
0.6
|
|
|
29.2
|
|
|
(14.7
|
)
|
|
—
|
|
|
—
|
|
|
14.5
|
|
|
—
|
|
|
14.5
|
|
|||||||
|
Share-based compensation
|
—
|
|
|
—
|
|
|
35.0
|
|
|
—
|
|
|
—
|
|
|
35.0
|
|
|
—
|
|
|
35.0
|
|
|||||||
|
Employee withholding taxes related to share-based awards
|
—
|
|
|
—
|
|
|
(21.2
|
)
|
|
—
|
|
|
—
|
|
|
(21.2
|
)
|
|
—
|
|
|
(21.2
|
)
|
|||||||
|
Tax benefits from stock options exercised
|
—
|
|
|
—
|
|
|
17.9
|
|
|
—
|
|
|
—
|
|
|
17.9
|
|
|
—
|
|
|
17.9
|
|
|||||||
|
|
342.3
|
|
|
9,810.3
|
|
|
260.9
|
|
|
(2,365.0
|
)
|
|
(915.9
|
)
|
|
6,790.3
|
|
|
122.3
|
|
|
6,912.6
|
|
|||||||
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
73.7
|
|
|
—
|
|
|
73.7
|
|
|
0.8
|
|
|
74.5
|
|
|||||||
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(411.7
|
)
|
|
(411.7
|
)
|
|
(0.2
|
)
|
|
(411.9
|
)
|
|||||||
|
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(338.0
|
)
|
|
0.6
|
|
|
(337.4
|
)
|
||||||||||||
|
Balance, March 31, 2015
|
342.3
|
|
|
$
|
9,810.3
|
|
|
$
|
260.9
|
|
|
$
|
(2,291.3
|
)
|
|
$
|
(1,327.6
|
)
|
|
$
|
6,452.3
|
|
|
$
|
122.9
|
|
|
$
|
6,575.2
|
|
|
12.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
Foreign
Currency
Translation
Adjustment
|
|
Pension
Adjustment
|
|
Total
|
||||||
|
Balance, January 1, 2014
|
|
$
|
(170.3
|
)
|
|
$
|
37.5
|
|
|
$
|
(132.8
|
)
|
|
Foreign currency translation adjustment
|
|
(6.6
|
)
|
|
—
|
|
|
(6.6
|
)
|
|||
|
Pension adjustment
(1)
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
|
Balance, March 31, 2014
|
|
$
|
(176.9
|
)
|
|
$
|
36.9
|
|
|
$
|
(140.0
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Balance, January 1, 2015
|
|
$
|
(886.5
|
)
|
|
$
|
(29.4
|
)
|
|
$
|
(915.9
|
)
|
|
Foreign currency translation adjustment
|
|
(411.3
|
)
|
|
—
|
|
|
(411.3
|
)
|
|||
|
Pension adjustment
(1)
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
|
Balance, March 31, 2015
|
|
$
|
(1,297.8
|
)
|
|
$
|
(29.8
|
)
|
|
$
|
(1,327.6
|
)
|
|
(1)
|
Reflects changes in defined benefit obligations and related plan assets of the Company’s defined benefit pension plans and the U.S. postretirement benefit plan (refer to note 10 titled "PENSION AN POSTRETIREMENT EMPLOYEE BENEFIT PLANS").
|
|
13.
|
INCOME TAXES
|
|
14.
|
EARNINGS (LOSS) PER SHARE
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc.
|
$
|
73.7
|
|
|
$
|
(22.6
|
)
|
|
|
|
|
|
||||
|
Basic weighted-average number of common shares outstanding
|
336.8
|
|
|
334.9
|
|
||
|
Diluted effect of stock options, RSUs and other
(a)
|
6.6
|
|
|
—
|
|
||
|
Diluted weighted-average number of common shares outstanding
|
343.4
|
|
|
334.9
|
|
||
|
|
|
|
|
||||
|
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.:
|
|
|
|
||||
|
Basic
|
$
|
0.22
|
|
|
$
|
(0.07
|
)
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.07
|
)
|
|
(a)
|
In the three-month period ended March 31, 2014, all potential common shares issuable for stock options and RSUs were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive. The dilutive effect of potential common shares issuable for stock options and RSUs on the weighted-average number of common shares outstanding would have been as follows:
|
|
|
|
Three Months Ended
March 31, |
|
|
|
|
2014
|
|
|
Basic weighted-average number of common shares outstanding
|
|
334.9
|
|
|
Dilutive effect of stock options and RSUs
|
|
6.6
|
|
|
Diluted weighted-average number of common shares outstanding
|
|
341.5
|
|
|
15.
|
LEGAL PROCEEDINGS
|
|
16.
|
SEGMENT INFORMATION
|
|
•
|
Developed Markets
consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of eye health, dermatology and podiatry, aesthetics, and dentistry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products we developed or acquired, and (iii) pharmaceutical products, OTC products, and medical device products sold in Canada, Australia, New Zealand, Western Europe and Japan.
|
|
•
|
Emerging Markets
consists of branded generic pharmaceutical products and branded pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
Revenues:
|
|
|
|
||||
|
Developed Markets
(1)
|
$
|
1,764.4
|
|
|
$
|
1,421.8
|
|
|
Emerging Markets
(2)
|
426.5
|
|
|
464.4
|
|
||
|
Total revenues
|
2,190.9
|
|
|
1,886.2
|
|
||
|
|
|
|
|
||||
|
Segment profit:
|
|
|
|
||||
|
Developed Markets
(3)
|
636.0
|
|
|
439.3
|
|
||
|
Emerging Markets
(4)
|
54.6
|
|
|
68.1
|
|
||
|
Total segment profit
|
690.6
|
|
|
507.4
|
|
||
|
|
|
|
|
||||
|
Corporate
(5)
|
(69.2
|
)
|
|
(38.1
|
)
|
||
|
Restructuring, integration and other costs
|
(55.0
|
)
|
|
(133.6
|
)
|
||
|
In-process research and development impairments and other charges
|
—
|
|
|
(12.0
|
)
|
||
|
Acquisition-related costs
|
(9.8
|
)
|
|
(1.5
|
)
|
||
|
Acquisition-related contingent consideration
|
(7.1
|
)
|
|
(8.9
|
)
|
||
|
Other (expense) income
|
(6.1
|
)
|
|
43.3
|
|
||
|
Operating income
|
543.4
|
|
|
356.6
|
|
||
|
Interest income
|
0.9
|
|
|
1.8
|
|
||
|
Interest expense
|
(297.8
|
)
|
|
(246.5
|
)
|
||
|
Loss on extinguishment of debt
|
(20.0
|
)
|
|
(93.7
|
)
|
||
|
Foreign exchange and other
|
(71.1
|
)
|
|
(13.4
|
)
|
||
|
Income before provision for income taxes
|
$
|
155.4
|
|
|
$
|
4.8
|
|
|
(1)
|
Developed Markets segment revenues reflect incremental product sales revenue in the
three-month period ended March 31, 2015
from 2014 and 2015 acquisitions of
$208 million
, in the aggregate.
|
|
(2)
|
Emerging Markets segment revenues reflect incremental product sales revenue in the
three-month period ended March 31, 2015
from 2014 acquisitions of
$12 million
, in the aggregate.
|
|
(3)
|
Developed Markets segment profit in the
three-month period ended March 31, 2015
reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of
$314 million
, in the aggregate.
|
|
(4)
|
Emerging Markets segment profit in the
three-month period ended March 31, 2015
reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of
$76 million
, in the aggregate.
|
|
(5)
|
Corporate reflects non-restructuring-related share-based compensation expense of
$24 million
and
$15 million
in the
three-month periods ended March 31, 2015 and 2014
, respectively.
|
|
|
As of
March 31, 2015 |
|
As of
December 31, 2014 |
||||
|
Assets:
|
|
|
|
||||
|
Developed Markets
(1)
|
$
|
30,106.2
|
|
|
$
|
19,093.4
|
|
|
Emerging Markets
(2)
|
6,025.1
|
|
|
6,332.9
|
|
||
|
|
36,131.3
|
|
|
25,426.3
|
|
||
|
Corporate
|
2,434.6
|
|
|
926.7
|
|
||
|
Total assets
|
$
|
38,565.9
|
|
|
$
|
26,353.0
|
|
|
(1)
|
Developed Markets segment assets as of
March 31, 2015
reflect the provisional amounts of identifiable intangible assets and goodwill of the 2015 acquisitions of
$759 million
and
$42 million
, in the aggregate, respectively.
|
|
(2)
|
Emerging Markets segment assets as of
March 31, 2015
reflect the provisional amounts of identifiable intangible assets and goodwill of the 2015 acquisitions of
$93 million
and
$9 million
, in the aggregate, respectively.
|
|
17.
|
SUBSEQUENT EVENTS
|
|
•
|
workforce reductions across the Company and other organizational changes;
|
|
•
|
closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities;
|
|
•
|
leveraging research and development spend; and
|
|
•
|
procurement savings.
|
|
|
|
Three Months Ended March 31,
|
|||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
|||||
|
($ in millions, except per share data)
|
|
$
|
|
$
|
|
$
|
|
%
|
|||
|
Revenues
|
|
2,190.9
|
|
|
1,886.2
|
|
|
304.7
|
|
|
16
|
|
Operating expenses
|
|
1,647.5
|
|
|
1,529.6
|
|
|
117.9
|
|
|
8
|
|
Net income (loss) attributable to Valeant Pharmaceuticals International, Inc.
|
|
73.7
|
|
|
(22.6
|
)
|
|
96.3
|
|
|
NM
|
|
Earnings (loss) per share attributable to Valeant Pharmaceuticals International, Inc.:
|
|
|
|
|
|
|
|
|
|||
|
Basic
|
|
0.22
|
|
|
(0.07
|
)
|
|
0.29
|
|
|
NM
|
|
Diluted
|
|
0.21
|
|
|
(0.07
|
)
|
|
0.28
|
|
|
NM
|
|
|
|
Three Months Ended
March 31,
|
||||
|
|
|
2015
|
|
2014
|
||
|
($ in millions)
|
|
$
|
|
$
|
||
|
Gross product sales
|
|
3,250.0
|
|
|
2,450.5
|
|
|
Provisions to reduce gross product sales to net product sales
|
|
1,103.1
|
|
|
599.4
|
|
|
Net product sales
|
|
2,146.9
|
|
|
1,851.1
|
|
|
Percentage of provisions to gross sales
|
|
34
|
%
|
|
24
|
%
|
|
•
|
Developed Markets
consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of eye health, dermatology and podiatry, aesthetics, and dentistry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products we developed or acquired, and (iii) pharmaceutical products, OTC products, and medical device products sold in Canada, Australia, New Zealand, Western Europe and Japan.
|
|
•
|
Emerging Markets
consists of branded generic pharmaceutical products and branded pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East.
|
|
|
|
Three Months Ended March 31,
|
|||||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
|||||||
|
($ in millions)
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
||||
|
Developed Markets
|
|
1,764.4
|
|
81
|
|
1,421.8
|
|
75
|
|
342.6
|
|
24
|
|
|
Emerging Markets
|
|
426.5
|
|
19
|
|
464.4
|
|
25
|
|
(37.9
|
)
|
(8
|
)
|
|
Total revenues
|
|
2,190.9
|
|
100
|
|
1,886.2
|
|
100
|
|
304.7
|
|
16
|
|
|
•
|
the incremental product sales revenue of
$208 million
(which includes a negative foreign currency exchange impact of $3 million), in the aggregate, from all 2014 and 2015 acquisitions, primarily from (i) the 2014 acquisition of PreCision Dermatology, Inc. ("PreCision") (mainly driven by Clindagel® product sales) and (ii) the 2015 acquisitions of certain assets of Marathon (mainly driven by Isuprel® and Nitropress® product sales) and assets of Dendreon (Provenge® product sales).
|
|
•
|
a negative impact from divestitures and discontinuations of $63 million in first quarter of 2015, primarily driven by $56 million related to the divestiture in the third quarter of 2014 of facial aesthetic fillers and toxins; and
|
|
•
|
a negative foreign currency exchange impact on the existing business of $59 million in the first quarter of 2015 due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Euro, Canadian dollar, Japanese yen, and Australian dollar.
|
|
•
|
the incremental product sales revenue of
$12 million
(which includes a negative foreign currency exchange impact of $1 million), in the aggregate, primarily from all 2014 acquisitions.
|
|
•
|
a negative foreign currency exchange impact on the existing business of $77 million in the first quarter of 2015 due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Russian ruble, Polish zloty, Euro, Mexican peso, and Brazilian real; and
|
|
•
|
a negative impact from divestitures and discontinuations of $8 million in the first quarter of 2015, primarily from Latin America and Eastern Europe.
|
|
|
|
Three Months Ended March 31,
|
|||||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
|||||||
|
($ in millions)
|
|
$
|
%
(1)
|
|
$
|
%
(1)
|
|
$
|
%
|
||||
|
Developed Markets
|
|
636.0
|
|
36
|
|
439.3
|
|
31
|
|
196.7
|
|
45
|
|
|
Emerging Markets
|
|
54.6
|
|
13
|
|
68.1
|
|
15
|
|
(13.5
|
)
|
(20
|
)
|
|
Total segment profit
|
|
690.6
|
|
32
|
|
507.4
|
|
27
|
|
183.2
|
|
36
|
|
|
•
|
an increase in contribution of $164 million, in the aggregate, from all 2014 and 2015 acquisitions, primarily from sales of Marathon, Dendreon and PreCision products, including higher expenses for acquisition accounting adjustments related to inventory of $25 million, in the aggregate, in the first quarter of 2015; and
|
|
•
|
a favorable impact of $7 million related to the existing business acquisition accounting adjustments related to inventory in the first quarter of 2014 that did not similarly occur in the first quarter of 2015.
|
|
•
|
an increase in operating expenses (including amortization and impairments of finite-lived intangible assets) of $78 million in first quarter of 2015, primarily associated with the acquisitions of new businesses within the segment;
|
|
•
|
a decrease in contribution related to divestitures and discontinuations of $50 million in the first quarter of 2015, primarily driven by $44 million related to the divestiture in the third quarter of 2014 of facial aesthetic fillers and toxins; and
|
|
•
|
a negative foreign currency exchange impact on the existing business contribution of $45 million in the first quarter of 2015 due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Euro, Canadian dollar, Japanese yen, and Australian dollar.
|
|
•
|
a decrease in operating expenses (including amortization and impairments of finite-lived intangible assets) of $12 million in first quarter of 2015; and
|
|
•
|
an increase in contribution of $6 million, primarily from all 2014 acquisitions.
|
|
•
|
a negative foreign currency exchange impact on the existing business contribution of $45 million in the first quarter of 2015 due to the impact of a strengthening of the U.S. dollar against certain currencies, including the Russian ruble, Polish zloty, Euro, Mexican peso, and Brazilian real; and
|
|
•
|
a decrease in contribution related to divestitures and discontinuations of $5 million in the first quarter of 2015.
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
||||||||
|
($ in millions)
|
|
$
|
%
(1)
|
|
$
|
%
(1)
|
|
$
|
%
|
|||||
|
Cost of goods sold (exclusive of amortization and impairments of finite-lived intangible assets shown separately below)
|
|
560.4
|
|
26
|
|
504.1
|
|
27
|
|
|
56.3
|
|
11
|
|
|
Cost of other revenues
|
|
14.3
|
|
1
|
|
14.3
|
|
1
|
|
|
—
|
|
—
|
|
|
Selling, general and administrative
|
|
573.8
|
|
26
|
|
482.0
|
|
26
|
|
|
91.8
|
|
19
|
|
|
Research and development
|
|
55.8
|
|
3
|
|
61.3
|
|
3
|
|
|
(5.5
|
)
|
(9
|
)
|
|
Amortization and impairments of finite-lived intangible assets
|
|
365.2
|
|
17
|
|
355.2
|
|
19
|
|
|
10.0
|
|
3
|
|
|
Restructuring, integration and other costs
|
|
55.0
|
|
3
|
|
133.6
|
|
7
|
|
|
(78.6
|
)
|
(59
|
)
|
|
In-process research and development impairments and other charges
|
|
—
|
|
—
|
|
12.0
|
|
1
|
|
|
(12.0
|
)
|
(100
|
)
|
|
Acquisition-related costs
|
|
9.8
|
|
—
|
|
1.5
|
|
—
|
|
|
8.3
|
|
553
|
|
|
Acquisition-related contingent consideration
|
|
7.1
|
|
—
|
|
8.9
|
|
—
|
|
|
(1.8
|
)
|
(20
|
)
|
|
Other expense (income)
|
|
6.1
|
|
—
|
|
(43.3
|
)
|
(2
|
)
|
|
49.4
|
|
NM
|
|
|
Total operating expenses
|
|
1,647.5
|
|
75
|
|
1,529.6
|
|
81
|
|
|
117.9
|
|
8
|
|
|
•
|
a favorable impact from Isuprel® and Nitropress® product sales (these products were acquired from Marathon in the first quarter of 2015), as such products have a higher gross profit margin than our overall margin. This is partially offset by a lower gross profit margin related to the Provenge® product which was acquired as part of the Dendreon acquisition in the first quarter of 2015; and
|
|
•
|
a favorable impact from product mix and geographic mix driven by growth in the U.S. businesses and recent dermatology product launches, including Jublia®, RAM 0.08%, and Onexton™. These products have a higher gross profit margin than our overall margin.
|
|
•
|
an unfavorable impact on gross margin from foreign currency exchange; and
|
|
•
|
the impact of incremental acquisition accounting adjustments of $19 million in the first quarter of 2015 primarily related to step-up for acquired inventory from the Marathon acquisition which was expensed in the first quarter of 2015 that did not similarly occur in the first quarter of 2014.
|
|
|
|
Three Months Ended March 31,
|
|||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
|||||
|
($ in millions; Income (Expense))
|
|
$
|
|
$
|
|
$
|
%
|
||||
|
Interest income
|
|
0.9
|
|
|
1.8
|
|
|
(0.9
|
)
|
(50
|
)
|
|
Interest expense
|
|
(297.8
|
)
|
|
(246.5
|
)
|
|
(51.3
|
)
|
21
|
|
|
Loss on extinguishment of debt
|
|
(20.0
|
)
|
|
(93.7
|
)
|
|
73.7
|
|
(79
|
)
|
|
Foreign exchange and other
|
|
(71.1
|
)
|
|
(13.4
|
)
|
|
(57.7
|
)
|
431
|
|
|
Total non-operating expense
|
|
(388.0
|
)
|
|
(351.8
|
)
|
|
(36.2
|
)
|
10
|
|
|
|
|
Three Months Ended March 31,
|
||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
||||
|
($ in millions; Expense (Income))
|
|
$
|
|
$
|
|
$
|
%
|
|||
|
Current income tax expense
|
|
18.4
|
|
|
15.1
|
|
|
3.3
|
|
22
|
|
Deferred income tax expense
|
|
62.5
|
|
|
10.0
|
|
|
52.5
|
|
525
|
|
Total provision for income taxes
|
|
80.9
|
|
|
25.1
|
|
|
55.8
|
|
222
|
|
|
|
Three Months Ended March 31,
|
|||||||||
|
|
|
2015
|
|
2014
|
|
Change
|
|||||
|
($ in millions)
|
|
$
|
|
$
|
|
$
|
%
|
||||
|
Net cash provided by operating activities
|
|
491.1
|
|
|
484.3
|
|
|
6.8
|
|
1
|
|
|
Net cash used in investing activities
|
|
(11,240.5
|
)
|
|
(384.1
|
)
|
|
(10,856.4
|
)
|
NM
|
|
|
Net cash provided by (used in) financing activities
|
|
12,306.3
|
|
|
(122.7
|
)
|
|
12,429.0
|
|
NM
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(15.1
|
)
|
|
(1.5
|
)
|
|
(13.6
|
)
|
907
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
1,541.8
|
|
|
(24.0
|
)
|
|
1,565.8
|
|
NM
|
|
|
Cash and cash equivalents, beginning of period
|
|
322.6
|
|
|
600.3
|
|
|
(277.7
|
)
|
(46
|
)
|
|
Cash and cash equivalents, end of period
|
|
1,864.4
|
|
|
576.3
|
|
|
1,288.1
|
|
224
|
|
|
•
|
the inclusion of cash flows in the first quarter of 2015 from all 2014 acquisitions;
|
|
•
|
incremental cash flows from the continued growth of the existing business, including new product launches; and
|
|
•
|
lower payments of $72 million related to restructuring, integration and other costs primarily due to payments in the first quarter of 2014 related to the acquisition of B&L.
|
|
•
|
an increased investment in working capital of
$167 million
in the first quarter of 2015, primarily related to the impact of changes related to timing of payments and receipts in the ordinary course of business and the post-acquisition build up in accounts receivable for recent acquisitions where no accounts receivable balances were acquired.
|
|
•
|
an increase of $10.34 billion in restricted cash and cash equivalents related to the net proceeds on the issuance of the senior notes in the first quarter of 2015 which were utilized to fund the Salix Acquisition, as well as the related accrued interest deposited into escrow. See note 8 to the unaudited consolidated financial statements for additional information; and
|
|
•
|
an increase of
$516 million
, in the aggregate, related to higher purchases of businesses (net of cash acquired) and intangible assets, driven by the Dendreon and Marathon acquisitions.
|
|
•
|
an increase due to the net proceeds of $10 billion related to the issuance of the senior notes in the first quarter of 2015, which were utilized to fund the Salix Acquisition (such proceeds were included as restricted cash and cash equivalents as of March 31, 2015 as explained above under "Investing Activities");
|
|
•
|
an increase due to the net proceeds of $1.43 billion related to the issuance of common stock in March 2015, which were utilized to fund the Salix Acquisition;
|
|
•
|
an increase due to the net proceeds of $992 million from the issuance of the 2023 Notes in the first quarter of 2015; and
|
|
•
|
an increase due to the net proceeds of $250 million related to the issuance of incremental term loans under the Series A-3 Tranche A Term Loan Facility in the first quarter of 2015.
|
|
•
|
a decrease due to $500 million paid in connection with the redemption of the December 2018 Notes in the first quarter of 2015.
|
|
|
|
Payments Due by Period
|
|||||||||||||
|
|
|
Total
|
|
2015
|
|
2016 and 2017
|
|
2018 and 2019
|
|
Thereafter
|
|||||
|
($ in millions)
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
|
Long-term debt obligations, including interest
(1)
|
|
35,874.1
|
|
|
930.5
|
|
|
3,961.1
|
|
|
7,553.6
|
|
|
23,428.9
|
|
|
(1)
|
Expected interest payments assume repayment of the principal amount of the debt obligations at maturity.
|
|
•
|
the challenges and difficulties associated with managing the rapid growth of our Company and a large complex business;
|
|
•
|
our ability to retain, motivate and recruit executives and other key employees;
|
|
•
|
the introduction of products that compete against our products that do not have patent or data exclusivity rights;
|
|
•
|
our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;
|
|
•
|
our ability to identify, finance, acquire, close and integrate acquisition targets successfully and on a timely basis;
|
|
•
|
factors relating to the acquisition and integration of the companies, businesses and products acquired by the Company, such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations (including potential disruptions in sales activities and potential challenges with information technology systems integrations), the difficulties and challenges associated with entering into new business areas and new geographic markets, the difficulties, challenges and costs associated with managing and integrating new facilities, equipment and other assets, and the achievement of the anticipated benefits from such integrations, as well as risks associated with the acquired companies, businesses and products;
|
|
•
|
factors relating to our ability to achieve all of the estimated synergies from our acquisitions as a result of cost-rationalization and integration initiatives. These factors may include greater than expected operating costs, the difficulty in eliminating certain duplicative costs, facilities and functions, and the outcome of many operational and strategic decisions, some of which have not yet been made;
|
|
•
|
factors relating to our recent acquisition of Salix, including the impact of substantial additional debt on our financial condition and results of operations; our ability to effectively and efficiently integrate the operations of the Company and Salix; our ability to achieve the estimated synergies from this transaction; the challenges associated with entering into Salix's gastrointestinal (GI) business, which is a new business for our Company; our ability to reduce inventory levels of certain of Salix's products and the timing of such reduction; and, once integrated, the effects of such business combination on our future financial condition, operating results, strategy and plans;
|
|
•
|
our ability to secure and maintain third party research, development, manufacturing, marketing or distribution arrangements;
|
|
•
|
our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries;
|
|
•
|
our substantial debt and debt service obligations and their impact on our financial condition and results of operations;
|
|
•
|
our future cash flow, our ability to service and repay our existing debt, our ability to raise additional funds, if needed, and any restrictions that are or may be imposed as a result of our current and future indebtedness, in light of our current and projected levels of operations, acquisition activity and general economic conditions;
|
|
•
|
any downgrade by rating agencies in our corporate credit ratings, which may impact, among other things, our ability to raise additional debt capital and implement elements of our growth strategy;
|
|
•
|
interest rate risks associated with our floating rate debt borrowings;
|
|
•
|
the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets (including the challenges created by new and different regulatory regimes in such countries);
|
|
•
|
adverse global economic conditions and credit markets and foreign currency exchange uncertainty and volatility in the countries in which we do business (such as the recent instability in Russia, Ukraine and the Middle East);
|
|
•
|
economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;
|
|
•
|
the introduction of generic competitors of our branded products;
|
|
•
|
our ability to obtain and maintain sufficient intellectual property rights over our products and defend against challenges to such intellectual property;
|
|
•
|
the expense, timing and outcome of legal proceedings, arbitrations, investigations and regulatory proceedings and settlements thereof;
|
|
•
|
the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or withdrawals of products from the market;
|
|
•
|
the availability of and our ability to obtain and maintain adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third party insurance or self-insurance;
|
|
•
|
the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to approvals by the U.S. Food and Drug Administration (the "FDA"), Health Canada and similar agencies in other countries (such as the anticipated approval by the FDA of Salix's Xifaxan® product for the indication of irritable bowel syndrome with diarrhea ("IBS-D")), legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;
|
|
•
|
the results of continuing safety and efficacy studies by industry and government agencies;
|
|
•
|
the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products;
|
|
•
|
the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith;
|
|
•
|
the impact of price control restrictions on our products, including the risk of mandated price reductions;
|
|
•
|
the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, which could lead to material impairment charges;
|
|
•
|
the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges;
|
|
•
|
negative publicity or reputational harm to our products and business;
|
|
•
|
the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing;
|
|
•
|
our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and related supply difficulties, interruptions and delays;
|
|
•
|
the disruption of delivery of our products and the routine flow of manufactured goods;
|
|
•
|
the seasonality of sales of certain of our products;
|
|
•
|
declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;
|
|
•
|
compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations;
|
|
•
|
the impacts of the Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate;
|
|
•
|
potential ramifications, including possible financial penalties, relating to Salix's restatement of its historical financial results and our ability to address historic weaknesses in Salix's internal control over financial reporting;
|
|
•
|
interruptions, breakdowns or breaches in our information technology systems; and
|
|
•
|
other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing.
|
|
Period
|
Total Number of
Shares (or Units)
Purchased
(1)(2)
|
|
Average Price
Paid Per Share
(3)
|
|
Total Number of Shares
Purchased as
Part of Publicly
Announced Plan
|
|
Maximum Number
(Approximate Dollar Value)
of Shares That
May Yet Be Purchased
Under the Plan
(1)
|
||||||
|
|
|
|
|
|
|
|
(In millions)
|
||||||
|
January 1, 2015 to January 31, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,000
|
|
|
February 1, 2015 to February 28, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,000
|
|
|
March 1, 2015 to March 31, 2015
|
222
|
|
|
$
|
200.37
|
|
|
—
|
|
|
$
|
2,000
|
|
|
(1)
|
On November 20, 2014, our Board of Directors authorized the repurchase of up to $2.0 billion of senior notes, common shares and/or other securities, subject to any restrictions in our financing agreements and applicable law (the “2014 Securities Repurchase Program”). The 2014 Securities Repurchase Program will terminate on November 20, 2015 or at such time as we complete our purchases. During the three-month period ended March 31, 2015, we did not make any repurchases of our senior notes or common shares under the 2014 Securities Repurchase Program.
|
|
(2)
|
Includes 222 shares purchased (subsequently cancelled) under the employee stock purchase program.
Such purchases were not made under the 2014 Securities Repurchase Program.
|
|
(3)
|
The average price paid per share excludes any broker commissions.
|
|
2.1**
|
|
Agreement and Plan of Merger, dated as of February 20, 2015, by and among Salix Pharmaceuticals, Ltd., Valeant Pharmaceuticals International, Sun Merger Sub, Inc. and, solely for the purposes set forth therein, Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 23, 2015, which is incorporated by reference herein.
|
|
|
2.2
|
|
Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 16, 2015, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Sun Merger Sub, Inc. and Salix Pharmaceuticals, Ltd., originally filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 16, 2015, which is incorporated by reference herein.
|
|
|
4.1
|
|
Indenture, dated as of January 30, 2015, between Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the 5.50% Senior Notes due 2023, originally filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 30, 2015, which is incorporated by reference herein.
|
|
|
4.2
|
|
Indenture, dated as of March 27, 2015, between VRX Escrow Corp., the Bank of New York Mellon Trust Company, N.A., as trustee, registrar and US paying agent, and The Bank of New York Mellon, acting through its London branch, as the Euro paying agent, respecting the 5.375% senior unsecured notes due 2020 (the "2020 Notes"), the 5.875% senior unsecured notes due 2023 (the "May 2023 Notes"), the 4.50% senior unsecured notes due 2023 (the “Euro Notes”) and the 6.125% senior unsecured notes due 2025 (the "2025 Notes" and together with the 2020 Notes, the May 2023 Notes and the Euro Notes, the "Notes"), originally filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 27, 2015, which is incorporated by reference herein.
|
|
|
4.3
|
|
First Supplemental Indenture to the Indenture, dated as of March 27, 2015, between Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the Notes, originally filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 27, 2015, which is incorporated by reference herein.
|
|
|
10.1
|
|
Successor Agent Agreement and Amendment No. 9 to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended, among Valeant Pharmaceuticals International, Inc., the guarantors party thereto, the lenders party thereto and the agents party thereto (the “Third Amended and Restated Credit and Guaranty Agreement”), dated as of January 8, 2015, by and among Valeant Pharmaceuticals International, Inc., certain subsidiaries of Valeant Pharmaceuticals International, Inc. as guarantors, each of the lenders named therein, Barclays Bank PLC, as the successor agent, and GSLP, originally filed as Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 25, 2015, which is incorporated by reference herein.
|
|
|
10.2
|
|
Amendment No. 10 to the Third Amended and Restated Credit and Guaranty Agreement, dated as of March 5, 2015, by and among Valeant Pharmaceuticals International, Inc., certain subsidiaries of Valeant Pharmaceuticals International, Inc. as guarantors, each of the lenders named therein, and Barclays Bank PLC, as administrative and collateral agent, originally filed as Exhibit (b)(23) to the Company’s Tender Offer Statement on Schedule TO filed on March 4, 2015 on Amendment No. 1 to Schedule TO filed on March 6, 2015, which is incorporated by reference herein.
|
|
|
10.3
|
|
Joinder Agreement dated January 22, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the New Revolving Loan Commitment, originally filed as Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 25, 2015, which is incorporated by reference herein.
|
|
|
10.4
|
|
Joinder Agreement dated January 22, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Additional Series A-3 Tranche A Term Loan Commitment, originally filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 25, 2015, which is incorporated by reference herein.
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|
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10.5*
|
|
Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series A-4 Tranche A Term Loan Facility.
|
|
|
10.6*
|
|
Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series F Tranche B Term Loan Facility.
|
|
|
10.7
|
|
Commitment Letter, dated as of February 20, 2015, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., HSBC Bank USA, National Association, HSBC Bank Canada, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd., DNB Capital LLC, DNB Markets, Inc., SunTrust Bank and SunTrust Robinson Humphrey, Inc., originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 23, 2015, which is incorporated by reference herein.
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10.8
|
|
Amended and Restated Commitment Letter, dated as of March 8, 2015, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Island Branch, Deutsche Bank Securities Inc., HSBC Bank USA, National Association, HSBC Bank Canada, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd., DNB Capital LLC, DNB Markets, Inc., SunTrust Bank, SunTrust Robinson Humphrey, Inc., Barclays Bank PLC, Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, RBC Capital Markets and Citigroup Global Markets Inc., originally filed as Exhibit (b)(24) to the Company’s Tender Offer Statement on Schedule TO filed on March 4, 2015 on Amendment No. 2 to Schedule TO filed on March 9, 2015, which is incorporated by reference herein.
|
|
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10.9
|
|
Underwriting Agreement, dated March 17, 2015, among Valeant Pharmaceuticals International, Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Mitsubishi UFJ Securities (USA) Inc., DNB Markets, Inc., Barclays Capital Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc., originally filed as Exhibit 1.1 the Company’s Current Report on Form 8-K filed on March 18, 2015, which is incorporated by reference herein.
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|
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10.10†
|
|
Employment Agreement between Valeant Pharmaceuticals International, Inc. and J. Michael Pearson, dated as of January 7, 2015, originally filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 13, 2015, which is incorporated by reference herein.
|
|
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31.1*
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2*
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1*
|
|
Certificate of the Chief Executive Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2*
|
|
Certificate of the Chief Financial Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Document
|
|
|
*
|
Filed herewith.
|
|
**
|
One or more exhibits or schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. We undertake to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
|
|
†
|
Management contract or compensatory plan or arrangement.
|
|
|
Valeant Pharmaceuticals International, Inc.
(Registrant) |
|
Date: April 30, 2015
|
/s/ J. MICHAEL PEARSON
J. Michael Pearson
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
|
Date: April 30, 2015
|
/s/ HOWARD B. SCHILLER
Howard B. Schiller
Executive Vice-President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director |
|
Exhibit
Number
|
|
|
Exhibit Description
|
|
2.1**
|
|
Agreement and Plan of Merger, dated as of February 20, 2015, by and among Salix Pharmaceuticals, Ltd., Valeant Pharmaceuticals International, Sun Merger Sub, Inc. and, solely for the purposes set forth therein, Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 23, 2015, which is incorporated by reference herein.
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|
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2.2
|
|
Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 16, 2015, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Sun Merger Sub, Inc. and Salix Pharmaceuticals, Ltd., originally filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 16, 2015, which is incorporated by reference herein.
|
|
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4.1
|
|
Indenture, dated as of January 30, 2015, between Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the 5.50% Senior Notes due 2023, originally filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 30, 2015, which is incorporated by reference herein.
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4.2
|
|
Indenture, dated as of March 27, 2015, between VRX Escrow Corp., the Bank of New York Mellon Trust Company, N.A., as trustee, registrar and US paying agent, and The Bank of New York Mellon, acting through its London branch, as the Euro paying agent, respecting the 5.375% senior unsecured notes due 2020 (the "2020 Notes"), the 5.875% senior unsecured notes due 2023 (the "May 2023 Notes"), the 4.50% senior unsecured notes due 2023 (the “Euro Notes”) and the 6.125% senior unsecured notes due 2025 (the "2025 Notes" and together with the 2020 Notes, the May 2023 Notes and the Euro Notes, the "Notes"), originally filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 27, 2015, which is incorporated by reference herein.
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4.3
|
|
First Supplemental Indenture to the Indenture, dated as of March 27, 2015, between Valeant Pharmaceuticals International, Inc., the guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as trustee, respecting the Notes, originally filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 27, 2015, which is incorporated by reference herein.
|
|
|
10.1
|
|
Successor Agent Agreement and Amendment No. 9 to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, as amended, among Valeant Pharmaceuticals International, Inc., the guarantors party thereto, the lenders party thereto and the agents party thereto (the “Third Amended and Restated Credit and Guaranty Agreement”), dated as of January 8, 2015, by and among Valeant Pharmaceuticals International, Inc., certain subsidiaries of Valeant Pharmaceuticals International, Inc. as guarantors, each of the lenders named therein, Barclays Bank PLC, as the successor agent, and GSLP, originally filed as Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 25, 2015, which is incorporated by reference herein.
|
|
|
10.2
|
|
Amendment No. 10 to the Third Amended and Restated Credit and Guaranty Agreement, dated as of March 5, 2015, by and among Valeant Pharmaceuticals International, Inc., certain subsidiaries of Valeant Pharmaceuticals International, Inc. as guarantors, each of the lenders named therein, and Barclays Bank PLC, as administrative and collateral agent, originally filed as Exhibit (b)(23) to the Company’s Tender Offer Statement on Schedule TO filed on March 4, 2015 on Amendment No. 1 to Schedule TO filed on March 6, 2015, which is incorporated by reference herein.
|
|
|
10.3
|
|
Joinder Agreement dated January 22, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the New Revolving Loan Commitment, originally filed as Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 25, 2015, which is incorporated by reference herein.
|
|
|
10.4
|
|
Joinder Agreement dated January 22, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Additional Series A-3 Tranche A Term Loan Commitment, originally filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed on February 25, 2015, which is incorporated by reference herein.
|
|
|
10.5*
|
|
Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series A-4 Tranche A Term Loan Facility.
|
|
|
10.6*
|
|
Joinder Agreement dated April 1, 2015 to the Third Amended and Restated Credit and Guaranty Agreement, relating to the Series F Tranche B Term Loan Facility.
|
|
|
10.7
|
|
Commitment Letter, dated as of February 20, 2015, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., HSBC Bank USA, National Association, HSBC Bank Canada, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd., DNB Capital LLC, DNB Markets, Inc., SunTrust Bank and SunTrust Robinson Humphrey, Inc., originally filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 23, 2015, which is incorporated by reference herein.
|
|
|
10.8
|
|
Amended and Restated Commitment Letter, dated as of March 8, 2015, among Valeant Pharmaceuticals International, Inc., Valeant Pharmaceuticals International, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Island Branch, Deutsche Bank Securities Inc., HSBC Bank USA, National Association, HSBC Bank Canada, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd., DNB Capital LLC, DNB Markets, Inc., SunTrust Bank, SunTrust Robinson Humphrey, Inc., Barclays Bank PLC, Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, RBC Capital Markets and Citigroup Global Markets Inc., originally filed as Exhibit (b)(24) to the Company’s Tender Offer Statement on Schedule TO filed on March 4, 2015 on Amendment No. 2 to Schedule TO filed on March 9, 2015, which is incorporated by reference herein.
|
|
|
10.9
|
|
Underwriting Agreement, dated March 17, 2015, among Valeant Pharmaceuticals International, Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Mitsubishi UFJ Securities (USA) Inc., DNB Markets, Inc., Barclays Capital Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc., originally filed as Exhibit 1.1 the Company’s Current Report on Form 8-K filed on March 18, 2015, which is incorporated by reference herein.
|
|
|
10.10†
|
|
Employment Agreement between Valeant Pharmaceuticals International, Inc. and J. Michael Pearson, dated as of January 7, 2015, originally filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 13, 2015, which is incorporated by reference herein.
|
|
|
31.1*
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2*
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1*
|
|
Certificate of the Chief Executive Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2*
|
|
Certificate of the Chief Financial Officer of Valeant Pharmaceuticals International, Inc. pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Document
|
|
|
*
|
Filed herewith.
|
|
**
|
One or more exhibits or schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. We undertake to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
|
|
†
|
Management contract or compensatory plan or arrangement.
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|